Australian judge allows crypto usage as collateral

A recent defamation case in New South Wales, Australia, might have a lasting — although positive — consequences on the crypto industry. The case saw the NSW district court judge allow cryptocurrency usage as collateral, thus making it a legitimate investment vehicle.

The judge in question, Judith Gibson, stated that the coin is a recognized form of investment. However, the judge also acknowledged the coin’s volatility, as reported by the local news source.

As for the case itself, the court had ruled that the accusing party has to place 20,000 AUD ($13,000) in a bank account which would be guarded by the court. If the party secedes or loses the case, the funds would be used to pay for the portion of the legal fees of the defendant. Of course, since cryptocurrencies cannot be stored in a bank account, the court has instructed the accusing party to use a crypto exchange account.

Crypto industry’s validity on the rise

Now, since the instability from the legal team of the defendant, the plaintiff will have to provide regular monthly reports regarding the status of the value of the stored coins. Furthermore, the plaintiff will also be obligated to report the account’s value to the defendant’s solicitor, as long as it remains below 20,000 AUD.

The judge said that the defendant might be interested in receiving quick notification if the account’s value happens to drop, especially due to the financial uncertainty.

This use case for the cryptocurrency is, clearly, not one of the most glamorous ones that were discovered so far. However, it shows that the industry’s validity is growing, at least in the eyes of the government. And, if it grows enough in one region, the same is likely to happen elsewhere.