Have you ever received an email that is so fascinating that you have to read it out loud to make sure you that you read it correctly?
I received one of those several days ago.
The email asked the following question:
“This past summer I purchased [factory equipment] in [Country X] with Bitcoin. I never received the equipment and [the supplier] won’t respond to my messages. Is it possible to file a lawsuit against [the supplier] even if I used bitcoin?
Wow.
I had to re-read the email several times to make sure I understood what I was reading.
I have heard of people buying all kinds of things with Bitcoin, mainly consumer goods and even trips to space.
But this was the first time I learned of Bitcoin being used as a payment method in a major international business transaction.
And it’s certainly the first time I read anything about anyone contemplating a lawsuit based on a failed bitcoin transaction.
My mind raced with all the implications behind the question, i.e. “Is it possible to file a lawsuit against [the supplier] even if I used bitcoin?”
I could think of only more questions:
- Why, for example, did this person use bitcoin to make the purchase instead of using a conventional payment method?
- Is bitcoin considered legal currency in the U.S.? How about in other countries?
- Can one sue for breach of contract where payment was made using bitcoin?
- Could a court seize the defendant’s bitcoin account? How is “bitcoin jurisdiction” determined?
Bitcoin Basics.
Let me back up a bit to explain what bitcoin is for readers who may not be familiar with it.
In the most basic terms, Bitcoin is a decentralized digital currency that enables instant payments to anyone, anywhere in the world.
It uses peer-to-peer technology to manage transactions and issue money with near real-time confirmation. The price of ฿1 bitcoin is currently near the $1000 mark.
Bitcoin Gaining International Legitimacy
Getting back to the question whether a bitcoin-based lawsuit is possible, it’s my impression is that a cause of action would be viable, at least here in the United States–putting any jurisdictional issues aside for the moment.
A recent SEC decision is guiding and supports the proposition that bitcoin is a legitimate currency. In SEC v. Shavers, the court held that bitcoin was a “form of money” subject to regulation by the Securities and Exchange Commission. (Civ. No. 13-416 E.D. Tex. Aug. 6, 2013).
While the U.S. is just beginning to address the issue, other
Source: http://feeds.lexblog.com/~r/InternationalBusinessLawAdvisor/~3/1ffCgVyMiKM/
