Japan does not recognize bitcoin as a property right

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The Spanish website "sobrebitcoin.com" reported on 2 September a Tokyo District Court ruling published by Kyodo in "The Japan Times" on 6 August 2015 that bitcoins do not confer a property right. The case was that a Tokyo resident (not represented by legal counsel in the proceedings) had sought reimbursement of his 458 bitcoins deposited in an account at the failed bitcoin exchange platform, Mt. Gox, which has gone bankrupt.

A lawyer following the Mt. Gox case had stated that it would be difficult under Japanese law to respond favourably to such a request and that other legal arguments would have been preferable.

Indeed, other plaintiffs have gone to court to claim damages from Mt. Gox for negligence in the management of the site.

The Japan Times reporter reports that the presiding judge, Masumi Kurachi, confirmed these fears by stating that the Japanese Civil Code only recognises a property right in material things that allow exclusive control over them.

According to the court, Bitcoin does not have the characteristics of material things and does not offer exclusive control because transactions between users are structured in such a way that they require the involvement of a third party. The Court therefore rejected the claim.

It should be noted that in this decision the Japanese judge did not retain one of the essential characteristics of bitcoin, namely, the possibility for two individuals to exchange bitcoins directly between themselves (over-the-counter sale) without going through an intermediary. This technique of peer-to-peer exchange of bitcoins does not require the intervention of any third party.

This decision is interesting both because there is little case law on bitcoins (in this case, the question raised was to assess the legal nature of bitcoins in the light of a law that was previously unaware of their existence) and because, as the Japanese Civil Code is strongly inspired by the French Civil Code, it would be interesting to see the response of a French judge to a similar request.

Sources: japantimes.co.jp - sobrebitcoin.com

This article was first published on www.bitcoin.fr