The Supreme Court of British Columbia has issued a landmark ruling in a dispute over a Bitcoin loan, highlighting the growing legal recognition of cryptocurrencies. The court ordered defendant Daniel Tambosso to repay $1.2 million to plaintiff Hung Nguyen for a loan of 22 Bitcoin (BTC) taken in September 2021.
In September 2021, Nguyen loaned Tambosso a total of 22 Bitcoin in two transactions facilitated by lawyers. The loan agreement stipulated repayment within 48 hours. However, Tambosso failed to fulfill his obligation, prompting Nguyen to file a lawsuit.
Justice Fitzpatrick’s ruling emphasized the binding nature of the contract, regardless of the success or failure of Tambosso’s venture for which the Bitcoin loan was intended. The judge acknowledged the case’s unique nature, characterizing it as “an old-fashioned cause of action” with a “modern twist” due to the use of Bitcoin.
The Canadian court’s decision adds to a growing trend of legal judgments supporting cryptocurrencies. This indicates wider acceptance and adoption of this asset class within the legal framework. For instance:
Loan Repayment Options in Bankruptcy: A recent bankruptcy case involving Bitcoin mining firm Rhodium Enterprises showcased a court approving loan options in either USD or Bitcoin, highlighting the growing acceptance of cryptocurrency within bankruptcy proceedings.
Landmark US Supreme Court Ruling: In June 2023, the US Supreme Court ruled in favor of cryptocurrency exchange Coinbase, marking the first cryptocurrency-related ruling by the highest court in the US.
Recognizing Crypto Salaries in Dubai: The Dubai Court of First Instance recognized salary payments in cryptocurrency as legitimate under employment contracts, demonstrating a shift in the UAE’s legal approach towards digital assets.
While legal recognition of cryptocurrencies is increasing, authorities remain vigilant in protecting investors. Examples include:
US Denies Dismissal Motion From Kraken: A US federal court rejected crypto exchange Kraken’s attempt to dismiss a lawsuit from the SEC alleging unregistered securities exchange operations.
Hong Kong’s Crackdown on Unlicensed Platforms: Operating an unlicensed virtual asset trading platform (VATP) in Hong Kong has been a criminal offense since June 2024. Several prominent exchanges await full licenses, while others have withdrawn their applications due to this stricter regulatory environment.
The Canadian Bitcoin loan case exemplifies how courts are adapting to the evolving world of cryptocurrencies. While legal recognition is growing, regulatory bodies remain cautious to protect investors. This interplay between legal acceptance and regulatory oversight will likely shape the future of cryptocurrencies within the legal landscape.
