Challenges of including cryptocurrency in the bankruptcy estate in individual bankruptcy proceedings

Abstract

Introduction. The article is devoted to the analysis of the problems associated with including cryptocurrencies in the bankruptcy estate during the bankruptcy proceedings of individuals, which has become particularly relevant due to the growing value and circulation of digital financial assets in Russia, as well as their specific characteristics. Despite the legislative recognition of cryptocurrencies as property (under the Civil Code of the Russian Federation and Federal Law No. 259-FZ "On Digital Financial Assets"), their anonymity, high volatility, and lack of centralized control create challenges in identifying, valuing, and liquidating cryptocurrencies in bankruptcy proceedings.Purpose. To examine the key issues of including cryptocurrencies in the bankruptcy estate, analyze judicial practice and regulatory conflicts, and develop proposals for improving regulation to balance the interests of creditors and debtors.Methods. Empirical methods of analyzing court decisions, theoretical methods of systemic and logical analysis. Special legal methods: formal legal analysis of regulatory acts, comparative legal approach. The theoretical basis includes the works of Russian legal scholars, judicial practice materials, and the positions of regulators.Results. The study found that cryptocurrencies, despite being recognized as property, remain a complex asset for inclusion in the bankruptcy estate due to their anonymity, high volatility, and lack of centralized control. Key challenges in including cryptocurrencies in the bankruptcy estate during individual bankruptcy proceedings include: difficulty in identifying assets without voluntary disclosure by the debtor, the absence of standardized valuation and conversion methods for cryptocurrencies, fraud risks, and a lack of expertise among bankruptcy trustees in handling digital assets.Conclusions. To improve the transparency and efficiency of bankruptcy proceedings, the authors propose the following measures: establishing a mechanism for accounting and managing cryptocurrencies in bankruptcy procedures, creating a unified registry of crypto-asset holders, expanding trustees' authority to request information, and developing standards for the valuation and liquidation of digital assets. Implementing these measures will minimize risks for both creditors and debtors, ensuring fairness in bankruptcy proceedings amid the digitalization of the Russian economy.