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Russian Court recognized cryptocurrency as valuable property

The Ninth Arbitration Court of Appeals ruled on Monday that a bankrupt person’s cryptocurrency must be included in the debtor’s bankruptcy estate, – Coinstelegram.ru reported yesterday.

The case involves Russian citizen Ilya Tsarkov who filed bankruptcy in October 2017. The court has ordered his cryptocurrencies to be transferred to the trustee, Alexei Leonov, who is expected to be handed the private key to the crypto wallet belonging to Tsarkov soon. Leonov said:

«The court indirectly recognized the cryptocurrency as property and recognized its value».

Prior to Monday’s ruling, the case was heard in February by the Moscow Arbitration Court, which ordered Tsarkov to disclose his cryptocurrency holdings after he revealed to the bankruptcy trustee that he had a wallet at Blockchain.info.

Leonov requested the court to order the transfer of Tsarkov’s cryptocurrencies into the bankruptcy estate, but at the time the court rejected his request, stating that cryptocurrency cannot be used to pay creditors because «the laws of the Russian Federation do not recognize cryptocurrency as property».

But with Monday’s ruling the Ninth Arbitration Court of Appeals overturned the judgment of the Moscow Arbitration Court after Leonov appealed. The court recognized the cryptocurrency as property, which must be included in the debtor’s bankruptcy estate.