A Tokyo District court has dismissed a lawsuit by a former MtGox customer seeking repayment of his bitcoins, arguing that they are not “subject to ownership” claims.
The ruling comes at a time of revisitation of the MtGox saga and the missing 850,000 bitcoins. On Saturday, Tokyo police arrested former CEO Mark Karpeles on suspicion that he had falsified account balances and funneled customer funds for personal use to his other businesses. The investigation may eventually shed light on how the 850,000 coins disappeared.
A resident of Kyoto claimed to have 458 bitcoins, worth ¥31 million, on the exchange at the time of its collapse, according to The Japan Times. While most former customers have relied on the ongoing liquidation proceedings to recover a portion of their funds, the resident sought to recover his full balance through a lawsuit. Several other customers have reportedly tried to do the same.
FBS Receives Best Forex Broker Europe 2019 Award by The European MagazineGo to article >>
Presiding Judge Masumi Kurachi ruled, however, that the Civil Code for property rights applies only to tangible assets that occupy space and allow for exclusive control over them. Bitcoin does not qualify, he argued, because transactions between users require the involvement of a third party.
Perhaps a more intuitive argument would be the fact that by their very definition, bitcoins do not carry legal ‘ownership’. Whoever has access to them, i.e. their private keys, controls them and can spend them.
The notion of partial control, such as multisignature configurations where multiple keys are stored with several parties, has been a subject of debate when discussing regulation. The question has been posed whether a business partially controlling the private keys to client funds is subject to licensing requirements.