- Court delivers verdict on 1,000 USDT loan from 2023.
- According to the court, there is no reason to deny the property rights of cryptocurrency owners.
- The judges are asking lawmakers to create new legislation to clarify the ownership status of cryptocurrencies.
A Russian court has handed a massive victory to crypto holders.
The Constitutional Court has ruled that cryptocurrencies are subject to property laws, which will have far-reaching consequences for cryptocurrency owners and the courts, according to a legal expert.
Ignat Likhunov, lawyer and director of the Cartesius law firm, told Russian media RBC that the decision will reverberate in future civil litigation and criminal cases involving stolen digital assets.
“This sets a precedent for future (police and court) investigations,” Likhunov said.
The decision not only clarifies the rules regarding ownership of digital assets, but it also highlights the growing popularity of cryptocurrency in Russia, as Moscow prepares to make sweeping changes to crypto regulation later this year.
While federal lawmakers are still working on the new rules, courts must ensure protection for crypto holders, provided they obtained the assets legally, Likhunov said.
Civil suit
The high-profile case revolves around a civil suit filed by Moscow resident Dmitry Timchenko. In 2023, Timchenko provided a loan of 1,000 USDT, the dollar-pegged stablecoin developed by Tether, to an unidentified borrower on predetermined terms.
However, the borrower allegedly did not return the funds. Timchenko responded by filing a civil complaint with the Savelovsky District Court. The court dismissed the case, ruling that Russian legislation on digital financial assets, Moscow’s version of tokenized assets, does not cover stablecoins.
Timchenko challenged the decision before a regional appeals court and the Supreme Court, but both upheld the original decision.
Undeterred, Timchenko’s legal team took the case to the Constitutional Court, claiming that the previous judgments violated his property rights as enshrined in the Constitution. His lawyers argued that “no other form of ownership in Russia is subject to such limitations.”
Incoming legislation
In previous criminal proceedings, Russian courts have recognized that intangible property rights laws can be extended to cryptocurrencies such as Bitcoin and Ethereum.
“The (lower) courts rejected Timchenko’s application because he did not inform the tax authorities that he owned USDT tokens. (…) This results in a denial of judicial protection,” the Constitutional Court said in a statement.
The court noted that the obligation to report crypto assets to tax authorities only applies to minors.
The ruling shows that failure to declare the coins does not void the crypto owner’s ownership rights, Likhunov said – provided those tokens were not obtained through illegal means.
Tim Alper is a news correspondent at DL News. Do you have any advice? Email to tdalper@dlnews.com.
