For the first time ever, a Russian court has confirmed bitcoin as an asset in a move that could lead to clarifying the status of crypto in the country.
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Bankruptcy Ruling Provides New Perspective
On Wednesday, August 8th, Moscow’s arbitration court, which considered a bankruptcy case against an individual named Ilya Tsarkov, ruled that 0.2 bitcoin held in his crypto wallet should be listed among his assets, state-run news service RIA Novosti reported.
During the bankruptcy hearing, Tsarkov’s legal representative argued that bitcoin should not be considered an asset because it isn’t legally recognized in the country. The lawyer said that bitcoin, just like other cryptocurrencies, are “information” or “surrogate money banned on the Russian territory.”
However, the plaintiff, Alexei Leonov, insisted that, if cryptocurrencies are not treated as assets, that would create an opportunity for debtors to convert their assets into crypto and avoid repaying their outstanding debts.
The court accepted the latter argument, ruling that cryptocurrencies don’t have to be specifically defined by the law and could be classified as “other assets” without any extra definitions.
“Taking into consideration contemporary economic realities and the high level of development of information technologies, the widest possible definition of ‘other assets’ is acceptable,” ruled the court.
Thanks to the precedent set by the ruling, cryptocurrencies and tokens will now be treated as assets in Russia before any legislation defining the status of crypto is adopted.
Bitcoin Legislation on the Slate
Prior to the ruling, cryptocurrencies and tokens had no legal status in the country whatsoever.
This past May, the State Duma, the lower house of the Russian parliament, adopted a package of three draft laws aimed at bringing regulation into the crypto space in the first reading, which means that the drafts will need to pass the second and third readings, get approved by the upper chamber, the Federation Council, and ultimately signed by the president, in order to be enacted.
The second reading is expected to take place this coming Fall. Although the legislation was expected to introduce a definition of crypto assets, the drafts adopted in the first reading fell short of recognizing cryptocurrencies as a means of payment.
Experts and observers criticized the drafts, warning that, if enacted in its current form, the legislation would make Russia a crypto-unfriendly country.
In addition to failure to recognize cryptocurrencies as a legitimate means of payment or provide a definition of digital money, the preliminarily-adopted legislation stipulated significant restrictions on ICOs.
Where do you stand? How do you think bitcoin should be legally classified? Let us know in the comments below.
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