The two lawyers Jillian Friedman and Joseph Neudorfer have prepared ‘Bitcoin and the Law’ report wherein they discussed various issues relating to the digital currency. The report in its abstract says that Bitcoin does not exist in a legal vacuum by detailing how the relevant legal and regulatory frameworks already apply to its use.
According to the two lawyers in their study they posit that whether or not Bitcoin is classified as “money” does not preclude Bitcoin and other digital currencies from being subject to the principles of private law, criminal law. This is applicable even for certain business models, financial services law as well.
Regarding contracts under private law, their report says that it is clear that the mere fact that Bitcoin is an instrument to an agreement or a contract does not render the parties exempt from the application of the rule of law. Even consumer protection laws apply to Bitcoin as the legal obligations resulting from the sale of a good with Bitcoin.
Bitcoin is a Complicated Technology
The report from the duo also talks about financial services law and its applicability in Bitcoin transactions; it says that the activities of digital currency businesses that are similar to money services businesses, such as exchanges, will likely soon have to play by the same rules as their fiat counter parts.
The report from the two lawyers says that Bitcoin is a complicated technology and law-makers must educate themselves on distributed ledger technology and consult industry players before they extend existing laws to digital currency and Bitcoin technology or create new ones. Thus, it thrusts a lot on how the government should proceed towards understanding the technology.
The Report is Important as the Canada Passed First Law Regulating Bitcoin Recently
According to the Bitcoin community in Canada, the release of Bitcoin and the Law report is important as it not just analyzes federal law and Quebec civil law but also the Canada’s first legislation dealing with virtual currencies i.e. Bill C-31 that amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
The Bitcoin and the Law report asserts that Bitcoin ATMs operators should tell the fees for the use of the ATM to their customers as it’s not clear whether the GST (goods and services tax) applies to the purchase of Bitcoins. It emphasizes that legal practitioners and law-makers should take a functions based approach.
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