Italian Court Rejects Business Register for Company Using CryptocurrencyDecember 1, 2018
The Judge at the Italian Court ruled in decree number: 7556/2018 that a business that has been using cryptocurrency was not an eligible candidate for registering with the Business Register.
Every kind of business owner or investor is dealt with the private and public law of Italy. The commercial transactions are governed by the Commercial Law of Italy.
According to the Italian Commercial Law, an Italian Joint Stock Company with S.r.l (‘società a responsabilità limitata’) is a limited liability company. This company is supposed to fulfil the social obligation within the limits of shares that are paid by each member of the company.
An appeal was made in Italy by a company with limited liability as the company was refused registration in the Business Register. Though several other companies using cryptocurrencies in general were not discriminated, this company was particularly discriminated for using a specific type of cryptocurrency.
The cryptocurrency that was used by the S.r.L was not registered in any of the main exchanges. Also, the cryptocurrency was being used in just one platform making it difficult to enable an assessment of the economics of the currency.
Therefore, the cryptocurrency was right away rejected as not within acceptance.
Article 2465 of the Civil code on the subject of conferment, states “All asset items must have a measurable economic value… those who confer assets in kind or credits should attach a report containing an indication of the evaluation criteria adopted and the attestation that their value is at least equal to that attributed to them for the purposes of determining the capital share”.
Since the cryptocurrency that has been used is not verifiable objectively the appeal for candidacy did not win a favorable decree.
The subject matter contended in the appeal, questioned the state of the Business Registrar Applicants. The appeal stated that there is uncertainty about the confer-ability of the asset types. When credit and intangible assets are conferred, it was contended on why ambiguous assets are not conferred.
The company provided access to its credentials and passwords to the court in response to the court’s findings that insufficient materials were presented to the registrar to approve their candidacy in the registrar.
The Italian courts have started to identify with the degree of impact that the cryptocurrencies might have in the economy. Since there is an economic inconsistency when it comes to handling cryptocurrencies, it is felt that improved regulation is required to handle the situation in a consistent manner.
This decree would serve as a precedent when it comes to dealing with cases that will involve conferment of virtual currency, thus providing for protection of creditors with due regulation in place.