Moscow City Arbitration Court completed Ilya Tsarkov’s bankruptcy case, which created a precedent of recognizing cryptocurrency as a type of property in Russian judicial practice.
Back in May, the Ninth Appellate Commercial Court in Moscow held that Ilya Tsarkov’s cryptocurrency savings (0.2 BTC), which were kept in his crypto wallet, were to be included into his debtor’s insolvency estate. In doing so, the Russian court determined the legal status of cryptocurrency through recognizing digital assets as property.
The debtor, in turn, was arguing that that cryptocurrency could not be subject to civil rights until the official establishment of its legal status within the Russian law. The defense was appealing to the definition of cryptocurrencies formulated by the Bank of Russia, which classified digital currencies as “surrogate money prohibited from circulation in Russia”. Tsarkov’s attorney was also claiming that “cryptocurrency is not recognized by the state” and may only be regarded as information, not property.
The plaintiff, however, insisted that cryptocurrency should be included into the debtor’s insolvency estate along with other property items.
“If excluded from insolvency estate, it will set a precedent fraught with asset outflow in future,” – the asset administrator added.
As noted by the Appellate Court, there is no exhaustive list of proprietary items in the Civil Code of the Russian Federation, whereas personal belongings, cash, certified securities and other property are defined as such by the law. At the same time, the “other property” category is not precisely defined and thus allows for “may be interpreted on the widest possible scale, given the contemporary economic realities and the level of information technology development”. Thus, cryptocurrency may be recognized as other property, the court ruling reads.
As reported earlier, back in June, the Bank of Russia and the Ministry of Finance had finalized the joint draft law on mining and cryptocurrencies.
It is also worth noting in this context, that in accordance with the recent survey, only 44% of Russians are familiar with the notion of cryptocurrencies itself.