If you are planning to start a crypto business in New Zealand, you may find our blog post useful. This jurisdiction is now seriously considering how to adapt existing legislation to the latest emerging technologies, in particular with regard to cryptocurrency operations. Steps are being made to eliminate uncertainty in the regulation of cryptocurrencies and their underlying systems.
Recently, in the course of a dispute resolution in New Zealand, some aspects of the legal status of cryptocurrency have been considered and the High Court came to interesting conclusions long-awaited by the cryptocurrency service providers.
A dispute over cryptocurrencies in New Zealand
It has been for the first time that the status of cryptocurrency as property was considered in the NZ courts. Similar cases in the UK courts were also considered as precedents. In particular, recently, to address this pressing issue, a panel of UK judges and lawyers has made an important announcement that cryptocurrency assets are legally equivalent to property.
However, for the judges in New Zealand, the issue was still under question. Further, we will take a closer look at the concrete litigation process in New Zealand.
Crypt (conditional name) the cryptocurrency exchange operator. As a result of a serious hacking of the company's servers, about 30 million New Zealand dollars in cryptocurrency were stolen. This led to the company liquidation but at the same time, about 1 million account holders with a positive balance of coins remained, a significant part of which had a "zero value" as a result of the hacking.
Cryptocurrency - property or not?
During the liquidation procedure, the company’s creditors and account holders filed competing claims against the company's assets. If digital currency is property, then traditional New Zealand ownership concepts should be applied to it. The court has considered a number of precedents in the UK on cryptocurrencies and smart contracts, as well as verdicts on several dispute resolution processes in New Zealand, where rulings have indicated that virtual currencies? as well as crypto assets can and should be considered property.
Finally, the High Court ruled that cryptocurrencies are intangible personal property and clearly identifiable value.
The above decision is an essential step in expanding the understanding of cryptocurrency regulation in New Zealand and other countries where virtual currencies have become widespread. If you have any queries on this topic, you can contact our company experts for advice. Qualified legal professionals will provide the necessary legal assistance in registering a cryptocurrency exchanger in Australia, New Zealand or any other jurisdiction of your choice.