In the context of the media frenzy that propelled cryptocurrency to the center of an impressive speculative bubble, Bitcoin is now the subject of considerable publicity and increased attention regarding its legal framework. Since its widespread adoption, numerous other forms of cryptocurrencies and digital tokens have developed and spread, notably the recent non-fungible tokens – NFTs.
As a reminder, blockchain is a technology for storing and transmitting information without a central authority. Applied to the financial and monetary sector, cryptocurrencies and other derivatives, such as crypto-assets and cryptocurrencies, are currencies usable on a dedicated and decentralized computer network, protected by secure blockchain technology.
The rapid development and volatility of certain cryptocurrencies have generated an explosion of investment opportunities, which can pose risks for savers and investors. While blockchain technology shows promise, extreme caution is therefore advised when investing in crypto-assets, particularly through unsecured or risky exchange platforms. Indeed, the French Financial Markets Authority (AMF) is increasingly focused on monitoring transactions and operations associated with cryptocurrencies, especially Bitcoin, which is widely used in numerous illegal activities, particularly on Darknet platforms.
Bitcoin: a multifaceted payment tool
Compared to the dollar, gold, and PayPal, Bitcoin is a monetary system independent of states and supported by a community of users. It comprises two distinct elements: on the one hand, a virtual currency unit used for transactions—BTC—and on the other, its secure exchange protocol software for individuals or businesses. This protocol is characterized by self-regulation among its members, permanent traceability of its database, and the facilitation of commercial transactions without any banking intermediaries.
Based on blockchain technology—aggregated, encrypted, and time-stamped transactions—Bitcoin has grown considerably thanks to cryptocurrency exchange platforms that allow anyone to convert their currency into bitcoins.
Bitcoin: A recent financial boom in the blockchain
Bitcoin’s price fluctuations, linked to cyberattacks on exchanges, the closure of illegal trading sites, and speculative frenzy, reveal its extreme volatility and the inherent dangers of the widespread adoption of such a payment system. Already considered a new speculative bubble, this cryptocurrency, a pioneer of a new generation of its kind, quickly attracted the attention of governments.
Denounced as early as 2013 by the Bank of France as lacking price and liquidity guarantees, Bitcoin, excluded from the legal classifications of electronic money or payment instrument, is reduced in France to a mere “transactional valuation tool.” Yet, other countries have demonstrated greater confidence in Bitcoin. Germany has designated it as a private currency, while Japan has recognized it as legal tender. The Ministry of Finance has also focused on limiting and controlling cryptocurrencies by their users, international regulation and cooperation on the subject, and the development of tools for analyzing the use of these new exchange systems.
The legal implications of Bitcoin: blockchain, evidence and liability
Indeed, Bitcoin is a source of worrying legal uncertainty. Irrevocably linked to the Blockchain and its own legal issues, Bitcoin faces legal challenges related to questions of evidence, determination, and the liability of actors in a fully automated process characterized by anonymity and the impossibility of halting transactions.
Furthermore, Bitcoin exchange platforms have been subject to constant scrutiny and even prosecution since their inception for illegally conducting banking operations, offering online gambling and betting, and engaging in undeclared work.
States, for their part, are grappling with adapting their tax systems and taxing these new methods that circumvent traditional regulatory processes. Lacking a suitable legal framework and an international consensus on its legal status, Bitcoin, as a global payment tool, ultimately offers no security or guarantees for its users.
Finally, Bitcoin owners are vulnerable to fraud, scams, and the theft of personal data, even their Bitcoin wallets, which are subject to numerous security vulnerabilities regularly highlighted by professionals.
