Cryptocurrency is a digital exchange which uses cryptographic functions to conduct financial transactions. Transactions in Cryptocurrency are processed on blockchain. The Blockchain is a shared database. Blockchain is a decentralized network which allows the fast and secure peer to peer transactions of currency and data. It is a type of a ledger which contains information about all the transactions, to approve a transaction via blockchain it must be approved by majority of nodes and then it is written into a block. Blockchain being a decentralized network makes it powerful as there is no third party to trust or pay a fee to. Some of the most common and widely accepted cryptocurrencies are Bitcoin, Ethereum
Bitcoin is the very first and popular kind of cryptocurrency. It is a form of digital electronic money which is independent of any third-party control and need of intermediaries. This digital currency can be transferred from user to user via bitcoin blockchain network. People often confuse between Blockchain and Bitcoin. In simple words Bitcoin is one kind of digital currency and Blockchain is the technology which is used by Bitcoin to secure all the transactions.
Bitcoin Mining is the process which involves releasing Bitcoins and circulating them. For this process minors solve computationally difficult puzzles to discover a new block which is then added to the blockchain. Gradually Bitcoin Minting has been overtaken by the Mining process. Minting is a part of Mining when a new block is hashed for the very first time in the Bitcoin network it triggers minting of new coins, this process does not require mining it rather requires staking.
CRYPTO ASSETS- crypto assets is a broad term that covers all assets and includes all cryptocurrency assets as well as non-currency assets.
Recently in the landmark judgement validity of cryptocurrency has been legalized and recognition of property has been given to the Bitcoin.
Internet and Mobile Association of India v. Reserve Bank of India
The Supreme court lifted the ban on use of cryptocurrencies across India and accessed the fundamental right of Right to freedom of profession. Court stated that the crypto ban violated Article 19(1)(g) which guarantees the right to practice any profession or carry on any occupation, trade, or business. The honorable court regarded crypto currency as an intangible property which can act under certain circumstances as money (even without faking a currency) then RBI can take note of it and deal with it.
Since its creation cryptocurrency has gained massive acceptance and popularity. However, with the booming crypto capitalization around the world questions arose on the treatment of usage of cryptocurrency and one of the alarming hottest issue is-
IS CRYPTO ASSET A PROPERTY OR NOT?
Legal status is cryptocurrency is of utmost vitality since it affects the legal actions on the regulation of cryptocurrency. The UK Jurisdiction Taskforce’s in its legal statement of 2019 observed the nature of cryptocurrencies and stated that regulation of cryptocurrency might cause some obstacles or hinderances but it does not means that it is outside the purview of law. The analysis concluded that crypto assets are capable of the recognition same as of the property
In the case of Robertson v Persons Unknown, around $1.2 million was transferred to a fraudster. The court held that Bitcoin should be treated as a property for the purpose of asset preservation. Similarly, in another case law, AA v Persons Unknown [2019] EWHC 3556 (Comm), the Court held that “crypto assets such as Bitcoin are property” for the purpose of being subject to an interim proprietary injunction.
PLUS- TOKEN SCAM
Plus-token scam is one of the largest scam which totaled over $3 billion in total. The legal regulations of Cryptocurrencies are not followed by people and crypto trading was unstoppable in China. In 2020 China passed the country’s long-awaited civil code which expands the scope of inheritance rights to include cryptocurrency, such as bitcoin. Inherited cryptocurrencies will be protected under the new law. Several Chinese courts have recently ruled that bitcoin and Ethereum are properties protected by law, Therefore, taxation of cryptocurrency in China is parallel as property.
David Ian Ruscoe And Malcolm Russell Moore v Cryptopia Limited (in liquidation) [2020] NZHC 728 (8 April 2020)
The recent High Court of New Zealand decision considered the very much unchartered waters of the legal standing of cryptocurrencies as “property”.
FUTURE OF CRYPTO ASSETS
Crypto assets have the power and potential to accelerate social and economic growth throughout the world. Many Nations are steadily increasing the transformation towards digitalization with prudent practices. With the amendment of laws and enforcement of laws this new era of crypto capitalization has been accepted by most nations all over the world. With mere acceptance of cryptocurrency most of the world is still figuring a way out for its legislation and regulation by prosecuting a set of laws.
Lack of uniformity of laws among different jurisdictions causes hindrances to expand the crypto market moreover lack of global regulations limits global crypto trading. In order to prevent scams such as “Plus Token Scam” and “One- coin scam” the world needs to be vigilant and prudent by using the technology for their benefit and doesn’t let technology use man! “The Global Financial and Monetary System in 2030” argues that the increasing acceptance and adoption of cryptocurrencies will contribute to bringing markets, institutions and infrastructure together in a multi-polar, complex and interconnected world. This in turn will present a challenge to the conduct of monetary policy and have implications for financial stability and financial crime prevention.
“If crypto-assets are indeed here to stay, governments need to determine how best to regulate them and to govern their connections with the conventional financial system.”
