The court in the Russian Federation for the first time qualified cryptocurrency as property

On May 7, the Ninth Arbitration Court of Appeal of Moscow issued an interesting decision, upholding the bankruptcy petition. In the framework of this case, the debtor was obliged to transfer access to his crypto wallet to the creditor, writes RBC. The contents of the wallet should be implemented (transferred to fiat) in the near future.

Earlier, Russian courts did not recognize cryptocurrency as property, nor was it qualified as money. The judges referred to the lack of the necessary regulatory framework for such a decision. In particular, two years ago, the city court of St. Petersburg ruled that "virtual money is not an object of the material world and does not exist in a physically tangible form."

Making the first decision, the court refused to consider cryptocurrency property, saying that it represents only “a certain set of symbols of signs”, arising “from the Internet”. And since cryptocurrency does not have a single control center, and users are anonymous, therefore, it cannot be established whether it belongs to a specific individual. The court then argued that crypto-money is distinguished from real money in digital form by the fact that in the first case you need to deposit ordinary fiat money into an electronic account, but in the second case, bitcoin and altcoins initially exist in electronic form.

The plaintiff disputed this statement, saying that the cryptocurrency belongs to the debtor and no one disputes this. Moreover, the defendant in the lawsuit admits the fact of owning a crypto wallet. The Court of Appeal took the side of the plaintiff and recognized the cryptocurrency as property. “To abolish the determination completely and resolve the issue on the merits,” the court’s card index says after the meeting.

The plaintiff was financial manager Alexei Leonov, and the defendant was Ilya Tsarkov, who owns a digital wallet and its contents on the Blockchain.info platform. Tsar'kov was declared bankrupt in October 2017. He owed Rikas Finance LLC a guarantee agreement of more than 18 million rubles.