On Tuesday, a Chinese court made a ruling that could have significant implications for the cryptocurrency and gaming industries. The court’s decision stated that investments in Play-to-Earn (P2E) games, also known as “idle games,” powered by cryptocurrency are not legally protected.
This ruling has caused concerns among many investors and gamers, as P2E games have become increasingly popular in recent years.
P2E games allow players to earn cryptocurrency by participating in in-game activities or simply leaving the game on their devices. These virtual currencies can then be traded or used to purchase in-game items. This ruling may discourage some investors from participating in P2E games, as they may be hesitant to risk their money in an activity that is not legally protected.
The case that led to this ruling in Shanghai involved a plaintiff who invested 700,000 yuan (approximately US$101,700) in a defendant who led a team dedicated to earning crypto rewards in an unnamed P2E game. However, the plaintiff ultimately claimed they did not receive the promised rewards, leading to a legal dispute.
During the market crash of 2022, the value of many assets plummeted. Unfortunately, the defendant took advantage of this situation by selling the cryptocurrencies managed by their team in the game accounts without informing the plaintiff. As a result, the defendant profited by 110,000 yuan, leading to a legal tussle.
After reviewing the case, the Shanghai court ruled that the initial 700,000 yuan investment made by the plaintiff was not protected under the law. However, the court also determined that the defendant must return the 110,000 yuan profit to the plaintiff, as it was considered a property lost due to the defendant’s misuse.
It is important to note that the Chinese government has issued regulations stating that any cryptocurrency-related investments or derivatives are not protected under the law. This means that individuals or entities engaging in these transactions do so at their own risk, as there is no legal recourse available in case of a dispute or loss.
If you would like to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, and Instagram.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
