united-states civil-law
Can the board of a company gamble on bitcoins without the consent of the shareholders?
<p>Can the board of a company invest in bitcoins without the consent of the shareholders? Is it allowed in privately owned companies as well as publically traded  companies and in what situations can the shareholders sue the company for it? I see people suing company for losing money in stocks, so I am wondering if it applies here.</p>
<p>Assume the country is the United States.</p>

<p>A privately held company can generally pursue any lawful business activity unless it has led its private investors to believe otherwise with its representations.</p>
<p>A publicly held company (i.e. one with shares or bonds traded on a securities exchange, or otherwise marketed to the general public, or having more than 500 investors and more than a certain amount of capital), must essentially disclose to its investors all foreseeable material risks associated with the investment, including the risk of losses in cryptocurrency if it makes material investments in it. Shareholder consent wouldn't be required, but disclosure of this potential investment activity to shareholders (allowing shareholders who are displeased to sell shares in the company to avoid the risk) is required in publicly held companies.</p>

<h2 id="a-company-can-buy-sell-and-hold-cryptocurrency-7nj5">A company can buy, sell and hold cryptocurrency</h2>
<p>Just like they can buy, sell or hold: land, motor vehicles, other companies, mineral rights, pork futures, stationary, computers, office furniture etc.</p>
<p>The obligation on directors to serve the interests of the comply is subject to the “business judgement” rule. That is, they can operate the business and make decisions and not be liable if those decisions turn out bad with the benefit of hindsight.</p>
<p>If there is a legitimate business reason for a business to buy, sell or hold cryptocurrency then that’s what they should do. Legitimate reasons would be if they need to buy or sell goods and services denominated in crypto or if the business actually exists in order to invest in crypto.</p>
