The Russian prosecutor’s office has summoned Burger King to explain the issuance of its cryptocurrency called Whoppercoin. Burger King is confident that it has not broken any laws since there is currently no regulation for cryptocurrency in Russia.
Burger King’s Cryptocurrency Questioned
Less than one month after the fast food giant launched its blockchain token called Whoppercoin in Russia, the company was reportedly summoned by the Izmailovo inter-district prosecutor’s office regarding its cryptocurrency.
A Burger King representative told RNS that the company had received two notifications from the prosecutor’s office; one on September 13 and the other on September 19 “with an invitation to the Izmaylovskoy prosecutor’s office on behalf of the prosecutor’s office in Moscow.” He added:
On the instructions of the Moscow Prosecutor’s Office, information was checked that we issued a cryptocurrency and started making payments with it. Accordingly, we were summoned to be reminded that within the territory of the Russian Federation the turnover of any currency other than Russian rubles was banned and all details of this project were clarified.
What is Whoppercoin?
The Russian network of Burger King revealed in August that it had issued a cryptocurrency in Russia on the Waves blockchain platform. The token platform lets users who download their wallet issue their own coins and trade them with other Waves wallet holders. A decentralized exchange built into Waves wallets allows their tokens to be traded with other cryptocurrencies as well as fiat currencies.
Whoppercoins “will be used to reward customers for their purchases, and can be used to buy burgers in return when enough have been accrued,” Waves detailed at the time. These blockchain tokens are held in Burger King-themed wallets for both Android and iOS smartphones and can be freely transferred and traded online, the platform noted, adding that:
The initiative is being run by Burger King Russia. Whoppercoins have already been issued, with a supply of 1 billion (further Whoppercoins can be issued if required). Customers will receive one Whoppercoin for every rouble they spend (1 USD = 59 RUB), and a Whopper burger can be purchased for 1,700 Whoppercoins.
In its notices, the prosecutor’s office asked Burger King to clarify what a Whoppercoin is and how it works. The company was also asked to provide a statement that it did not conduct a mass issuance of Whoppercoins, Vedomosti detailed.
Burger King Says No Laws Broken
The Burger King representative insisted that the company did not break any laws, according to Vedomosti. Nino Tsiklauri, the senior legal counsel for Burger King in Russia explained:
In the Russian legislation, the concept of ‘cryptocurrency’ is not fixed, as there is no ban on conducting transactions using virtual currency.
The Russian finance ministry and the central bank are currently working to provide a legal framework for cryptocurrencies. A draft law is expected by the end of the year, according to the Minister of Finance. A partner at A2 law firm, Mikhail Aleksandrov, said that in the case of Burger King, the cryptocurrency can be treated like coupons used by food retailers. “It’s more of a marketing story, not a payment story,” he described, as reported by Vedomosti.
In June, the general manager of the Burger King Russia franchise reportedly said that one retail location had been testing bitcoin payments and that “Burger King Russia will begin accepting Bitcoin in 2017.”
What do you think will happen to Whoppercoin? Let us know in the comments section below.
Images courtesy of Shutterstock and Waves platform.
Need to calculate your bitcoin holdings? Check our tools section.
Spot-markets for Bitcoin, Bitcoin Cash, Ripple, Litecoin and more. Start your trading here.