Ountries try to decipher legal unknowns involving cryptocurrencies

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If from a financial perspective the world is still somewhat confused about the use of bitcoins , from a legal perspective it is basically lost. There are many unknowns that have not yet been deciphered, which hamper the search for solutions to legal problems arising from the use of cryptocurrencies. In other words, there are many questions and few answers.


Right now in the US, the first fundamental B2B Lead question is whether a country can regulate a “thing” that is not national. A bitcoin , also treated as cryptocurrency, virtual currency, digital currency and cyber currency, is not a national currency or even a foreign currency, because it is “stateless” — or without a defined nationality. Who knows, it might be a universal currency.

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Nature of bitcoins is not yet unanimous between countries.
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And it may not even be exactly a coin. The hasty definition that a cryptocurrency is a currency is impertinent. Cryptocurrency does not necessarily fit into the definitions of currency — definitions such as a monetary unit in force in a certain region, a monetary value issued by a government, a medium of exchange, etc.

In fact, cryptocurrencies are not even widely accepted within a country. A merchant cannot refuse payments in the national currency, but can refuse to receive payments in cryptocurrencies, despite them circulating virtually throughout the territory.

Cryptocurrencies are often purchased as an investment. That is, as if it were a share, which would give cryptocurrency the definition of “security”. When a serious company — or an adventurous one — launches an Initial Coin Offering (ICO), investors acquire cryptocurrencies like buying a share to trade in the future and make a profit. In this case, cryptocurrency functions as a security, subject to the rules of the country's capital market.



Can cryptocurrencies then be defined as securities? That's a question that Judge Raymond Dearie, of a federal court in Brooklyn, New York, will answer in a lawsuit filed by the government against businessman Maksim Zaslavskiy, accused of deceiving investors.

The judge said he will do it. But first, he has to answer a (second) fundamental question. Does a court in New York have jurisdiction to hear civil and criminal cases related to cryptocurrencies?

In the criminal case, federal prosecutors accused Zaslavskiy of launching “digital currencies” onto the market, backed by real estate and diamonds. But in reality, such real estate and diamonds do not exist. In turn, the Securities and Exchange Commission (SEC) filed a civil lawsuit against Zaslavskiy for defrauding investors.

In another lawsuit, also filed in federal court in Brooklyn, the SEC accuses Canadian Dominic Lacroix, 35, of launching an ICO of his cryptocurrency PlexCoin, promising to multiply interested parties' investments by 13 in 29 days. Thousands of investors were seduced by the promise, and it allowed Lacroix and his partner, Sabrina Paradis-Royer, 26, to raise $15 million.

When promoting the ICO on social media, Lacroix declared that the return was guaranteed because he had more than 50 experts working in this market. However, the SEC discovered that his team consisted of just a few employees in Quebec and that he was involved in financial fraud in Canada.