Two recent decisions issued by an Italian Court of First Instance and, subsequently, by the Court of Appeal intervene in the debate around the qualification of cryptocurrencies as an asset or money that may be validly injected into a limited liability company’ s capital.

Both decisions refer to the same question: can a company accept cryptocurrencies as a contribution in kind to the company’ s corporate capital? Both courts answered in the negative, however on different grounds, so leaving room for a more open interpretation once the cryptocurrencies landscape evolves further.

The facts of the dispute are around a corporate capital increase which:

  • the shareholders effected via a contribution in kind consisting of a cryptocurrency; and

  • the notary public refused to register with the Italian Companies Register.

Legal action was brought by the company against the notary’ s refusal, in order to obtain a court decision that would force such registration of the corporate capital increase with the Companies Register.

At the first instance level, the court advocated that the economic value of cryptocurrencies is impossible to assess in a reliable manner and, therefore, cryptocurrencies are not capable of being injected into the corporate capital of a company in the form of a contribution in kind.

On appeal, the court upheld the first instance decision, but laid down a baffling principle, i.e. that cryptocurrencies may not be contributed in kind because they are tantamount to currencies – but currencies with an exchange rate system that is not “as stable and as easily determined as in the case of currencies with legal tender status in other countries (dollars, yen, pounds etc.)”.

The path the courts have taken in these decisions is in need of more clarity. Cryptocurrency and its use by shareholders in a corporate environment will thrive only when courts provide consistent views on cryptocurrencies as goods/services (whose value can be assessed, just as for any other asset) or money (with sufficiently clear and undisputable value). A window on the patterns of disruptive technologies through which business can be done, will need to be further opened.

Contributor: Giovanni Rindi


Raffaele Giarda is the global head of Baker McKenzie's Technology Media & Telecoms Industry Group and co-heads the IPTech and Corporate/M&A practices in the Firm's Italy offices. Raffaele assists domestic and multinational clients in the areas of technology, telecoms, media, M&A, corporate law and commercial contracts. He advises on regulatory matters as well as on wireless networks and services, infrastructures rollout and provision, satellite networks, media platforms, mobile virtual network operators (MVNO), interconnection and access, the Internet of Things (IoT), other internet protocol scenarios, disruptive technologies, Artificial Intelligence (AI) and connected vehicles.