Thread by @propelforward

#California appellate court affirms summary judgment in favor of @coinbase as to claims for #conversion #breach of contract & negligence; related to #coinbase not supporting #bitcoingold fork for its users; since it's precedent in CA, let's dive in /1

Court ruled that there was no agreement to give Plaintiff #Bitcoingold; there was no "contractual obligation to support or provide services for any particular cryptocurrency." Merger clause barred parol evidence & there was no contractual duty. That's breach of contract /2

Conversion of crypto is a pet issue of mine because it requires the Court to determine that the thing that is allegedly converted (i.e. the civil version of theft) is legally recognized property. Fun Fact- property rights are mostly created by state law. Only 1 state (Wyoming)/3

expressly defines #bitcoin or #crypto as property. The weight of fed & state regulation & law suggests that most #cryptoassets are proeprty, & we all act like its property, but it's an open issue. Even if we assume a #bitcoin is property, there are ~10000 questions about what /4

#bitcoin as property means, and how it should be treated, which implies a variety of things including crim law, the #UCC (paging @Prof_CarlaReyes @Andrea_Tosato) which governs secured lending among other things, and has extremely broad implications for #crypto writ large. /5

So a case that looks at #conversion of #crypto has my attention. Here, the court found no conversion b/c #Coinbase "took no affirmative action" to block Plaintiff's access to the #bitcoingold, & the court rejected the claim that blocking access = asserting control or ownership /6

of that fork. To rule otherwise would "impos[e] a major new duty on all cryptocurrency exchanges...to affirmatively honor every single #bitcoin fork." The court cited BDI, a GA Federal opinion, & declined to impose a "major new absolute tort duty" on exchanges to honor forks /7

According to Archer, the user, not the exchange, has that duty: "There is no requirement that investors keep their coins in exchanges; they can always withdraw the coins to their own private wallets..." There goes the conversion claim... Now, negligence...

Same story- no legal duty, AND "[a] person may not ordinarily recover in tort for the breach of duties that merely restate contractual obligations." Given that plaintiff could not identify a non-contract duty, negligence fails here. /9

What does this mean: A few things. 1. Even tho it's a clickwrap, READ the Terms of Service, & expect to be bound by them. 2. If you think a fork is coming and you want it, don't expect your exchange to support it unless it agreed to do so in those term. /10

So, what about the property issue? While Archer punted , it cites to BDI. BDI is a pretty important opinion (trial level, alas) that says yes we consider #bitcoin to be "specific intangible property" under Georgia law that may be converted. Note the cases cited (Wright!) /11