Yinchuan court mediates a virtual currency entrusted investment dispute, with the defendant ordered to return the investment principal

Gate News, April 2, Yinchuan City Xingqing District People’s Court has recently concluded a civil and commercial dispute arising from entrusted investment in virtual currency. After the plaintiff, Wei M., met the defendants, Li M. and Hu M., online, the plaintiff transferred funds to Li M. and entrusted him to jointly carry out virtual currency investment operations with Hu M. The earlier investment generated some returns, and the plaintiff participated in the distribution of dividends. Later, because the plaintiff urgently needed funds, he requested repayment of the investment principal, but this was unsuccessful. The plaintiff filed a lawsuit in court, claiming “unjust enrichment.” After reviewing the case, the presiding judge held that the underlying legal relationship in this case should be a relationship of a mandate/agency contract. The judge informed the plaintiff that filing suit on the basis of unjust enrichment carried a high risk of losing, and also pointed out to the defendant that the two parties indeed had an entrusted investment relationship. If the matter proceeded as a dispute over a mandate/agency contract, the defendant would very likely have to bear the responsibility to return the funds. Through mediation, the plaintiff withdrew the lawsuit against Hu M.; Li M. returned the investment principal to the plaintiff; and both sides reached a settlement.