As part of the defamation case, the NSW court stated the accusing party must place $20,000 AUD, or approximately $13,000 USD, in a bank account guarded by the courts. Should the accusing party lose or secede, the funds would pay for a portion of the defendant’s legal fees.
As part of a defamation case in front of the New South Wales, or NSW district court, Judge Judith Gibson allowed cryptocurrency usage as collateral.
“This is a recognized form of investment,” Gibson said of cryptocurrency, also acknowledging its volatility, according to a brief from the Australian Associated Press.
The plaintiff vies for crypto usage
Instead of a bank account, the court allowed the plaintiff to use their cryptocurrency exchange account.
The account requires monitoring
Given concerns of instability from the defendant’s legal team, the plaintiff agreed to provide reports each month on the status of the crypto account’s value.
The courts also required the plaintiff to notify the defendant’s solicitor if the crypto account’s value falls south of $20,000 AUD.
“I can see the desirability of the defendant receiving prompt notification of any drop in the value of the account”, Gibson said. “These are uncertain financial times.”
Cointelegraph reached out to the court for additional details, but received no response as of press time. This article will be updated should we receive a response.
Although cryptocurrency usage as collateral is not the most glamorous use case, it shows growing industry validity in the eyes of governments worldwide.
Traditional Financial Exchanges Oppose UK Crypto Derivatives Ban for Retail Investors
The World Federation of Exchanges (WFE) has asked UK regulator Financial Conduct Authority (FCA) not to ban the sale of crypto derivatives to retail investors.
A proposed ban would envelop regulated exchanges and CCPs who operate under stringent regulations to provide pre- and post-trade risk management standards that are designed tot foster safe and efficient markets, the group said.
The London-based organization includes major regulated trading platforms for crypto futures and options, including CBOE, CME Group and national exchanges.
WFE’s comment comes in response to a FCA’s consultation paper stating “retail consumers can not reliably the value and risks of crypto derivatives and exchange-traded products.”
The draft paper came out in July and its final version, which may result in a ban on derivatives trading for retail investors, will be announced in 2020.
In the document, the FCA said retail consumers are not ready to trade derivatives, such as futures and options on crypto exchanges, due to market abuse, financial crime, extreme volatility and a lack of understanding in the new asset class.
WFE CEO Nandini Sukumar said: “We ask that authorities, including the FCA, chart the right regulatory course to allow the market to flourish and benefit its consumers even as we understand that it’s a balancing act.”
However, Sukumar said that the WFE did support the regulator’s desire to better protect vulnerable consumers.
FCA’s ban draws a stark contrast with the U.S. financial watchdog’s response to crypto derivative trading. This week, the Commodity Futures Trading Commission (CFTC) has ruled ether, the second-largest cryptocurrency by market cap, is a commodity.
“We’ve been very clear on bitcoin: bitcoin is a commodity. We haven’t said anything about ether – until now”, Tarbert said. “It is my view as chairman of the CFTC that ether is a commodity.”