Spanish Debate On The Status Of Virtual Currencies

SPANISH DEBATE ON THE STATUS OF VIRTUAL CURRENCIES

30th November, 2014 at 03:51:37
Source: http://www.azonlinecasinos.com

If gambling companies using Bitcoin have to licence, does that validate the cybercurrency?

Interesting legal questions around the use of cybercurrencies like Bitcoin by online gambling companies have been raised in Spain recently, with the Spanish Treasury advising a legal firm that providing exclusive cybercurrency services still constitutes gambling, and operators must have a licence.

The issue was raised by the local law firm Abanlex, which asked the Treasury for its opinion on whether Bitcoin is considered as legal tender (ie money), and whether online gambling operators using cryptocurrencies are regarded as falling under the national gambling regulations and should therefore be licensed and regulated, paying the appropriate fees and taxes.

In its response, the Treasury implies that cybercurrencies are treated as legal tender, because it opines that gambling is taking place using the cybercurrency, and therefore licensing is required

The Treasury advised:

"Ultimately, the bitcoin is a convertible virtual currency that can be exchanged between users and, likewise, be converted into dollars, euros, or other currencies both real and virtual.

"The activity of betting with bitcoins is considered to be included within the definition of bets, [and] it is therefore mandatory to obtain the general betting licence and the corresponding singular license."

In a statement to the publication Teknautas, an Abanlex spokesman discussed the Treasury opinion, pointing out that whilst the Treasury does not generally regard cybercurrencies like Bitcoin as money, they have a more ambivalent view of its status when it comes to whether gambling has taken place or not, and therefore whether the licensing and regulatory provisions of the national gambling laws apply.

But, the spokesman argues, in legal terms the principle of analogy usually means that if something is considered money under a specific law, it must be applied equally for all; ergo if the Treasury treats cybercurrency as legal tender under the Gambling Act, then it must also regard cybercurrency in other laws such as those concerned with money laundering, terrorist activity and even those setting operational restrictions such as prohibiting the cash payment of amounts in excess of Euro 2,500.

Such an argument could work to the detriment of operators offering cybercurrencies like Bitcoin, where one of the attractions for players is the anonymity possible and easier use of such instruments.

The situation also creates interesting debate on cybercurrency liability for more general taxation such as VAT or its equivalent sales-based levies, which has been an issue in several countries, including Britain, Australia, Finland and the Netherlands.

With Bitcoin apparently growing in popularity as a global transaction currency for a variety of industries, and the coming advent of Bitcoin automatic teller machines, this is clearly a debate that is likely to continue for some time.

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