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Digital Assets and Digital Inheritance
 
PIIS123456780015732-6-1
DOI10.18254/S123456780015732-6
Publication type Article
Status Published
Authors
Julia S. Kharitonova 
Occupation: Professor of the Department of Business Law of the Faculty of Law at Lomonosov Moscow state University
Affiliation: Lomonosov Moscow state University
Address: Moscow, Russia
Journal nameLaw & Digital Technologies
EditionVolume 1 № 1
Pages19-26
Abstract

The paper reveals the concept of "digital inheritance" - a new term in law, which has become widespread in many legal systems and refers to the transfer of rights to digital assets in a broad sense. It is established that only turnable digital assets are subject to transfer by way of universal succession. It is shown that the possibility of digital inheritance by law and by will is limited depending on the object by the terms of the contract (a license, services, confidentiality) and/or the human constitutional right to privacy.

Keywordsdigital assets, digital inheritance, social network account, digital content, privacy
AcknowledgmentThis research was supported by the Russian Foundation for Basic Research via grant No 18-29-16145 MK «The Mechanism of legal regulation of relations using the Distributed Ledger Technology».
Received30.06.2021
Publication date02.07.2021
Number of characters38593
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Table of contents

References
Digitale nalatenschap. >>>>
1 Introduction
2 Digital assets are becoming more and more valuable to the modern society. And while in Russia this topic has only recently become popular among lawyers, outside the country this trend has been developing for several decades. In 2011, the Center for Creative and Social Technologies (CAST) in the UK (Goldsmiths, University of London) published a study on the Internet use in the UK called "Generation Cloud". The study found that Brits have at least £2.3 billion worth of digital possessions stored in the cloud. Meanwhile, 24% of UK adults believed they had a digital asset worth more than £200 per person (Rackpace Hosting 2011). PricewaterhouseCoopers (PwC) conducted a similar survey in 2013 and found that people value their digital assets at £25 (PWC 2013). We see a similar situation in other European countries (Nemeth et al. 2017) and in the USA. Moreover, suggestions concerning the current situation of digital inheritance are put forward in views of Internet companies, users, and the government in China (Zhao and Yang 2012; Wei-jie 2012). Considering the size of this market segment, owners are concerned about what happens to our Facebook, Twitter, LinkedIn and other social media accounts after death, to whom and how digital assets, including tokens and cryptocurrency, can be transferred. The problem is all the more urgent because losing passwords for the access to asset depositories, digital platforms, etc. can be fatal (Sarnek 2016). In Russian literature, the problem of inheritance of digital assets is considered through the prism of Articles 128 and 141.1 of the Civil Code of the Russian Federation. In particular, Yatsenko (2019) concludes that since the Russian legislation defines a digital right as a token, it is the only one of all digital assets in our legal order "capable of being an autonomous object of inheritance. At the same time, the heirs may realize the possibilities inherent in it concerning another object associated with it, for example, by exercising the right of ownership to a car certified by a token". This approach seems very narrow. By today, practicing lawyers, notaries, and citizens are faced with questions of the possibility of succession in respect of such specific digital assets as cryptocurrencies, tokens, social media accounts, and virtual gaming assets. In recent years, many countries have discussed in some detail the possibility of universal succession of social media assets and other digital assets. The term "digital inheritance" has been developed in foreign legal literature to denote the relevant direction.
3 The concept of digital assets in a broad and narrow sense
4 The process of digitalization of the economy has led to the creation of new objects of wealth circulation, which have received the common name - digital assets. At the same time, there is no unified approach to the understanding of digital assets in the current literature. As the most important features of digital assets a "binary" form of their existence and the presence of real or potential value are rightly pointed out. It is these features that are reflected in the very name of the new property objects. However, these features are not enough to unambiguously qualify objects existing in the binary form as digital assets. According to the literature, digital assets include not only tokens and cryptocurrencies, Big Data, domain names and social media accounts, virtual gaming property, but also, a digital content, i.e. information stored on Web resources (texts, video and audio files, graphic images, animations, and so on). But this, in our opinion, is not always reasonable. The designation of any digital object as a digital asset is largely driven by the legal definition of digital assets contained in the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA 2014). According to (h) Section 870 of the Act, "Digital asset" means an electronic record in which an individual has a right or interest. The term "digital asset" does not include an underlying asset or liability unless the asset or liability is itself an electronic record. A "record," however, means information that is recorded on a tangible storage device or stored on an electronic or other medium and is removable in a perceptible form (r) Section 870. Consequently, «a digital asset is anything that can be stored and transmitted electronically (using a computer) that can be owned and thus, can have ownership and usage rights associated with it» (Ibáñez et al. 2018). A broad approach to the concept of digital assets is also demonstrated by Russian legal scholars. So, Laptev (2018) distinguishes: “cryptocurrencies (bitcoin, ethereum, and so on); shares, bonds, shares in the authorized capital of corporations; tokens (financial assets issued by a legal entity or individual entrepreneur to attract investment); intellectual property (for example, musical works, works of art, books); photos; electronic insurance policies; smart-contract (here smart contract is considered not as a transaction, but as an independent object of law that has value); personal data; loyalty points, etc.” It seems that the range of phenomena related to digital assets depends mostly on the purpose of classification. For the protection of the right to digital assets by restricting access to them, it is reasonable to define this concept as widely as possible, thereby ensuring higher security. However, legal regulation of such digital assets as tokens and cryptocurrencies requires special provisions that consider the specifics of financial relations. For other purposes, researchers can identify different types of digital assets. So, Ruan (2019) outlines the following as the types of digital assets: networked system assets, software assets; hardware assets; service assets; robotic assets; data assets, metadata assets, digitally-enabled devices. It should be noted that when ordinary objects of civil rights get a new form such as digital (electronic), there are specific problems associated with their legal regulation. From this point of view, their recognition as digital assets can be entirely substantiated. But then the concept of digital assets in a broad and restricted sense shall be distinguished. In a broad sense, any objects of property turnover that exist in the digital (electronic) form can be referred to as digital assets. In a restricted sense, digital assets should be understood as new economic objects established using digital technologies. Outlining of digital assets category in a restricted sense is necessary, first of all, to distinguish new objects of property circulation that require the establishment of an appropriate legal regime from those objects of civil rights, which do not require a new legal regime despite undergone modification as a result of digitalization. These may include tokens, cryptocurrency, Big Data, domain names and social media accounts, virtual gaming property, etc. For the purpose of ensuring the stability of their property turnover, it is required to create a special legal regime either by adapting the existing norms of civil legislation or by creating new rules. First of all, to solve this problem it is necessary to identify their legal nature, distinguishing them from the already known legal phenomena in a digital form, which have received a proper legal regulation. That will allow us to form both conceptual approaches to regulating relations, the object of which are digital assets, and proposals for the creation of special legal regimes for certain types of digital assets. The Russian legislator is on the way to solve this problem. In particular, Article 6 of the Digital Financial Assets Act states that it is allowed to issue a certificate of succession, providing for the transfer of digital financial assets of a specific type in the order of universal succession (Federal Law of the Russian Federation of 31.07.2020 No 259-FZ "On Digital Financial Assets, Digital Currency and on Amendments to Certain Legislative Acts of the Russian Federation»).

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