As expected right before 2017 ended, regulators went full steam when it comes to tackling the crypto industry. There were stricter rules regarding crypto exchanges and ICOs. All with a goal to prevent scams and to avoid people’s money being taken away. However, what exactly is digital currency? There are some countries that agree that its money while there are those countries such as Russia that think otherwise.
The Russian Ministry of Justice has made a decision regarding cryptocurrencies. The Russian Justice Ministry categorized cryptocurrencies as “other property”. Russia’s Justice Minister Alexander Konovalov mentioned to reporters last week that digital coins should not be treated as electronic money.
There was a bankruptcy case that involved Bitcoin holdings. And this case posed a question regarding the classification of digital currencies. Without a firm definition on cryptos, the question split Russian legal experts. There are those who think that cryptocurrencies have real value while there are those who don’t believe so since the law doesn’t explicitly define it.
According to Konalov, the department has reached a “consolidated opinion” regarding the nature of cryptocurrencies. He mentioned that it should be defined as a property. He says that “if digital money is not property, its theft would not be considered criminal offense because there would be no object of the crime”.
He added that “if cryptocurrencies are to develop, additional regulations will be necessary. The main point is to ensure that all this does not grow into financial pyramids”.
And because of this case, Konovalov mentioned that Russia should do its best in providing rigid crypto regulations when it comes to the industry. However, he recognized that the crypto market is a “manifestation of the people’s desire to escape from total dependence”.
Not Mentioned in Russia’s Civil Code
Cryptocurrency is a relatively new term that it is not part of Russia’s Civil Code. The Moscow Arbitration Court has accepted this opinion so far. It says that “A conclusion can be drawn that cryptocurrency is a certain set of symbols/characters contained in an information system. It cannot be an object of civic rights”.
Regulators Are Not Yet Decided
One of the things that make the crypto world volatile in terms of its price is due to the lack of consensus among worldwide regulators. South Korea is now planning to relax and clarify its crypto regulations following G20s classification of cryptocurrencies.
Japan, on the other hand, is now implementing stricter rules and regulations when it comes to businesses trying to open and operate a cryptocurrency exchange. There are new rules that are going to be implemented in order to avoid another Coincheck scandal wherein funds of investors were lost.
During the start of 2018, it was the regulatory changes that made significant changes in crypto prices. For instance, Bitcoin that was priced at around $14,000 during the start of 2018 plummeted to somewhere around $8,000 today.
So should cryptocurrencies be considered something like money? Or perhaps, it is simply a property? Up to this day, there are no general rules and regulations when it comes to cryptos. Regulators act differently from one country to the next. And for this reason, it may take some time before cryptos reach mainstream.