Legal regime of cryptocurrencies

Authors

DOI:

https://doi.org/10.26512/lstr.v16i1.45592

Keywords:

Cryptocurrency. Digital Currency. Electronic Money. Property. Financial Instrument. Virtual Asset. Private Money.

Abstract

[Purpose] The purpose of this research is to examine the legislative approaches to regulating cryptocurrencies in different states and regions. The aim is to analyze the legal framework of cryptocurrencies in the Kazakh and international economy and determine the modern scientific approaches used in their functioning.

[Methodology/Approach/Design] The study employs a combination of theoretical and empirical methods, including analysis, synthesis, historical analysis, comparative analysis, formal-logical methods, and hermeneutics. A comparative analysis is conducted to assess the different regulatory approaches of states towards cryptocurrencies and evaluate the justification for terms such as "digital currency" and "digital asset."

[Findings] The findings of this study underscore the necessity for further amendments to the legislation in Kazakhstan, specifically addressing overlooked details and features concerning the financial and legal aspects of cryptocurrencies. Key decisions need to be made regarding their acceptance for public payments, tax considerations, declaration requirements, and recognition as private money. The study emphasizes the significance of adopting a comprehensive and forward-thinking legal approach that supports the full legalization of cryptocurrencies while establishing a robust regulatory framework. This approach would effectively safeguard the interests of individuals and entities, address concerns, and promote a balanced and secure environment.

Downloads

Download data is not yet available.

Author Biographies

Kristina Proskurina, Caspian University

Doctoral Student at the Adilet Law School, Caspian University, Almaty, Republic of Kazakhstan. E-mail: proskurinakristina12@gmail.com.

Yevgeniy Porokhov, Caspian University

Full Doctor of Law, Professor at the Adilet Law School, Caspian University, Almaty, Republic of Kazakhstan. E-mail: ‎yporokhov@yahoo.com.

References

ARTYOMOV, N.M., ARZUMANOVA, L.L., & SITNIK, A.A. (2012). Monetary law (financial and legal regulation of the circulation of national and foreign currencies in the territory of the Russia). Moscow: "Elita" Publishing House.

ARTYOMOV, N.M., LAGUTIN, I.B., SITNIK, A.A., & URDA, M.N. (2016). Legal regulation of monetary circulation (Money law). Moscow: INFRA-M.

BEIGEL, O. (2022). Who Accepts Bitcoin as Payment? Retrieved from: https://99bitcoins.com/bitcoin/who-accepts/.

Bitcoin is recognized as an official payment method in Japan. (2017). Retrieved from: https://pravo.ua/v-japonii-bitkoin-priznan-oficialnym/.

Bitcoin: El Salvador makes cryptocurrency legal tender. (2021). Retrieved from: https://www.bbc.com/news/world-latin-america-57398274.

Blockchain., Cryptocurrency Laws., & Regulation. (2021). Retrieved from: https://www.globallegalinsights.com/practice-areas/blockchain-laws-and-regulations/Japan.

China declares all crypto-currency transactions illegal. (2021). Retrieved from: https://www.bbc.com/news/technology-58678907.

CHORNOUS, Y., DENYSENKO, S., HRUDNYTSKYI, V., TURKOT, O., & SIKORSKYI, O. (2019). Legal regulation of cryptocurrency turnover in Ukraine and the EU. Journal of Legal, Ethical and Regulatory Issues, 22(2), 91-102.

Civil Code of the Republic of Kazakhstan. (1994). Retrieved from: https://online.zakon.kz/Document/?doc_id=1006061.

Civil Code of the Russia. (1994). Retrieved from: http://www.consultant.ru/document/cons_doc_LAW_5142/.

Code of the Republic of Kazakhstan No. 120-VI "On taxes and other obligatory payments to the budget (Tax Code)". 2017. Retrieved from: https://online.zakon.kz/document/?doc_id=36148637#sub_id=0.

Constitution of the Russia. (1993). Retrieved from: http://www.constitution.ru/.

CVETKOVA, I. (2018). Cryptocurrencies Legal Regulation. BRICS Law Journal, 5(2), 112-120.

DE HOON, I. (2021). Germany: A Surprising Bitcoin Tax Haven. Retrieved from: https://nomoretax.eu/bitcoin-tax-haven-germany/.

DIGITAL CURRENCIES. (2021). Retrieved from: https://cutt.ly/kXvo1jT.

Digital ruble. Report for public consultations. (2020). Retrieved from: https://www.cbr.ru/StaticHtml/File/112957/Consultation_Paper_201013.pdf.

Digital tenge (pilot project). (2021). Retrieved from: https://nationalbank.kz/ru/page/cifrovoy-tenge-pilotnyy-proekt.

Directive (EU) 2018/843 of the European Parliament and of the Council amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU. (2018). Retrieved from: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32018L0843.

DOLGIYEVA, M.M. (2018). Foreign experience of legal regulation of relations in the field of cryptocurrency circulation. Lex Russica, 10(143), 116-128.

Draft Law No. 1065710-7 "On Amendments to Parts One and Two of the Tax Code of the Russia". (2020). Retrieved from: https://sozd.duma.gov.ru/bill/1065710-7.

DULATOVA, N., ABD RAZAK, H. (2020). The Ecosystem of Cryptocurrency as an Object of Civil Rights in BRICS Countries. BRICS Law Journal, 7(2), 92-105.

EGOROVA, M.A. (2019). Bitcoin as a special type of cryptocurrency: the concept, meaning and prospects of legal regulation in entrepreneurial activity. Actual Problems of Russian Law, 6(103), 53-71.

EGOROVA, M.A., EFIMOVA, L.G. (2019). The concept of cryptocurrencies in the context of improved. Lex Russica, 7(152), 130-138.

Federal Law No. 115-FZ "On counteracting the legalization (laundering) of proceeds from crime and the financing of terrorism". (2016). Retrieved from: http://www.consultant.ru/document/cons_doc_LAW_32834/.

Federal Law No. 127-FZ "On Insolvency (Bankruptcy) ". (2011). Retrieved from: http://www.consultant.ru/document/cons_doc_LAW_39331/.

Federal Law No. 229-FZ "On Enforcement Proceedings". (2016). Retrieved from: http://www.consultant.ru/document/cons_doc_LAW_71450/.

Federal Law No. 259-FZ "On digital financial assets, digital currency and on amendments to certain legislative acts of the Russia". (2020). Retrieved from: http://www.consultant.ru/document/cons_doc_LAW_358753/.

Federal Law No. 273-FZ "On Combating Corruption". (2014). Retrieved from: http://www.consultant.ru/document/cons_doc_LAW_82959/.

Federal Law No. 39-FZ "On investment activities in the Russia carried out in the form of capital investments". (2005). Retrieved from: http://www.consultant.ru/document/cons_doc_LAW_22142/.

Federal Law No. 79-FZ "On the prohibition of certain categories of persons to open and have accounts (deposits), keep cash and valuables in foreign banks located outside the territory of the Russia, own and (or) use foreign financial instruments". (2011). Retrieved from: http://www.consultant.ru/document/cons_doc_LAW_145998/.

FOMIN, D. (2020a). China spoke about the results of testing the digital yuan. Retrieved from: https://www.rbc.ru/crypto/news/5f8d83a69a7947976d8dc9ee.

FOMIN, D. (2020b). Aksakov called bitcoin a threat to the financial system. Retrieved from: https://www.rbc.ru/crypto/news/5f3634719a79473cc75f6aac?from=main.

FOMIN, D. (2020c). The European Commission presented the rules for regulating the cryptocurrency market. Retrieved from: https://www.rbc.ru/crypto/news/5f6cc6fe9a79470f9eb8a854.

Germany: Federal Ministry of Finance Publishes Guidance on VAT Treatment of Virtual Currencies. (2018). Retrieved from: https://cutt.ly/sXvsqEx.

GERSHOWITZ, A. M. (2019). Criminal-Justice Apps: A Modest Step Toward Democratizing the Criminal Process. Virginia Law Review, 105, 37-56.

GIKAY, A.A. (2019). European Consumer Law and Blockchain based Financial Services: A Functional Approach against the Rhetoric of Regulatory Uncertainty. Tilburg Law Review, 24(1), 27-48.

Guide for cryptocurrency users and tax professionals. (2021). Retrieved from: https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/digital-currency/cryptocurrency-guide.html.

HACKETT, R. (2021). That settles it: Visa is making life way easier for crypto businesses. Retrieved from: https://fortune.com/2021/03/29/visa-crypto-business/.

HAMUKUAYA, N.H. (2021). The Development of Cryptocurrencies as a Payment Method in South Africa. Potchefstroom Electronic Law Journal, 2021(24), 125-134.

KARAGUSOV, F. S. (2002). Securities and money in the system of objects of civil rights. Almaty: Zheti Zhargy publishing house.

KARAGUSOV, F.S. (2014). Abstracts of the report on the regulation of the regime of financial instruments by the norms of the civil code of the Republic of Kazakhstan. Retrieved from: https://online.zakon.kz/Document/?doc_id=31664253.

KERIMKHULLE, S., AITKOZHA, Z., SALIYEVA, A., KERIMKULOV, Z., ADALBEK, A., TABERKHAN, R. (2023). Using Technical and Structural Coefficients of Economic Statistics to Equalize Flows of Input-Output Table. Lecture Notes in Networks and Systems, 596 LNNS, 501-511. https://doi.org/10.1007/978-3-031-21435-6_44

KERIMKHULLE, S., BAIZAKOV, N., SLANBEKOVA, A., ALIMOVA, Z., AZIEVA, G., KOISHYBAYEVA, M. (2022). The Kazakhstan Republic Economy Three Sectoral Model Inter-sectoral Linkages Resource Assessment. Lecture Notes in Networks and Systems, 502 LNNS, 542-550.

KLIMENKO, O., MASHCHENKO, M. (2022). Forecasting effectiveness of government measures regarding the economic development of Ukraine. Economics of Development, 21(3), 8-14. https://doi.org/10.57111/econ.21(3).2022.8-14

KORNEYEV, A. (2020). Bill Gates criticized bitcoin due to electricity consumption. Retrieved from: https://www.rbc.ru/crypto/news/603750589a7947672d8bd615.

KUCHEROV, I.I. (2012). Money, monetary obligations and monetary penalties. Moscow: YurInform Center.

KUCHEROV, I.I. (2018). Cryptocurrency as a payment method. Financial Law, 7, 43-51.

Law of the Republic of Kazakhstan No. 234-III "On Accounting and Financial Reporting". (2007). Retrieved from: https://online.zakon.kz/document/?doc_id=30092011.

Law of the Republic of Kazakhstan No. 347-VI "On amendments and additions to certain legislative acts of the Republic of Kazakhstan on the regulation of digital technologies". (2020). Retrieved from: https://online.zakon.kz/Document/?doc_id=34230083. Access date: 09 November 2022.

Law of the Republic of Kazakhstan No. 418-V "On Informatization". (2015). Retrieved from: Retrieved from: https://online.zakon.kz/Document/?doc_id=33885902. Access date: 03 November 2022.

Law of Ukraine No. 2074-IX "On virtual assets". (2022). Retrieved from: https://zakon.rada.gov.ua/laws/show/2074-20#Text. Access date: 04 November 2022.

Layoffs continue in Abkhazia due to cryptocurrency mining farms. (2021). Retrieved from: https://eadaily.com/ru/news/2021/02/26/v-abkhazii-prodolzhayutsya-uvolneniya-iz-za-ferm-po-dobyche-kriptovalyut. Access date: 01 November 2022.

MAKALIUK, I. (2016). Diagnostics of transaction costs flow quality influence on economic results. Economic Annals-XXI, 156(1-2), 74-77.

MIRZOYAN, R.E. (2005). Historical background of non-cash money circulation. Bulletin of the Adyghe State University, 1, 131-133.

MISHCHENKO, V., NAUMENKOVA, S., GRYTSENKO, A., MISHCHENKO, S. (2022). Operational risk management of using electronic and mobile money. Banks and Bank Systems, 17(3), 142-157. http://dx.doi.org/10.21511/bbs.17(3).2022.12

MISHCHENKO, V.I., MISHCHENKO, S.V. (2015). Enhancing the effect of transmission channels in monetary policy of Ukraine under the transition to inflation targeting. Actual Problems of Economics, 163(1), 421-428. http://nbuv.gov.ua/UJRN/ape_2015_1_52

NAKAMOTO, S. (2014). Bitcoin: A Peer-to-Peer Electronic Cash System. Retrieved from: https://bitcoin.org/bitcoin.pdf. Access date: 02 November 2022.

Note of the Ministry of Finance of the Russia No. 03-04-07/80764. (2018). Retrieved from: http://www.consultant.ru/document/cons_doc_LAW_311847/.

Order of the Minister of Finance of the Republic of Kazakhstan No. 50 "On Approval of the National Financial Reporting Standard". (2013). Retrieved from: https://online.zakon.kz/m/document/?doc_id=31335042.

OZHEGOV, S.I. (2021) Explanatory Dictionary. Retrieved from: https://slovarozhegova.ru/. Access date: 09 November 2022.

PANDYA, S., MITTAPALLI, M., TEJA GULLA, S.V., LANDAU, O. (2019). Cryptocurrency: Adoption efforts and security challenges in different countries. Holistica, 10(2), 15-19.

PANOVA, O., LEHEZA, YU., IVANYTSIA, A., MARCHENKO, V., OLIUKHA, V. (2019). International models of legal regulation and ethics of cryptocurrency use: country review. Journal of Legal, Ethical and Regulatory Issues, 22(2), 67-72.

PAQUET-CLOUSTON, M., HASLHOFER, B., DUPONT, B. (2019). Ransomware payments in the Bitcoin ecosystem. Journal of Cybersecurity, 5(1), 39-42.

PATASHKOVA, Y., NIYAZBEKOVA, S., KERIMKHULLE, S., SERIKOVA, M., TROYANSKAYA, M. (2021). Dynamics of Bitcoin trading on the Binance cryptocurrency exchange. Economic Annals-XXI, 187(1-2), 177-188. https://doi.org/10.21003/EA.V187-17

PHADTARE, M. (2022). Saudi Arabia:The Legality of Cryptocurrency in Saudi Arabia: Everything you need to know. Retrieved from: https://regtechtimes.com/the-legality-of-cryptocurrency-in-saudi-arabia/. Access date: 05 November 2022.

Q2 2022 Global Crypto Ranking: Germany goes head to head with the USA. (2022). Retrieved from: https://coincub.com/ranking/the-coincub-q2-global-crypto-ranking-categories-2022/. Access date: 09 November 2022.

Rosstat Order No. 260 "On Approval of Guidelines for Completing Federal Statistical Observation Forms No. 2 Production of Agricultural Products in Personal Partial and Other Individual Farms of Citizens". (2008). Retrieved from: http://www.consultant.ru/document/cons_doc_LAW_82598/. Access date: 09 November 2022.

RUECKERT, C. (2019). Cryptocurrencies and fundamental rights. Journal of Cybersecurity, 5(1), 13-17.

SAVELYEVA, A. (2021). Power outages began in Iran due to Chinese miners. Retrieved from: https://www.it-world.ru/it-news/reviews/169409.html. Access date: 05 November 2022.

SEPHTON, C. (2021). How many cryptocurrencies are there? Retrieved from: https://currency.com/how-many-cryptocurrencies-are-there. Access date: 02 November 2022.

SILAGADZE, A. (2022). Contemporary Global Economic Trends: Transitional Economies during Covid-Depression. Bulletin of the Georgian National Academy of Sciences, 16(3), 130-135. http://science.org.ge/bnas/vol-16-3.html

SINGH, A., CHAWLA, S. (2019). Cryptocurrency Regulation: Legal Issues and Challenges. International Journal of Reviews and Research in Social Sciences, 7(2), 365-375.

SULEIMENOV, M.K. (2020). Digitalization and improvement of civil legislation (article two, corrected and amended). Retrieved from: https://online.zakon.kz/Document/?doc_id=39845707.

The first loan secured by cryptocurrency was issued in Russia. (2020). Retrieved from: https://cutt.ly/aXvgVbQ. Access date: 05 November 2022.

TOVMA, N. (2013). Audit organization for commodity transactions. Actual Problems of Economics, 146(8), 472-476.

TSINDELIANI, I.A., NIGMATULINA, L.B. (2018). Cryptocurrency as an object of civil law and financial and legal regulation. Financial Law, 7, 43-61.

UKWUEZE, F.O. (2021). Cryptocurrency: Towards Regulating the Unruly Enigma of Fintech in Nigeria and South Africa. Potchefstroom Electronic Law Journal, 2021(24), 519-525.

USHAKOV, D.N. (2021). Explanatory dictionary of the Russian language. Retrieved from: https://ushakovdictionary.ru/.

ZAITSEV, O.V. (2016). Monetary inflation and its connection with rising prices. Journal of Advanced Research in Law and Economics, 7(3), 698-707. https://doi.org/10.14505/jarle.v7.3(17).

Downloads

Published

2024-05-11

How to Cite

PROSKURINA, Kristina; POROKHOV, Yevgeniy. Legal regime of cryptocurrencies. Law, State and Telecommunications Review, [S. l.], v. 16, n. 1, p. 239–277, 2024. DOI: 10.26512/lstr.v16i1.45592. Disponível em: https://periodicos.unb.br/index.php/RDET/article/view/45592. Acesso em: 8 nov. 2024.