English Court Considers Whether Debt Can Be Paid in Bitcoin

The English court evaluated the payment of a corporate debt with bitcoin on Saturday (18), reported Bitcoin Policy, an initiative that monitors the local ecosystem.

The case exposes the friction between the recognition of cryptocurrencies as property and the enforcement of contractual obligations.

The lawsuit involves a claim from British businessman Hamze Haji Hussain against investor Markus Harald Fix.

The action demands the payment of a balance of 7.8 BTC as reimbursement for joint corporate expenses.

The two men collaborated on foreign trade projects between 2021 and 2023.

The partnerships involved payment settlement businesses in Africa and gold trading in the Gulf region.

Hussain claims to have paid various company expenses with his own fiat money during the partnership period.

Fix allegedly agreed to reimburse half of these costs by sending crypto assets at market value.

The creditor presented old messages to prove the mutual acceptance of this payment format in the contract.

The defendant missed the main hearing and left the court without an official defense to refute the presented facts.

The court responsible for the trial accepted the validity of the claim due to the lack of counterarguments against the process.

However, the legal authority hesitated to issue a payment order based solely on the balance in bitcoin, which could set precedents.

The price of bitcoin experiences sharp fluctuations against the local currency over time in the market, and in the view of the English court, this factor creates a broad financial impact on decisions regarding the exact date of conversion of the disputed amounts.

Old English laws divide personal property into tangible possessions and rights of action over third-party obligations.

The asset falls outside these categories as it does not require a physical form and is not controlled by central entities.

The country's law commission recognizes crypto assets as a new and flexible category of personal property.

Despite this progressive stance, the judge in the case opted to order the conversion of the owed balance into British pounds.

The settlement converted into the state currency frustrates creditors' plans to seek the original asset.

Moreover, the conversion removes the price variation risk assumed by the parties at the time of the commercial agreement.

If a company accepts payment in bitcoin, the interest lies in the possession of the asset itself in question.

Reverting to government currencies strips cryptocurrencies of the financial characteristics sought by entrepreneurs during contract negotiations.

Most global disputes involving crypto assets tend to involve allegations of fraud or theft perpetrated by complex gangs.

This process points to a shift with the organic adoption of cryptocurrencies in the corporate routines of ordinary citizens.

The outcome of this dispute did not set a precedent for the judicial settlement of debts in the direct format of crypto assets. The market anticipates new cases with the potential to compel courts to adapt the rules to the advancement of the economy.

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