Blockchain Papers

M.G. Kellerman

Security and Global Affairs

<p>Wang Lifang</p>

Virtual property, including digital currencies and virtual goods on online platforms, has become an important component of the digital economy. Digital currencies such as Bitcoin and Ethereum are characterized by decentralization and anonymity, possessing both currency attributes and investment tool characteristics. At the same time, virtual goods like in-game equipment and pets carry emotional significance for users and have economic value. However, the legal status of these virtual properties is ambiguous, leading to uncertainty in dispute resolution and protection mechanisms. This article explores the current legal protection status of virtual property, particularly focusing on digital currencies and game-based virtual assets, and emphasizes the need to establish a regulatory framework that adapts to rapid technological changes. The article analyzes the legal attributes of digital currencies and the legal status of virtual goods, proposing that legislation should clarify the legal attributes of virtual property and optimize regulatory mechanisms to promote healthy market development and protect consumer rights.

V. Sukhomlyn

their organizational and methodological principles.Energy-intensive consensus mechanisms, such as PoW, have raised concerns about their sustainability.Methodological solutions, including the adoption of energy-efficient algorithms and the use of renewable energy sources for mining operations, address these concerns while ensuring the long-term viability of cryptocurrency ecosystems.The integration of cryptocurrencies with decentralized applications (dApps) and smart contracts further expands their potential within the system of electronic and virtual money.These applications enable programmable financial transactions, automation of complex processes, and the creation of decentralized financial instruments.Methodological principles for smart contract implementation include thorough code audits, formal verification, and the use of standardized programming languages to minimize vulnerabilities.In conclusion, the organizational and methodological principles of cryptocurrencies in the system of electronic and virtual money require a multidisciplinary approach that balances innovation, security, and compliance.By addressing technological, regulatory, and societal considerations, these principles can support the sustainable growth and integration of cryptocurrencies into the global financial ecosystem.As the adoption of cryptocurrencies accelerates, their alignment with established systems of electronic and virtual money will be instrumental in unlocking their full potential.

Serhii Hrytsai

Цифрові фінансові технології (криптовалюта, крипто-актив, віртуальні активи, тощо) мають різну природу походження, що створює їхню неоднорідність і породжує специфіку правовідносин, у яких вони знаходять висвітлення через їх особливості. Метою дослідження є проведення правового аналізу їх визначень за джерелами їх висвітлення:1) міжнародні організації; 2) українське законодавство. Як результат, у дослідженні проведено правовий аналіз поняття &laquo;віртуальні активи&raquo; представлене в українському законодавстві та трактування тотожних понять &laquo;крипто-активів&raquo;, які надають найвідоміші у світі міжнародні організації: Європейський центральний банк (ECB), Група розробки фінансових заходів боротьби з відмиванням грошей (FATF), Рада з фінансової стабільності (FSB), Міжнародний валютний фонд (IMF), Базельський комітет (BIS), Європейська комісія (EС), Міжнародна організація комісій з цінних паперів (IOSCO). На підставі проведеного дослідження через вибірку характерних рис у кожному з досліджених визначень цифрових-фінансових технологій, виявлена загальна прогалина, з урахуванням якої автором сформовано власне їх визначення поняття, виходячи з різних точок зору: фінансової, правової, технологічної, &ndash; що на думку автора є взаємодоповнюючими і дає змогу освітити це поняття найбільш повно.

Roman Maydanyk

Background. The article covers the analysis of the smart contract of cryptoassets in the civil law of Ukraine. Attention is argued that the essence of a smart contract of cryptoassets is that it is a self-executing contract, that is represented and executed by a computer program, the terms of which are included in the internal functions of a decentralized database that is not under the control of the databases of the parties to the contract or third parties . It is noted that a smart contract of cryptoassets, like any contract, can be declared invalid if the will to conclude it does not meet the conditions of validity of this transaction, regardless of the form in which this transaction is concluded, as in this case in the form of computer code. It is also stated that the terms of the smart contract of cryptoassets must be specific (clear, unambiguous), feasible (objective), valid, capable of automation (evaluative terms such as "reasonable term" cannot be used); it must exist within the blockchain platform (on which crypto-asset transactions are currently carried out) and not provide for the receipt and confirmation of information from the outside (in this regard, the terms of force majeure are not specified in the smart contract). Methods. The research uses dialectical, comparative-legal, formal-logical and other methods of scientific knowledge. Results. It is proved that a smart contract is an agreement represented and executed by a computer program containing all its terms and conditions, which are stored in an electronic registry system, where the result of this program execution is recorded. Conclusions. The determination of the person on whom legal liability is imposed when a smart contract does not perform the programmed function depends on the terms of the smart contract, and in their absence, the provisions of applicable law regarding the legal consequences of non-performance of the contract and liability for such non-performance should be used.

L.L. Neskorodzhena, Bérénice Bon, O.M. Kononets

Нескороджена Л.Л., к.ю

Aleksander Volevodz

No abstract is available for this record.

Bogdan Stojanović

This research intends to provide a deeper insight into the potential of cryptocurrencies as a tool in geopolitical competition.Based on blockchain technology, cryptocurrencies could reshape the international economy and politics in a decentralised manner, challenging centralised money control, transforming trade relations, and offering alternative pathways for international financial transactions.The author employs the theoretical perspective of structural realism, which acknowledges the existence of anarchy in international relations in the absence of a central global authority, to support the main hypothesis that cryptocurrencies have the potential to exacerbate this anarchy.As these digital assets gain prominence, their impact on global trade and financial systems will likely further enhance the decentralised and anarchical characteristics of the international system.Nation-states will seek to control cryptocurrencies through legislative restrictions, regulation, and, most importantly, by creating their own central bank digital currencies (CBDCs).The analysis showed that such processes are already taking place, but states will ultimately fail to minimise the role of cryptocurrencies in geopolitical competition.Some countries have successfully avoided international pressures and sanctions through cryptocurrencies, and secret money flows open up new challenges such as money laundering, war financing, and terrorist and subversive activities.

Diogo Pereira Coelho

No abstract is available for this record.

Zelin Wu

With the acceleration of global integration and the rapid development of technology, economic cooperation and regional integration have become an undeniable force in today's world development. Especially with the implementation of the "the Belt and Road" strategy, this development trend is more obvious. This plan was launched by China in 2013 with the aim of promoting infrastructure construction, trade cooperation, cultural exchanges, common development, and regional cooperation in Asia, Europe, Africa, and other regions. With the rapid development of Internet, big data, artificial intelligence and other technologies, the digital economy has become an important driving force for the development of the world economy. It has not only changed the operation mode of traditional industries, but also spawned new industrial forms. However, in a network environment lacking trust, trustworthy communication of data is an important prerequisite for promoting active data sharing among network entities. Information security technology based on encryption technology can effectively solve problems such as data untrustworthiness and privacy leakage in information exchange. This paper focused on the trusted exchange of data in the "the Belt and Road" digital economic cooperation, and discussed how to solve the trust problem in data exchange with the help of blockchain smart contract technology. First, the background of the "the Belt and Road" initiative and the significance of digital economy development were briefly introduced. Subsequently, the challenges faced by trusted data exchange in a network environment lacking trust were analyzed, and a solution based on blockchain smart contracts was introduced. The experimental results showed that when the data block size was 1GB, the data trusted exchange system based on blockchain technology took 10 seconds, and the data transmission rate still reached 891Mbps.

Julia Patterson Forrester Rogers

No abstract is available for this record.

wonguk lee, Euiseok Kim

No abstract is available for this record.

Husan S. UMAROV

The prospects for the widespread introduction of decentralized finance into global financial markets are analyzed. The aim of the study is to consider the opportunities provided to users and investors by the DeFi ecosystem (decentralized finance), and the potential risks of implementing services, applications, protocols based on decentralized financial instruments in both foreign and Russian financial markets. With the help of the theoretical (analysis, synthesis, abstraction) and empirical (comparison, observation) research methods, opinions of leading domestic and foreign experts on the innovative capabilities of DeFi are presented. Based on up-to-date statistical data from the innovative dApps – DappRadar platform, analytical reviews, conference reports, public speeches and expert interviews, initiatives of the main financial regulator of the United States – The United States Securities and Exchange Commission (The United States Securities and Exchange Commission), the Commodity Futures Trading Commission (CFTC), and the Russian Financial Action Task Force (FATF) group for the development of financial measures to combat money laundering, the author emphasizes the need to implement a regulatory framework to settle the spread of decentralized finance. The resulting conclusions are the inclusion of digital assets in the “anti-money laundering” legislation of Russia, as well as a number of other measures aimed at bringing regulatory clarity to the sphere of DeFi initiatives. The main conclusion of the study highlights the difficulties in the large-scale spread of decentralized finance, which is justified by the direct impact of potential risks of using it, distributed by the author to a number of system groups. As a promising predictive model for the development of DeFi, the author proposes a safe harbor model for tokens developed by Hester Peirce. The relevance and scientific novelty of the research are justified by the possibility of using the achieved results (including in the field of analyzing initiatives recommended by large regulatory institutions in relation to uncontrolled financial markets) to introduce a transparent, open, reliable ecosystem of decentralized finance.

R. I. Samsin

The article examines the emergence and transformation of the fundamental concepts in the field of crypto-finance. It is observed that the advent of bitcoin and its rapid proliferation gave rise to analogous crypto-products, whose crypto-tokens exhibited a digital representation of value and turnover, which were designated as “cryptocurrencies.” The evolution of the crypto industry has led to the emergence of novel crypto products with technical and financial characteristics distinct from those of cryptocurrencies (investment tokens, utility tokens, non-fungible tokens, stablecoins, etc.). These products have been positioned by their developers as cryptocurrencies. In 2018, the Financial Action Task Force (FATF) proposed the use of “virtual assets” as an alternative to “cryptocurrency.” Over time, the concept evolved to encompass all crypto-products whose cryptotokens exhibited both a digital expression of value and negotiability. In 2023, the EU adopted Regulation (EU) 2023/1114 of the European Parliament and of the Council on cryptoasset markets and amending Regulations (EU) No. 1093/2010 and (EU) No. 1095/2010 and Directives 2013/36/EC and (EU) 2019/1937 (MiCA Regulation) at supranational level, which was designed to harmonize the regulation of the cryptocurrency asset sector across the EU. This Regulation employs the term “cryptoassets” as a general definition for various crypto products whose crypto tokens possess a digital value and turnover (investment tokens, utility tokens, non-fungible tokens, stablecoins, etc.). It is posited that there has been a transformation of concepts, from cryptocurrencies to virtual assets, and then to cryptoassets. At this point in time, cryptocurrencies may be defined as a type of virtual asset. It could be argued that the concepts of “virtual assets” and “cryptoassets” are in fact identical.

Alexander Mironov

Countering and combating manifestations of terrorism and extremism is an urgent and priority task for law enforcement agencies. These provisions underlie the national security of the state, and the fight against manifestations of this kind of crime rightfully deserves the most serious attention. The article presents the prerequisites for the use of cryptocurrencies for criminal purposes, based on the features of its functioning and use. The role of cryptocurrencies in the financing of terrorist and extremist activities in the current international financial and economic environment is indicated. The main problems that law enforcement agencies have to face in identifying and suppressing criminal activity, the financing of which can be organized with the help of cryptocurrencies, are reflected. Substantiated points of view are presented regarding the danger of the spread of cryptocurrencies in crimes of this direction, not only in relation to the Russian Federation, but also to the world community as a whole. The author presents statistical data of the indicated areas of crime and analyzes it. The results of a study by third-party organizations specializing in research in the field of cryptocurrencies are also presented and summarized. Examples of the use of cryptocurrencies to finance terrorist and extremist activities are noted. The ways of solving the presented problems are proposed, taking into account the mechanisms already proposed by scientists for preventing crimes using cryptocurrencies. In particular, the main emphasis is placed on the need to modernize the existing mechanisms of financial control and the reasonable involvement of representatives of large IT companies in this activity, since the main flow of information capable of exposing criminal activity is accumulated by them.

Анастасія Толкачова, Andrian Piskozub

This research article discusses current and promising issues in the field of cybersecurity, in particular, the analysis of potential threats and risks of Web3 development. Web3 is a new generation of the Internet based on blockchain technology, decentralization, cryptography, and smart contracts. This approach aims to improve security, privacy, and user rights in the virtual environment, but without proper understanding, it can carry the opposite risk. The article begins with an analysis of recent research and issues. The authors discuss potential threats and risks, including possible attacks on decentralization protocols, censorship manipulation, attacks on blockchain protocols, attempts to break the consensus system, and unfair smart contract transactions. The article discusses a number of vulnerabilities and attacks that can harm the new Web 3.0 technology. The article describes new threats to the privacy of users and their digital assets, including the use of anonymization technologies and countermeasures by criminal organizations or government agencies. The article also emphasizes the importance of discussing the legal aspects of Web3 integration, finding an optimal balance between the regulation of the digital space and users' rights to privacy and autonomy. Global challenges require international cooperation and standardization of regulatory rules in this area. The results of the study demonstrate that a conscious approach to analyzing Web3 threats is the key to building a secure future for the Internet. This article contributes to the dissemination of information and knowledge about possible risks, opens up new horizons for scientific research, practical implementation of cybersecurity measures, and political dialogue in the Web3 era.

Th. D. Lamappulage Donn

Objective : the automation inherent in smart contracts makes them an attractive tool for global trade applications, especially for the automation of transactions. The prospects foreseeable will significantly impact international economic relations and the transformation of international trade rules. This fact determines the study objective - to identify the possibilities of transforming the said rules and the political and legal strategies adopted by European countries to implement smart contracts in international trade. Methods : the study, devoted to the current international trade regulation in the context of contracts digitalization and spread of smart contracts, uses a combination of formal-legal and comparative-legal methods. They allow researching the international trade rules, analyzing and comparing the UK and the EU political and legal positions on the smart contracts introduction in international trade, as well as predicting the legal consequences of using smart contracts in international trade. Results : the research shows that the proliferation of smart contracts has significant implications for international trade and its regulation. Smart contracts have numerous advantages, such as increased efficiency, reduced costs, and wide availability. However, they may lead to legal challenges when harmonizing traditional legal principles with the digital environment, in particular concerning the authentication of subjects, enforceability under specific circumstances of a case, and jurisdictional issues. Scientific novelty : the current literature on the transformation of international trade regulation in the context of digitalization processes and the spread of smart contracts is complemented by the results of a comparative analysis of the legal positions existing in the European legal space and developed on the basis of problems, lessons and achievements in the smart contracts implementation in international trade. Practical significance : understanding the legal implications of smart contracts is important for businesses involved in international trade. The study provides insights into the UK and the EU legal positions from which guidance can be provided to companies navigating the digital landscape. Policymakers can also benefit from the findings when developing appropriate legal acts to balance the benefits of smart contracts with the need for legal certainty and protection in international trade.

Liana Spytska

Presently, legal circles, both among theorists and practitioners, are particularly concerned about the legalisation of cryptocurrencies and transactions with them according to the current legislation. For this reason, the purpose of this work was to study approaches and methods to legalisation of income derived from cryptocurrency speculation based on the provisions of the tax legislation of Ukraine. A theoretical analysis of the general concepts under study was conducted, which in turn formed the object of this study. The common and distinctive features of the researched concepts were identified, thus establishing the relationship and dependence between them. As for the practical aspects, the study revealed them in the analysis of particular regulations, namely, the specific features of their implementation. Positions and opinions of various scholars on it were compared, which allowed for a qualitative coverage of ways to legalise the income that citizens receive from cryptocurrency speculation. On the basis of the analyzed scientific publications, the most successful and suitable for implementation in Ukraine, the experience of other countries, in particular the USA and Canada, has been determined. It has been proven that the legalization of citizens’ incomes received from cryptocurrency transactions is a necessary process for the economic development of the state.The practical value of the study lies in the fact that it can be used both by scholars, in the context of the primary source for further study of this issue, and by lawyers whose activities are related to cryptocurrencies. The scientific value of this study was covered in the description of effective approaches to transactions with income generated by cryptocurrencies, which have not yet been studied to the required level

Polina O. Gertsen, Aleksey Yu. Churilov

Based on the analysis of legal norms, explanations provided by the Plenum of the Supreme Court of the Russian Federation, and legal practice, it can be concluded that issues related to the judicial protection of cryptocurrencies, including through the use of criminal law and criminal procedure, have not been subject to consistent regulation within the current legislative framework. This poses a threat to the possibility to prosecute individuals involved in cryptocurrency theft and the accessibility of legal remedies for those who became victims of such cases. The authors conclude that at present the legal narrative has been established, which effectively serves as a sole source of the law enforcement practice in the absence of comprehensive regulatory provisions. The authors have formulated some proposals for the improvement of the existing legislation aimed at addressing the identified and researched legislative ambiguities and ensuing the access of cryptocurrency owners to the judicial protection of their rights.

Luong Kien

Introduction. The author draws attention to the emerging practice of recognizing cryptocurrency as property and converting it into the income of the Russian Federation. The purpose of the study was to identify the features of emerging practice and develop recommendations for further development of law enforcement practice. As part of the study, the author solved a number of tasks, namely, establishing which decisions the preliminary investigation body had allowed to foreclose on cryptocurrency as well as which indirect circumstances had influenced the effectiveness of the preliminary investigation. As part of the study, the author used the method of analyzing law enforcement practice. The author came to the conclusion that the effectiveness of the work of the preliminary investigation bodies in terms of the subsequent conversion of cryptocurrency into the income of the Russian Federation largely depended on the efficiency of decision-making, the application of professional knowledge about digital currency, and the competent building of a dialogue with the suspect and witnesses.

Yevgeniy A. Ignatenko

The article discusses certain features of the legal regulation of cryptocurrency, taking into account the specifics of building a model for the functioning of blockchain networks, which consists in combining various tools, technologies and principles that form a logical and secure structure for distributed data storage. The problems of criminal law protection of digital currency are highlighted and the most common scientific approaches are identified, on the basis of which the author indicates that the use of the concepts of “digital currency” and “cryptocurrency” as synonyms does not correspond to the legislative definition of digital currency, since the concept of cryptocurrency is wider in content than the concept of digital currency. As a result of a comprehensive analysis of the norms of the Federal Law of July 31, 2020 No. 259-FZ On Digital Financial Assets, Digital Currency and Amendments to Certain Legislative Acts of the Russian Federation, the author comes to the conclusion that digital currency is exclusively a “domestic” currency. Based on the study of judicial practice, it is shown that the broadest possible interpretation of the concept of “other property”, which includes digital currency and cryptocurrency, is allowed. It indicates the presence of judicial acts in criminal cases, in which the subject of a crime are such cryptocurrencies as, for example, bitcoin. Attention is focused on the importance of civil law regulation of cryptocurrencies for their criminal law protection and the range of social relations that develop regarding cryptocurrencies subject to protection by means of criminal law is determined.

Giovanni Maria Nori, Matteo Girolametti

That the legal nature of cryptocurrencies does not fit into a comprehensive definition is already known. On the one hand, EU case law, albeit for tax purposes, has categorised bitcoin as a means of payment (European Court of Justice, judgment of 22 October 2015, C. 264/14). On the other hand, the highest European banking authority, with the opinion of 12 October 2016, reiterated that “virtual currencies do not qualify as currencies”. These latter words stand up in defence of that State’s patent, theorised by Georg Simmel (in Philosophy of money), concerning the monopoly right to coin money. Yet, this antinomic contradiction is only illusory, as with Directive 843/2018/EU, the European legislator restated that virtual currencies are: a digital representation of value that is not issued or guaranteed by a central bank or a public authority, is not necessarily attached to a legally established currency and does not possess a legal status of currency or money, but is accepted by natural or legal persons as a means of exchange and which can be transferred, stored and traded electronically. On the basis of these considerations, in the first part of this chapter the authors try to outline the current legal framework of cryptocurrencies with regard to their qualification as property. This contribution also focuses on the analysis of the recent proposal of a Regulation of the European Parliament and of the Council, on Markets in Crypto-assets, and amending Directive (EU) 2019/1937. This legislative draft is part of the Digital Finance package (made up of 4 draft laws), with the aim of “ensuring that the EU embraces the digital revolution and drives it with innovative European firms in the lead, making the benefits of digital finance available to European consumers and businesses”. The Commission therefore goes beyond the wait-and-see approach, aiming at uniformisation of the discipline inherent to crypto assets at a supranational level. In this context, the second part of this chapter tackles the issue of the solvency of a debtor with digital assets from a European transnational perspective, especially in light of the discipline laid down by EU Regulation 848/2015. Specifically, it relates how the legal qualification of digital assets, especially concerning cryptocurrencies, will affect the claim of virtual assets owners against the insolvency estate. This analysis then focuses on the debated matters of the insolvency of cryptocurrency exchange platforms and e-wallet service providers (applicable law, jurisdiction, recoverable assets), also relating to insolvency proceedings case-law. The authors thus attempt to relate the issues concerning insolvency, ordinarily connected to the application of national law, with the Blockchain and its decentralisation.

Burcu Yüksel Ripley, Florian Heindler

Crypto assets can be defined broadly as “cryptographically secured digital representations of value which can be transferred, stored or traded electronically” by the use of distributed ledger technology or a similar technology. They introduce new challenges to Private International Law due to their novel, complex, fast-evolving and cross-border nature. The purpose of this chapter is to critically examine some of the key applicable law questions regarding crypto assets. The chapter first gives an overview of crypto assets, highlighting their key features. It next addresses challenges around characterisation of crypto assets as money or legal tender, and property, and reflects on the legal implications of this characterisation. The chapter then discusses freedom of choice and its operation and limitations; explores considerations around suitable objective connecting factors; and, aims to shed light on the possible ways forward in terms of policy choices in determining the law applicable to crypto assets.

Igor B. Ilovaysky, Tofik Huseynov

Introduction. The emergence of new technologies poses to the Russian legislator a number of complex issues that require rapid and high-quality study, since successful or, conversely, unsuccessful legal regulation of certain processes can promote or hinder their development. These are currently digital technologies and, as their separate element, the metaverse, which exists through the operation of a system of distributed registries, smart contracts, and primary accounting units – tokens. In this regard, the purpose of this publication is to consider the current state and certain aspects of improving the legal regulation of the metaverse and the turnover of a particular type of token, namely the non-fungible token (NFT). Methods. The research is based on the application of logical and dialectical techniques and methods of scientific cognition, comparative legal and legal-technical analysis of texts of normative acts, and materials of law enforcement practice. As a result of the research, the features of the functioning of metaverses as a symbiosis of the real, virtual, and imaginary worlds were considered. The introduction of such technologies into civil circulation, including the sphere of maritime transportation, can significantly improve the quality of legal protection of the rights and interests of subjects involved in these relations. The results of the review became the basis for the following conclusion: the Russian Federation is at the initial stage of the formation of metaverses on its territory, including the issue of legal regulation of such phenomena. In this connection, and taking into account the geopolitical situation, it was proposed by the state forces, with the involvement of the largest Russian transport organizations, on the basis of a public-private partnership, to accelerate the creation of such systems, including regulations in this area, both within Russia and at the regional and international level within the framework of the EAEU and BRICS.