Australian Judge Allows Cryptocurrency Use as Collateral for Legal Costs

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New South Wales district judge Judith Gibson has allowed the plaintiff in an Australian defamation case to use a cryptocurrency account as security to cover potential legal costs. According to an Australian Associated Press report published by the Wauchope Gazette, the judge described digital currency as a recognized investment vehicle.

The decision came after the court was asked to require the plaintiff to provide collateral to defray the defendant’s legal costs in the event that the plaintiff withdrew or lost the lawsuit. And though the defendant’s attorney suggested that the plaintiff’s cryptocurrency was too volatile to provide the needed security, the judge accepted it as collateral, noting that “this is a recognized form of investment.”

To guard against the volatility, however, she accepted a proposal from the plaintiff that will require him to provide the defendant’s attorney with monthly statements for the account, and notification if its value declines below the $20,000 AUD threshold.

As the judge noted:

“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.”

 

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