In the course of libel suit proceedings in the New South Wales (Australia) district court, Judge Judith Gibson permitted crypto use as collateral.
Regarding cryptocurrency, Gibson said “This is a recognized form of investment,” while admitting the volatile nature of the asset. The info was revealed by the Australian Associated Press.
In the context of the defamation case, the NSW court ordered the plaintiff must deposit A$20,000 (~$13,000), in a court managed bank account.
In case the plaintiff lose or withdraw, a portion of the funds would be used to pay the defendant’s legal charges.
Rather than a bank account, the court permitted the plaintiff to utilize their trading account with cryptocurrency exchange.
As defendant’s counsel pointed to volatility of cryptocurrencies, plaintiff accepted to submit reports every month on the value of crypto portfolio.
The courts also necessitated the plaintiff to inform the defendant’s solicitor in case the market value of crypto portfolio falls below A$20,000. Gibson said “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.”
Even though the use of cryptos as collateral is not an attractive use case, it reflects industry accreditation by governments across the globe.
