Supreme Court of Victoria confirms Bitcoin is property

Category: Australia, Insolvency & Restructuring
Date: 23 January 2017
Author: Binti Prasad - Genuine People
In an Australian first, the Supreme Court of Victoria has recently confirmed in Blockchain Tech Pty Ltd' [2024] VSC 69 that Bitcoin qualifies as property under Australian law.'  The decision follows the earlier judgment of ASIC v NGS Crypto Pty Ltd (No 3) [2024] FCA 822, where the Federal Court found that the definition of "property" in the Corporations Act 2001 (Cth) is sufficiently broad to encompass cryptocurrency assets, at an interlocutory level. The case involved the question of whether Bitcoin can be the subject of a bailment arrangement, or held on trust.'  This necessitated a consideration of whether an interest in Bitcoin is "property."'  Ultimately, the Court held that cryptocurrency assets such as Bitcoin is property, as it meets the four criteria set out in Lord Wilberforce's classic definition of property in National Provincial Bank v Ainsworth [1965] AC 1175, namely:
  1. Definable '€“ The "thing" is Bitcoin, which is an electronic coin that can be identified by its public key on the blockchain.\
  2. Identifiable by third parties '€“ The public key identifies an address of Bitcoin at that address on the shared public ledger.
  3. Permanence '€“ Bitcoin remain stable at the digital address until there is a transaction involving those Bitcoin.
  4. Alienability '€“ Although a Bitcoin transfer transaction does not involve the "transfer" of a person's interest in the Bitcoin, alienability is not an essential attribute of property.
Ultimately, the Court held that a person's interest in Bitcoin is a chose in action, being a heterogeneous group of rights which do not confer the present possession of a tangible object. Because Bitcoin is intangible, the Court concluded it cannot be the subject of a bailment, but can be held on trust. The landmark decision brings Australia into line with other common law s, and provides greater certainty regarding the remedies available for recovering misappropriated Bitcoin. The judgment is precedent for the recognition of other cryptocurrencies as property.