2013-11-07 WSJ: Judge Orders CoinLab to Pay Up…in Bitcoin

[elux]

5:56 pm Nov 7, 2013 | REGULATORY

Judge Orders CoinLab to Pay Up…in Bitcoin


A well-known bitcoin company has been ordered by a judge to produce and deliver the virtual currency to a New York investment firm that accused it of reneging on their contractual agreement.

Judge Robert W. Sweet of U.S. district court for the southern district of New York barred CoinLab Inc. from delivering the virtual currency to any other parties before it meets its obligation to Bitvestment LLC.

The dispute underscores the frenzy surrounding bitcoin, a virtual currency that isn’t backed by a central bank. It is produced electronically using computers, and enthusiasts trade it on exchanges and privately. Some merchants are now accepting bitcoin as a method of payment.

Bitvestment sued CoinLab last week for breach of contract, contending that the Bainbridge, Wash.-based company isn’t living up to its obligation to provide 8,000 bitcoin under an August arrangement between the two firms.
One bitcoin was worth $295 Thursday afternoon on the volatile Tokyo-based Mt. Gox exchange on Thursday, giving the disputed 8,000 bitcoin a value of $2.36 million.

The process of generating bicoin is known in the industry as “mining.”

CoinLab Chief Executive Peter Vessenes has said that the lawsuit was a contributing factor in last week’s bankruptcy filing of CoinLab’s mining unit, which is called Alydian Inc.
Mr. Vessenes is also chairman of the Bitcoin Foundation, a nonprofit trade group that promotes the virtual currency.

Mr. Vessenes noted in an email on Thursday that CoinLab itself has no mining operations, but “of course we will comply (with the judge’s order) as well as we’re able.” It isn’t clear if Alydian is still generating bitcoin while it is under bankruptcy protection.

He also said that CoinLab was pleased that the judge denied other requests from BitVestment, such as seeking certain financial data from officers of CoinLab and Alydian.

“We continue to treat this as a simple contract dispute case, and feel confident on the merits of the case,” Mr. Vessenes said.

Bryan Reyhani, a lawyer representing Bitvestment in the case, declined to comment on the judge’s ruling.

http://blogs.wsj.com/moneybeat/2013/11/07/judge-orders-coinlab-to-pay-up-in-bitcoin/

[FeedbackLoop]

Excellent news to everyone scammed in Bitcoins and Bitcoin itself!   

[420]

CoinLab was the company set to take over US operations from mt. gox correct? which then subsequently said they filed a lawsuit against mt gox

[marcus_of_augustus]

This is a really truly bizarre ruling ... it might make Bitcoin a preferred settlement for legal disputes (involving bitcoins), i.e legal tender.

There are long running disputes over gold loans and gold contracts to be specifcially settled in gold species. These went all the way to the Supreme Court  because they involved the constitutionality of fiat currency and every time since 1913 the Federal Reserve Dollars have been ruled the ultimate settlement medium for legal debts ... it says it right on front of the note "For all debts public and private", it is the essence of legal tender.

Bitcoin is now legal tender in the USA?

Edit: on further reading it actually is surrounding stopping CoinLab from shifting the bitcoins to another company before settling up with Bitvestment ... so not so profound maybe. Vessness does seem to get himself into more than your usual number of legal disputes.

[Foxpup]

This is a really truly bizarre ruling ... it might make Bitcoin a preferred settlement for legal disputes (involving bitcoins), i.e legal tender.

It's not bizarre at all. The preferred settlement for a legal dispute over property (including bitcoins) is for the property in dispute to be delivered to its rightful owner. If the contract stipulates payment in bitcoins, then those bitcoins are the legal property of the payee, and the court can and will order the debtor to hand them over. Only if that fails will the court award damages in legal tender.

[cunicula]

This Vessness guy... probably works as a patent troll on his days off.

[User705]

5:56 pm Nov 7, 2013 | REGULATORY

Judge Orders CoinLab to Pay Up…in Bitcoin


A well-known bitcoin company has been ordered by a judge to produce and deliver the virtual currency to a New York investment firm that accused it of reneging on their contractual agreement.

Judge Robert W. Sweet of U.S. district court for the southern district of New York barred CoinLab Inc. from delivering the virtual currency to any other parties before it meets its obligation to Bitvestment LLC.

The dispute underscores the frenzy surrounding bitcoin, a virtual currency that isn’t backed by a central bank. It is produced electronically using computers, and enthusiasts trade it on exchanges and privately. Some merchants are now accepting bitcoin as a method of payment.

Bitvestment sued CoinLab last week for breach of contract, contending that the Bainbridge, Wash.-based company isn’t living up to its obligation to provide 8,000 bitcoin under an August arrangement between the two firms.
One bitcoin was worth $295 Thursday afternoon on the volatile Tokyo-based Mt. Gox exchange on Thursday, giving the disputed 8,000 bitcoin a value of $2.36 million.

The process of generating bicoin is known in the industry as “mining.”

CoinLab Chief Executive Peter Vessenes has said that the lawsuit was a contributing factor in last week’s bankruptcy filing of CoinLab’s mining unit, which is called Alydian Inc.
Mr. Vessenes is also chairman of the Bitcoin Foundation, a nonprofit trade group that promotes the virtual currency.

Mr. Vessenes noted in an email on Thursday that CoinLab itself has no mining operations, but “of course we will comply (with the judge’s order) as well as we’re able.” It isn’t clear if Alydian is still generating bitcoin while it is under bankruptcy protection.

He also said that CoinLab was pleased that the judge denied other requests from BitVestment, such as seeking certain financial data from officers of CoinLab and Alydian.

“We continue to treat this as a simple contract dispute case, and feel confident on the merits of the case,” Mr. Vessenes said.

Bryan Reyhani, a lawyer representing Bitvestment in the case, declined to comment on the judge’s ruling.

http://blogs.wsj.com/moneybeat/2013/11/07/judge-orders-coinlab-to-pay-up-in-bitcoin/

Wonder why this isn't generating a bigger discussion?  Is this the 1st test at an attempt to legally seize bitcoin?

[FeedbackLoop]

Any news on this historical ruling?

[patricktim]

Does CoinLab have enough to Pay ?

[alani123]

Does CoinLab have enough to Pay ?

What makes you think they would not?

[User705]

The more interesting issue is what will happen if they have them but simply refuse to transfer them.