* Govt issues first detailed view on bitcoin
* Bitcoin not a currency, may be taxable
* Monitoring Mt. Gox bankruptcy process
By William Mallard
TOKYO, March 7 A week after the collapse of Mt.
Gox, Japan is still struggling to craft a response to the
bitcoin phenomenon, saying the crypto-currency is not legal
tender, though it might be taxable and subject to
In its first detailed response to the bankruptcy of the
Tokyo-based company, once the world's biggest bitcoin exchange,
the government issued a statement assessing how bitcoin is
covered - or more often, not covered - by existing law.
The issue took on new prominence in Japan on Feb. 28, when
Mt. Gox sought Chapter 11-style bankruptcy protection, saying it
had lost bitcoins and cash worth some half a billion dollars due
to hacker attacks.
Bitcoin is not a currency, but could be taxable under some
circumstances, the statement says. Although the government
understands that bitcoin is not issued or backed by any
government or central bank, "we have not grasped the situation
in its entirety."
The authorities are monitoring the Mt. Gox bankruptcy
process and, if necessary, will consider a response, said Chief
Cabinet Secretary Yoshihide Suga.
Fewer than 1 percent of Mt. Gox's 127,000 creditors are
Japanese, the company has said. Yet across the government,
officials are wrestling with how to handle bitcoin.
"It's not money," said Finance Minister Taro Aso. "Does the
Financial Services Agency have jurisdiction? The Finance
Ministry? The Consumer Affairs Agency? The Ministry of Economy,
Trade and Industry?" he asked at a regular news conference.
"Opinions are divided."
The government statement, citing 18 sections of 11 laws and
regulations, says bitcoin is not a currency or an asset within
the purview of professional trading or asset management, while
trading the virtual currency is not a banking or
But, generally speaking, bitcoin could be taxable if it
meets certain conditions of income, corporate or consumption tax
laws, the statement says. This leaves open the possibility that
bitcoin could be treated as a commodity like gold, although the
statement does not specify this.
Regarding money laundering, certain transactions - whether
with bitcoin or not - require people to identify themselves, it
The 6-page document is the government's official response to
questions posed by Tsutomu Okubo, a member of the opposition
Democratic Party of Japan and former managing director at Morgan