A court in Ohio found that bitcoin is covered ‘property’ under a homeowner’s policy and not ‘money’ and therefore the claim for lost bitcoin was not limited by the money sublimit. The decision was based partly on a recent Internal Revenue Service document that categorised virtual currency such as bitcoin as property for federal tax
With Bitcoin’s popularity and value growing significantly, many wonder how cryptocurrencies will be treated by the South African Revenue Service (SARS) and other regulators.
Bitcoin is one of hundreds of different cryptocurrencies in existence. Cryptocurrencies are unregulated, decentralised digital currencies which can be bought, sold and traded for fiat money or goods and services.
Because of the anonymity associated with Bitcoin and many other cryptocurrencies and their role in illicit transactions on the Dark Net (a hidden part of the internet that is not accessible through normal browsers and search engines), public perception is often suspicious or at least cautious. However, the use of Bitcoin and other cryptocurrencies is
Many creditors require some form of security to be given by their debtors to ensure the payment of a debt. The creditor acquires a right over property of the debtor which may be exercised if the debt is not paid. One of the most common examples is a mortgage bond over immovable property in favour
South African courts have yet to deal with a case involving Bitcoin or other cryptocurrencies. But the fact that cryptocurrencies remain largely unregulated in most jurisdictions does not place cryptocurrency disputes beyond the reach of the courts.
Globally, most litigation has related to insolvency, fraud and breach of contract.
Cryptocurrencies are unregulated in most jurisdictions and their legal nature has not yet been determined by legislation or case law.
Virtual or digital currencies display certain key features of money:
As the use of cryptocurrencies like Bitcoin increases, so will the demand for insurance to protect against the risks associated with them. A number of global Bitcoin storage providers offer their customers insurance for storage vault failure. At least one US insurance group offers Bitcoin holdings insurance as an endorsement to existing crime policies.
Given
The use of and interest in cryptocurrencies like Bitcoin have grown substantially.
In the 24 hours from 1 to 2 June 2015, 130 632 Bitcoin transactions occurred globally with a total value of ZAR 611 321 864.85 (or USD 59 079 000.24 at exchange rates of USD 1 to ZAR 12.21).