Virtual Assets Research Articles

Discussion of Relevant Legal Issues of the Supervision of Virtual Asset Spot ETFs in R.O.C

Discussion of Relevant Legal Issues of the Supervision of Virtual Asset Spot ETFs in R.O.C

Virtual Assets: Holistic Data Analysis as the Way Forward to Mitigate Risks to National Security and Financial Stability

Virtual Assets: Holistic Data Analysis as the Way Forward to Mitigate Risks to National Security and Financial Stability

SPECIFICS OF LEGAL REGULATION OF VIRTUAL SPACE

The relevance of this research is driven by the rapid development of information technologies and global digitalization processes, which have led to the emergence of virtual space as a new environment for social interactions. Virtual space has become an integral part of modern life, influencing various areas of society. However, despite its growing importance, the existing legal frameworks have not fully adapted to the specific characteristics of virtual space, such as its anonymity, global nature, and dynamic structure. The purpose of this article is to examine the peculiarities of legal regulation in virtual space and to propose effective mechanisms to ensure legal governance in the context of digitalization. This study addresses the gaps in the current legal system and explores ways to adapt legal norms to meet the demands of the digital environment. The study is particularly timely, given the increasing impact of digital technologies on social relations and the need for appropriate legal frameworks to regulate interactions within virtual space. The research methodology is based on an analysis of recent studies and publications, highlighting the growing interest of scholars in the legal regulation of digital technologies and virtual interactions. While there is a substantial body of work on virtual assets and digital rights, the issue of comprehensive legal regulation of virtual space remains underexplored. This article fills that gap by focusing on the development of cross-sectoral legal mechanisms and emphasizing the need for harmonization with international standards. The interdisciplinary nature of virtual space requires legal frameworks that can address the complexity of digital interactions, taking into account both national and international legal norms. The findings of the study show that for effective regulation of virtual space, it is essential to adapt existing legal mechanisms to the specific conditions of the digital environment. This includes the integration of international legal norms, the development of self-regulation tools, and the creation of a comprehensive legal system that can manage social relations in virtual space. The practical value of the article lies in its analysis of the challenges facing legal regulation in virtual space and the solutions proposed for improving the effectiveness of legal mechanisms. These recommendations can be used by policymakers and legal practitioners to develop a more robust regulatory framework for virtual interactions. Only through a comprehensive and flexible approach to regulation can legal systems ensure the orderly conduct of social relations in virtual space and protect the rights of individuals in the digital age.

Economic legal personality of virtual assets service providers: concept and elements

The objective of the study is to provide substantiation for proposals to clarify the definition of the concept and elements of economic legal personality of virtual assets service providers. In light of the findings presented in the study, the author concludes that economic legal personality of service providers related to the circulation of virtual assets is the ability of service providers related to the circulation of virtual assets to be parties to economic legal relations - to participate in legal relations arising in the field of business through the exercise of economic competence (rights and obligations determined by law) and economic legal capacity (rights and obligations acquired voluntarily due to the need to carry out economic activities and enshrined in the relevant documents). In terms of their economic legal personality, virtual assets service providers are characterized by two key elements: economic competence and economic legal capacity. The moment when the general legal personality of service providers related to the turnover of virtual assets arises is the state registration of a business entity as a legal entity. In contrast, special legal personality will arise only after obtaining a permit, since the activities of service providers related to the turnover of virtual assets are subject to specific regulatory requirements. The provision of services related to the turnover of virtual assets is permitted only if a specific permit has been obtained, in accordance with the stipulations set forth in the Law of Ukraine «On Virtual Assets» (part 2 of Article 18). It has been determined that virtual assets service providers possess exclusive economic legal personality, encompassing an exhaustive list of permissible activities. These entities may only engage in activities authorized by the Law of Ukraine «On Virtual Assets,» upon acquiring the relevant permits. It may be inferred that obtaining such a permit simultaneously entails the prohibition against engaging in alternative business endeavors.

Unlinkable Policy-Compliant Signatures for Compliant and Decentralized Anonymous Payments

Privacy-preserving payment systems face the difficult task of balancing privacy and accountability: on one hand, users should be able to transact privately and anonymously, on the other hand, no illegal activities should be tolerated. The challenging question of finding the right balance lies at the core of the research on accountable privacy that stipulates the use of cryptographic techniques for policy enforcement. Current state-of-the-art systems are only able to enforce rather limited policies, such as spending or transaction limits, or assertions about single participants, but are unable to enforce more complex policies that for example jointly evaluate both, the private credentials of sender and recipient, situations that occur in cross-border payments, let alone to do this without auditors in the loop during payment. This severely limits the cases where decentralized virtual assets can be used in accordance with regulatory compliance such as the Financial Action Task Force (FATF) travel rule, while retaining strong privacy features. We present unlinkable Policy-Compliant Signatures (ul-PCS), an enhanced cryptographic primitive extending the work of Badertscher et al.~(TCC 21). We give rigorous definitions, formally proven constructions, and benchmarks using our prototype developed using CharmCrypto which gives the first insights into feasibility of PCS. Unlinkable PCS has the following unique combination of features: 1) It is an enhanced signature scheme where the public key encodes in a privacy-preserving way the user's verifiable credentials (obtained from a credential authority). 2) Signatures can be created (and later publicly verified) by additionally specifying a recipient's public key aside of the to-be-signed message. A valid signature can only ever be created if the attributes $x_S$ of the signer and the attributes $x_R$ of the receiver fulfill some global policy $F(x_S,x_R)$. 3) The signature can be created by the signer just knowing the recipient's public key; there is no further interaction needed and no information is leaked (beyond the validity of the policy). 4) Once credentials are obtained, a user can generate fresh public keys without interacting with the credential authority. By merging the act of signing a transaction with the act of providing an assurance about the involved participants being compliant with complex policies, yet retain that participants are able to change public keys without the involvement of an authority, we formally show how ul-PCS is a step towards improving regulatory compliance of privacy coins such as Monero or Zcash.

The Principle of Wage Payment in Currency and Virtual Assets

The Principle of Wage Payment in Currency and Virtual Assets

Volatility Spillovers in Real Estate, Virtual Assets, and Stock Markets

Volatility Spillovers in Real Estate, Virtual Assets, and Stock Markets

Future considerations for pan-European regulation of virtual assets

Future considerations for pan-European regulation of virtual assets

The European System of Supranational and State Authorities Regulating the Circulation of Virtual Assets

The European System of Supranational and State Authorities Regulating the Circulation of Virtual Assets

The legal nature of crypto assets and its reflection in the civil and tax legislation of the Russian Federation

The article analyzes the legal nature of crypto assets in Russian legislation and the specifics of their taxation, focusing on the need to form a legal framework that promotes effective protection of the rights of participants in the turnover of crypto assets.The methodological basis of the research is the dialectical method, the formal logical method, the formal legal method and the method of interpretation of law.The lack of a unified terminology base in the field of digital economy in Russian legislation creates additional difficulties in creating comfortable conditions for the development of the crypto asset market. Currently used various terms such as “virtual assets”, “digital assets”, “crypto assets”, “cryptocurrency” are not fixed in the current legislation. At the same time, the terms existing in Russian legislation do not allow for effective regulation in the field of taxation and civil turnover, since they intentionally exclude the most common crypto assets from their scope. Without clear and unambiguous legal regulation, it is difficult to ensure proper control and taxation of transactions with crypto assets, which can lead to significant tax losses and a decrease in budget revenues.Moreover, the concept of “digital currency” used in Russian legislation does not correspond to the generally accepted meaning in international practice and is mainly considered in an economic context, rather than in a legal one. Such a discrepancy in terminology creates additional difficulties for participants in the cryptocurrency market and creates obstacles to the formation of an effective legal framework for the regulation of the digital economy. According to the results of the study, it was concluded that the current approaches to the development of the terminological apparatus of the regulation of crypto assets have flaws, since they allow for a mixture of concepts and do not imply the formation of a clear hierarchy. The definition of “the digital asset” is proposed for the purpose of filling existing terminological gaps in the current legislation.

What drives user interest and purchase of virtual 3D assets? An empirical investigation of 3D model attributes and pricing dynamics

Virtual 3D assets, i.e., 3D models that form the basis of virtual environments, products, and goods, are essential for the creation of a future metaverse. However, we have limited knowledge about the market dynamics in which virtual 3D assets are traded and the indicators that influence their value and pricing − and thus the purchasing mechanisms. The present study draws on multi-attribute utility and value- and competition-informed pricing theory to determine what drives the purchase of virtual 3D assets using secondary data from the marketplace Sketchfab. The empirical analysis indicates that the sellers’ value perception of virtual 3D assets contradicts the users’ interest and that organizational sellers outperform individual sellers by relying to a higher degree on competition- and value-informed pricing. Based on our findings, we identify implications for both organizational and individual sellers to refine their pricing strategies in accordance with the unique dynamics of 3D virtual asset marketplaces.

Assessing the solvency of virtual asset service providers: are current standards sufficient?

ABSTRACT Centralized cryptocurrency exchanges, which manage annual trading volumes on the scale of trillions of US dollars worldwide, are classified as virtual asset service providers (VASPs). They facilitate the exchange, custody, and transfer of cryptoassets organized in wallets across distributed ledger technologies (DLTs). As any corporation, VASPs can become insolvent. Despite the public availability of DLT transactions, their cryptoasset holdings are not yet subject to systematic auditing procedures. In this paper, we propose an approach to assess the solvency of a VASP by cross-referencing data from three distinct sources: cryptoasset wallets, balance sheets, and supervisory entity data. We investigate 24 VASPs registered with the Financial Market Authority in Austria. Regulatory data insights show that their yearly incoming and outgoing transaction volume amounts to 2 billion EUR for 1.8 million customers; the financial services they provide position them closer to brokers, money exchanges, and funds, rather than banks. Next, we empirically measure DLT transaction flows of four VASPs and compare their cryptoasset holdings to balance sheet entries. Data are only partially consistent; this enables us to identify gaps in the data collection and propose strategies to address them, towards achieving a more systematic, reliable, and automated assessment of VASPs solvency.

Comparative characteristics of virtual assets and other objects of private law relations

Comparative characteristics of virtual assets and other objects of private law relations

A Thesis on Virtual Asset in View of Behavioral Finance

A Thesis on Virtual Asset in View of Behavioral Finance

DEVELOPMENT OF APPROACHES TO THE TAXATION OF CRYPTOASSETS IN THE MODERN WORLD

In the article the dual economic nature of cryptocurrencies was analyzed same as investment assets and means of payment in foreign countries and Ukraine. It has been established that the asset and means of payment in foreign countries and Ukraine. It has been established that the classification of crypto-assets and their functions are of key importance for the introduction of their effective taxation. Approaches to the taxation of crypto-assets in various European countries, also in the USA, Malaysia, Singapore, Australia, India and other countries of the world have been studied. Taxation of such asset doesn’t have a unified nature and depends on the type of operation with them. According to research by Western scientists, it has been established that in modern word, cryptocurrencies are more often used for shadow operation than for tax evasion. The main principle that should be followed in the taxation of virtual assets is the principle of neutrality: taxation of cryptocurrencies should be carried out in the same way as similar traditional financial assets. In Ukraine, the legal framework for taxation of income operation with virtual assets (further – VA) is the stage of formation. In the work both draft laws “On the Legalization of Virtual Assets in Ukraine”, which were adopted at the end of 2023, are examined. Ones are proposing changes to the Tax Code of Ukraine regarding the procedure for taxation of VA and providing an opportunity to launch legislative regulation of the procedure for taxation of VA market. The differences between draft law on taxation of virtual assets have been highlighted in the work. Thus, it is proposed to tax VA according to the rules for securities or investment assets, which corresponds to the specifics of the domestic tax field

Definition of the concept of «virtual assets»: a comparative analysis of legislation and judicial practise of the European Union Countries

The article analyzes the essence and legal nature of the concept of «virtual assets» as reflected in the legislation and case law of the EU countries. The value of the article lies in the study and legal analysis of the EU laws and case law regulating and defining the concept of «virtual assets». This article examines the main legislative acts regulating virtual assets, as well as important court decisions that affect the definition of this concept. Special attention is paid to the comparative analysis of laws and court practice in such EU countries as Poland, Italy, Estonia, Lithuania, Germany, etc. The article highlights the variety of approaches to the definition of «virtual assets» through the prism of analysis of court decisions and provisions of laws. The main trends in the interpretation of this concept are outlined, as well as some problematic issues that require detailed and unified regulation. In some countries, virtual assets are treated as financial instruments, means of payment, electronic money, financial services, intangible goods, subject to civil rights, etc., while other countries, on the contrary, do not classify them as either financial instruments or means of payment.Having analyzed the regulation of virtual assets, it can be concluded that there is still no clear, unified approach to defining and regulating this phenomenon, so many countries are only trying to establish it. The adoption of the Markets in Crypto-Assets Regulation will help to create a unified regulatory framework for the regulation of the crypto-assets market. Key words: virtual assets, virtual currency, EU case law, EU legislation, crypto assets, money, financial instruments.

Protection of personal data of Internet user after death

Relevance. The article examines the problems associated with the protection of personal data of deceased citizens, including those posted on social media accounts, on other online-platforms, analyzes the «right to be forgotten» in relation to personal information about a person after his death.The purpose of the study is to supplement scientific provisions aimed at deepening the theory of law on the posthumous protection of personal data of a person, including his digital assets, on the removal of irrelevant and inaccurate information in succession; in developing proposals to address gaps in civil regulation of digital inheritance and «digital death».Objectives: to determine legal means of protecting personal data of a person and other personal information posted on the global network after his death; identify shortcomings of the current legislation; update, taking into account the scientific discussions of legal scholars, proposals for improving the protection of intangible benefits of this category of citizens.Methodology. To achieve a theoretical and practical result, the study was carried out with the involvement of the of schenoscientific and private scientific methods - dialectical, induction and deduction, analysis and synthesis, statistical, analysis of judicial practice, formal-legal, system-analytical and formal-logical methods.The results of the study are of a theoretical-applied and legislative nature. They include proposals to resolve problems related to the protection of personal data of deceased citizens, the heritability of their virtual assets, including social media accounts. To overcome gaps in civil law, legalization of some concepts (digital inheritance, digital assets, “digital death”) is required, recognition in certain cases of a digital asset as a virtual property by the hereditary mass, the introduction of a probate order, the appointment of a digital keeper, etc.Conclusion. Taking into account foreign experience, Russian legislation on the protection of personal data, personal information and digital assets of a person after his death is characterized by legal unresolved and uncertainty, which must be eliminated through the modernization of the norms of the Civil Code of the Russian Federation, regulatory laws and user agreements.

The Legal System of Transactions and the Challenges of the Metaverse World in accordance with UAE Law

The world has undergone important technological transformations, making commercial transactions move from normal to electronic and linked to the real world. Still, the new generation of the Internet led to the emergence of the Metaverse world, which attracted many companies and governments, including the UAE, to pay attention to and invest in it. It is based on the use of Blockchain and Artificial Intelligence. This has affected the commercial activities of companies, as it has made contracts done smartly. Its subject will be non-fungible tokens, which is the subject of the study that emphasized the leadership of the UAE government and companies in its interest in the technologies of the Fourth Industrial Revolution and the world of Metaverse and its legislative exclusivity in regulating virtual assets and encrypted tokens and the intelligent agent, but that remains insufficient to control transactions in the Metaverse world.

METHODOLOGY OF USING VIRTUAL ASSETS AS MEANS OF PAYMENT AT THE FIAT LEVEL: PROBLEMATIC ISSUES IN UKRAINE

The FinTech sector, as one of the dynamic parts of Ukraine's economic frontier, has not only withstood the challenges of one of the most difficult times of independence, but has also continued to develop despite all the difficulties of the difficult time, and often despite it. The purpose of the article is to study the legal framework and methodology for the use of virtual assets as a means of payment in Ukraine before and after the entry into force of the cryptocurrency- specific Law No. 2074. Methodology. Both general scientific and special legal research methods were used to achieve the purpose of the study. The scientific novelty is an attempt to provide a legal assessment of the existing methodology for conducting increasingly popular transactions with virtual assets through the acquiring mechanism, against the background of an almost non-existent legal framework for their regulation. Conclusions. In fact, there is a paradigm in Ukraine regarding the recognition of virtual assets as means of payment. On the one hand, formally, at the legislative level, there are no plans to recognize virtual assets as a means of payment after the entry into force of Law 2074. On the other hand, from a practical point of view, before the entry into force of Law 2074, virtual assets are increasingly accepted as a means of payment in Ukraine. Prior to the entry into force of Law 2074, banks and cryptocurrency exchanges must act as tax agents in acquiring transactions for the purpose of payment for services and goods. Amendments to the Tax Code of Ukraine for the entry into force of Law 2074 do not provide for withholding tax when paying income to an individual from transactions with virtual assets. This will not contribute to the timely and full payment of taxes to the budget. The widespread use of cryptocurrencies directly in payments for goods and services in Ukraine, without official acquiring operations, before the entry into force of Law 2074 may have certain negative tax consequences for business entities.

Research on the Regulation of Unfair Trade Practices in Virtual Assets: Focusing on IOSCO's CDA Recommendations and Act On The Protection Of Virtual Asset Users

Research on the Regulation of Unfair Trade Practices in Virtual Assets: Focusing on IOSCO's CDA Recommendations and Act On The Protection Of Virtual Asset Users