Wuxi Court Dismisses Virtual US Dollar Lawsuit
The Wuxi Intermediate People’s Court has dismissed a lawsuit over “virtual US dollars,” underscoring that overseas cryptocurrency investments remain illegal, unprotected, and solely the responsibility of investors.
The case involved an individual who invested 84,350 yuan on an overseas trading platform, converting the funds into 13,000 so-called “virtual US dollars.”
When the platform collapsed on September 6, the account balance plummeted to just 0.1 yuan. Seeking compensation, the investor pursued legal action—but the court rejected the claim.
After review, the court ruled that the investor knowingly violated China’s ban on crypto trading. As such, the losses fell entirely on the individual, with no protection under Chinese law.
This decision reinforces the message: investments in overseas crypto platforms remain outside China’s legal framework. Such activities carry inherent risks, and those who engage in them must bear the consequences.
Analysts view the ruling as a clear signal of Beijing’s determination to safeguard financial stability. By denying legal recourse, regulators are discouraging citizens from bypassing compliance and funneling capital into unregistered platforms.
Hong Kong’s Divergence and Stablecoin Regulation
The ruling comes as Hong Kong takes a contrasting approach. The city is introducing licensing requirements for stablecoin issuers, demanding high-quality reserves and strict compliance—a sharp departure from the mainland’s outright ban.
While mainland authorities remain focused on financial security and capital controls, Hong Kong is positioning itself as a hub for regulated digital asset innovation, using compliance frameworks to attract institutional interest.
The Wuxi case spotlights the risks of noncompliance in China’s digital asset market and signals that legal protection will not extend to offshore crypto investments. At the same time, Hong Kong’s stablecoin licensing regime suggests a pathway for compliant innovation.
As cross-border crypto innovation accelerates, the contrast is stark: mainland China is doubling down on bans, while Hong Kong is opening the door to regulated digital finance. This regional split may define the future of crypto adoption in Greater China—one side enforcing prohibition, the other cultivating opportunity.
Hui Xin