Court Will Not Seize Crypto as Debt Payment from Bankrupt Citizen in Russia

[amirshaf]

The Moscow bankruptcy court has ruled that cryptocurrencies of a bankrupt debtor will not be seized to pay his creditors. The trustee for the case has failed to convince the judge to include the debtor’s cryptocurrencies in the bankruptcy estate
The Moscow Arbitration Court ruled this week that cryptocurrency cannot be used to pay creditors in the bankruptcy case of Russian citizen Ilya Tsarkov, who filed bankruptcy in October of last year.

Court Will Not Seize Crypto as Debt Payment from Bankrupt Citizen in RussiaInterfax reported from the courtroom that the appointed trustee for the case, Aleksey Leonov, proposed “to collect [Tsarkov’s] digital savings as a debt payment.” He claimed that cryptocurrency “is definitely an asset that can be sold,” adding that it will not contradict the country’s current legislation, the news outlet detailed, as translated by Crime Russia

[Mometaskers]

Ugh, imagine if they can actually seize it, you'd be way poorer than you should be. They get all the benefits should they decide to hold on to it. At least with some crypto in stash you can still hope for a rally before selling that out and using that to pay the debt and the interest.

[TorbjornE]

This is bad news for crypt holders. It is impossible to hope for the protection of justice. In July, Russia will have a law on the crypt and then the situation will probably improve.

[jseverson]

This is bad news for crypt holders. It is impossible to hope for the protection of justice. In July, Russia will have a law on the crypt and then the situation will probably improve.

Source: https://news.bitcoin.com/court-seize-crypto-debt-payment-bankrupt-citizen-russia/

How this is bad news? I have no idea how Russia handles bankruptcy, but it seems that putting your assets into crypto will at least protect them from debt collectors. It's an interesting ruling because of how easily exploitable it seems. You'd have to imagine there's a catch somewhere. It's likely a loophole that will be addressed in Russia's much anticipated crypto regulations.

[cellard]

This is bad news for crypt holders. It is impossible to hope for the protection of justice. In July, Russia will have a law on the crypt and then the situation will probably improve.

Source: https://news.bitcoin.com/court-seize-crypto-debt-payment-bankrupt-citizen-russia/

How this is bad news? I have no idea how Russia handles bankruptcy, but it seems that putting your assets into crypto will at least protect them from debt collectors. It's an interesting ruling because of how easily exploitable it seems. You'd have to imagine there's a catch somewhere. It's likely a loophole that will be addressed in Russia's much anticipated crypto regulations.

This is irrelevant to the fact that governments can change laws arbitrarily to screw you up. Russia has been so incredibly bipolar about Bitcoin since the beginning, claiming it's banned, then claiming it's not, then claiming it's banned again, then seeing Vitalik Buterin visiting Putin... ridiculous.

Just be sure to have your crypto assets safe at all times, irrespective of what your governments have to say about it. Who is to say that they will decide it's time to confiscate all of it, just like they did with gold in the us in the 33? you can't expect good things, specially from a shithole like Russia, so always assume worst case scenario is around the corner for your savings.

[Rustamm]

It's just that judges are still very poorly aware of what crypto currency is. In addition, there are no normative acts that would classify the crypto currency. In the future, when the relevant nomadic base is adopted, the judges will change their position and the crypto currency will be used to pay off the debt.

[dado7]

This is actually very interesting. I wonder if in my country the debtors could do the same, because when bank sits on their accounts they can actually take 2/3 or, in some cases, all of it leaving you with nothing.

[Hydrogen]

This is good news. It may only be a temporary measure until bureaucrats in russia create regulatory guidelines for how bitcoin may be seized under legal means. At the moment, there would seem to be no paperwork to file such a thing and no laws to determine the specifics of how such a thing may be done. All of which will likely change in the future.

The article does not mention how much in bitcoin the defendant was holding. Maybe it was a small amount? In the USA there are things like filing for bankruptcy which limit how much of someone's net worth can be liquidated and claimed by creditors. Not certain if russia has similar laws.

[8count]

I'm sure the loophole will be fixed, but at this point you could borrow a personal loan and sell all your assets and buy cryptocurrency, Then file for bankruptcy. Years later when you're clear you could then start to cash it out or use it to purchase stuff. Basically free money. Bit scammy which I hate but could be done under the current ruling.