In a hallmark case for the cryptocurrency, a Dutch court has ruled in favor of a man suing a private company for 0.591 BTC owed to him. The decision represents far more than the fractional amount of bitcoin in question, but an overall acknowledgment of the digital currency as a legitimate store and transfer of value that cannot be ignored by the government.
Initial petition ignored
As initially ruled by the Dutch court to which the plea was taken, Koinz Trading BV was ordered to pay the amount. At the time, the ruling was that failure to meet the court order would hold a potential penalty of 10,000 euros.
Nonetheless, the due amount was not paid to the plaintiff, and the court subsequently imposed a stricter ultimatum on the company: Should the 0.591 not be settled, Koinz Trading BV would be declared bankrupt.
Bitcoin mining involves solving complex mathematical equations with a computer or specialized mining machine. Although the exercise is free for anyone to take part in, the process consumes enormous amounts of energy, which has resulted in a mining ban in individual countries.
Legal Obligation to Pay
As far as the Dutch court was concerned, the agreement entered into by de Vries and Koinz Trading BV was legally binding, despite the terms being centered around bitcoin, the de facto digital currency not yet lawfully accepted by the vast majority of governments worldwide.
“Bitcoin represents a value and is transferable,” said the court. “In the court’s view, it thus shows characteristics of a property right. A claim for payment in Bitcoin is therefore to be regarded as a claim that qualifies for verification.”
In addition, the court made mention of the Dutch Bankruptcy Act, explicitly highlighting articles 1, 2, 4, 6 and 14 thereof.
“From the documents submitted by the applicant, it appears that several persons have claims on the vested party that see the payment of Bitcoin or on claims for non-fulfillment of obligations under an agreement, with penalties attached in some cases,” the court continued.
“At the hearing, therefore, it appeared briefly that the applicant had a right of action, as well as facts and circumstances, which show that the applicant is in the position of having ceased to pay.”
It is unclear at this stage whether Koinz Trading BV intends to settle the outstanding amount after failing to honor the initial agreement. In any case, bankruptcy is a steep alternative to recompensing the 0.591 bitcoin in question.
Implications for cryptocurrency
Regardless, the more significant impact for digital currencies has been noted worldwide. The ruling suggests a gradual acceptance of cryptocurrency on the part of governments, yet progression remains slow.
The recent G20 summit discussed the implication of cryptocurrencies for the banking and the financial sector at large, with the final ruling being that financial instrument was not a threat. With that said, many public institutions remain a long way off from regulation and the widespread acceptance of bitcoin and its peers.