Bitcoin and the trade with Germany is not a punishable offence. You can buy Bitcoin and sell it on, with legal consequences, expect – of course you do not need to pay attention to the fact, to upset the tax office. With a judgment of the chamber court of Berlin, this is now officially.
While the Bitcoin Ecosystem is not moving at the moment with FUD-heavy news, as well as bearish trends so right to the front, coming from Germany, a bit of momentum in the case. In a judgment of the court of Berlin, it is called:
„trading with Bitcoin is not punishable, because Bitcoin is not a financial instrument within the meaning of the KWG [German banking act, editor’s note. d. Red.] is.“
The process, and the judgment
The judgment is based on a process in which the then 16-year-old operator of bitcoin-24.com according to Paragraph 54 of the German banking act (KWG) was charged. It provides that any person who operates
shops, in accordance with section 3, also in conjunction with section 53b Para. 3, sentence 1 or 2, are prohibited or without permission according to § 32 Abs. 1 sentence 1 of the banking transactions or financial services,
must reckon with a prison sentence of up to five years in prison or a fine. According to this scheme, the Amtsgericht Tiergarten, sentenced a defendant on the 29. February 2016 due to negligent breach, to a fine. The defendant went in appeal and got right.
The defendants operating according to the verdict, a (unspecified) German Bitcoin exchange. His revenue, he transferred to a Bank in Poland:
„is Triggered by a strong media interest and numerous reports from March 2013 to a „Hype“ on Bitcoin and the corresponding trading platforms. Finally, the account increased, the platform of the defendant within a few days of 209.832,16 Euro (Stand 27. March 2013), to around 2.45 million Euro (as of 15. April 2013).
At 9. April 2013 has been blocked by the Polish account on suspicion of money laundering by Polish authorities. The C (…), the bank announced on 8. April 2013, the account properly to 17. June 2013. The defendant lawyer sought advice. It was because of the disturbed payment transactions, operating a proper business, to the temporary closing. On the website by the defendants was 11. or 12. April 2013 switched off.“
The acquittal
On the Revision of the Berlin court comes to the following judgment:
„The chamber has not denied the culpability of the actions of the accused, since the trading Bitcoin permission in the identified Form required. In the case of Bitcoin, it were not a financial instrument within the meaning of the KWG.“
The trial chamber justified its decision saying that Bitcoin is not a financial instrument within the meaning of section 1 of the KWG, nor to units of account within the meaning of § 1 Abs. 11 KWG handle. Therefore, you don’t need permission within the meaning of the banking act.
The justification
As you can see from the judgment, there was also a clear classification of Bitcoin. In the model for official English, it means:
„The Senate, as the chamber – in the absence of sufficiently detailed fixed court verdict open positions to the precise embodiment of the of the defendants operated a business in the country, to subsume under which of the above types of business, the Act of the accused would be. As an application of the KWG is contrary to that of the defendant, traded or brokered, Bitcoin are not a financial instrument. Considered alone, the adoption of a unit of account within the meaning of § 1 Abs would be to that extent. 11 sentence 1 of the KWG.“
Is Bitcoin a currency?
to be clear, The court does not know how Bitcoin is defined, it is certain, however, that Bitcoin is not a financial instrument. Among the financial instruments law, securities, money market instruments, derivatives, rights to subscribe for, any securities and other instruments traded on an organised market in accordance with the value of paper.
But also as a unit of account, the Bitcoin will be eliminated according to the judgment:
„The draft law are, however, found no evidence that so-called crypto-currencies under the concept of the unit of account should fall. This is due to the fact understandable that, for example, the physical Bitcoin is only in 2008/2009 for the first time on the Internet mention (see Frase, BB 2016, 26). Therefore, the legislator Bitcoin could not include in his consideration. The wording of the Law, no one interpretation is available, according to which only after the adoption of the law which have surfaced Bitcoin would be under the concept of unit of account subsumierbar. Considered alone, the adoption of a unit of account within the meaning of § 1 Abs would be to that extent. 11 sentence 1 of the KWG.“
in Short: Bitcoin is too new (!), as that the legislature could assess the crypto-currency, based on its current Definition. But it
gets even better: „The Bitcoin is neither issued by a Central Bank or a public authority […] a generally applicable Issuer as a replacement currency, used to pay system exists in the network. There is no parent and identifiable (legal) Person can regulate on the distribution of Bitcoin influence […], rather, all of the participants to monitor the accuracy of the Transfer of Bitcoin within the network. The Bitcoin has no representable or comparable value. It is not a currency and have no monetary means of payment in the classical sense, which is accepted in a currency area, by operation of law by anyone to the right of the effective fulfilment of due services […].“
Bitcoin has no determinable value
Here, the legislature writes the most celebrated property of bitcoin: its decentralized nature There is no authority that can monitor Bitcoin, and therefore its value, you can’t control:
„So it is missing the Bitcoin to a General recognition and the corresponding foreseeable value of resistance, which allows him to the General comparability of different Goods or services to be used […].
BaFin has exceeded its competences
Finally, the court issued a rebuke to the BaFin, by says you’ve exceeded your competence. So you have the Bitcoin in a sheet of 20. December 2011, as a complementary currency. To do this, you will not be entitled:
„With the Behauptung, Bitcoins fell under the definition of units of account within the meaning of § 1 Abs. 11 of the KWG, spanning the Federal to the tasks assigned to the area.“
chamber of the court is undecided
we Summarize: The court of appeal don’t know what Bitcoin is, however, that he is neither a unit of account nor a complementary currency. In addition, to keep the BaFin in the Definition of currencies the hell out of it.
Bitcoin: E-money
Now, what about Bitcoin then? When it comes to the Berlin court: no E-money. The Definition of E-money is as follows:
„In the case of network money, like card money prepaid electronic payment units issued by a Bank or non-Bank, and as a means of payment instead of cash or paper money can be used. The network of money will be saved by the user on PC hard disk and, once or several times for the settlement of remote payments by means of dialogue between the participating computers used, modern cryptographic methods against counterfeiting or tampering protection.“
The judicial Organ resourceful way:
detects „the condition of the issue by the Issuer is not given in Bitcoin (cf. judges/Augel op CIT, p. 940; Casper/Terlau aaO, Rn. 49 f.).“
here, Too, the authority relies again on the fact that Bitcoin is not issued by a Central authority such as a Bank or authority. But what is Bitcoin then, if there is neither E-money nor a unit of account? The Berlin court of appeal remains to this explanation so far is guilty.
summary: Bitcoin is Neither meat nor fish
let’s Summarize: According to the court of appeal of Bitcoin is not an alternative currency, electronic money and has no determinable value.
What do you think would say Satoshi Nakamoto? Now, we remember the White Paper:
„[Bitcoin is] a purely Peer-to-Peer based Version of electronic cash that allows Online to send payments directly from one party to the other, without the need for a financial Institution.“
We propose the term „crypto-currency“. However, The then-16-year-old multi-millionaire is expected to make the definitions, no further thoughts.
The full judgment can be found here. Also when trading with the crypto-currency is not prohibited: taxes you must pay, nevertheless. Who would like to learn more on the subject of Bitcoin & taxes, you can read our Podcast and/or our special contribution to listen to.