Bitcoin, Lifecoin, Namecoin: The Legal Nature of Virtual Currency

  • Elena Anatolyevna KIRILLOVA Southwest State University, Kursk, Russian Federation
  • Albert Valentinovich PAVLYUK MGIMO University, School of Governance and Politics, Moscow, Russian Federation
  • Irina Aleksandrovna MIKHAYLOVA Russian State Academy of Intellectual Property, Moscow, Russian Federation
  • Teymur E. ZULFUGARZADE Plekhanov Russian University of Economics, Moscow, Russian Federation
  • Sergey Sergeevich ZENIN Kutafin Moscow State Law University, Russian Penitentiary Service Research Institute, Moscow, Russian Federation


The current article examines the peculiarities and legal nature of Bitcoin, Lifecoin, Namecoin, Quark, WebMoney, Ripple and other virtual currencies. There is no single understanding of the legal essence of virtual currency in the world today; therefore, the legal status of such currencies is not officially fixed and there are no official rates of Bitcoins or other crypto currencies against national currencies. Their rate is determined in the course of trading at virtual Bitcoin exchanges and exchange platforms. Such a situation is dictated by the novelty of legal relations in the field of crypto currency circulation, the risks of their implementation, as well as security problems. The main goal of the study is to define the legal nature and features of virtual currencies and the possibilities of legislative regulation of using crypto currencies. When writing the article, the methods of collecting and studying singularities have been used, as well as generalization methods, the methods of scientific abstraction, and the methods of studying regularities. The study has concluded that it is advisable to provide for the licensing of mining and crypto trading at the international level, customers should be identified when selling and buying virtual currencies, introducing a special verification procedure for Bitcoin users will prevent the abuse of virtual currencies for money laundering and terrorism financing. As a result of the analysis, a definition has been given, and the main features and functions of the virtual currency have been highlighted. It has been proved that virtual currencies are a new kind of electronic money stored in computer memory, the monetary value of the virtual currency is managed by means of a technical device. Virtual currency is a new means of payment and does not require access to deposit accounts.


[1] Aron, J. 2011. Bitcoin Miners Are in the Money. New Scientist, 210(2815), 23-25.
[2] Baur, D.G., Dimpfl, T., Kuck, K. 2017. Bitcoin, Gold and the US Dollar – A Replication and Extension. Finance Research Letters, In press.
[3] Birch, D.G.W. 2015. Chapter 25: What Does Cryptocurrency Mean for the New Economy? In Handbook of Digital Currency (pp. 505-517). Academic Press.
[4] Chan, M., Kemp, S., Finsterwalder, J. 2016. The Concept of Near Money in Loyalty Programmes. Journal of Retailing and Consumer Services, 31, 246-255.
[5] Cheah, E.T., Fry, J. 2015. Speculative Bubbles in Bitcoin Markets? An Empirical Investigation into the Fundamental Value of Bitcoin. Economics Letters, 130, 32-36.
[6] Choo, K.K.R. 2015. Chapter 15: Cryptocurrency and Virtual Currency: Corruption and Money Laundering. Terrorism Financing Risks? In Handbook of Digital Currency (pp. 283-307). Academic Press.
[7] Dibrova, A. 2016. Virtual Currency: New Step in Monetary Development. Procedia – Social and Behavioral Sciences, 229, 42-49.
[8] Firth, N. 2017. Bitcoin Tech to Restore Democracy. New Scientist, 235(3142), 8.
[9] Gürkaynak, G., Yilmaz, I. 2015. Regulating Payment Services and Electronic Money: A Comparative Regulatory Approach with a Specific Focus on Turkish Legislation. Computer Law & Security Review, 31(3), 401-411.
[10] Heaven, D. 2017. Remaking Money. New Scientist, 236(3154), 37-39.
[11] Huang, T., Zhao, Y. 2017. Revolution of Securities Law in the Internet Age: A Review on Equity Crowd-Funding. Computer Law & Security Review, 33(6), 802-810.
[12] Kubát, M. 2015. Virtual Currency Bitcoin in the Scope of Money Definition and Store of Value. Procedia Economics and Finance, 30, 409-416.
[13] Levin, R.B., O'Brien, A.A., Zuberi, M.M. 2015. Chapter 17: Real Regulation of Virtual Currencies. In Handbook of Digital Currency. Moscow: Academic Press, pp. 327-360.
[14] Li, X., Wang, C.A. 2017. The Technology and Economic Determinants of Cryptocurrency Exchange Rates: The Case of Bitcoin. Decision Support Systems, 95, 49-60.
[15] Lim, J.W. 2015. Chapter 18: A Facilitative Model for Cryptocurrency Regulation in Singapore. In Handbook of Digital Currency (pp. 361-381). Academic Press.
[16] Low, K.F.K., Teo, E. 2018. Chapter 10: Legal Risks of Owning Cryptocurrencies. In Handbook of Blockchain, Digital Finance, and Inclusion (Vol. 1, pp. 225-247). Academic Press.
[17] McKinney, R.E, Shao, L.P., Rosenlieb, D.C., Shao, D.H. 2015. Chapter 8: Counterfeiting in Cryptocurrency: An Emerging Problem. In Handbook of Digital Currency (pp. 173-187). Academic Press.
[18] Phillip, A., Chan, J., Peiris, S. 2018. A New Look at Cryptocurrencies. Economics Letters, 163, 6-9.
[19] Pieters, G., Vivanco, S. 2017. Financial Regulations and Price Inconsistencies across Bitcoin Markets. Information Economics and Policy, 39, 1-14.
[20] Sapovadia, V. 2015. Chapter 13: Legal Issues in Cryptocurrency. In Handbook of Digital Currency (pp. 253-266). Academic Press.
[21] Scott, B. 2014. Future Money: Many Possible Paths. New Scientist, 221(2955), 21.
[22] Urquhart, A. 2016. The Inefficiency of Bitcoin. Economics Letters, 148, 80-82.
[23] Vandezande, N. 2017. Virtual Currencies under EU Anti-Money Laundering Law. Computer Law & Security Review, 33(3), 341-353.
[24] Wonglimpiyarat, J. 2016. S-Curve Trajectories of Electronic Money Innovations. The Journal of High Technology Management Research, 27(1), 1-9.
How to Cite
KIRILLOVA, Elena Anatolyevna et al. Bitcoin, Lifecoin, Namecoin: The Legal Nature of Virtual Currency. Journal of Advanced Research in Law and Economics, [S.l.], v. 9, n. 1, p. 119-126, sep. 2018. ISSN 2068-696X. Available at: <>. Date accessed: 25 feb. 2024. doi: