It has been a while since we last heard from Chinese cryptocurrency exchanges. Ever since the CNY trading ban, very little has changed in that part of the world. In recent news, a Beijing district court has dismissed a lawsuit against such exchanges. Some traders had complained about exchanges being responsible for their financial losses. It was evident such claims wouldn’t hold up for long.
A Decision in Favor of Chinese Cryptocurrency Exchanges
All of this revolves around a few people who claimed to have lost money while trading Bitcoin on Chinese exchanges. More specifically, a Huobi user claimed that Bitcoin didn’t exist and that his previous trades should be invalidated. In a way, this statement makes some sense to people who have no clue as to how cryptocurrencies work.
In the real world, however, such statements are quickly dismissed as delusional. It is impossible to trade something for real money if that product or vehicle doesn’t exist. While it is true Bitcoin doesn’t exist in tangible form by default, that doesn’t mean it doesn’t exist at all. Bitcoin is a very real investment opportunity, yet it is prone to major value fluctuations. It is certainly possible for people to lose a lot of good money by buying and selling Bitcoin at the wrong time.
When that happens, however, the exchanges are not to blame whatsoever. Instead, individual users should take their precautions and only invest in vehicles they can comprehend. No exchange is at fault for their users not understanding how financial markets work. It would be rather silly if it were possible to blame exchanges for every bad trade their users made. It seems that a fair few Chinese investors do not understand Bitcoin, and thus their decision to invest in this vehicle is their own problem, so to speak.
Claiming Bitcoin doesn’t exist and has no value according to Marxism is by far one of the more interesting statements we have heard in quite some time. There are many debates as to whether or not Bitcoin has value, and if so, where this value comes from. Throwing Marxism into the mix makes virtually all financial instruments useless and worthless. It is another clear example of why investing in Bitcoin may not necessarily be suited for “normal” people, even though most investors are more than capable of figuring things out before throwing money at them.
Thankfully, the Beijing Haidian District Court dismissed these claims pretty quickly. According to the ruling, the plaintiff could not provide evidence that the exchange was operating illegally. After all, Huobi has done nothing wrong, as it merely offers users the tools necessary to make their own decisions. As a result, the plaintiff was held responsible for his own trading behavior and the associated financial losses.
It is good to see the Beijing court render a decision that makes sense. It is certainly true that cryptocurrencies are still popular in China, although CNY trading is strictly forbidden until further notice. Whether or not the latter development has done anything to curb the public’s interest in this new form of money seems highly unlikely at this point. Had this decision gone the other way, it could have set a very disturbing precedent for cryptocurrency trading in the rest of the world.