Apparently, not only was the sales contract invalidated, but the buyer paid for the vehicle with a dodgy digital token in the first place.
Last week, a WeChat post from the Shanghai Fengxian Court began circulating in the cryptocurrency community regarding its recent ruling on a May 2019 car sale made with digital currency. At that time, the buyer, identified only as Mr. Huang, signed a sales contract to purchase a 2019 Audi AL6 for CNY 409,800 ($59,477) in exchange for 1,281 Unihash (UNIH) tokens with an undisclosed car dealer in Shanghai. Under the original contract, the seller was to deliver the car to Huang within three months.
According to the Shanghai Fengxian Court, Mr. Huang paid UNIH 1,281 on the date of signing the contract but did not receive the car within or after the specified time. Consequently, Mr. Huang took the seller to court, demanding the delivery of the vehicle and the payment of 0.66% daily interest of the transaction amount as damages for all the days that the car was not delivered beyond the original deadline.
The case lasted more than three years until a verdict was reached this June. Citing the September 2017 regulations that evolved into what is now known as the ban on cryptocurrencies in China, the Shanghai Fengxian Court said that digital assets “cannot and should not be used as circulating currency in the markets,” and that the use of digital tokens such as UNIH instead of fiduciary money as consideration in everyday contracts violated the respective regulation that nullifies such contracts in themselves. Therefore, the sales contract was declared null and void. The buyer was not awarded compensation for damages, delivery of the car, or reimbursement of his 1,281 UNIH.
It is unclear how the seller accepted a conversion rate of UNIH 1 = CNY 320 as stipulated in the original contract in the first place. Unihash was purportedly a digital payment token developed for e-commerce in 2018 and was only available to private investors without a public initial coin offering. Shortly after its launch, accusations quickly surfaced on Chinese social media that labeled the project a “scam” and that its token metrics, as well as company history, had allegedly been grossly inflated to attract investors.
At present, the project appears to be abandoned, with no link to social media, no listing on the market, and no development activity. Furthermore, the company behind UNIH did not meet any of its goals listed in its original white paper. One such promise made to investors in the document included: “What can be certain is that the Unihash token may appear on various exchanges by Q4 2019.”
By Audy Castaneda