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Bitcoin is a legal property, confirmed by the Russian Minister of Justice

The Russian Ministry of Justice launched a fierce debate on the legal status of cryptocurrencies that are still not subject to regulation. The bankruptcy case involving a small amount of Bitcoin has triggered discussions in the Russian legal community. Some people say that cryptocurrency is just "a set of characters." But others, including the Russian Minister of Justice, have firmly stated that, apart from property, cryptocurrency cannot be anything else.

Russian Ministry of Justice chooses side station in a legal debate

The Russian Attorney General Alexander Konovalov told reporters this week that the cryptocurrency belongs to the "other property" legal category. In the case that the two draft laws of the Russian State Duma are still pending, he also pointed out that digital currency should not be considered as electronic money, at least at this stage.

Recently, a bankruptcy case involving some Bitcoin holdings caused anxiety in the Russian legal community, which was questioned as providing an interim answer to questions concerning the status of cryptocurrencies. Because there is no clear definition in the current legislation, this problem has divided Russian legal experts into two camps. On the one hand, it is those who believe that cryptocurrencies have real value. On the other hand, some people think that if the law does not specify, then it should not be so.

Konovalov said that his department has adopted a "comprehensive opinion" on the legal nature of the cryptocurrency and supports the view of defining them as property. He warned: "If the digital currency is not property, then its theft will not be regarded as a crime because there is no object of crime."

"If you want to develop cryptocurrency, you must strengthen supervision. The main purpose is to ensure that all these will not develop into a financial Ponzi scheme," Konovalov added. He is convinced that Russia should introduce strict cryptocurrency laws, but at the same time it also recognizes that this phenomenon itself is "the manifestation of people's desire to escape from complete dependence."

This question will soon be answered by the Russian State Duma

Minister Konovalov’s comments expanded the ongoing debate between Moscow’s experts and officials and they are discussing the possibility of considering cryptocurrency as a property based on Russia’s current legislation. These discussions were triggered after a bankruptcy filing was filed in October last year. In a bankruptcy arbitration process, the debtor protested that the trustee had requested to include less than 0.2 BTC of cryptocurrency funds in his bankruptcy property.

According to his legal representative, such an act is impossible because there is no mention of "cryptocurrency" in the Russian civil code. The Moscow Arbitration Court accepted this position. The court stated that "it can be concluded that cryptocurrency is a set of symbols/characters contained in an information system. It cannot be a target of civil rights."

But then, in early May, an appeals court overturned the ruling and determined that the cryptocurrency was a valuable asset. On Thursday, the Ninth Appeal Court issued a ruling on the case. According to the document cited by Interfax, cryptocurrency cannot be considered as anything other than property. The court explained that since the current civil law does not contain the concept of “other property”, the widest possible interpretation of property is permissible.

The question of the legal status of cryptocurrencies in the Russian Federation will soon be answered. Duma (Russia), the lower house of the Russian parliament, has submitted two drafts, one of which is the legalization of ICO on May 22. The second bill is expected to amend the country’s civil code to regulate cryptocurrency payments. According to comments by Russian Prime Minister Dmitry Medvedev this week, the new legislation will call cryptocurrencies and tokens "digital currency" and "digital rights", respectively. Whether this means that bitcoin will be accepted as money and property remains to be seen.

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