California Bankruptcy Judge: Bitcoin is property not cash

Regulation | February 23, 2016 By:

During a hearing held last Friday, US Bankruptcy Judge Dennis Montali has ruled that bitcoin is an intangible personal property.

The hearing relates to a suit filed by the trustee of bankrupt bitcoin mining firm HashFast Michael Kasolas against Marc Lowe, a former promoter for the service, seeking to recover 3,000 BTC (approximately $1.3 million) that had been paid by HashFast to Lowe for promoting the service.

Montali acknowledged that although the bankruptcy code “wasn’t written with bitcoin in mind”, the cryptocurrency is an “intangible personal property” rather than a currency. He also said that even though the firm and Lowe might have used bitcoin to conduct a business deal “that doesn’t make them dollars.”

Montali said that he would return to the question of whether, if required, Lowe would transfer the 3,000 BTC or the equivalent dollar amount. The judge indicated that he would issue an order on the decision, which at press time is currently unavailable.