According to some foreign experts, an important event has taken place in the history of cryptocurrencies, which will probably be remembered as the starting point of the relationship between the courts and the crypto industry in the future. On June 21, the U.S. Supreme Court first mentioned Bitcoin in its conclusion. What does this mean and why does the market continue falling after this news?
The very situation that is under discussion in the highest court is not connected with the legal status or regulation of the cryptocurrency. Rather, the question is whether employee stock options are taxable “compensation” under the Railroad Retirement Tax Act, which was adopted as early as 1937. To make a decision, the judges needed to consider the historical development of money, and they mentioned Bitcoin as a monetary alternative.
As a result, four of the five judges decided that employees should not pay tax for the sales of stock options because the action is not a "money remuneration." The only one who expressed a different opinion was Stephen Breyer. The judge argued that options should be classified as taxable compensation in a "broader understanding of money."
But not all experts agree with this positive assessment. This mention of Bitcoin may lead to the opening of numerous criminal cases. In addition, the characterization of cryptocurrencies is not the prerogative of the Supreme Court, says Elina Sidorenko, Doctor of Law and director of the Center for Digital Economy and Financial Innovation.
"These words about Bitcoin do not mean anything for the crypto industry, so the market did not react to this decision and continued to fall. In addition, the case considered by the U.S. Supreme Court concerned options. The opinion of Judge Breyer may lead to the opening of criminal cases on crypto crimes because earlier we encountered only crypto fraud and considered developing regulatory framework to provide punishment for such thefts," Sidorenko said in a comment to DeCenter.
The judge's words about Bitcoin are overrated because this note refers to the transfer of cash varieties that exist in the world. Soon, cryptocurrencies will appear more often in government documents, but such references are unlikely to change the legal situation, as stated by Roman Yankovskiy, partner at Zartsyn, Yankovskiy & Partners, venture lawyer and Moscow State University professor.
"This is news of the overhyped variety. One supreme judge mentioned Bitcoin within the framework of a reasoning when speaking of a decision and said that profit is not necessarily usual money for all of us because cryptocurrencies can someday be recognized as money. Naturally, digital coins will be mentioned in decisions and rulings of various state structures, but this will not give any additional status to cryptocurrencies," as Yankovskiy shares his opinion specifically for this article.
Let us remember that the legal status of cryptos has not yet been determined in all concerned countries of the world. Therefore, the crypto community is reacting vigorously to any statement about digital money from any supreme authority. In a number of countries, digital currencies are viewed as a commodity or an investment asset, and the fact that the representatives of the Supreme Court started speaking about the legal status of Bitcoin can be regarded as a positive moment, Sidorenko adds.