Key Takeaways
- The Supreme Court of Victoria ruled that Bitcoin constitutes 'property' under Australian law.
- This decision aligns Australia with other common law jurisdictions that recognize cryptocurrency as a proprietary interest.
- The ruling provides a legal foundation for the treatment of digital assets in commercial disputes and insolvency proceedings.
- Bitcoin can be recovered as company property under section 483(1) of the Corporations Act 2001.
- The decision enhances the legal clarity for investors and businesses dealing with digital currencies.
Introduction
In a defining moment for digital asset law in Australia, the Supreme Court of Victoria ruled in Re Blockchain Tech Pty Ltd [2024] VSC 690 that Bitcoin constitutes “property” under Australian law. This landmark decision not only brings Australia in line with other common law jurisdictions that have recognised cryptocurrency as a proprietary interest but also provides a robust legal foundation for the treatment of digital assets in commercial disputes, insolvency proceedings, and asset recovery actions.
The ruling clarifies how cryptocurrencies are to be treated in the eyes of the law, offering greater certainty to investors, liquidators, and commercial entities engaging with blockchain technology. It represents a shift towards integrating technological advancements into established legal frameworks and affirms that intangible digital assets like Bitcoin can be subject to proprietary claims and legal remedies.
Background
The case originated from an application made by the liquidator of Blockchain Tech Pty Ltd, a company undergoing external administration. The liquidator sought court orders under section 483(1) of the Corporations Act 2001 (Cth) to recover property that was alleged to belong to the company—namely, 36 Bitcoin.
The first defendant had received the Bitcoin through a series of transactions and allegedly held them under a bailment arrangement. A further 25 Bitcoin were claimed to have been transferred to a cryptocurrency exchange to provide working capital for the company but were allegedly misappropriated. The Court was therefore tasked with determining whether these digital assets could be recovered as property of the company.
Key Legal Issues and Questions for the Court
The Supreme Court of Victoria was required to determine several key legal issues concerning the nature of Bitcoin and the powers of liquidators under Australian corporate and property law.
- Recognition of Bitcoin as Property: The primary question was whether Bitcoin meets the established legal definition of property in common law and equity. The Court examined whether the intangible, decentralised, and digital characteristics of Bitcoin preclude it from being classified as property.
- Applicability of Bailment and Trust Principles: The Court considered whether Bitcoin can be the subject of a bailment or trust arrangement. This required analysis of whether possession and control of Bitcoin could give rise to legal obligations equivalent to those imposed by traditional bailment or fiduciary relationships.
- Recovery of Property under s 483(1) of the Corporations Act 2001: The Court assessed whether Bitcoin, as company property, was capable of being recovered by the liquidator under section 483(1). This involved interpreting the scope of the liquidator’s statutory powers and whether those powers extended to digital assets such as cryptocurrency.
- Compatibility with Traditional Doctrines: The Court addressed how the unique nature of blockchain assets interacts with existing legal doctrines, such as chose in action, and whether these frameworks are adequate for resolving disputes involving digital currencies.
Case Authorities and Cited Precedents
Justice Attiwill relied on various precedents and legal principles in reaching his conclusion:
- National Provincial Bank Ltd v Ainsworth [1965] AC 1175 — set out the common law criteria for property: definability, identifiability by third parties, capability of assumption, and permanence.
Link: Full Case
- Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 — the High Court of Australia confirmed and applied the Ainsworth property test in the Australian legal context.
Link: Full Case
- AA v Persons Unknown [2019] EWHC 3556 (Comm) — the English High Court held that crypto assets are capable of being property under English law.
Link: Full Case
- Ruscoe v Cryptopia Ltd (in liq) [2020] NZHC 728 — New Zealand High Court found that cryptocurrencies can be subject to trust relationships.
Link: Full Case
- Quoine Pte Ltd v B2C2 Ltd [2020] SGCA(I) 2 — the Singapore Court of Appeal confirmed the proprietary nature of digital tokens.
Link: Full Case
Court’s Findings
Justice Attiwill held that Bitcoin meets the common law definition of property and is best classified as a form of intangible personal property—a “chose in action.” Applying the Ainsworth criteria, the Court found that:
- Definability and Identifiability: Bitcoin can be identified by its location on the blockchain, associated with unique public and private keys.
- Recognition by Third Parties: Transactions are publicly recorded, and ownership is acknowledged in the digital ledger.
- Capability of Assumption: Bitcoin can be transferred and controlled by third parties.
- Permanence or Stability: Bitcoin remains at a specific digital address until intentionally transferred.
Justice Attiwill further rejected the argument that Bitcoin was merely information. He noted that possession and control of private keys afford the holder real, exclusive rights of control—akin to traditional forms of property.
Having established Bitcoin’s proprietary status, the Court concluded that the digital assets held by the defendant were recoverable under section 483(1) of the Corporations Act 2001, thereby granting the liquidator’s application.
Legal Implications and Precedent Summary
The decision in Re Blockchain Tech Pty Ltd has wide-reaching implications for how digital assets are treated under Australian law. Most notably, it affirms that cryptocurrencies such as Bitcoin are legally recognised as property. This means they can form part of a deceased estate, be held on trust, or be subject to legal recovery actions—much like traditional forms of property.
For insolvency practitioners, this decision provides clarity and authority to pursue digital assets as part of a company’s asset pool during liquidation or external administration. It offers greater assurance that such assets fall within the remit of statutory recovery powers.
From a commercial perspective, the ruling allows businesses that transact in digital currencies to structure contractual arrangements and asset management practices with greater confidence in their enforceability. It also places Australia in alignment with other leading common law jurisdictions that have already recognised the proprietary status of cryptocurrencies, thereby enhancing the credibility and coherence of Australian law in the global digital economy.
Conclusion and Call to Action
The Supreme Court of Victoria’s decision in Re Blockchain Tech Pty Ltd is a legal milestone for cryptocurrency in Australia. By recognising Bitcoin as property, the Court has resolved a long-standing ambiguity and strengthened the enforceability of legal rights in the digital asset space.
For investors, businesses, and insolvency professionals, this decision offers much-needed legal clarity. At Pentana Stanton Lawyers, our legal practitioners can provide expert advice on digital asset disputes, asset protection, and insolvency law.
Contact our experienced team today to safeguard your cryptocurrency interests and navigate this evolving area of law with confidence.
