The Blockchain Association of Iran reacted to the recent developments in the digital currency market in Iran by publishing an article on its official website. You can read the full text of this article below:
Considering that in recent days, scattered and sometimes contradictory materials have been published or announced in the media by the relevant authorities regarding legal issues related to the ownership and exchange of cryptocurrencies and the issue of their permissibility or impermissibility, and non-constructive executive measures. Based on these arguments, the exchange working group of the Association of Blockchain Technologists in cooperation with an experienced legal team, which works under the supervision of Dr. Erfan Lajevardi (Basic Lawyer of a Judiciary), may also be implemented soon. Has prepared and published the most important legal questions related to this issue.
It should be noted that the sources and references in this article include documents, relevant laws, as well as announcements by official authorities, and naturally do not include documents that are claimed to be confidential by the authorities and have never been made public. This makes it impossible to refer to them in this article.
Are ciphers considered property?
From a legal point of view, property is something that has the value of trade and in return money or other property is given and has an exchange value economically (Emami, Seyed Hassan, Civil Law, Vol. 1, p. 26, Tehran, Islamic Bookstore Publications, Nineteenth Edition, Spring 1998) The criterion for distinguishing this value is a kind and is in the possession of custom, that is, anything in the market that is equivalent to an amount of money is considered from the legal approach of property.
From the jurisprudential point of view, property is “we spend money on property”, which means that property is spent in return. It has also been said that wealth means, “We desire for the wise”; That is, what the wise desire is considered property. Imam Khomeini (may God bless him and grant him peace) has argued that those who consider taxation valid on sale, this tax is not a criterion for all customs, tax is not a criterion for a particular sect, even if it is taxed by one person, it is sufficient. In his definition of property, the Iranian scholar also puts forward two criteria: “Hajj al-Nas to him”, that is, property is what people needed in this world or in the hereafter, for example, what is the value of the grave itself, regardless of death and the hereafter? Can anyone buy here before, even underground? He wants to buy the heart of the earth for himself, because he needs it in the affairs of the Hereafter and for his death. He gives this development and says what people need in the affairs of this world or in the affairs of the Hereafter.
The second condition is “impossibility of access to it without action”; That is, it belongs to man who does not reach him without doing something. (Ayatollah Mohammad Javad Fazel Lankarani, courses outside of jurisprudence, the book of Al-Bayy based on Tahrir al-Wasila, the conditions of the two, fifth session, 6/31/2015)
According to the legal and jurisprudential definition mentioned above, there is no doubt about the ownership of the cryptocurrencies; Because
– Cryptocurrencies are economically viable;
– Domestic and international custom has shown such a desire for cryptocurrencies that today the global market value is over 2530 billion dollars.
– People pay money to buy cryptocurrencies, which may include rials, currency or other cryptocurrencies;
– Cryptocurrencies are used to respond to worldly needs, such as investment, technology development or foreign payments; and finally
Acquisition of cryptocurrencies requires human activity that is manifested in extraction or trade.
Is it permissible to buy and sell cryptocurrencies according to general legal and jurisprudential standards?
According to Article 10 of the Civil Code, “Private contracts are valid for those who have concluded them, unless it is explicitly against the law.”
Private contracts mean consent to any obligation to transfer, abandonment of a particular act, definite act, and its abrogation; And if there is any doubt about the necessity of a certain law, the principle is that it is not obligatory. (Jafari Langroudi, 1349, pp. 249, 660)
Some think that this principle has no historical background in our law, and that the authors of the Civil Code were inspired by French civil law
They have taken, if our jurists have followed the same principle, at least in the matter of condition. A group of commentators and jurists have also considered it obligatory to fulfill all contracts that are not contrary to morality, reason and sharia; “Ibn Zayd and Zayd ibn Aslam say: The meaning of covenants that people make with each other or with themselves, such as marriage, sale, covenant, oath, etc.” or some quoting Ibn Abbas and a group of commentators say: O believers in Keep the covenants and contracts.
According to the provisions of civil law and jurisprudential opinions mentioned above
– The exchange of cryptocurrencies is allowed according to Article 10 of the Civil Code, the principle of freedom of contract and the rule of UFOs in contracts; Unless the law explicitly prohibits the exchange of cryptocurrencies.
Is it allowed to buy and sell cryptocurrencies within the framework of regulation (market regulation)?
– Approval No. 58144 / T55637 AH dated 13/5/1398 Honorable Council of Ministers
According to paragraph 1 of the resolution of the Honorable Council of Ministers, “the use of cryptocurrencies is done only by accepting the responsibility of risk (risk) by the parties and is not subject to the support and guarantee of the government and the banking system and its use is not allowed in domestic transactions.”
The provisions of the resolution of the esteemed Council of Ministers indicate the following matters:
A- The use and sale of Ramzarz is allowed.
B. The government and the banking system do not guarantee the intrinsic value of the cryptocurrencies.
The mentioned non-guarantee, as opposed to the obligation to guarantee Rials, is the common currency of the country. Documented in paragraph 1 of Article 5 of the Monetary and Banking Law of the country, approved on 4/18/1351 and subsequent amendments, “The Central Bank of the Islamic Republic of Iran must always have equal support for 100% of the issued banknotes.”
Therefore, since the Central Bank, unlike the Rial, does not guarantee the intrinsic value of cryptocurrencies, it has no obligation to maintain support for cryptocurrencies.
C- The use of cryptocurrencies for internal exchanges of the country is not allowed.
This prohibition arises from letter “a” of Article 3 of the Monetary and Banking Law of the country, approved on 4/18/1351 and subsequent amendments, which stipulated that “the privilege of issuing the country’s currency is the monopoly of the government and this privilege is exclusively in accordance with the provisions of this law. “The Central Bank of the Islamic Republic of Iran will be transferred.”
According to the mentioned legal documents, individuals are not allowed to use cryptocurrencies as intermediaries of value or means of payment in domestic transactions; However, a ban on the use of cryptocurrencies as a means of payment does not mean a ban on the acquisition and exchange of cryptocurrencies as property; What is more, the first paragraph of the Cabinet resolution approves the acquisition and exchange license by accepting the responsibility of taking risks.
– Executive Instruction on the subject of Articles 4 and 5 of the Resolution No. 39228 / T57373 dated 15/4/2016 of the Honorable Council of Ministers
According to the mentioned executive instruction, the purpose of compiling the instruction is “to determine the task, to organize the transparency of the activity of Ramzarz (Miner) extraction devices that have entered the country without observing and formalizing the law.”
– The mentioned instruction does not provide any ruling regarding the prohibition of acquiring and buying and selling Ramzarz; And at the same time, implicitly, it implies that Ramzarz is owned and traded legally; Because the product of the activity of extraction devices is Ramzarz, which according to the above explanations, is considered property; And its transaction license is inferred from Article 10 of the Civil Code, the principle of freedom of contracts, valid jurisprudential sources and the instructions of the Resolution No. 58144 / T55637 dated 13/5/1398 of the esteemed Council of Ministers; What is meaningless is that the legislator legalizes the use of the extraction device; However, to deny the tax on the product resulting from the extraction, ie Ramzarz.
Is it permissible to block cryptocurrency payment gateways?
– The invalidity of Shaparak’s letter regarding the blocking of Ramzarz payment gateways:
Shaparak, in accordance with letter No. 12583 / p. 99 dated 12/12/2016, addressed to paying companies, stated: Discontinue electronic payment services to supported acceptors who provide goods or services contrary to the laws of the Islamic Republic of Iran and the requirements and laws of the Central Bank of the Islamic Republic of Iran (such as and not limited to selling cryptocurrencies, vpn sales, betting and gambling sites, etc.) “And inform Shaparak about the result.”
The letter does not comply with legal standards; Because:
A- Based on the license of the cryptocurrency transaction, pursuant to Article 10 of the Civil Code, the principle of freedom of contracts, valid sources of jurisprudence and Resolution No. 58144 / T55637 dated 13/5/1398, the esteemed Council of Ministers, claiming that these transactions are contrary to the laws of the Islamic Republic of Iran. It is incorrect.
B- The powers and competencies of the Central Bank of the Islamic Republic of Iran are defined according to the Monetary and Banking Law of the country, approved on 4/18/1351 and subsequent amendments; These powers are detailed in Articles 10 to 15 of the said law; None of the above provisions refer to the legislative or executive powers of the Central Bank in the field of cryptocurrencies.
It is important to note that the judiciary, in dealing with alleged foreign exchange violations of the central bank, even with regard to the supply of foreign exchange, which is one of the clear competencies of the central bank, recognized the central bank’s decision to sell foreign exchange without the approval of the Monetary and Credit Council; Accordingly, the regulatory indictment was referred to the court by the trial of the then Governor of the Central Bank.
Therefore, the Central Bank is not allowed to prohibit or restrict ordinary transactions and services provided to individuals in the absence of specific legal authority.
– The invalidity of the alleged resolution of the Supreme Council for Combating Money Laundering regarding the ban on the exchange of cryptocurrencies
According to some of the esteemed officials of the Central Bank, it has been claimed that the Supreme Council for Combating Money Laundering has banned the exchange of cryptocurrencies; Refrains from the fact that despite repeated requests from market stakeholders, the alleged resolution has not been published and it seems that the principle of its approval was also inferential; However, in accordance with paragraph 2 of Article 4 of the Anti-Money Laundering Law, approved on 2/10/2007, the Supreme Council for Combating Money Laundering is not allowed to make regulations or approve by-laws; And the approval of regulations in this field is among the competencies of the esteemed Council of Ministers.
Therefore, the alleged decision of the Supreme Council for Combating Money Laundering has no effect on the license to buy and sell cryptocurrencies, resulting from the approval No. 58144 / T55637 dated 13/5/1398 of the esteemed Council of Ministers.
– Contradiction of payment gateways with the views of the General Legal Department of the Judiciary
According to Advisory Opinion No. 7/92/2442 dated 12/20/2013, “Transaction and having a bank account are among the civil rights of every person, and in principle, according to the twenty-second principle of the Basic Law, no one can be deprived of these rights.”
Even with regard to convicts, Theory No. 7/860 dated 10/18/2003 has been prescribed. Despite the criminal conviction, individuals cannot be banned from being prosecuted; Unless a person is prohibited from doing business in a court order.
Therefore, restricting access to payment gateways, obstructing the civil rights of individuals, is contrary to Article Twenty-two of the Constitution and contrary to the advisory opinions of the General Legal Department of the Judiciary.