Chinese court invalidated car sale for cryptocurrency

What’s new? The Shanghai Fengxian Court has invalidated a car sale using cryptocurrency that took place in 2019. Mr. Huang signed a sales contract with an unnamed car dealership for an Audi AL6 for 409 800 Chinese yuan ($59 477) in exchange for 1281 Unihash (UNIH) tokens but did not receive the car within the period specified in the contract. This was reported by The Bharat Express News, citing a court article published on the messenger WeChat.

Material by The Bharat Express News

Details of the case. According to the court’s data, Huang paid 1281 UNIH on the day of signing the contract but never received the car. After that, he sued the car dealership, demanding his car and the payment of daily interest of 0,66% of the transaction amount in damages.

The case lasted more than three years before a verdict was handed down in June 2022. Referring to the September 2017 rulings, which later evolved into a ban on cryptocurrencies in China, the court stated that digital assets “cannot and should not be used as a currency for circulation in the markets.” As a result, the sales contract was declared null and void and the buyer was not granted any damages.

The Unihash project is now abandoned, with the asset not listed on any exchange. UNIH, developed in 2018, was supposed to be a digital payment token for e-commerce. The asset was only available to private investors without an initial public coin offering. Soon after its launch, reports quickly surfaced on Chinese social media that the project was a scam.

Earlier, the court of St. Petersburg recognized cryptocurrency as a means of payment for the first time. In 2018, the victim G.A. Shemet handed over 5 million Russian rubles (RUB) in cash and 55 million RUB worth of cryptocurrency to the attackers. Initially, the court took into account only fiat and noted that cryptocurrency “is not a means of payment within the Russian Federation, therefore it cannot be recognized as an object of civil rights and the subject of a crime.” However, cryptocurrency was later included in the final verdict and the terms for the convicts did not change.