Blockchain Legal Watch
Australian Judge Legitimizes Crypto Down Under
by
W. Paul Alexander
[New South Wales, AU] February 28, 2019 - In cryptocurrency and blockchain legislation news, a judge on the NSW District Court bench has made a ruling that will resound across the cryptosphere. In a ruling as part of an obscure libel suit, the judge ordered that the Plaintiff place collateral on deposit with the clerk of courts pending the resolution of the matter.
The court ordered the plaintiff to place AU$20,000 worth of collateral in the custody of the clerk. During the proceedings related to this collateral, the matter of whether crypto assets could be used to secure this collateral. In a ruling that can be seen only to help the status of cryptocurrency worldwide, the judge in this case stated:
“This is a recognized form of investment,”
This statement sounds as though it is just a routine yes/no to a question about types of acceptable collateral, but it is so much more than that.
When a judge makes a ruling or a court issues an opinion, each word is carefully thought out, and with good reason. Future courts, attorneys/solicitors, and litigators in general will be able to refer to this statement made by this court should their opposition present an argument against the use of crypto as a "recognized investment form."
Now, what does this actually mean, in practice? While there is no new rule change or law or anything else the actually changes the status of crypto in Australia, it does signify a shift in legal thinking as time goes on and more and more "normies" start using crypto on a much larger scale.
So, as a recognized form of investment, this puts crypto on par with gold, platinum, and other investment-grade elements; but it also means that it is on par with a stamp collection or a physical coin horde.
However, what I found more remarkable about this matter was the fact that the court found itself -- in a rare state of being completely informed about a tech topic -- made it a point to also comment about the volatility of crypto as a store of value and made a special condition regarding the same:
“I can see the desirability of the defendant receiving prompt notification of any drop in the value of the account. These are uncertain financial times.”
Now, in the end, we are not involved in the blockchain industry because we see a great use case for crypto as collateral, but for the court to accept a crypto-denominated account as collateral in this matter goes quite a long way in legitimizing cryptocurrencies, potentially turning on quite a few of those people who otherwise stay away from blockchain altogether because of the rampant scams and frauds that are just about omnipresent in any under-regulated industry.
However, if we look at some of the crypto alternatives to banking, such as Nexo, the entire mechanism behind their "Instant Crypto Credit Lines" uses crypto assets on deposit as collateral for their lending practices, so I guess as a use case, a blockchain built to be a form of universal collateral could be a very interested project.
What would this look like?
Think Crypto-backed bail bonds agencies and pawn shops. Why not?
The Australian case that is the backbone of our story here has already made major news across the Cryptoverse, with many commentators noting that this precedent could be the catalyst behind the judicial use of crypto. You could pay your traffic tickets with BTC; child support with ETH; court fines with LTC. Or maybe some innovating developer out there should start working on a blockchain purposed solely to facilitate judicial transactions. This would be HUGE, given the rulings that are likely just around the corner.
In sum, this means one thing....
.......however you slice it, mass adoption is coming sooner than we think!
Deo Volente,
for
