What looks like a lively debate about the status of cryptocurrencies that are still unregulated in the country is taken side by the Russian Ministry of Justice. Discussions in Russian legal circles has sparked due to a bankruptcy case involving a modest amount of bitcoin. As some say, a crypto is nothing more than “a set of characters”. Others, such as the justice minister, are categorical – cryptocurrency that can’t be anything else but property.
In a Legal Argument, Russian Justice Ministry takes a side which falls under the legal category of “other property,” known as Cryptocurrency as what’s stated to reporters by Russia’s Justice Minister Alexander Konovalov this week.
He also noted that digital coins should not be considered electronic money, at least on this stage with two draft laws on the matter still pending in the State Duna. Challenged to provide a provisional answer to the question about the status of cryptocurrencies was a bankruptcy case involving some bitcoin holdings has recently stirred the Russian legal community. This question split Russian legal experts into two camps as in the absence of firm definitions in the current legislation. On one side are those who think that cryptocurrencies have real value while on the other side, their colleagues who believe that they don’t as if the law doesn’t explicitly say so.
Konovalov’s department has adopted a “consolidated opinion” on the legal nature of cryptocurrencies and it supports the view that they should be defined as property.
“If digital money is not property, its theft would not be considered criminal offense because there would be no object of the crime,” he explained.
“If cryptocurrencies are to develop, additional regulation will be necessary. The main point is to ensure that all this does not grow into financial pyramids,” Konovalov added.
He is convinced that Russia should introduce rigid crypto regulations but they are also aware that the phenomenon is itself a “manifestation of the people’s desire to escape from total dependence.”
Cryptocurrency can be considered a property in accordance with the current Russian legislation of Minister Konovalov’s comments added to the ongoing debate among experts and officials in Moscow. From October last year, the discussion were prompted by a bankruptcy filling. The debtor protested the trustee’s request to include his crypto funds, with less than 0.2 bitcoin (BTC), in his bankruptcy estate during the arbitrage proceedings.
Such move is impossible as the term “cryptocurrency” is not mentioned in the Russia’s Civil Code at all. The Moscow Arbitration Court accepted this position according to his legal representative. It said: “A conclusion can be drawn that cryptocurrency is a certain set of symbols/characters contained in an information system. It cannot be an object of the civil rights.”
But then, an arbitration court of appeals overturned this ruling recognizing cryptocurrency as a valuable property, as reported earlier in May. The decision on the case of the Ninth Arbitration Court of appeals had been published on Thursday.
Cryptocurrency cannot be regarded as anything else but property according to the document quoted by Interfax. Since the current civil law does not contain the notion “other property”, the court had explained that the wildest possible interpretation of property is permissible.
The question on the status of cryptocurrencies will be answered soon by the Russian Federation. In the Duma, two drafts have been filed as the lower house of Russia’s parliament, and the one that focuses on legalizing initial coin offerings will have its first reading on May 22, Tuesday. In order to regulate crypto payments, the second bill is expected to amend the country’s Civil Code. The new legislation will refer to cryptos and tokens as “digital money” and “digital rights”, respectively according to comments made by the Russian Prime Minister Dmitry Medvedev this week. Whether this means that bitcoin will be accepted both as currency and property remains to be seen.