Australian Court Accepts Cryptocurrency Exchange Account as Security for Legal Costs
A court in Australia has agreed that a crypto exchange account can be used as security for potential legal expenses. Acknowledging the volatile nature of decentralized digital assets, the judge nevertheless conceded that cryptocurrency is a recognized form of investment in the current uncertain financial times.
$20,000 Worth of Crypto Allowed to Cover Legal Costs
Hearing a defamation claim, the New South Wales District Court was recently asked by the defendant to order the plaintiff to put $20,000 AUD (approx. $13,000 USD) into a court-controlled bank account, the Australian Associated Press reported Thursday. The money is supposed to cover some of the defendant’s expected legal costs if the plaintiff loses the case or decides to withdraw it altogether.
The court accepted the request allowing a cryptocurrency exchange account owned by the plaintiff to be used as security for the potential legal expenses, but a lawyer for the defendant remarked that although the account might be evaluated in Australian dollars, the digital money in it represented a highly unstable investment.
Judge Judith Gibson stated she was prepared to accept that cryptocurrency was volatile. “However, this is a recognized form of investment,” she pointed out in a judgment issued earlier this week. Trying to alleviate the expressed concerns regarding the assets, she also accepted the plaintiff’s undertaking to provide the defendant’s solicitor with monthly statements for the crypto account.
“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,” Judge Gibson added. The plaintiff will be obliged to also alert the defendant’s lawyer if the account’s crypto balance falls below the equivalent of $20,000 AUD. The report notes that breaches of such undertakings can lead to the defaulting party being found in contempt of court.
Australia’s Proactive Regulatory Stance Creates Clarity for Crypto Companies
Compared to other developed nations around the world, Australia has advanced further in the efforts to regulate the crypto and blockchain space. Since 2017, cryptocurrencies similar to bitcoin in their main characteristics have been treated as property in the country and are subject to capital gains tax.
Austrac, the analysis center responsible for financial intelligence gathering and anti-money laundering policies, has been successfully working in that direction for almost two years. As news.Bitcoin.com reported this month, the regulator has already registered over 300 cryptocurrency exchanges. Global digital asset trading platforms have also demonstrated interest in the market. In January, U.S.-based exchange Kraken announced the acquisition of Bit Trade, Australia’s oldest operating exchange.
Besides trading, other related services such as crypto payments have also enjoyed growing popularity on the continent over the past few years, thanks to platforms like Travelbybit, Hula and the Bitcoin Cash Register. Retail spending reports published towards the end of last year showed that bitcoin cash (BCH) consistently captures the largest portion of these expenditures, with bitcoin core (BTC) and Binance coin (BNB) being among the other popular options. In early January, the leading global exchange donated $1 million in BNB to support the Australian bushfire relief efforts.
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