Cryptocurrencies: Legal and shadow-criminal aspects of turnover

Abstract

The authors enumerate and analyze key challenges that global financial and legal systems face in connection with the introduction of cryptocurrency. They present definitions of cryptocurrency used in international and Russian practice. The authors also study the court practice on crimes involving the use of bitcoins and examine the approaches to determining the legal status of cryptocurrency in foreign countries and in the Russian Federation. It is stated that at present the international regulatory practice lacks a common universal document that would regulate the use of digital (electronic) currencies. At the same time, a considerable number of foreign countries have already worked out their attitudes to virtual currency — ranging from the absolute prohibition of all operations to stimulating mining and payments in cryptocurrencies. The authors identify five key approaches to regulating the market of cryptocurrencies in international practice. They outline multiple risks connected with the partial substitution of official means of payment by cryptocurrencies. It is stated that in our country cryptocurrencies and operations involving them are now beyond the scope of law because cryptocurrencies are not recognized as an object of legal protection. However, a number of draft laws that regulate the issue and turnover of «virtual assets» are to be adopted in the near future. The authors identify key prerequisites for the use of effective regulatory approaches to operations with cryptocurrencies and the directions for the creation of a normative legal base for such operations in the Russian Federation. It is important to take measures and prevent the use of cryptocurrencies for the financing of criminal activities and terrorism. The authors use the analysis of the normative legal basis of the Russian Federation, existing theories and their own considerations to recommend an introduction of a favorable regime of cryptocurrency market regulation by implementing the best international practices whose essence (in general terms) is reflected in the clauses of this article.