The Bitcoin situation in Tokyo could very well shape the future of virtual currencies in Japan. Two weeks ago, the Tokyo District Court judged that Bitcoin are not subject to ownership. With the Mt. Gox investigation looming overhead, plenty of affected users were hoping to see a different outcome so they could recoup some of their losses. However, there are some vital points to be made regarding this judgement.
Hold Your Horses! The Judgement Probably Won’t Affect You
As soon as news broke about the Tokyo District Court deeming Bitcoins are not subject to ownership; panic started to ensue. But things are not as bleak as they may appear, as the ruling only involves the involved parties and not affected customers. Additionally, this part of the ruling can still be appealed if needed and it should not be seen as an established view under Japanese law just yet.
Furthermore, this ruling is a mere analysis under Japanese law and holds no merit for any other country in the world. It is also important to note this ruling will not change the treatment of Mt. Gox creditors by any means. More importantly, lack of ownership does not mean there are no legal protection options to explore by affected customers.
What is of peculiar interest is how this judgement is in fact contradictory to Bitcoin being subject to ownership under Japan’s Civil Code. Even though every Bitcoin address ever created by Mt. Gox is in fact co-owned with the affected users, the return of these Bitcoins can be demanded by the plaintiff.
Appointed Mt. Gox creditors have an obligation to demand the return of any deposited Bitcoins gone missing, regardless of whether ownership of these coins is a factor. As a result, Mt. Gox creditors would fall under the same category as bankruptcy creditors, which are subject to the distribution of Mt. Gox assets.
The major question is whether or not customers’ Bitcoins, are protected from the insolvency of Bitcoin exchanges or not? Legal protection regarding this matter is a difficult hurdle to tackle, even though Japanese law clearly guarantees legal protection if such as event were to transpire. From that point of view, affected Mt. Gox customers have nothing to worry about at this time.
What It Means For Bitcoin’s Tradeable Aspect
If a user can claim no ownership of a Bitcoin, it can – technically speaking – not be traded in the traditional meaning of the word. With Bitcoin, however, that is not the case, as any agreement to send any amount of Bitcoin from address A to address B is a legally binding contract under Japanese law.
The decision by the Tokyo District Court is quite favourable to Bitcoin users around the world, as having ownership of Bitcoins would mean there is a chance for the other party to demand their coins back. While some people may see the benefit of such a system, it would create a chargeback solution (which is open to misuse) which is not the end goal here.
It will take a while until proper Bitcoin regulation is put in place in Japan and other countries around the world, yet the unfolding of the Mt.Gox case, could help shape the regulatory framework industry experts have been waiting for. The first step, ruling Bitcoins are not subject to ownership, seems to be leading Bitcoin on a path in the right direction.
Source: News Tip Via Email
Images courtesy of Mt. Gox, Shutterstock, Tokyo District Court