It’s become clear that the Insolvency Act, first drafted in 1935, never anticipated a case such as that of Mirror Trading International .
“Be that as it may, the application of Section 32 by the liquidators in relation to claiming bitcoin or the higher value of bitcoin is causing massive resistance and resentment to such claims amongst investors who innocently invested in MTI and who believe they are being unfairly penalised.”Lister cites one example of a client who is prepared to pay in the rand value of bitcoin when it was withdrawn in an amount of R57 000.
“This clearly demonstrates that the section 32 shoe does not fit when it comes to bitcoin. When the Insolvency Act was promulgated in 1935, an intangible, volatile digital … currency bitcoin was not around at the time and not in the eye on the beholder ,” adds Lister. In Ben Janse van Vuuren’s case, this means he would have to repay R21 000 rather than the R97 000 demanded by the liquidators.
“Whilst it is understandable that they may deem the provisions of the Insolvency Act to be unreasonable and unimaginable in the present circumstances, these very same investors would no doubt have been quite prepared to, in the event of a substantial drop in the value of bitcoin, buy bitcoin at a reduced price and restore same to the liquidators.”
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