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Legal status of crypto-assets in the Kyrgyz Republic

Are crypto-assets recognized as ‘objects of rights and obligations’ in the Kyrgyz Republic?

— Yes, they are.

The Civil Code of the Kyrgyz Republic provides a list of objects of civil rights and obligations which is not exhaustive and includes any «things» (res) and other «material and immaterial values»:

Civil Code, Article 22. Types of civil rights objects
 
Objects of civil rights include things (res), including money and securities, other property, including property rights; works and services; protected information, results of intellectual activity and equivalent means of individualization (intellectual property), as well as other material [tangible] and non-material [intangible] values.

What is a more precise qualification of crypto-assets under Kyrgyz law?

— Crypto-assets fall within the category of «movable things» (res mobiles).

Civil Code of the Kyrgyz Republic, Article 24 «Immovable and Movable Things»

1. Immovable things (realty, immovable property) are plots of land, underground resources, separated water objects and anything which is firmly connected to land, meaning objects which can not be moved without causing a disproportionate damage to their intended use, including forests, perennial plants, buildings, constructions etc.
The law of the Kyrgyz Republic may attribute other property to immovable things.
2. Title and other proprietary rights to immovable things, limitations on such rights, their creation, transfer and termination shall be subject to State registration in a unified State register.
3. Things which are not attributed to immovable property, including money and securities, are recognized as movable property. Registration of rights to movable things is not required, unless otherwise provided by this Code or by law.

Are there any limitations on transactions with crypto-assets?

— In the Kyrgyz Republic transactions with crypto-assets are not restricted because the law does not contain any specific indication to the contrary, and in the absence of a direct limitation, the law provides that:

The Civil Code of the Kyrgyz Republic

Article 23. Objects of civil rights in their civil circulation (turnover)

1. Objects of civil rights can be freely alienated or transferred from one person to another as a matter of universal succession (inheritance, legal entity reorganization) or by any other means, unless the legislation removes them from the civil circulation or limits their civil circulation.

2. Types of civil rights objects which may not be in civil circulation (objects removed from civil circulation), must be directly named in law.
Types of the objects of civil rights which may be owned only by specifically determined participants of the civil turnover, or the circulation of which is allowed only by special permission (objects with limited circulation), are determined by a procedure established by law.

Are crypto-assets securities?

— No, they are not.

In order for an instrument to be classified as a security under Kyrgyz law, it must be a ‘document’ or ‘a method of fixing rights which is provided by law’ (Civil Code, Article 37, paragraph 1)1. Consequently, the crypto-assets we know now are not securities under the law of Kyrgyzstan.

Moreover, Kyrgyz law strictly supports the position that all the requisites of, and the requirements for, securities must be provided by law, and as a consequence, one may not give the status of a security to any asset whose characteristics are not defined in law as such of a security.

The Civil Code of the Kyrgyz Republic, Article 37, paragraph 2.

Types of rights which are certified by securities, mandatory requisites of securities, requirements as to the form of securities and other necessary requirements are determined by the law of the Kyrgyz Republic or in the manner provided by the law.

The absence of mandatory requisites of a security or non-conformity of a security to the form provided for it makes such security void.

Article 38. Kinds of securities

Securities are: bonds, promissory notes, cheques, bank certificates, bills of lading, shares and other documents which by law or by a procedure established by law are attributed to securities.

Finally, the Kyrgyz law regards as a security only such an instrument which has an obliged person. Each instrument recognized as a security under Kyrgyz law has an obligor — shares, bonds, bills of lading etc. Note that some of the crypto-assets do not have an obligor (bitcoin or ether, for example).

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