French commerce court likens bitcoin to money in recent ruling
Mon, 09 Mar 2020, 06:42 am UTC
French court broke down the claims that bitcoin (BTC) has no value.
The Commercial Court of Nanterre decided on Feb. 26 that BTC is an interchangeable asset just like fiat money, Cointelegraph reported citing local news outlet Les Echos. The ruling was part of a dispute between French cryptocurrency exchange Paymium and alternative asset investment firm BitSpread.
In 2014, Paymium loaned 1,000 BTC (over $9.1 million of press time) to BitSpread. The latter also got hold of 1,000 Bitcoin Cash (BCH) when the fork creating the altcoin was implemented in 2017. At present, the two are arguing as to which between them has the rights to the BCH that’s worth over $350,000 today.
The court decided that the BCH belongs to the borrower in a similar way that dividends belong to shareholders. The recent ruling may have far-reaching implications in the future cryptocurrency loan contracts.
“The scope of this decision is considerable because it allows Bitcoin to be treated like money or other financial instruments. It will, therefore, facilitate Bitcoin transactions, such as lending or repo transactions, which are growing, and thus favor the liquidity of the cryptocurrency market,” said Hubert de Vauplane, a specialized lawyer at law firm Kramer & Levin.
There is an ongoing debate about the legal definition of crypto assets with some disputing that they are commodities, securities or utility tokens and money. In 2016, Japan became the first country to clarify BTC’s legal nature by officially recognizing it and other digital currencies as money.
A little over a year, Wyoming passed a bill that also recognized cryptocurrencies as fiat money. In July 2019, China considered cryptocurrencies as digital property.
Meanwhile, Protocol Labs General Council member Marvin Ammori said during the United States congressional meeting titled “Building Blocks of Challenge: The Benefits of Blockchain Technology for Small Businesses” that taxing crypto would be very difficult because one has to keep track of what he paid for using bitcoin, how much the crypto is worth and pay the capital gain or loss in every single transaction.
“Doing your taxes for crypto is the worst nightmare. The tax treatment is very complicated,” Ammori said.
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