Bitcoin As Financial Products: What Does It Mean?
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Today bitcoins are considered financial products, let’s try
to explain what that means.
Bitcoins were initially devised for the limited context of
video-games, then they spread as a means of payment. Today they are
“crypto-currencies”, i.e.a currency that can be seen and
used only when knowing a specific code.
More in detail, bitcoins are created, stored, and used on
electronic devices, where they are stored in personalized accounts
or “electronic wallets”(“e-wallets”).The holder
in possession of the alphanumeric access keys can access and
transfer them at any time and without the need for the intervention
of third parties.
Bitcoins can be purchased for legal tender through service
platforms or “exchanges”. They conventionally replicate
the functions of legal tender.
With the agreement of the parties involved, transactions for the
purchase of goods and services can be concluded inthe
“peer-to-peer” mode, i.e. between two devices and without
intermediaries, just as it happens with legal tender.
That said, it should be noted that virtual currencies:
- are not legal tender,in that they can be accepted as a means of
payment only on a voluntary basis;
- are not regulated by central government bodies, but are
generally issued and controlled by the issuing body according to
its own rules, which the members of the community of reference must
The changes by the Italian Court of Cassation: bitcoins are
With Order no. 26807 of 17 September 2020 the Italian Court of
Cassation has addressed, for the firsttime during a trial for
money-laundering, the theme of the nature
of “virtual currencies” or cryptocurrencies.
The above mentioned Order has gained his place in the history of
Italian Law, since it has clearly stated that
bitcoins are to be considered as financial
products, and as such they are regulated by the
Consolidated Law on Finance.
The Italian Court of Cassation focused on evaluating of virtual
currency trading activities carried out on a specific website and
advertised through Facebook.
The information provided to “potential customers” in
order to allow them to decide whether to purchase currency should
have been compliant with such mandatory requirements as the
publication of information statements and prior communication to
Because of its non-compliance with the aforementioned
obligations, the offer of bitcoins, given that bitcoins are
financial products, can be considered a criminal offense, that of
unauthorized financial activities pursuant to art. 166 paragraph 1)
of the aforementioned Consolidated Law on Finance.
But what exactly are financial products?
Art. 1 of the Consolidated Law on Finance defines financial
products as typified forms of investment or any investment of a
financial nature, characterized by the combined presence of:
- use of capital;
- a financial return expectation;
- assumption of a risk directly connected to the use of
In compliance with what has just been said, contracts whose
justification consists precisely in the investment of capital (the
“block” of savings) with the prospect of increasing the
funds invested without other services by the investor than that of
giving a sum of money, can be considered investment contracts with
a financial cause (see Order no. 2736/2013 of the Italian Court of
Bitcoin as financial products: the consequences of Order no.
2736/2013 of the Italian Court of Cassation?
The consequences of Order no. 2736/2013 of the Italian Court of
Cassation: selling bitcoin is a crime without Consob’s
In accordance with the above mentioned principles, the Italian
Court of Cassation has stated that selling bitcoins on a website
can be considered illegal financial intermediation
whenConsob’srules imposed by are not observed. It is worth
noticing here, that the European Court of Justice considers
cryptocurrencies as payment instruments.
Indeed, according to the Italian Court of Cassation, what
matters is the fact that purchasing bitcoins on a site represents a
form of investment and, as such, it is subject to controls and
authorizations by Consob.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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