A primary school art teacher surnamed Chen in Taiwan, in 2017, opened accounts and managed trades on behalf of a former student surnamed You by using You’s assistance. The trades involved ETH, BTC, Bitcoin Cash, and XRP. In 2017, You’s account received 11 transfers from Chen totaling NT$7.83M. When the market surged in 2017, Chen’s paper gains exceeded $1 million. You suggested withdrawing, but Chen refused, saying, “Hold on until I have assets worth over 72k, then stop.” After the market reversed, Chen ultimately suffered total losses. Chen later filed a lawsuit to seek compensation, but he lost.
The full story of student-teacher goodwill managed trading: paper gains over $50k refused to withdraw
According to the process reconstructed in the judgment, from May to December 2017, Chen made 11 transfers one after another to You’s account, purchasing ETH, BTC, and other cryptocurrencies. The largest single transfers—two of them—were each NT$2 million. In 2017, it was the most feverish period for crypto investment in Taiwan, and at one point the paper gains exceeded $50k. You reminded him: “When do you plan to withdraw your money? You’re putting so much money into high-risk speculative products—I have so much pressure every day. Right now, you’ve already made over $50k in profit.” Chen replied: “I’ll stop when my assets are over 100 million.”
After the market reversed, the judgment cited Chen’s own messages: “The main force is running a scam line, and they’re doing things so much like they have a script. Because I was anxious inside, I easily fell for it,” including messages such as “turn off my permissions.” Those records, however, showed that the account trading permissions were always controlled by Chen—he was the one entering and exiting trades in the market.
After Bittrex locked the account: 0.9 BTC left
Later, due to abnormal trading, Bittrex locked the account, leaving about 0.9 BTC in it. Chen asked You to buy back at the all-time high of $72k per BTC (the principal). You argued that the market price at the time was only about NT$1.7 million. Ultimately, You still paid NT$2.7 million in installments and took over the 0.9 BTC. But in 2024, Chen pursued repayment again. On June 1 of that year, You signed a repayment agreement acknowledging a commitment to repay NT$7 million within five years.
The NT$7 million agreement in 2024 and a NT$50k settlement
On June 24, 2024, You’s parents stepped in to mediate, and both sides reached a settlement: the NT$7 million agreement would be nullified, offset by NT$50k. Chen personally wrote in his own handwriting: “Both parties have been fully settled, and I will no longer pursue this matter,” and the entire process was recorded for evidence. However, Chen still sued using the NT$7 million agreement that had been invalidated, claiming that the settlement was obtained through fraud by You’s parents using the line “You’ll end up on the brink of disaster,” and he attempted to rescind the settlement under the Civil Code. The court did not accept this, stating that Chen failed to prove that the settlement itself involved fraud. The settlement had already extinguished the NT$7 million debt.
FAQ
If someone loses money by managing someone else’s virtual currency, are they responsible?
Based on this decision by the Hsinchu District Court, if the parties had no management mandate contract, the manager does not guarantee profits and did not employ fraudulent tactics, and the investor retained control of the account trading authority, then investment losses are market risk and should be borne by the investor. In this case, because You repeatedly warned of risks and recommended withdrawing funds, the court found no duty for fraud and granted a judgment that no damages were owed.
Can you still sue after signing a settlement agreement for an investment dispute?
In principle, no. Under Articles 736 and 737 of the Civil Code, a settlement extinguishes the original rights. In this case, on June 24, 2024, both sides offset NT$7 million with NT$50k and clearly wrote in black and white, “Both parties have been fully settled.” The court held that the NT$7 million debt had been extinguished. Unless it can be proven that the settlement itself was obtained through fraud, it cannot be used to seek compensation again under the original agreement.
Why did the court determine Chen’s claim of fraud was not valid?
The court noted that the party alleging fraud bears the burden of proof. Chen’s audio recordings and dialogue screenshots only show him repeatedly questioning You after the investment failed; they cannot prove that You provided false information. On the contrary, You not only did not guarantee profits, but also repeatedly warned of risks and advised withdrawal. In addition, the messages about account trading showed Chen placing orders himself in the market, making it difficult to conclude that You had fraudulent intent.
