Legal analysis: From the bitcoin loan case involving 100 million yuan to see the compliance points of the loan agreement

The currency circle has a unique method of capital turnover - borrowing currency. Whether it is turnover between friends, or miners use coins to offset electricity bills during the mining process. We have mentioned in the previous articles of Chain Law (Must-read for virtual currency lending｜Does lending USDT constitute private lending? The court ruled to reject the plaintiff’s claim), with Bitcoin, Ethereum, Tether and other digital assets as the subject matter Although the "loan" in the currency circle is called a loan, it is not a "loan contract" recognized in the legal sense. Suing the court on the grounds of a loan dispute is likely to face a disadvantageous situation. Then in reality, there are frequent loans and loans in the currency circle. Whether it is a lender or a borrower, how to draft a currency loan agreement to protect their rights? Recently, a judgment was made in a bitcoin lending case involving 250 bitcoins, which is around 100 million according to the current market value. Some opinions reflected in the judgment of this case are of great reference to how to draft a bitcoin loan agreement. The author makes a summary as follows (the case is attached to the article): Obligations are clarified. First, my country's laws and administrative regulations do not prohibit the holding and legal circulation of Bitcoin, which is the current general knowledge. Second, according to the first paragraph of Article 467 of my country's "Civil Code", for contracts that are not expressly stipulated in this Law or other laws, the provisions of the General Principles of this Part shall apply, and the provisions of this Part or other laws and regulations may be referred to. provisions of similar contracts. That is to say, the "currency loan" contract with digital assets such as Bitcoin as the subject of borrowing is a currency loan contract under which both parties express their true intentions. Once established, it will have corresponding contractual binding force on both parties. The performance of the rights and obligations corresponding to the corresponding clauses in the contract is protected by law. UK releases Digital Dispute Resolution Rules to resolve legal disputes in the field of encryption: A working group of UK jurisdictions backed by the UK government has released the Digital Dispute Resolution Rules to resolve legal disputes in the field of encryption, including with blockchain technology , Legal disputes related to encrypted assets and smart contracts. The rules aim to put the UK at the forefront of the smart contract market, which is estimated to reach $345 million by 2026, according to the announcement. [2021/4/22 20:48:19] The Beijing Haidian Court released the eighth of eight typical Internet-related commercial cases: Feng Mou v. A Company Contract Dispute Case has such a statement: "Bitcoin itself does not contain inherent value. Bitcoin holders must exercise the powers of possession, use, income, and disposal through the information recorded in the "public accounting book" (database) that is distributed and stored and confirmed by the entire network. Property is defined as a "thing" in the property law. Therefore, based on the legal principle of property rights, bitcoin holders cannot claim rights in accordance with the legal provisions of ownership. It should be noted that bitcoin transactions exist in reality, and holders still hope to obtain In the process of commodity exchange in the network environment, the value of Bitcoin depends on the market's confidence in Bitcoin as a trading medium. Therefore, Bitcoin belongs to the transaction object in the contract law and has "civil interests" that should be protected by law. The disputes about the delivery of Bitcoin can be found in the basis of contract law. Liu Feng, Shanghai University of International Business and Economics: Virtual currency derivatives related business has a high legal risk: Shanghai University of International Business and Economics Artificial Intelligence and Change Management Research Institute block Liu Feng, director of the Chain Technology and Application Research Center, said in an interview with a reporter from Beijing Business Daily that although the virtual currency lending business has business and technological innovations, the overall business is not protected by law. From the perspective of business model, the virtual currency lending business is the largest The risk still depends on the value fluctuation of the entire virtual currency market. Whether it is for the lender or the borrower, the greater the volatility, the higher the risk. In addition, from a policy perspective, this business belongs to virtual currency derivatives. Currently, from the perspective of virtual currency related From the point of view that the relevant laws and regulations have not yet been implemented and the law has not yet been formed, there are relatively high legal risks in the business related to virtual currency derivatives. From the current point of view, it is difficult to do virtual currency business. When the price of virtual currency fluctuates greatly, Both the pledger and the lending platform will suffer loss of interest, which is mainly reflected in the sharp decline in the market, the lender's assets will depreciate rapidly, and the lending platform will liquidate all the mortgage assets of the lender when the market falls sharply. However, if a large number of loans default at the same time , Service providers will also sell in large quantities, which will further aggravate the market downturn. In his view, the virtual currency lending market is still in a chaotic situation, and there are not many things to do. Therefore, further observations need to be made after the market stabilizes. ( Beijing Business Daily) [2020/4/20] From a legal point of view, the currency loan agreement establishes the rights and obligations of both parties to the currency loan in the form of a contract. If the agreement does not violate the legal provisions, it is binding on both parties and is valid according to law. Dynamic Ira Kleiman's legal representative nominates a new co-counsel for the Craig Wright case: Jinse Finance reported that on February 20, Ira Kleiman's legal representative submitted a new document requesting New York lawyer Stephen Lagos to be allowed in the case against Craig Wright. Co-counsel to Kleiman in the case. Since the case is pending trial in Florida, Special assignments are required for representatives not licensed to practice in the jurisdiction. [2020/2/21] Clarify the addresses of both borrowers and borrowers: Unlike traditional bank transfers, since the wallet addresses of digital assets such as Bitcoin are anonymous, it is necessary to ensure that each link is clear and undisputed during the transfer process. That is: in the contract, the lender's lending address and the receiver's address must be specified, and the contract must be "real-named" during the currency transfer process, which corresponds to the pseudo-anonymous feature of the blockchain. For example, the lender transfers bitcoins to the borrower's bitcoin address (specify address) through its bitcoin address (specify address). Clarify the method of repayment: the current common practice is to borrow currency to repay currency, repay fiat currency or other methods of repayment agreed by both parties. From the point of view of the lender, the way to protect one's own interests is to set the "right of choice", that is, to agree on several methods of repaying the currency, and to put the right of choice in one's own hands. For example, when we helped an institutional client draft a loan agreement, we made it clear: Voice | China Communications Industry Association Shang Kun: The distribution of cultural products based on blockchain and legal service products around copyright protection can be the first to generate economic benefits: Golden Finance According to the report, Shang Kun, executive deputy director of the Blockchain Committee of China Communications Industry Association, said in an interview that we used to consider the application of blockchain in the cultural industry, and more from the perspective of copyright protection, we used certificate storage applications. However, depositing evidence can only prove value, it is difficult to generate value, and depositing certificates is not the purpose, let alone the end point, to maximize the value of copyright is the direction of commercial development. Therefore, from the perspective of commercial value, there are two directions that can take the lead in generating economic benefits. One direction is the distribution of cultural products based on blockchain. The second is legal service products around copyright protection. [2020/1/3] A: Party A has the right to ask Party B to return X bitcoins at one time (if Party B has already refunded part, Party A can ask it to return the rest at one time); Binet (including but not limited to Huobi App, huobi.sh, huobi.gf, huobi.pro, etc.) at 12:00 (noon) on X, X, 202X, the price of Bitcoin converted into RMB and the price anchor of each Bitcoin Set a price of X ten thousand US dollars, and pay to Party A the higher of the above two prices. (The exchange rate between the U.S. dollar and the renminbi is based on the middle exchange rate between the renminbi and the U.S. dollar announced by the People's Bank of China on X, X, 202X); Voice | AMF Executive Director of Legal Affairs: France will put forward transformative encryption regulatory proposals at the G7 Finance Ministers meeting: According to cointelegraph, Anne Marechal, executive director of legal affairs of the French Financial Market Authority (AMF), said recently that, as the rotating presidency, at the G7 Group Finance Ministers Meeting, proposed transformative encryption regulatory proposals will make France a leader in this field. pioneer. It is reported that the French financial regulator plans to approve the first batch of cryptocurrency-related companies under the new digital currency regulation. [2019/7/17] Loan interest: Can interest be stipulated in the loan agreement? The author thinks the answer is yes. According to Article 585 of the "Civil Code of the People's Republic of China", the parties may agree that when one party breaches the contract, he shall pay the other party a certain amount of liquidated damages according to the circumstances of the breach, and may also agree on the calculation method for the amount of compensation for losses arising from the breach. If the agreed penalty for breach of contract is lower than the losses caused, the people's court or arbitration institution may increase it at the request of the parties; if the agreed penalty for breach of contract is excessively higher than the losses caused, the people's court or arbitration institution may appropriately reduce it at the request of the parties. If the parties agree on liquidated damages for the delay in performance, the defaulting party shall perform the obligation after paying the liquidated damages. The interest agreed in the currency loan agreement is valid for both parties. Please refer to the terms: If Party B fails to return the bitcoin after the currency repayment period expires, Party A has the right to request Party B to compensate Party A for the interest loss and other actual losses. Among them, the interest loss is based on the price corresponding to all unreturned bitcoins approved at XXX time, and is calculated according to 4 times the loan market quotation rate announced by the National Interbank Funding Center during the same period, starting from X, X, 202X to the date of actual payment ; my country's current policy is to prohibit digital assets such as Bitcoin from being used for exchange with legal tender. In December 2013, relevant authorities issued the "Notice on Preventing Bitcoin Risks". On September 4, 2017, the People's Bank of China and other seven ministries and commissions issued the "Announcement on Preventing the Financing Risks of Token Issuance" which further clarified: "Any so-called token financing trading platform shall not engage in legal currency and tokens, 'virtual currency' Exchange business between each other, shall not buy or sell tokens or 'virtual currency' as a central counterparty, and shall not provide pricing, information intermediary and other services for tokens or 'virtual currency'." Personal acquisition of digital assets such as Bitcoin does not Violation of existing laws and policies. Virtual goods such as Bitcoin can be legally held by anyone. In addition, it can be seen from some existing cases that although the court cannot directly price Bitcoin in the judgment, the voluntary agreement between the parties can be recognized. The arbitral award in the above case ordered Gao to return the U.S. dollar equal to the value of the digital currency, and settle it in RMB according to the exchange rate of U.S. dollar to RMB on the date of the award, which is equivalent to supporting the exchange of digital currency and legal tender in disguise, and is suspected of supporting the illegal sale of proxy. The illegal circulation of currency notes and renminbi violates the mandatory provisions of the law and the public interest, and the arbitration award should be revoked. (The rescission procedure of this case was approved by the Supreme People's Court.) Among the cases selected by the Shanghai court as an excellent case of the national court system in 2020, on the one hand, it means the identification of the property attributes of Bitcoin and judicial relief for cases involving Bitcoin. The content-zce has been recognized by the Supreme People's Court. On the other hand, the verification of the bitcoin price in the case also inspired us: that is, if the parties agree on the specific exchange method from bitcoin to legal currency, it is binding on both parties. Such as the guarantee responsibility for currency repayment, the jurisdiction of dispute resolution, etc. can be stipulated in the agreement. In addition, due to the cases involving Bitcoin, the two parties mostly communicate, dock and trade through the Internet, so once dispute resolution is involved, the well-designed terms of service can effectively submit the efficiency of dispute resolution. Reference terms: Judiciary or arbitration institutions can also send relevant documents and (legal) documents to the recipient according to the correspondence address, email address and other contact information stipulated in this agreement. Relevant documents and legal documents are sent by email, fax, SMS, etc. , shall be deemed to have been delivered once dispatched. If no one signs for it or the recipient refuses to accept it, the date when the (legal) document is returned shall be regarded as the date of delivery; if the recipient refuses to accept it when it is delivered directly, the sender may take photos or videos to record the delivery process. Detaining (legal) documents is also deemed to have been delivered. If one party provides wrong contact information or fails to notify the changed contact information in time, resulting in failure to deliver or return the (legal) document, the date of return of the (legal) document shall be deemed as the date of delivery. The scope of the service address includes the non-litigation stage and the first instance, second instance, retrial and enforcement procedures after the dispute enters arbitration and civil and commercial litigation procedures. Case information: Court of trial: People's Court of Jiang'an District, Wuhan City Case number: (2020) E 0102 Min Chu No. 1574, Judgment time: February 22, 2021 Cause of action: Dispute over return of original property Brief introduction: In 2018, Ao and Gu A signed the "Bitcoin Loan Agreement", agreeing that Ao would lend 250 bitcoins to Gu for a period of one year, counting from the date when Ao transferred the currency to Gu. At the same time, the two parties agreed that after the loan period expires, Gu should return 250 bitcoins to Ao Hai. If it is not repaid beyond the one-year period, the unreturned part will generate interest at 0.05% per day, calculated in Bitcoin. Subsequently, Ao delivered 250 bitcoins to Gu's designated account (the bitcoin wallet address assigned to Gu by a trading platform at that time) through the Bitcoin network according to the agreement and Gu's instructions, and Gu received 250 bitcoins. Bitcoin also confirmed to Ao afterward. At present, the one-year loan period has expired, but Gu refused to return the bitcoins after being demanded. In order to protect his legal rights, Ao filed a lawsuit in the court. The court ruled: The court held that the possession and legal circulation of bitcoins are not prohibited by the laws and administrative regulations of our country, and the "Bitcoin Lending Agreement" signed by Ao and Gu is the true intention of both parties and is binding on both parties . Ao lent 250 bitcoins to Gu in accordance with the contract. After the loan period stipulated in the "Bitcoin Lending Agreement" expired, Ao asked Gu to return the 250 bitcoins, and this court supported it. Then the judgment is as follows: 1. The defendant, Gu, shall return 250 bitcoins to the plaintiff, Ao, within ten days from the effective date of this judgment; The number of bitcoins that should be returned but not returned × 0.05%/day is calculated from the date of X, X, 2019 to the date of the actual return; 3. If the defendant Gu cannot return the bitcoins involved in the first and second items of this judgment If the judgment takes effect, the amount of bitcoin determined on the effective date of this judgment shall be compensated according to the conversion ratio between bitcoin and RMB displayed on a certain website on the effective date of this judgment.

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