Written by attorneys · grounded in primary & secondary sources — see below
A person or entity engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency.
Sources & Authorities· 24 primary sources
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Cases
Statutes
How it applies
Common Examples
6
Remainder Transfer in Historic Mansion
Shirley conveyed a mansion to Delta Museum while retaining a future interest that she then transferred by deed to Lucas. Lucas later exchanged that remainder interest with an unrelated virtual-currency dealer for cryptocurrency tokens. The exchange gave the dealer the right to the future interest upon expiration of Delta Museum's estate because the remainder could become possessory only after all prior interests ended and could not divest any interest except one left in the transferor.
Lease Obligation Exchange
A landlord transferred leased property to a new owner but remained obligated on an express lease promise that touched and concerned the property. The landlord then exchanged its continuing contractual obligation with a fintech exchanger for virtual currency. The exchanger received the right to any distributions or payments the landlord would have received because the obligation rested on privity of contract and the landlord was not relieved by the tenant.
Put it into practice
Test Yourself
10
Practice Questions5
Federal Rules
Uniform Acts
Common Law
Restatements
Study Supplements
Limited Partnership Interest Swap
A limited partner transferred its transferable interest in a limited partnership to an exchanger in return for virtual currency. The exchanger obtained the right to receive distributions that the limited partner would otherwise have received, although the exchanger acquired no management or information rights beyond those distributions.
General Partnership Distribution Exchange
A partner assigned its transferable interest in a general partnership to an exchanger for cryptocurrency. The exchanger thereby acquired the right to receive distributions to which the partner would otherwise have been entitled, while the partner retained all other partner rights and duties.
Real Property Transfer by Operation of Law
After a tax sale transferred real property by operation of law, the former owner exchanged any remaining reversionary interest with a virtual-currency exchanger. The exchanger received the future interest that passed without a deed because the transfer by operation of law vested title directly in the exchanger as successor.
Mortgage Covenant Exchange
A mortgagor transferred mortgaged property to a buyer but remained personally liable on the mortgage covenants. The mortgagor then exchanged that personal liability with an exchanger for virtual currency. The exchanger stepped into the position of the original transferor and remained liable on the covenants to the extent the liability existed before the property transfer.
Common questions
Frequently Asked
1
What conduct makes a person or entity an exchanger under fintech regulations?+
Engaging as a business in the exchange of virtual currency for real currency, funds, or other virtual currency qualifies a person or entity as an exchanger. Selling tokens on one's own account can satisfy the business-engagement element.
Supporting sources
Real PropertyOwnership of real property · Special problemsUBEIntermediate