Entering into a settlement agreement where one party makes a payment denominated in cryptocurrency raises a host of questions that a careful lawyer must evaluate.
июля 31, 2024 at 09:51 AM
By Michael Mix, Morrison Cohen | июля 31, 2024 at 09:51 AM
Disputes relating to digital assets are already common, and will only increase in frequency as the popularity of this exciting new sector continues to grow. Many such disputes are settled before or during the pendency of formal litigation, and a crucial element of a typical settlement agreement in most disputes is the payment of a negotiated amount from one party to another. Because many digital assets industry participants are comfortable transacting in cryptocurrency, they may request that a settlement agreement provide for the settlement payment to be made in cryptocurrency rather than fiat currency. Since legal practitioners may not be used to such a request, this article provides a non-exhaustive roadmap of topics to consider when settling a dispute for a cryptocurrency payment.
Make Sure the Wallet Address Is Correct. While this advice may seem obvious, a simple internet search will reveal numerous stories and requests for advice by individuals who mistakenly provided the wrong wallet address for a cryptocurrency transaction. Because blockchain transactions are irreversible, recourse for that mistake is extremely limited. Misdirected payments can be accidentally sent to someone else’s wallet, or even to a “burn address” where the value is permanently destroyed.
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