This is a guest post by Drew Hinkes, an attorney at Berger Singerman. Drew is also frequently published and cited for his work on IT and technology-related issues, including virtual currencies, smart contracts, distributed ledger-based technologies, computer data security/breaches, and technology regulation.
Tokyo District Court Judge Masumi Kurachi recently rejected a claim for relief brought by a Kyoto man against the Mt. Gox bankruptcy receiver for bitcoin lost as a result of Mt. Gox’s collapse. In his ruling, Kurachi opined that bitcoin is “not subject to ownership.”
The court ruled that Japanese law allows only for proprietorship of “tangible entities that occupy space and which allow for exclusive control over them.” Since transactions of bitcoin require the involvement of a third party, exclusive control over bitcoins was not possible. Although the ruling seems dangerously misguided, it will likely be relegated to its own specific facts and not govern future disputes over bitcoin ownership.
Why This Opinion Seems Dangerous:
Taking the court’s conclusions about bitcoin at face value could create problematic results. Many assets, including stocks and bonds, transact through third parties.