Again with the cryptocurrencies. We are definitely in unchartered territory when it comes to the currency itself, and even the technology in many ways. Recently, a Dutch court has ruled in favor of a petitioner who was owed 0.591 BTC by a private company. Significantly, the judge classifies Bitcoin as a “transferable value”. Which definitely points towards the mainstream adoption of cryptocurrencies. I mean, more governments and regulators need to get on board with cryptocurrency because they’re not going away. It’s an interesting phenomenon. Governments and regulators need to be prepared to be dealing with this for years to come.
The petition was filed in a Dutch court by JW de Vries on February 2, 2018, against Koinz Trading BV. Koinz Trading BV is a private company who was earlier ordered by a lower court to pay the mining proceeds of 0.591 BTC owed to de Vries or risk paying a fine of 10,000 euros. Following the failure to pay the amount owning in BTC, the court has now ordered that either the company pays the amount owed, or they will be declared bankrupt. It’s interesting to me that a court can declare a company bankrupt. I mean, I understand, from a bureaucratic perspective how this could work, but I don’t understand logistically how a court can do that. Or is it just me?
The court judgment states:
Bitcoin exists, according to the court, from a unique, digitally encrypted series of numbers and letters stored on the hard drive of the right-holder’s computer. Bitcoin is ‘delivered’ by sending bitcoins from one wallet to another wallet. Bitcoins are stand-alone value files, which are delivered directly to the payee by the payer in the event of a payment. It follows that a bitcoin represents a value and is transferable. In the court’s view, it thus shows characteristics of a property right. A claim for payment in Bitcoin is, therefore, to be regarded as a claim that qualifies for verification.
Why was this the court’s decision? The court found that there was an undisputed contract between the company and de Vries. This was because the undertaking was taken in Bitcoin, the amount should also be paid in Bitcoin. The court then qualified this legal relationship as a civil obligation to pay. The court took note of article 1, 2, 4, 6 and 14 of the Bankruptcy Act and commented the following:
It is undisputed that it is clear that the claim that the applicant has seized has not been paid by the plaintiff. At the hearing, the applicant demonstrated the existence of several (aid) claims. From the documents submitted by the applicant, it appears that several persons have claims on the vested party that see the payment of Bitcoin or on claims for non-fulfillment of obligations under an agreement, with penalties attached in some cases. At the hearing, therefore, it appeared briefly that the applicant had a right of action, as well as facts and circumstances, which show that the applicant is in the position of having ceased to pay.
While this ruling might not be extremely significant in terms of monetary outcomes, it is significant in how it will be viewed in future rulings when it comes to cryptocurrencies. Which means, this case is precedent-setting and could have big implications down the road.