Do not speculate in virtual currencies like Bitcoin or Tether, and do not follow others into crypto schemes: crypto transactions are not legally protected, and losses cannot be recovered in court

Domestic legal frameworks do not recognize virtual currencies as legal tender. Private transactions exchanging fiat currency for cryptocurrency tokens can be judged legally null and void, meaning any resulting financial loss is borne entirely by the individual investor. In a documented case, an investor purchased approximately 448,000 RMB ($63,000 USD) worth of Tether (USDT) through peer-to-peer sellers; when the exchange disabled withdrawals and shut down, his lawsuit seeking recovery was dismissed by the courts. Note that direct theft of digital assets is handled separately under criminal law, where perpetrators are prosecuted for criminal theft.

Zero financial outlay. Do not buy cryptocurrency tokens, and refuse invitations to join "signal-calling" or "guaranteed profit" crypto investment groups. The only trade-off is foregoing speculative gains during cryptocurrency bull runs.

In February 2026, the People's Bank of China (PBOC) and seven other national authorities jointly promulgated Notice Yinfa [2026] No. 42 on Further Preventing and Disposing of Risks Related to Virtual Currencies. The directive affirms that virtual currencies such as Bitcoin, Ethereum, and Tether "lack legal tender status and must not and cannot circulate as currency in the market." Exchanging fiat currency for virtual currency, token-to-token trading, and initial coin offering (ICO) financing constitute illegal financial activities that are strictly prohibited, alongside overseas entities providing services to domestic residents. Regarding individual investments, the regulatory notice explicitly mandates: "Where any entity or individual invests in virtual currencies, real-world asset (RWA) tokens, or related financial products in violation of public order and good morals, the relevant civil legal acts are null and void, and any resulting losses shall be borne entirely by the parties themselves." In judicial practice, a plaintiff (Tang) purchased Tether (USDT) totaling 448,000 RMB from platform merchants between 2018 and 2019. When the trading platform froze withdrawals and became unreachable, Tang filed a civil lawsuit to recover the funds. The court ruled that exchanging fiat currency for virtual currency was an invalid investment activity, held Tang personally responsible for all financial losses, and dismissed the lawsuit—a verdict upheld on appeal (Yixing People's Court, Jiangsu). Criminal theft of private keys or wallets is prosecuted differently: when hackers illicitly breached accounts to steal over 4 million RMB worth of crypto assets, the perpetrators were convicted of larceny and sentenced to 7 years' imprisonment alongside criminal fines.

The principle of "losses borne entirely by oneself" governs civil disputes between token buyers, sellers, and trade leaders: civil courts will not enforce contracts or assist in recovering speculative investment principal, making post-loss litigation futile. If tokens are stolen or obtained through fraudulent cybercrime, file an immediate police report under criminal fraud/theft statutes. Existing token holders must also safeguard against malicious authorization phishing: in Jiangsu, a victim scanned an in-person QR code and inadvertently granted smart contract approval, resulting in 57,000 USDT (~394,000 RMB) being instantly drained from his wallet. The US FBI warned of similar liquidity mining scams where signing deceptive smart contract permissions allows attackers to drain wallet balances without further user consent. Protection: never connect Web3 wallets to unverified portals, and periodically audit and revoke token approvals using verified third-party allowance checkers. Allowing third parties to route illicit funds through your personal bank accounts to buy crypto constitutes criminal aid (see Chapter 9, Rule 5). Identifying high-yield financial traps is covered in Chapter 5, Rule 6; legitimate channels for overseas asset allocation are detailed in Chapter 5, Rule 38. This does not constitute investment advice. Benefit magnitude is categorized as High based on avoiding total loss of liquid capital. Primary beneficiary is yourself.

中国人民银行、国家发展改革委、工业和信息化部、公安部、市场监管总局、金融监管总局、中国证监会、国家外汇局 (2026). 关于进一步防范和处置虚拟货币等相关风险的通知（银发〔2026〕42 号，第一、十九条）. https://www.csrc.gov.cn/csrc/c100028/c7614318/content.shtml（中国证监会发布）；宜兴市人民法院 (2025). 投资虚拟货币受损 风险责任自行承担. https://yx.wxfy.gov.cn/article/detail/2025/09/id/8970543.shtml；【新时代检察好故事】偷了虚拟币 被判盗窃罪 (2024). https://www.yw.gov.cn/art/2024/2/2/art_1229143073_59471301.html（义乌市人民政府网转载）；人民法院报 (2024). 非法窃取虚拟货币行为的刑法定性. http://www.sdcourt.gov.cn/jningzcfy/386500/386502/31441533/index.html（邹城市人民法院网转载）；Federal Bureau of Investigation (2022). Scammers Target and Exploit Owners of Cryptocurrencies in Liquidity Mining Scam (Alert Number I-072122-PSA). https://www.ic3.gov/PSA/2022/PSA220721