Japanese Court: Bitcoins Not “Tangible Property”
Following the collapse of Mt. Gox and the subsequent case of the missing 750,000 BTC, much legal legal has been undertaken, from bankruptcy filing to damage suits against what was once the world’s leading Bitcoin exchange, market maker, and price setter. For some time, a lawsuit regarding 458 BTC has been proceeding in a Tokyo court, a Kyoto claimant asking that the court rule his money be returned.
Also read: Mt. Gox’s Mark Karpeles: Of Cats, Temp. Unavailable Bitcoins & Double Lattes With Whipped Cream
In a surprising turn of events counter to rulings in places like Kentucky, Judge Masumi Kurachi said yesterday that current law is not up to the task of dealing with bitcoin negligence, dismissing the case. According to Kurachi, the current civil code does not contain enough statutes pertaining to Bitcoin, which he will not treat as traditional currency. According to the Japan Times:
[…] the Civil Code envisages proprietorship for tangible entities that occupy space and allow for exclusive control over them. The judge said it is evident bitcoins do not possess the properties of tangible entities and acknowledged that they also do not offer exclusive control because transactions between users are structured in such a way that calls for the involvement of a third party.
While the case has been dismissed, the ruling will necessarily trigger a watershed of new legal moves in attempts to regain funds. By the prevailing logic, transactions that require a bank might also not be the subject to fraud. It seems that rather than make a ruling in the absence of clear law to support it, Judge Kurachi has instead created a need for clarification about the Japanese government’s interpretation of bitcoins. Simply calling bitcoins “intangible property” will not sufficiently put the issue to bed, but rather spark a discussion in Japanese courts about Bitcoin.
Karpeles, meanwhile, was recently arrested for fraud regarding his holdings while running the exchange. Japanese authorities believe that, if nothing else, Karpeles was dishonest about the amount of money he had in accounts at the time. Further, authorities have in the past said that they do not believe a hack was responsible for the largest single loss in Bitcoin history.
