More than half of all cryptocurrency litigation last year involved bankruptcy disputes.
Posted: Wed Jan 22, 2025 3:22 am
The number of cryptocurrency-related lawsuits in Russia has increased fivefold over the past two years, from 510 in 2021 to 2,653 in 2023. This is stated in a study (available to RBC-Crypto) conducted by the educational platform Moscow Digital School in conjunction with the law firm EBR. In connection with the development of new areas in the cryptosphere, experts expect a further increase in the number of cryptocurrency-related lawsuits in the near future.
More than half (62%) of argentina whatsapp number database all proceedings in 2023 were related to bankruptcy disputes, which is 91% more than in 2022. The number of civil cases increased by 60%, criminal cases by 34%, and the number of administrative cases also increased by 19%.
Experts attribute this growth to the development of the crypto-economy, the rapidly growing interest in cryptocurrencies from society and business, as well as the emergence of new fraudulent schemes associated with them.
The authors of the report note an increase in the number of criminal cases related to the use of cryptocurrencies for settlements in the drug trade. Criminals convert the received fiat currency into cryptocurrency, then exchange it or transfer it to other people, after which they convert it back into rubles and withdraw it to the bank cards of so-called "drops" - citizens who register bank cards in their own names and, for a fee, provide them to criminals to withdraw funds.
According to Dmitry Kirillov, a teacher at Moscow Digital School and an adviser at Lidings, the second most common group of criminal cases related to cryptocurrency is the theft of crypto assets. Criminals use hacking of crypto wallets, phishing attacks, blocking access to user data with subsequent ransom in cryptocurrency, creating financial pyramids and fake cryptocurrency projects, the so-called scams.
The expert notes that civil disputes mainly concern the return of funds invested in crypto projects. There are frequent cases when courts reject claims, citing the lack of legislative regulation of cryptocurrencies as an object of civil rights. Such decisions state that cryptocurrency transactions are carried out at one's own risk.
On the other hand, in bankruptcy cases, courts follow an approach based on the legislation on digital financial assets (DFA), under which cryptocurrency is recognized as property.
Disputes over the collection of debts for electricity consumed in the process of cryptocurrency mining are also considered by the courts. Such judicial practice often works in favor of energy companies, notes Dmitry Kirillov.
According to Kristina Mkrtchyan, an adviser to the intellectual property practice at the EBR law firm, the main drivers of the growth in the number of lawsuits over crypto assets are two main factors: sanctions pressure and the desire to hide one's assets. According to Ms. Mkrtchyan, bankruptcy-related disputes make up the majority of the total number of cases, and the growth in the number of lawsuits requires the legal system to be flexible and adapt to new realities.
Experts expect further growth in the number of lawsuits related to cryptocurrency. In April 2023, analysts from the law firm RTM Group predicted that by the end of the year, the number of lawsuits related to cryptocurrency would increase to 2 thousand. In their report, the experts noted that in 2023, the most common violations in judicial practice were related to the circulation of cryptocurrencies on the Binance, Garantex platforms, as well as with the Blockchain, Coinomi applications and Bitmain resources.
More than half (62%) of argentina whatsapp number database all proceedings in 2023 were related to bankruptcy disputes, which is 91% more than in 2022. The number of civil cases increased by 60%, criminal cases by 34%, and the number of administrative cases also increased by 19%.
Experts attribute this growth to the development of the crypto-economy, the rapidly growing interest in cryptocurrencies from society and business, as well as the emergence of new fraudulent schemes associated with them.
The authors of the report note an increase in the number of criminal cases related to the use of cryptocurrencies for settlements in the drug trade. Criminals convert the received fiat currency into cryptocurrency, then exchange it or transfer it to other people, after which they convert it back into rubles and withdraw it to the bank cards of so-called "drops" - citizens who register bank cards in their own names and, for a fee, provide them to criminals to withdraw funds.
According to Dmitry Kirillov, a teacher at Moscow Digital School and an adviser at Lidings, the second most common group of criminal cases related to cryptocurrency is the theft of crypto assets. Criminals use hacking of crypto wallets, phishing attacks, blocking access to user data with subsequent ransom in cryptocurrency, creating financial pyramids and fake cryptocurrency projects, the so-called scams.
The expert notes that civil disputes mainly concern the return of funds invested in crypto projects. There are frequent cases when courts reject claims, citing the lack of legislative regulation of cryptocurrencies as an object of civil rights. Such decisions state that cryptocurrency transactions are carried out at one's own risk.
On the other hand, in bankruptcy cases, courts follow an approach based on the legislation on digital financial assets (DFA), under which cryptocurrency is recognized as property.
Disputes over the collection of debts for electricity consumed in the process of cryptocurrency mining are also considered by the courts. Such judicial practice often works in favor of energy companies, notes Dmitry Kirillov.
According to Kristina Mkrtchyan, an adviser to the intellectual property practice at the EBR law firm, the main drivers of the growth in the number of lawsuits over crypto assets are two main factors: sanctions pressure and the desire to hide one's assets. According to Ms. Mkrtchyan, bankruptcy-related disputes make up the majority of the total number of cases, and the growth in the number of lawsuits requires the legal system to be flexible and adapt to new realities.
Experts expect further growth in the number of lawsuits related to cryptocurrency. In April 2023, analysts from the law firm RTM Group predicted that by the end of the year, the number of lawsuits related to cryptocurrency would increase to 2 thousand. In their report, the experts noted that in 2023, the most common violations in judicial practice were related to the circulation of cryptocurrencies on the Binance, Garantex platforms, as well as with the Blockchain, Coinomi applications and Bitmain resources.