Russian Court Ruling Recognizes Bitcoin as “Valuable Property”

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

In what is being perceived as a landmark judgment, a Russian court has ‎ruled in favor of a petitioner who asked the judge to include the bitcoins held ‎by a bankrupt person in the debtor’s bankruptcy estate.

Significantly, the judgment classifies Bitcoin as a “valuable property,” a strong sign towards ‎the recognition of the virtual asset in Russia‏.‏

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The origins of this dispute traced back to a claim filed to the Ninth ‎Arbitration Court of Appeals by the bankruptcy trustee Alexei Leonov in October ‎‎2017. A lower court had initially directed the bankrupt Ilya Tsarkov to disclose the contents of his ‎Blockchain.info wallet as part of the real estate estimation process.

But at the time, the ‎court rejected the lawyer’s request to involve the bitcoins into the repayment ‎process, citing the absence of practice in selling cryptocurrencies.‎

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Following the failure of Tsarkov to pay the required debt ($285,000) in ‎ordinary assets, the appeal court has overturned the previous judgment and ordered Tsarkov to transfer the digital currency as a valid and legitimate property.‎

“The court indirectly recognized the cryptocurrency as property and recognized its value,” local media quotes ‎ Leonov as saying.‎

While Russian legislation does not provide a final ‎definition of cryptocurrency, this ruling sets a ‎precedent which recognizes the potential use of digital assets in contractual agreements.‎ The final passing of this judgment would mean that Bitcoin shows all the characteristics of a ‎property right.

Russian politicians repeatedly confirmed that it is ‎necessary to draft ‎laws and expand regulatory jurisdiction ‎in this dynamically developing field, while industry ‎participants are concerned about the unwarranted interference ‎of ‎law enforcement authorities in business activities ‎involving the use of ‎blockchain technology.‎

The latest draft law defines cryptocurrencies as “another ‎property of a special ‎kind.” However, it does not yet ‎describe the rules of taxation or ‎mining activities, which ‎can be considered as “an entrepreneurial activity.” ‎

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