Development of information technologies, cryptocurrencies and technology of distributed networks has caused the appearance of smart con- tracts as new types of civil contract. They have been widely used in recent years in such areas as initial coins offering (ICO), financial sector, inter- national trade and public services. At the same time the legal status and legal regulation of smart contracts are uncertain. These uncertainties cause many legal risks of smart-contractsutilization. The purpose of this article is to find out the conception of smart contract as a form of civil contract, to research its legal status and legal regula- tion issues and to develop proposals for the improvement of legal regulation of smart contracts and cryptocurrencies in Ukraine. By its legal nature a smart contract is a digital form of a civil contract realized in programming code automatically executed in a distributed network. Like a civil contract, smart contract has such elements as parties, subject and essential terms of the contract. The legal force of a smart contract depends on whether it includes the fundamental features of a civil contact, such as evidence that parties have intention to create legal relations, understandabil- ity of contract conditions and possibility to perform the terms of the contract under duress. The main advantages of a smart contract are its ability to significantly accelerate and reduce costs of the transaction and guarantee the fulfillment of contract terms regardless of the contractual parties' and third parties' will. The main risks of a smart contract are uncertainty of legal status of a smart contract and cryptocurrencies as a means of payment, complexity of expressing the contact terms in a mathematical algorithm, risk of software bugs and hacking attack. To solve the problems of legal regulation of smart contracts in Ukraine it is necessary to change the legislation in order to settle the legal status of cryptocurrencies and recognize a smart contract as a form of a civil contract. It is necessary to identify parties of the smart contract, confirm their agreement on the terms of the smart contract by using digital electronic signature. A smart contract should be supplemented by text application containing the es- sential terms of the contract which will have legal force in trail. It is necessary to implement blockchain technology in the state registers and pro- vide legal ability to make adjustments in the registers automatically for the performance of smartcontracts.
The recent decade has witnessed an extraordinary degree of innovation in the financial sector. Developments in financial technology, computing power, and networking theory have allowed decentralized online platforms such as Bitcoin to fundamentally change the way that financial services are provided. While these innovations have been applauded by many as bringing a welcome degree of competition to a sector long dominated by powerful incumbents, they also create a set of challenges for current financial regulation. How do fiduciary standards apply to algorithms? How does online finance affect the behavior of investors? And more generally, how can regulators monitor and constrain the financial industry when it is increasingly run by autonomous, dispersed computer networks? This Article argues that current financial regulation is inadequate to address the unique problems presented by the rise of Bitcoin and other fintech industries. In particular, these innovations raise concerns about the ability of financial regulation to promote three inter-related financial goals: the efficient allocation of capital, the protection of consumers, and the prevention of systemic risk. These goals, at the core of current approaches to financial regulation, are all challenged by fintech’s defining feature: its reliance on disembodied institutions and complex algorithms for its functioning. These traits render the traditional tools used by regulators to discipline markets—substantive behavioral obligations, the threat of sanctions, and the constraining effect of reputation—largely ineffective. The Article concludes by proposing a set of principles to guide lawmakers in designing a more effective financial regulatory structure for the Bitcoin era.
The article outlines the logical legal and regulatory sequence of building a highly civilized, highly developed and democratic Ukrainian state that will maximally facilitate the implementation of natural inviolable freedoms, rights, security and supreme power of a Ukrainian citizen and his social duties, rights and responsibilities in the family, community , nation and state. After all, Ukraine is shocked by populist speeches of immoral and illiterate government officials of different levels, their pseudoreforms, pseudo-decentralization and other chaotic actions lead the state to collapse, and people are lowering them to even greater poverty. The people are completely deprived of their property and state control. Prosecutors, judges, police, the SBU and other governing bodies of the state are not controlled by the people. The state's control went into the hands of criminal-oligarchic clans, which loose it uncontrollably and cynically. It should be noted that the management of a civilized state is the most complicated process in the world, which is tens of thousands of times more complex than the most complex computer and space technologies. Therefore, the management of the state categorically can not allow people with immoral reputation and without deep theoretical knowledge and practical skills in management science, micro-and macroeconomics, finance and freedoms and human rights. To build a Ukrainian state that will serve exclusively a man of honest work, he will constantly increase the welfare of his life and the power of the state and make it impossible for anyone to parasitize, and in any way, for another's account, one should link in one harmonious and dynamic whole such state-building mechanisms: socially-economic justice; the selection and appointment by the people of government personnel at all levels and control over their work; development of industrial production, entrepreneurship, agro-industrial complex and farming; wholesale and retail trade; communications and engineering; efficient use of all natural resources, recycled materials and private and public property; social infrastructure of settlements; foreign economic activity and investments; development of science and innovation; prophylactic, diagnostic and medical care of the population; the protection of freedoms, rights, security, the supreme power of man and the clear and unconditional compliance of all citizens and officials with the laws in force; internal and external security of citizens, communities of settlements and the state; operational and statistical control over the implementation of strategic and current programs for the development of settlements and the state, their diagnosis and improvement of management, systematic and comprehensive explanatory and educational work in Ukraine and abroad, as well as the formation of a highly civilized worldview of Ukrainians and their unification into a single monolithic highly professional and active National Community and state-building force.
Dyntu V. A. The roots of cryptocurrencies / V. A. Dyntu // Правові та інституційні механізми забезпечення розвитку України в умовах європейської інтеграції : матеріали Міжнародної науково-практичної конференції (м. Одеса, 18 травня 2018 р.) У 2-х т. Т. 2 / відп. ред. Г.О. Ульянова. – Одеса : Видавничий дім «Гельветика», 2018. – С. 388-392.
Open access
Ukrainian Legal and Forensic Studies
Legal Studies and Reforms
Legal, Health, Environmental and COVID-19 Challenges
The aim of the article is to study the theoretical and legal possibilities of using cryptocurrency in purchase and sale contracts, to determine the specificities of such a phenomenon as cryptocurrency (Bitcoin) from the perspective of jurisprudence, and to draw attention of legal scholars primarily to possible further scientific researches on the introduction of this phenomenon in the modern civilian legislation of Ukraine. The subject of the study is the specificities of using cryptocurrency in contracts of purchase and sale. Methodology. The research is based on an analysis of legal acts on the legal regulation of cryptocurrency in Ukraine. By means of the comparative legal method of investigation of certain provisions of Ukrainian legislation, the possibilities and limits of the use of cryptocurrency in contractual relations, in particular, contracts of purchase and sale are determined. The results of the study revealed that the cryptocurrency regime in Ukraine and in many countries is in a legal vacuum. Such a conclusion is based on the lack of clear legal clarification and consolidation of the concept and types of cryptocurrency in the relevant rules of the tax, banking, civil, and commercial law. In case of eliminating this gap, it is advisable to review the state policy on Bitcoin and its analogues. Practical implications. It is necessary and appropriate to introduce a corresponding license for cryptocurrency activities that can minimize the laundering of proceeds from crime or terrorism financing. It is suggested that eventually the relations concerning the digital currency will be regulated in Ukraine, but most likely, it will copy the experience of another state, which may have negative consequences. Relevance/originality. Analysis of a possible use of cryptocurrency in contracts of purchase and sale can become the basis for the development of the most promising directions of domestic civil law in contractual relations.
The analysis of using so-called smart contracts, which have become widespread in recent years. The definition of the term “smart contract” is given, some classification is offered for them. A comparative analysis of traditional and smart contracts in the part of legal regulation of their application was conducted. The article formulates legal problems of the theoretical and practical direction, which are a significant barrier to the use of smart contracts in the context of widespread use of Internet of Things, some solutions have been suggested for them.
Viktor Dmytrovych Chernadchuk, Viktor Sukhonos, Inna Shkolnyk
The financial system of the advanced countries develops according to two basic models – a bank-based system and a market-based system, depending on the level of protection of the rights of owners, investors and lenders. A paradigm shift in functioning of global financial system and financial systems of all countries is based on financial law, which formalizes all financial relations. Reviewing the financial system of Ukraine, the researchers pay a special attention to public finance due to its substantial share in redistribution of Ukraine’s GDP. A comparative analysis of the concept “financial system” makes it possible to draw a certain analogy with the approaches of experts in financial law. From the economic point of view, a country’s financial system includes three key areas – state finance, household finance and corporate finance, which are closely interrelated. Matching these three spheres with the legal approach, state finance is defined as public finance, while household finance and corporate finance are referred as private finance. The financial market functions as a part of the financial system. In economic terms, the financial system is a dynamic and open environment, while it implies an intense movement of financial resources, a rapid emergence of new financial instruments and integration into the global financial market. From the legal point of view, the financial system is a static financial and legal phenomenon, which includes centralized and decentralized public funds, as well as funds of business entities and individuals.
The article deals with contemporary tendencies of the banking policy of the world. For this purpose, the key issues have been worked out: analysis of the evolution of formation, specification of the essence and main characteristics of the blockchain technology, profiling of the mechanism of the work of the block chain technology, disclosure of the main purpose and the features of the use of smart contracts in the block chain environment, formulation of the advantages and disadvantages that arise in the process of working with smart contracts, analysis of perspective directions of application of smart contracts in the banking system. The study underlines that under current conditions of broad consumption, crypto-currency payments found general application. Such payments are relatively simple: there are wallets, you can transfer money from one wallet to another or several at once. The network is built on principles that allow you to do it without a single center, but the tasks are carried out in a traditional way. Thus, it is an ordinary payment system consisting of people, money and money transfer. Under the influence of the continuous development of technologies, a payment network that allows you to write programs that not only worked with wallets was created, but they themselves would take money out of wallets and decide who and how much to send. Important conditions for smart contracts are transparency, security and universality for all users.
The aim of this article is to study the theoretical, methodological, and legal possibilities of application of certain types of legal responsibility to the relations, which are connected with cryptocurrency (bitcoin). Some types of liability in the field of cryptocurrency relations make the subject of the study. Methodology. The research is based on a comparison of legal regulation of the sphere of cryptocurrency in Ukraine and in foreign countries. Advantages and disadvantages of different modes of cryptocurrency turnover are determined: from direct prohibition to granting the status of the official payment system. It is made on the basis of the analysis of peculiarities of the circulation of virtual money in Australia, Germany, the Netherlands, New Zealand, Singapore, Indonesia, China, the Russian Federation, Bolivia, Ecuador, Thailand, Vietnam, the USA, Japan, Spain, and some other countries. On the basis of the comparative legal study of certain provisions of the civil, administrative, tort, and criminal legislation of Ukraine, the possibilities and limits of the application of certain types of legal responsibility to violations in the field of cryptocurrency are determined. The results of the comparative legal study have shown that, unlike most foreign countries, in Ukraine, there is no legislative consolidation of the legal status of the virtual currency. In this regard, today in the national legislation, there are no direct rules that would predict the occurrence of administrative, criminal or civil liability for the offenses in the field of cryptocurrency relations. Practical impact. Since guarantees of compulsory restoration or protection of violated law play an important role in the legal regulation of any social relations, the proper legislative regulation of public relations in the sphere of crypto currency circulation is an urgent problem today, including with the help of establishing liability for the offenses in this field. Correlation/Authenticity. Comparative and legal research of legal regulation of the sphere of crypto currency gives us a better understanding of the most promising directions of development of administrative, criminal, and civil liability in this field.