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Anna Battams
Associate
FinTech
An Australian Court has spearheaded the treatment of cryptocurrency as property in relation to financial disputes. In Hague v Cordiner (No. 2) [2020] NSWDC 23, the New South Wales District Court approved the claimant’s cryptocurrency investment account as security for costs.
To recap some basic commercial litigation principles:
In this case, the claimant proposed that his cryptocurrency reserves (which were held by the digital currency exchange, BTC Markets) be treated as the security (i.e. without requiring payment into Court). While this was opposed by the defendant, on the basis that it was a “highly unstable form of investment”, the judge allowed the crypto account as security.
This decision (albeit from a lower Australian Court) is encouraging and gives further strength to the argument that cryptocurrency is indeed property. Further, the Judge took a sensible approach to dealing with the undoubted volatility of digital currency by requiring the claimant to: (1) notify the defendant’s solicitors (within 24 hours) when the balance of the digital reserves dropped below the amount of the security; and (2) provide periodic bank statements to the defendant’s solicitors.
http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWDC/2020/23.html
12 March 2020
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Specialising in Commercial disputes, Banking & financial disputes, Commercial arbitration and Financial regulatory
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