The Association of Russian Banks has prepared and drafted the framework for cryptocurrency adoption and cryptocurrency circulation which was presented during the XVII International Banking Forum. This framework suggests that owners of digital assets should either reveal their holdings or face criminal liability. Besides, the framework states that cryptocurrencies can be used in foreclosure within enforcement proceedings, bankruptcy or taxation. It is presumed that market agents will be able to provide services to identify the owners of the digital assets.

Earlier, the Financial Action Task Force (FATF) expressed its concerns about possible use of virtual assets for criminal purposes as well as by terrorists calling for all countries to “take immediate actions to implement the recommendations” stated in its Guidance for a Risk-Based Approach to Virtual Assets. Particularly, the FATF urges the states to control the exchange of customer information between market participants.

According to the vice president of the Association of Russian Banks, the model does not contain any legal proposals, being just a “regulatory” one. It also discusses the possibility to allow the use of specialized programs to establish the names of owners of cryptocurrencies in order for the information received to be used as evidence in court. However, despite the fact that such programs do exist, only around 1% of investors can be identified with their use, because the disclosure of the ownership information depends exclusively on the willingness of the owner to reveal his personality.

In addition, nowadays in Russia there is no legislative regulation of cryptocurrencies, nor the very legal definition thereof as an asset. Russian courts treat cryptocurrencies differently: some regard it as property that can be sold or otherwise disposed of (for example, in cases of bankruptcy of citizens), others state that it’s illegal even to disseminate information about the possibility of using it as a means of payment. Thus, the Ruling of Arbitration Court of Moscow District dated August 15, 2019 No F05-8713/2017 (case N А40-12639/2016) upheld the first instance court decision imposing obligation on a debtor to provide his bankruptcy trustee with the password to his cryptocurrency wallet. This decision follows the case law recently established in the so called “Tsarkov case” (case number A40-124668/2017) in which it was noted that any property of the debtor having economic value, including cryptocurrency, shall not be arbitrarily excluded from the bankruptcy estate. Besides, in the latter case the appellate court overturning the first instance court decision mentioned that the list of assets stated in art. 128 of the Russian Civil Code (which does not specifically name cryptocurrency as an asset) should not be regarded as exhaustive, thus justifying the broader interpretation of this article.

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