Bitcoin Is Property And Not Cash In ‘Clawback’ Action, Bankruptcy Judge Rules

Bitcoin Is Property And Not Cash In ‘Clawback’ Action, Bankruptcy Judge Rules

Bitcoin’s dual role as a commodity and a currency can create financial recovery disputes when a company that pays for services using bitcoin goes bankrupt. A bankruptcy court judge made a ruling on Friday in one such case, stating that the cryptocurrency is not the same as U.S. currency, but making it clear that he wanted the ruling confined to a specific legal framework, according to The Recorder, a California legal and technology newspaper.

Bankruptcy Judge Dennis Montali in the Northern District of California said Friday that in the case of HashFast Technologies, a mining company that sued to recover bitcoin paid to a physician for his promotional services, that bitcoin is “intangible personal property” and not cash. This distinction allows the company’s bankruptcy trustee to recover the property or its value.

A Test Case On ‘Clawback’ Actions

The ruling is seen as a test case in how the cryptocurrency should be treated in “clawback” actions, the recovery of disbursed money.

The judge did not rule on the ownership issue involved

Read more ... source: TheBitcoinNews

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