Abstract:at the beginning of 2018, considerable attention of lawyers attracted the case of a citizen’s bankruptcy with the decision to include cryptocurrency in the bankruptcy estate. This case exposed a number of problems associated with legal uncertainty regarding new technology products. What is cryptocurrency? To what objects of civil rights should it be attributed? What is the foreign practice and has the global tendency of regulating such relations formed? It is these issues that have become key to this article and determine its structure. The history of the issue, which has been going on for more than twenty years, is examined, foreign approaches of the legislator and law enforcer to regulate these relations are examined, the question of the economic nature of cryptocurrency is touched upon and, most importantly, questions are raised that law enforcers and legislators have yet to find answers.
Development of digital technology opens up new opportunities for corporate governance. At the same time, modern law faces a difficult task – to find a balance between creating conditions for development of technologies including by means of non-interference, and providing the stakeholders in corporate governance with proper legal guarantees. This paper considers the impact of some of the most significant digital technologies on corporate governance, such as distributed ledger technology, smart contracts and artificial intelligence. There are certain legal trends and challenges arising from such innovations including the pursuance of sociability, peer-to-peer and decentralization of corporate governance which in many cases is associated with abolishing of bodies (of a part of bodies) for a corporation management, or transferring their powers (a part of powers) to the corporation members and/or to a computer program (artificial intelligence, algorithm, smart contract). Besides, the paper considers occurrences of new subject of corporate relations – crypto-assets (tokens) holders as well as the possibility for recognition of the legal personality of computer programs, in particular, decentralized autonomous organizations and artificial intelligence.
Introduction: currently, the whole world is experiencing tremendous changes in connection with the transition to the information society. This work is devoted to the challenges faced by contract law. The aim of this work is to study the theoretical and practical problems of the legal regulation of "smart" contracts. Methods: the methodological framework for the study is the dialectical method of cognition, which assumes the comprehensiveness, objectivity and interconnectedness of the studied phenomena; the general scientific methods of cognition (analysis, synthesis, hypothesis, analogy, etc.); the comparative law and functional methods. As a result of the study, the main problems arising in the legislative regulation of "smart" contracts were grouped. The technical ones include: the problem of describing the conditions in the artificial language, obtaining the data from the real world by the system, the reliability of the input data, the system errors, the speed of transaction processing, the inability to maintain the complete confidentiality of the operations. The legal problems include: the complexity of the contract verification by a lawyer, the lack of control of transactions by the state and tax authorities, the possibility of illegal transactions, the complexity of proving the fact of the contract, the definition of the applicable law, remedies. The legislation of some foreign countries, which is also under development, is analyzed. The analysis of the draft law "On Digital Financial Assets" shows that the document does not satisfy the requests for the legal regulation of the digital economy. In the definition, there is no indication that a "smart" contract is written in the artificial language, the turnover of the crypto currency is significantly limited. It is concluded that a "smart" contract is now rational to use as part of a paper contract for simple transactions with the measurable conditions. The draft law "On Digital Financial Assets" needs the significant improvement to simplify the turnover of digital assets and the development of the institution of "smart" contracts.
The subject of the research is the tax burden of organizations engaged in new types of activities using digital information and communication technologies. The purpose of the research was to determine the specific features of the crypto economy to be taken into account in the development of measures for the tax regulation of organizations in the digital economy. It was established that the transformation of approaches to information exchange allowing economic agents to make transactions on the basis of digital platforms not linked to the geographical borders of states makes legal entities and individuals more reluctant to delegate some of the powers to the state as an institution of power. The paper classifies foreign practices of direct taxation of incomes from purchase and sale of crypto-currency, which made it possible to identify prospects for the development of tax regulation in Russia. The conceptual scenarios of taxation of cryptoproducts are analyzed and it is concluded that in creating a cryptocurrency the deferred recognition of the object of taxation is advisable in order to reduce the tax risks of users.
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Legal and Policy Issues
Economic and Technological Developments in Russia
Digitalization and Economic Development in Agriculture
The paper focuses on the definition of the legal status of the cryptocurrency in the framework of the current Russian legislation. The subject of the research is the principal scientific and practical approaches to determining the object of civil rights and the object of acquisitive crimes in terms of their adaptability to cryptocurrencies. The purposes of the work were the search for a universal algorithm for resolving civil disputes related to the turnover of the crypto currency, and the qualification of the virtual currency theft (fraud). By using historical, comparative legal and dialectical methods as well as the content analysis method parallels between cryptocurrencies and individual objects of civil rights (a thing, property rights, other property) were drawn, and a number of options for qualifying the actions related to the non-repayable withdrawal of the cryptocurrency were proposed. Finally, the paper analyzes the draft laws prepared by the RF Ministry of Finance and the Central Bank of the Russian Federation and presents the author’s vision of the prospects for legalizing the cryptocurrency as an object of civil rights.
The article considers the Swiss model of fiscal municipalization from the ideological and methodological positions of the anthroposociocultural approach. Such components of this approach as historical and genetic methods together with the method of system-structural analysis were applied especially thoroughly and consistently. By means of them it was found that the Swiss model of fiscal decentralization is an attributive part of the construction of public power in Switzerland – municipalization from bottom to top. Special attention is drawn to defining the basic legal features of the Swiss model of fiscal municipalization. It is argued that subsidiarity does not paradigmatically coincide with decentralization: the principle of subsidiarity postulates the sovereignty of the basic territorial collectives and considers the possible conditions for its limitation for general social needs and values. On the contrary, the principle of decentralization has the national level of governance as the starting point and considers the conditions of delegation of certain tasks and competences by the state to the lower levels of public power hierarchy in the principal frames of state sovereignty. Specificity of the principle of subsidiarity in Switzerland is that cantons play dual role from the standpoint of administrative federalism. On the one hand, they are the bearers of sovereignty of public power, including taxation. On the other hand, they are the sole bearers of administrative authority and are obliged to serve national interests, that is, the needs of the entire Swiss Confederation. Paradox is that this service function of the cantons gives them considerable benefits in the inevitable opposition to the Union state, when it comes to provision of services of the entire fiscal system and the entire system of public finance.
The paper analyzes the specific nature of high-tech systems in IT area in terms of the transition to the digital economy (Digital Economy of the Russian Federation program). The research identifies the characteristics of legal regulation of databases, distributed ledgers, and blockchain technology. The author determines that the legal regime of databases is admissible with regard to the above-mentioned systems. The study reveals the aspects of special sectoral laws and regulations applied to databases in order to introduce distributed ledgers and blockchain technology. The research considers the dual nature of database laws governing blockchain technology in different ways. The author concludes that laws and regulations concerning databases can be implemented to introduce distributed ledgers and blockchain technology considering their specific legal nature for particular legal relations.
A. Goriacheva, N. Jakubenko, O. Pogodina, Dmitry S. Silnov
This article is devoted to the exploration of services of anonymizing transactions, based on the Mixer, CoinJoin and CoinSuffle technologies, as well as to the description of the core principles of operation of these technologies and technical details. It analyzes the advantages and disadvantages of different realizations of this service. It formulates the problem of cryptocurrency laundering through anonymization services and offers solutions to this problem.Keywords: cryptocurrency, blockchain, bitcoin, mixing service, mining, money laundering.
D A Zakoldaev, Rodion V. Yamshchikov, Nadezhda V. YAmshchikova
The article analyzes the development and use of the blockchain technology in Russia. The authors assess the implemented solutions of the “distributed register” technology, the national blockchain platform Masterchain and the “Digital economy” program in particular. The process of developing solutions for the digitalization of different sectors of the economy is considered. Support of the “digital” trend of the country development by the first persons of the state is also scrutinized. Having analyzed the political practice and legal framework, the authors come to the conclusion about the need for joint work of all branches of the government on the construction of a digital society in modern Russia.
The article analyzes the current state of digital economy and crypto currency. It also attempts to outline the main development directions of the Russian legislation on legal regulation of digital currency usage on the basis of current national legislation and foreign experience. Significant attention is given to digital economic concept, its main paths, development of legal framework for digitalization of economic processes. The article includes a review of modern scientific publications on questions under investigation and highlights the necessity of the complex approach both to the analysis of phenomena under study and to their legal regulation. It is also shown that crypto currency circulation is ambiguous and multifaceted and it has both financial advantages and criminological threat. Special consideration is given to the provisions of the draft law on “Digital Financial Assets”, the first project dedicated to the regulation of relations arising in the creation, release, storage and circulation of digital financial assets, which contains key definitions for the legal regulation of cryptocurrencies and transactions with them in the Russian Federation.
The article is devoted to the theoretical justification of the need to introduce criminal law prohibitions on criminal encroachments in the sphere of cryptocurrency turnover in Russia. The author analyzes the principles and grounds for the criminalization of such acts in connection with their increased public danger. The article examines the prerequisites, grounds and justification for criminalizing criminal offenses in the field of cryptocurrency turnover, problems of applying current criminal law provisions to acts committed using cryptocurrency, examines the opinions of law enforcement officials, prosecutors and the court, relating to the category of cases considered. The author's position on problematic issues is presented.
The article is devoted to the study of legal resources, within the framework of information objects, the provision of Russian legislation. There are several approaches to the designation of the legal nature of detachments. The conclusion is that bloksn should not be considered as a separate information object. From the position of information law, offered primarily as a kind of information technology, on the basis of which there is a collection, processing, storage and transmission of information. From a legal point of view, the notebook can also be viewed as a decentralized distributed database ("ledger") of all confirmed transactions made with respect to certain assets, within the scope of which cryptographic algorithms lie. In the majority of cases, the block system should be considered as an information system, which is a register of information, as well as information processing technologies, including the formation and storage of accurate, specific data, confirming the totality of property and other rights and obligations of their holders, and allowing for electronic payments and other legally significant actions.
the development of digital economics has taken on vital importance nowadays. Entrepreneurs in their business actively use digital technologies by which they enter into civil law relationships of different nature. Cryptocurrency usage in commerce is one of the most topical issues discussed in a legal community. The article analyzes an issue of legal regulation of cryptocurrency which logically follows digital technologies and digital economics development. Presently there are no legislative mechanisms of cryptocurrency turnover and usage regulation. The main aim of the article is to develop legal suggestions for cryptocurrency effective regulation. With this aim the author has analyzed cryptocurrency development trend in the Russian Federation, studied experience of foreign countries (USA, Germany, France, China and Japan). In his article the author offers for the legal community a single matrix of the cryptocurrency legal regulation which comprises three levels: international, regional and national.
The article is devoted to the study of legal nature of smart contracts. Smart contracts definitions are analyzed, the data in the project of the Federal law «About digital financial assets» № 419059-7 (passed by the Gosudarstvennaya Duma in the first reading 20.05.2018), and in the technical, legal and economic literature, and outlines the main approaches to defining the legal nature thereof. The author comes to the conclusion that nowadays smart contracts should be qualified as technical means of contract performance, and that the statutory rules applicable to electronic contracts cannot apply to smart contracts.
The Fourth Industrial Revolution and the accelerated development of cyber-physical technologies lead to essential changes in national tax systems and international taxation. The main areas in which taxation meets cyber-physical technologies are digitalization, robotization, M2M and blockchain technologies. Each of these areas has its own opportunities and problems. Three main approaches towards possible solutions for these new problems are identified. The first is to try to apply taxation to new cyber-physical technologies and products of their application. This approach includes the OECD's Action 1 Plan on Base Erosion and Profit Shifting. It also includes the spread of traditional taxes on new objects -personal data, cryptocurrencies, imputed income of robots. The second is to replace digital transactions and shortfalls in revenues by traditional objects of taxation in the form of tangible assets and people and / or increase tax pressure (including by improving tax administration with use of Big Data) and the degree of progressiveness of taxes already levied on such objects. The third approach is to set a course on building a new tax space with smart taxes based on real-time principles, smart contracts and Big Data. This implies a transition to automatic taxation using blockchain technologies, which focus on the functions of applying distributed ledgers of business transactions in realtime. At present, the general trends are such that the first and second are prevalent, which is manifested in an increase in the relative importance of property, sales and employment taxes. Concerning the third approach, any movement in this direction is still facing a number of technical and other problems and is thus being discussed mainly at the conceptual level
The article presents the prospects for using distributed registry technologies (blockchain) in various socio-economic spheres related to state and municipal administration. Provided examples and forecasts of the use of blockchain technologies in the provision of state and municipal services for individuals and legal entities in the following areas: - formation of a unified register containing the history of the placement of the state, municipal order, as well as procurement of corporations with state participation and / or control; - registers of documents (diplomas, certificates, lost and disavowed passports, policies for movable and immovable property insurance, health, etc.); - database of court decisions and executive proceedings; - portals of public participation of citizens in the affairs of the district - city - country. The fact that the blockchain technology is, first of all, the principles, and not the only possible way of implementing them, allows us to count on maximum openness and multivariate application in a dynamically changing digital world .
After granting permission to the Internal Revenue Service to serve a digital exchange company a summons for user information, the Federal District Court for the Northern District of California created some uncertainty regarding the privacy of cryptocurrencies. The IRS views this information gathering as necessary for monitoring compliance with Notice 2014-21, which classifies cryptocurrencies as property for tax purposes. Cryptocurrency users, however, view the attempt for information as an infringement on their privacy rights and are seeking legal protection. This Issue Brief investigates the future tax implications of Notice 2014-21 and considers possible routes the cryptocurrency market can take to avoid the burden of capital gains taxes. Further, this Issue Brief attempts to uncover the validity of the privacy claims made against the customer information summons and will recommend alternative actions for the IRS to take regardless of whether it succeeds in obtaining the information.
The article explores the problem of the legal regulations of cryptocurrencies, considering socio-economic factors and changes in the modern globalized world.
The article deals with the certain aspects of the criminal law measures appliedto legal entities, the phenomenon of electronic legal entities (Decentralized Autonomous Organization or Decentralized Autonomous Corporation), the possibility of applying criminal law measures to electronic legal entities.
The presentation is dedicated to problems and approaches in the legal regulation of the use of one of the cryptocurrencies -Bitcoin. Currently Bitcoin causes bigger interest among the world society, which is connected, in particular, with the highly increased exchange rate of this cryptocurrency. A number of countries have already formed a well-defined position and created a legal basis for development or for a complete or partial restriction of this cryptocurrency. But at the moment the most part of the world countries do not have a legal and regulatory framework of Bitcoin. In this presentation there is an analysis identifying pros and cons of this cryptocurrency and also the consequences of its further integration into the biggest world countries. Besides, our group has considered the experience of the number of countries in which the legal regulation of this cryptocurrency is established. The research offers a way for the further legal regulation of Bitcoin in Russia.
The Internet of Things is a proliferating industry, which is transforming many homes and businesses, making them smart. However, the rapid growth of these devices and the interactions between these devices, introduces many challenges including that of a secure management system for the identities and interactions of the devices. While the centralized model has worked well for many years, there is a risk of the servers becoming bottlenecks and a single point of failure, thereby making them vulnerable to Denial-of-Service attacks. As a backbone of these interactions, Blockchain is capable of creating a highly secure, independent and distributed platform. Blockchain is a peer to peer, distributed ledger system that stores all the transactions taking place within the network. The main purpose of the servers that form a part of the distributed system is to provide a consensus, using various consensus algorithms, on the state of the blockchain at any given time and to store a copy of all the transactions taking place. This thesis explores the Blockchain technology in general and investigates its potential with regard to access management of constrained devices. A proof of concept system has been designed and implemented that demonstrates a simplified access management system using Ethereum Blockchain. This was done to check whether the concept can be applied at a global level. Although the latency of the network depends on the computing power of the resources participating in the Blockchain, an evaluation of the proof of concept system has been made, keeping in mind the smallest device that can be involved in the consensus process. Docker containers have been used to simulate a cluster of the nodes participating in the Blockchain, in order to examine the implemented system. An outline of the various advantages and the limitations of Blockchains in general, as well as the developed proof of concept system, has also been provided.