Russia Sees Cryptocurrency as a Valuable Property

Cryptocurrency Recognized as Valuable Property by Russian Court

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  • Ninth arbitration court recognizes digital currency as a valuable property.
  • This negates a prior ruling from Moscow arbitration court.

Russia: In its ruling on Monday 7th May, the Ninth arbitration court of appeals in Russia has seen digital currency as a valuable property. This ruling nullified an earlier ruling by another court, though Russia does not have any legal framework for digital currencies presently.

According to a local news outlet, the arbitration court ruled that the cryptocurrency of a bankrupt person must be added in the debtor’s bankruptcy estate. The case involves Ilya Tsarkov, a Russian citizen, who filed bankruptcy last year Oct. The court has therefore ordered that his digital currencies be transferred to the trustee, Alexei Leonov, who should be given the private key to Tsarkov’s cryptocurrency wallet soon. Vedomosti stated that Tsarkov holds about 0.2 BTC which presently worth almost $1,885.

Alexei noted that with this ruling:

“The court indirectly recognized the cryptocurrency as property and recognized its value.”

Prior to this ruling, the same had been heard by the Moscow Arbitration Court in February. The Moscow court directed Tsarkov to disclose his crypto holdings after he revealed to the bankruptcy trustee that he had a wallet at Alexei asked the Moscow court to order the transfer of Tsarkov’s digital currencies into the bankruptcy estate, but the court refused his request, stating that digital currency cannot be used to pay creditors since “the laws of the Russian Federation do not recognize cryptocurrency as property.”

However, the Ninth arbitration court with its ruling on Monday nullified the judgment of the Moscow Court. Rapsi, a Russian Legal Information Agency published the court’s explanation:

“Currently Russian legislation does not provide the definition of cryptocurrency and there are no requirements for its circulation. There is no way to tell if it is property, information or a ‘surrogate’…it is impossible to regulate the relations involving cryptocurrency.”

The agency stated that Alexei cited “the position of the European Court of Human Rights on the issue of property and a bankruptcy case in Japan, where a court permitted to sell the debtor’s cryptocurrency.”

He added that:

“The lower court should have taken into account modern economic realities and new information technologies…bad-faith parties could exploit the fact that cryptocurrencies were excluded from bankruptcy estates by converting their assets and thus rendering them inaccessible.”

What do you think about the court’s ruling? Tell us in the comment box.

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