A Chinese court has made a significant ruling regarding the use of cryptocurrency in wage payments, clarifying its legal distinction from fiat currency and highlighting its lack of protection under labor laws. This decision emerged from a labor dispute in the Shenzhen Qianhai Cooperation Zone, as reported by Shenzhen Special Zone Daily.
Background of the Labor Dispute
The case centered around Zhou, a senior engineer who previously worked for a technology company. Zhou claimed that part of his salary was to be paid in cryptocurrency, specifically USDT, alongside a bank transfer of 20,000 yuan. However, the tech company disputed these claims, stating that no formal agreement was in place for crypto wage payments. This disagreement led Zhou to seek legal recourse to recover the alleged unpaid wages.
Legal Ruling on Wage Payments in Cryptocurrency
In its decision, the Shenzhen Qianhai Cooperation Zone People’s Court cited a notice from 2021 issued by various Chinese governmental bodies that established cryptocurrency’s lack of legal status equivalent to fiat currency. The court emphasized that, under national labor laws, wages must be paid in legal tender, and any agreements involving cryptocurrency do not override these regulations.
The court examined the evidence presented by Zhou but found it insufficient to validate his claims about crypto payments being part of his employment contract. It determined that while cryptocurrencies can maintain value, their usage as a wage standard threatens public policy and contravenes existing financial laws. Zhou’s appeal was subsequently rejected by the Shenzhen Intermediate People’s Court, which upheld the original ruling.
Warnings from the Judiciary
Judge Zhao Junjun of the original court reiterated a critical warning to both employers and employees: incorporating cryptocurrency into wage agreements is inadvisable, as such arrangements not only violate labor laws but also lack any legal protections. This underscores the judiciary’s stance on the matter, solidifying authorities’ view on cryptocurrency payments in employment settings.
Bribery Charges Against Digital Currency Advocate
In a related context of cryptocurrency and legal scrutiny in China, Yao Qian, a notable proponent of digital currency and former head of the Science and Technology Supervision Department at the China Securities Regulatory Commission, has been charged with bribery. According to the Central Commission for Discipline Inspection (CCDI) and the National Supervisory Commission, Yao is accused of utilizing digital currencies to facilitate corrupt practices and exploiting his official position for personal financial gain.
These developments reflect a broader crackdown on illicit activities associated with the cryptocurrency sector in China, highlighting the government’s firm stance on regulating digital assets and ensuring compliance with the law.