Analysis of the legal regulation of cryptocurrencies in Russia. Judicial practice of accounting for virtual money in bankruptcy

Lepshakov Kirill Il'ich Advocate Collegium of Association "Pliev, Lepshakov and partners" of the city of Moscow 108815, Russia, Moscow, Vernadsky Ave., 11/19 9295008454@mail.ru

Introduction

Fifteen years ago, the first cryptocurrency appeared in the world – bitcoin, giving rise to an avalanche of other digital assets created "in the image and likeness" of bitcoin. Since that time, the rapid growth of its use in investing, accumulation and trading has begun ^[1]. Against this background, financial institutions in many countries of the world have come to understand the need to create legal norms to regulate this financial instrument. Today, no one doubts that cryptocurrency will become one of the most important components, if not the most important, of future domestic and international economic relations. In this regard, the number of countries legally recognizing cryptocurrencies is growing. Thus, the Republic of El Salvador was the first in the world to give bitcoin the status of a national monetary unit ^[2]. Japan became the first country in the world to recognize cryptocurrency as a payment instrument, as a result of which Japan has now created the most progressive regulatory climate in the world for cryptocurrencies ^{[3, 4]}. Among European countries, Switzerland is the locomotive of cryptocurrency legislation, since the cryptocurrency market is fully legalized in it: a legal framework has been created for the issuance and trading of crypto assets, clear instructions have been created for companies and investors, and issues of taxation of crypto assets have been worked out ^[5]. The United States is the leader in the number of bitcoins and the amount of cash in the cryptocurrency. In the USA, there is a fairly progressive approach to the introduction of the latest financial instruments, but regulators have different attitudes to cryptocurrency ^{[4, 5]}. The director of the Center for International and Comparative Law at Indiana University, Professor F. Emmert. He states that there is currently nothing close to reasonable and effective regulation in the United States, either at the state, federal or international level ^[6]. In the UK, there is still a rather cautious neutral legal environment regarding cryptocurrencies. Cryptocurrencies in the UK are not legal tender, there are no strict financial laws applicable to cryptocurrencies in the country. At the same time, cryptocurrency exchanges and crypto exchanges are required to undergo state registration with the Financial Supervision Authority ^[4].

In Russia, cryptocurrency has long been actively used by individuals and legal entities, but not as a means of payment ^[7]. Currently, work is underway to create a legal framework for regulating cryptocurrency transactions. Russian legislation regarding cryptocurrencies can be called emerging, since accounting, taxation, liability and many others are still open.

In the Russian public discourse and legal literature, the discussion of the legal regulation of digital currencies has been going on since 2014. During this time, a large number of domestic publications have been published on the use of cryptocurrencies in Russia, as well as covering various aspects of the formation of legislation regarding digital assets ^[8]. For example, quite a lot of articles are devoted to: the concept of "cryptocurrency" and its relation to terms such as "digital currencies", "virtual currencies" and "electronic money" ^[9], analysis of the main differences between cryptocurrencies and fiat currencies ^[10], assessment of the ambiguous influence of cryptocurrencies on international legal and economic processes ^[11], legal analysis of the advantages and disadvantages of using cryptocurrencies as cash, assets and other property ^[12], typology of cryptocurrency users ^[13], analysis of the legal status of cryptocurrencies in Russia ^[14], legal liability for using cryptocurrencies for illegal purposes ^[15], etc.

In order to create effective legislation in the field of digital assets and currencies, it is necessary to analyze the emerging legislation in order to promptly adjust it in accordance with the economic legal realities in Russia and the world. Nevertheless, in Russia, the main problems of legal regulation of the use of cryptocurrencies have not yet been identified and analyzed through the prism of new Russian legislation, prepared draft laws and the emerging rather contradictory judicial practice.

 All this must be done, otherwise the "brave new world" of cryptocurrencies can become, in the context of global challenges faced by Russia, a favorable environment for the development of the shadow economy with its negative manifestations such as tax evasion and money laundering and capital acquired illegally.

Thus, the purpose of this study is to identify the main problems of legal regulation of cryptocurrencies and ways to solve them in a timely manner through the prism of emerging Russian legislation and emerging judicial practice.

The concept and essence of cryptocurrency through the prism of the emerging Russian legislation in the field of virtual money and digital currency

The term "digital currency" in Russian legislation first appeared in 2020 as part of the adoption of the Federal Law "On Digital Financial Assets and Digital Currency". In this law, digital currency is understood as a set of electronic data (digital code or designation) contained in an information system that is offered and (or) can be accepted as a means of payment that is not a monetary unit of the Russian Federation, a monetary unit of a foreign state and (or) an international monetary or settlement unit, and (or) as investments and in respect of which there is no person obligated to each owner of such electronic data, with the exception of the operator and (or) nodes of the information system, who are only obliged to ensure compliance with the procedure for the release of these electronic data and the implementation of actions in relation to them to make (change) records in such an information system with its rules (part 3 Article 1 of Federal Law No. 259-FZ of 31.07.2020 "On Digital Financial Assets, Digital Currency and on Amendments to Certain Legislative Acts of the Russian Federation").

Cryptocurrency is also recognized as a kind of digital currency. However, the Federal Law "On Digital Financial Assets and Digital Currency" does not mention cryptocurrency anywhere.

But if we turn to the review of the Law on Digital Financial Assets and Cryptocurrency, it says that instead of the term "cryptocurrency", the law contains the term "digital currency". Also, according to this review, the main details of the definition of digital currency were highlighted, namely, digital currency should be understood as a set of electronic data (digital code or designation) in the system, they can be accepted as an investment or a means of payment that is not a monetary unit, in relation to digital currency, as a general rule, there is no person obligated to by each owner of such electronic data ^[16].

This review also addressed the issue of digital currency turnover, established by Federal Law No. 259-FZ of 31.07.2020 in the form of a ban on accepting payment for goods, works and services in digital currency, this applies to Russian legal entities and individuals who have been in Russia for at least 183 days during the year (Part 5 of Article 14 of the Federal Law No. 259-FZ of 31.07.2020 "On Digital Financial Assets, Digital Currency and on Amendments to Certain Legislative Acts of the Russian Federation"). It is also prohibited to disseminate information about the offer and (or) acceptance of digital currency as a counter-provision for the goods transferred by them, the work performed by them, the services rendered by them, or any other method that allows for payment in digital currency for goods (works, services) (Part 7 of Article 14 of the Federal Law dated 31.07.2020 N 259-FZ "On digital Financial Assets, digital currency and on Amendments to Certain Legislative Acts of the Russian Federation").

In the context of this issue, it is worth paying attention to the need to bring to administrative and criminal responsibility for violation of the law under discussion. Thus, the Ministry of Finance of the Russian Federation has developed a draft on administrative (Draft Federal Law "On Amendments to the Code of Administrative Offences of the Russian Federation" dated 02.10.2020). and Criminal Liability (Draft Federal Law "On Amendments to the Criminal Code of the Russian Federation and the Criminal Procedure Code of the Russian Federation dated 02.10.2020). for violating the rules of turnover of digital financial assets and committing a crime using digital currency, including for illegally accepting digital currency as a counter-provision for goods, works and services transferred, allowing for the assumption of payment in digital currency.

It should be noted that according to the current legislation of the Russian Federation, the right to own digital currency is subject to protection in court only if the owner has informed in accordance with the procedure established by the legislation of the Russian Federation on taxes and fees about the facts of possession of digital currency and the commission of civil transactions and (or) transactions with digital currency (Part 6 of Article 14 Federal Law No. 259-FZ of 31.07.2020 "On Digital Financial Assets, Digital Currency and Amendments to Certain Legislative Acts of the Russian Federation"), as evidenced by a small but already existing judicial practice, which we will talk about below.

However, Article 21 of the Tax Code of the Russian Federation does not yet contain a subparagraph defining the right of taxpayers to report on obtaining the right to dispose, including through third parties, of digital currency, to submit reports on transactions (civil transactions) with digital currency and on digital currency balances in electronic form (Article 21 of the Tax Code of the Russian Federation dated 31.07.1998 No. 146-FZ).

Thus, this legal position specified in the Federal Law "On Digital Financial Assets and Digital Currency" defining the conditions for the protection of the right to possess digital currency in court is not included in the Tax Code of the Russian Federation, which casts doubt on the legality of earlier court decisions, where one of the grounds for refusing to satisfy the stated claims was the absence of a message by the plaintiff in accordance with the procedure established by the legislation of the Russian Federation on taxes and fees on the facts of possession of digital currency and making civil transactions with it (Savelovsky District Court of Moscow, case No. 02-2888/2021).

This legal position, which determines the right of taxpayers to report the facts of possession of digital currency and the commission of civil transactions and (or) transactions with digital currency, is reflected only in the draft federal Law No. 1065710-7, adopted by the State Duma of the Federal Assembly of the Russian Federation in the first reading on 17.02.2021 on amendments to Part one and part two of the Tax Code The Russian Federation (Draft Federal Law No. 1065710-7 "On Amendments to Parts One and Two of the Tax Code of the Russian Federation (ed., adopted by the State Duma of the Federal Assembly of the Russian Federation in the first reading on 17.02.2021).

The legal regime of cryptocurrencies in different countries has a different legal nature, from a complete ban to full legalization. But a common problem for all countries is the lack of an exact legal status of the cryptocurrency and its legal regulation. Regulatory norms are frequent and changeable in a relatively short time. In Russia, despite the fact that there is no complete ban at the legislative level on Russian citizens and organizations conducting transactions with cryptocurrencies, some departments adhere more to the position of a prohibitive nature, since they believe that there are associated risks when using cryptocurrencies ^[17].

Thus, the Bank of Russia warns citizens about the existing dangers when making transactions with cryptocurrency and its use ^[18], and also believes that the admission of cryptocurrencies to the territory of Russia and its circulation and use in the settlement and clearing infrastructure and at organized auctions is premature ^[19]. However, the Bank of Russia in its annual report for 2022, within the framework of international cooperation and cooperation, also stated that the specialists of the Bank of Russia took an active part in the development of methodological approaches in the external sector of new economic phenomena and processes, including in the market of operations with cryptocurrency ^[20]. The Central Bank of the Russian Federation also notes that the official monetary unit in Russia is the ruble, and the introduction of another currency on the territory of Russia and the issue of monetary surrogates is prohibitive (Article 27 of Federal Law No. 86-FZ of 10.07.2002 "On the Central Bank of the Russian Federation (Bank of Russia)"). Also, the use of cryptocurrencies in Russia as a means of payment, as noted earlier, is still prohibited (Article 14 of Federal Law No. 259-FZ of 31.07.2020 "On Digital Financial Assets, Digital Currency and on Amendments to Certain Legislative Acts of the Russian Federation").

The Federal Financial Monitoring Service of the Russian Federation (Rosfinmonitoring) believes that the use of cryptocurrencies in transactions is the basis for classifying completed transactions or transactions as transactions aimed at the legalization (laundering) of proceeds from crime and the financing of terrorism ^[21].

The Federal Tax Service takes the position of the need to take measures to develop methods of control when using cryptocurrencies through legislative regulation, with the subsequent provision of a legal basis for the tax authorities to obtain information on transactions with cryptocurrency ^[22].

The Government of the Russian Federation and the Ministry of Finance of the Russian Federation adhere to a different position. So on February 18, 2022, on behalf of the Government of the Russian Federation, the Ministry of Finance of the Russian Federation prepared and submitted to the Government of the Russian Federation a bill on the regulation of cryptocurrencies, within which it is proposed to consider digital currencies as instruments for investment. The requirements for exchangers (operators) and exchanges are also defined, in order to be able to carry out their activities related to the turnover of cryptocurrencies within the framework of a specially created register of operators. These organizations will carry out their activities through licensing and control by special authorized bodies determined by the Government. All operations carried out with cryptocurrencies will be carried out only with full identification of the client. The entry and withdrawal of cryptocurrencies will be possible only through Banks using a bank account. In order to protect the interests of investors, exchanges will be required to inform citizens about possible risks when acquiring cryptocurrencies. Citizens will be required to undergo online testing in order to determine the level of knowledge about digital currencies. The amount of investments in cryptocurrency is determined in the amount of up to 600,000 rubles annually. If the test is not passed, the maximum amount of investments will be determined up to 50,000 rubles. In relation to qualified investors and legal entities, the limit of transactions will not be limited ^[23].

Thus, the changes in legislation proposed by the Ministry of Finance of the Russian Federation will make it possible to form a legal cryptocurrency market in Russia, establish the rules of turnover and the circle of subjects (participants in operations) with the requirements established by law. Without legislative regulation of crypto-financial flows, open information and client identification, law enforcement agencies will also not be able to respond in a timely manner to offenses (crimes) committed using cryptocurrencies. The establishment of rules for the use of cryptocurrencies at the legislative level will minimize the threat to the formed financial system of Russia (The concept of legislative regulation of mechanisms for organizing the turnover of digital currencies).

In Russian judicial practice, digital currencies began to be recognized as property (Resolution of the Ninth Arbitration Court of Appeal No. 09AP-16416/2018 of 15.05.2018), according to the Federal Law "On Digital Financial Assets and Digital Currency" (Articles 17, 19, 21, 22 of Federal Law No. 259-FZ of 31.07.2020 "On Digital Financial Assets, Digital Currency currency and on amendments to certain legislative acts of the Russian Federation"), as well as in such regulatory legal acts as the Federal Law "On Countering the Legalization (Laundering) of Proceeds from Crime and the Financing of Terrorism" dated 07.08.2001 No. 115-FZ (Part 3 of Article 3 of Federal Law No. 115 of 07.08.2001-Federal Law "On Countering the Legalization (Laundering) of Proceeds from Crime and the Financing of Terrorism"), Federal Law "On Insolvency (Bankruptcy)" (Article 2 of Federal Law No. 127-FZ dated 26.10.2002 "On Insolvency (Bankruptcy)"), Federal Law "On Enforcement Proceedings" (Part 4 of Article 68 of the Federal Law "On Enforcement Proceedings" dated 02.10.2007 No. 229-FZ), the Federal Law "On Combating Corruption" (Part 10 of Article 8 of the Federal Law "On Combating Corruption" dated 25.12.2008 No. 273-FZ). Also, according to the draft Federal Law No. 1065710-7 "On Amendments to Parts One and Two of the Tax Code of the Russian Federation", it was proposed to amend paragraph 2 of Article 38 of the Tax Code of the Russian Federation on the recognition of digital Currency as property (Draft Federal Law No. 1065710-7 "On Amendments to Parts One and Two of the Tax Code of the Russian Federation"). For the rest of the current laws, the status of the digital currency is still not defined, which leads to the lack of full legal regulation of cryptocurrencies in Russia.

Thus, there is currently no complete legislative regulation of such a financial instrument as cryptocurrencies in Russia. Due to the observed increase in the volume of investments in cryptocurrencies by Russian citizens, which, according to expert estimates, is about 2 trillion rubles with 12 million open crypto wallets, Russia needs to consider the possibility of legislative regulation of cryptocurrencies in Russia. Given the actual current reality, it will be difficult for Russia to completely ban and abandon the use of cryptocurrencies on its territory. The complete lack of regulation of the cryptocurrency industry in Russia can lead to the development and increase of the shadow economy and the growth of fraud in this industry. Legalization, in turn, will make it possible to protect the legitimate rights and interests of individuals and legal entities in the cryptocurrency market (the Concept of legislative regulation of mechanisms for organizing the turnover of digital currencies from 09.02.2022).

Based on the stated factual and legal circumstances, in the absence of full legal regulation of cryptocurrencies in Russia, it is recommended to create the necessary regulatory conditions for such a financial instrument as cryptocurrencies.

Also, in order to protect the legitimate interests of individuals and legal entities in the cryptocurrency market, including in court, it is necessary to finalize draft law No. 1065710-7 "On Amendments to Parts One and Two of the Tax Code of the Russian Federation", which provides for the obligation to declare information on transactions using digital currency. It should also provide for tax liability for failure to provide information on the turnover and balance of digital currency funds within the time limits established by law, as well as for non-payment of tax on transactions.

With regard to administrative responsibility for organizing illegal acceptance of digital currency as a counter-provision, it is necessary to finalize the draft law "On Amendments to the Code of Administrative Offences of the Russian Federation". Consideration of cases of administrative offenses with the preparation of protocols in the field of illicit trafficking in digital currency should be recommended to the Federal Tax Service of Russia.

As for criminal liability for committing a crime using digital currency, finalize the draft law "On Amendments to the Criminal Code of the Russian Federation and the Criminal Procedure Code of the Russian Federation" for evading the obligation to provide a report on transactions (transactions) with digital currency and on the balances of said digital currency. To recognize the commission of a crime using digital currency as an aggravating circumstance. The investigation should be attributed to the Investigative Committee of the Russian Federation.

I would also like to recommend amendments to the Federal Law "On Countering the Legalization (Laundering) of Proceeds from Crime and the Financing of Terrorism", the provisions of which would provide for the obligation of AML/CFT entities (countering money laundering and terrorist financing) to send, at the request of the Federal Financial Monitoring Service of the Russian Federation (Rosfinmonitoring), information on ongoing transactions with digital currency (cryptocurrencies), in order to identify and suppress illegal actions within the framework of financial transactions.

As part of the study of this issue, it is very important to note that the development of legislation in Russia in the field of the use of virtual money and digital currency, in particular cryptocurrencies, should not be only prohibitive and punitive. Russian legislation, taking into account the practices of other states, should develop towards creating all the necessary accessible and legitimate conditions for the legitimate use of digital currency (cryptocurrencies) in Russia, since Russia most likely will not be able to completely prohibit and abandon the use and regulation of the cryptocurrency industry on its territory, due to the large increase in the popularity of crypto services among Russians, and the annual growth of interest in cryptocurrencies.

Legal assessment of the inclusion of cryptocurrencies in the bankruptcy estate during the bankruptcy procedure of individuals, taking into account current judicial practice

In the modern period of time, the meaning of the legal norms on the procedure for including cryptocurrencies in the bankruptcy estate during the bankruptcy procedure of individuals and the procedure for its implementation in Russia remains unclear. At the same time, it is necessary to take into account the principles of legal regulation of public relations in the context of the issue under consideration. Since 2021, the digital currency in Russia has been recognized as property, as we have already discussed earlier. But despite the changes made in the legislation, judicial practice has faced the problem of requesting information about the availability of cryptocurrency from the debtor with subsequent inclusion in the bankruptcy estate ^[24]. If it is possible to convince the court of the need and possibility to demand the transfer of crypto assets and include them in the bankruptcy estate, the following question arises, how to establish in the framework of the trial that it is the bankrupt debtor who is the subject of the obligation for which the crypto wallet was registered. It is necessary to determine the legal and technical possibility of disclosure of relevant information. There is also an open question about the possibility of selling the debtor's property (crypto assets) as part of the bankruptcy procedure at auction, since the traditional procedure for selling property to a financial manager does not work for crypto assets. In this case, it is necessary to consider the possibility of centrally negotiating with all sites, with subsequent bidding under the control of a financial manager, or simplify the procedure in accordance with the current bankruptcy law ^[25].

Also, one of the ways to foreclose on crypto assets and the procedure for determining the ownership of a crypto wallet can be considered the possibility of arresting the wallet through a court order addressed to the custodial service. This service has a procedure for returning funds to the treasury. At the same time, it is important to notify the organization (association) of banks (exchanges) about the forced seizure of funds within the framework of a court order received from a crypto wallet. If the service is non-custodial, it is recommended to install monitors at exchange points if there is a technical possibility to block funds ^[26].

As part of the bankruptcy proceedings of individuals, if the financial manager has information about the presence of crypto assets in the debtor, it is worth considering filing an application to the court about the possibility of providing a writ of execution. Further, within the framework of the initiated enforcement proceedings, the bailiff offers the debtor to provide a private key to the crypto wallet and other necessary information for the purpose of arrest and foreclosure. The keys, in turn, will provide an opportunity to work with the blockchain on their own behalf and perform the necessary transactions with cryptocurrency. The debtor is prohibited from disposing of the crypto assets available in the crypto wallet. Further, its evaluation and implementation is carried out by analogy with foreclosure on securities ^[27].

The debtor should pay attention that if the private key is hidden and not transferred to the financial manager or bailiff, his actions may be qualified as illegal and unscrupulous behavior. Subsequently, the debtor-citizen will not be released from obligations on debts to creditors within the framework of the court ruling (Part 4 of Article 213.28 of the Federal Law "On Insolvency (Bankruptcy)" dated 26.10.2002 No. 127-FZ).

As part of the study of this issue, it is necessary to pay attention to a small, but already existing judicial practice on the inclusion of crypto assets in the bankruptcy estate during the bankruptcy procedure of individuals. The inclusion of cryptocurrencies in the bankruptcy estate is one of the frequent court disputes in the bankruptcy of citizens. The main difficulty in these categories of court cases is the search for property as cryptocurrencies. It is possible to note both positive judicial practice and negative. Let's reveal some of them.

Negative judicial practice

In one of the bankruptcy cases of individuals in the Arbitration Court of the Tyumen region in case no. A70-15360/2015, the debtor applied to the court to declare himself insolvent (bankrupt) with the amount of debt in the amount of 3.5 million rubles. In his statement, the debtor indicated that the amount of debt was formed in connection with the use of the loan funds received for mining (mining of digital currency with the help of special technical equipment). The court, within the framework of the case under consideration, considered the actions (behavior) of the debtor to be unfair, since the debtor deliberately allowed an increase in debt to creditors. The court indicated that transactions with cryptocurrencies are prohibited in Russia (The Ruling of the Tyumen Region Arbitration Court dated 22.06.2016, case no. A70-15360/2015).

 It is worth noting that if the debtor does not provide information about the availability of crypto assets himself within the framework of the bankruptcy procedure, it will be quite difficult to get access to it. For example, in case No. A57-21957/2017 on the recognition of the debtor as insolvent (bankrupt), which was considered in the Arbitration Court of the Saratov region, the bankruptcy creditor filed and considered a complaint about the inaction of the financial manager. When forming the debtor's bankruptcy estate, the financial manager did not request information in order to identify the debtor's property and the persons controlling the debtor. In particular, information was not requested about the availability of cryptocurrency from the debtor and his family members, for failure to take measures (applying to the court for a sanction) to gain access to the electronic correspondence of the debtor and his family members to identify electronic wallets and transactions with cryptocurrency. In addition, the bankruptcy creditor presented arguments about the deliberate and fictitious bankruptcy of the debtor. The Court of first instance and higher courts (the Twelfth Arbitration Court of Appeal, the Arbitration Court of the Volga District) refused to satisfy the complaint of the bankruptcy creditor. The courts proceeded from the fact that, from the direct interpretation of the norms of law, "cryptocurrency" does not relate to objects of civil rights, is outside the legal field on the territory of the Russian Federation. Execution of transactions with cryptocurrency, its transactions are not secured by the coercive force of the state, and the absence of a controlling center in the cryptocurrency system, the anonymity of cryptocurrency users does not allow to determine with certainty whether the cryptocurrency in the crypto wallet belongs to a specific person (Resolution of the Arbitration Court of Cassation F06-38270/2018 (Arbitration Court of the Volga District) of 18.10.2018, case no. A57-21957/2017). I would like to draw attention to the fact that in this case the courts approached the qualification of cryptocurrencies formally, without applying the analogy of law to this concept in the absence of the necessary norm in the law that govern similar legal relations.

There is also a practice of bringing to administrative responsibility for failure to provide information (information) to the bankruptcy trustee about the availability and size of cryptocurrencies within the framework of bankruptcy. So in 2020, the Arbitration Court of the Sverdlovsk Region in case No. A60-48563/2020, according to the statement of the Prosecutor's Office of the Tagilstroyevsky district of Nizhny Tagil, the director of a limited liability company was brought to administrative responsibility due to the fact that he did not fully transfer the requested documents to the bankruptcy trustee, including information about the presence of cryptocurrency and its size (The decision of the Arbitration Court of the Sverdlovsk region of 03.12.2020, case no. A60-48563/2020).

Some citizens apply to the court to declare themselves insolvent (bankrupt) also due to the fact that they take loans in order to purchase mining equipment, which also proves the growing popularity of cryptocurrencies among citizens. However, not always investing money in mining brings the expected profit. An example is open court proceedings No. A19-2074/2023 in the framework of an appeal to the Arbitration Court of the Irkutsk region of a citizen with an application for recognition as insolvent (bankrupt). From the debtor's explanations, it can be seen that the loan funds were used to purchase the necessary technical equipment for cryptocurrency mining and to repay the resulting debt. The reason for the loss of solvency was the loss of work related to mining activities (Ruling of the Arbitration Court of the Irkutsk Region dated 04.05.2023, case no. A19-2074/2023).

Positive judicial practice

According to the decision of the Arbitration Court of the City of Moscow in case A40-124668/17 of 24.10.2017, the citizen (debtor) was declared insolvent (bankrupt), the procedure for the sale of the debtor's property for a period of six months was introduced, the financial manager was approved (Decision of the Arbitration Court of the City of Moscow of 24.10.2017, case No. A40-124668/2017). As part of the initiated court proceedings, the financial manager filed a petition to resolve disagreements between the manager and the debtor on the inclusion of the contents of the crypto wallet located on the Internet with the declared identifier in the bankruptcy estate of a citizen (debtor), with access to the crypto wallet. The court of first instance refused to satisfy the petition, pointing out that the legal nature of the cryptocurrency is not defined in the legislation of the Russian Federation. At the same time, the conduct of transactions by Russian citizens and organizations using cryptocurrencies is not prohibited by the laws of Russia. However, the fundamental feature that distinguishes crypto money from money as such is the way they arise in the digital space. So, real means of payment must first be deposited to a certain account or electronic wallet, and cryptocurrency units appear already in electronic form. The concept of cryptocurrency is not defined by the current legislation of the Russian Federation, there are no special requirements for the order of its circulation, the legal status of cryptocurrencies is not defined, the essence of relations related to the turnover of cryptocurrencies does not allow applying to cryptocurrencies by analogy the norms governing similar relations. Since there is no concept of cryptocurrency in the legislation, it is impossible to unambiguously determine which category it belongs to: "property", "asset", "information", "surrogate" (Definition of the Arbitration Court of Moscow dated 05.03.2018, case no. A40-124668).  However, the Ninth Arbitration Court of Appeal did not agree with the arguments of the court of first instance, pointing out that the court's arguments about the impossibility of applying to cryptocurrencies by analogy the norms governing similar relations contradict the provisions of Article 6 of the Civil Code of the Russian Federation, according to which, if it is impossible to use the analogy of the law, the rights and obligations of the parties are determined based on the general principles and meaning of civil legislation (analogy rights) and the requirements of good faith, reasonableness and fairness. According to the court of appeal, cryptocurrency cannot be regarded in relation to Article 128 of the Civil Code of the Russian Federation as other property. Any property of the debtor that has economic value for creditors (including cryptocurrency) cannot be arbitrarily excluded from the bankruptcy estate without the grounds expressly provided for in Articles 131, 132, 213.25 of the Federal Law "On Insolvency (Bankruptcy)" or other federal laws. The court of first instance reasonably regarded the statement of the financial manager as disagreements with the debtor, however, in the opinion of the court of appeal, unlawfully refused to resolve them. In this regard, the Court of Appeal considers that the petition for dispute resolution is subject to satisfaction (Resolution of the Ninth Arbitration Court of Appeal No. 09AP-16416/2018 of 15.05.2018, case No. A40-124668/2017). Thus, the court of appeal in this case applied to the cryptocurrency the analogy of law with the attribution of cryptocurrencies to objects of civil rights as "other property". This case was the first in Russian judicial practice when the cryptocurrency was included in the bankruptcy estate.

If we proceed from the general analysis of legislation and judicial practice related to cryptocurrencies in Russia, we see that the legal status of cryptocurrencies is not fully settled. However, judicial practice and legislation in this matter has expanded. Basically, cryptocurrencies at the present time, from among those laws that determined its legal nature, refer it to the category of property. This approach has been established not only in bankruptcy court cases, but also in criminal and civil law.

So in 2020, where the cryptocurrency is somehow mentioned in various judicial acts, 1,086 court cases were issued, in 2021 – 1,531 judicial acts. In comparison, from 2009 to 2017, only 46 court decisions were made. 141 decisions were made on bankruptcy cases in 2021, which is twice as many as in 2020 – 79 court decisions. In 2022, from January to May, 25 court decisions were made using cryptocurrencies ^[28].

Thus, taking into account the current legislation of Russia and the established general judicial practice on cryptocurrencies in bankruptcy cases, in the framework of civil law disputes and criminal cases, the judicial system of the Russian Federation is not fully capable of protecting the legitimate interests of individuals and legal entities. The reason is the lack of complete and necessary legislative regulation of such a digital asset as cryptocurrencies.

But it is worth noting a positive developing trend, where the legislator in some legislative acts defines digital currency as property, which in turn allows arbitration courts in bankruptcy to include it in the bankruptcy estate of the debtor, as well as in accordance with Article 128 of the Civil Code of the Russian Federation to qualify cryptocurrencies as "other property".

Thus, as the President of the Russian Federation noted, it is necessary to develop the legislative framework of the digital economy in Russia (Decree of the President of the Russian Federation No. 203 dated May 9, 2017 "On the Strategy for the Development of the Information Society in the Russian Federation for 2017-2030"). With the active development of legislation on the use of digital currency in Russia, it is possible to introduce cryptocurrencies into the list of objects of civil rights, and judicial practice on this issue will become more uniform, which will lead to objective and fair judicial protection of individuals and legal entities in the Russian Federation in the use of digital currency.

Conclusions

Legislation in Russia regarding the legal regulation of cryptocurrencies requires further formation and development, taking into account current practices in other countries. In the legislative framework, it is still necessary to define the concept of "cryptocurrency", since the replacement definition of "digital currency" has a critically different character due to its content ^[29]. Determining the legal status of cryptocurrencies will also become the basis for the development of tax policy in relation to transactions with crypto assets. Legal regulation of cryptocurrencies in Russia will also allow the legal interests of both individuals and legal entities to be protected in court. Judicial practice will be more uniform. Also, at the legislative level, it is necessary to resolve the issue of cryptocurrency mining. The operations carried out with cryptocurrency should be controlled by the state within the framework of legislative regulation with the requirement of disclosure of information and identification of holders of crypto assets. It will be difficult for the Russian legislator to ignore the existence of the cryptocurrency market, since the absence of a legal market, in turn, can lead to the involvement of cryptocurrencies in the shadow economy in Russia, which in itself may already be a threat to the national security of the state.

Thus, the future of the cryptocurrency market in Russia depends on many factual and legal circumstances that the legislator will need to take into account when developing legislation on the use of cryptocurrencies in Russia.

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