Article title On the Comparison of Business Activity with Cryptocurrency Production (“Mining”) and Transactions with It
Authors
Name of magazine Legal journal «Law of Ukraine» (Ukrainian version)
Issue 5/2018
Сторінки [164-175]
DOI https://doi.org/10.33498/louu-2018-05-164
Annotation

The purpose of the article is to give the characteristics of cryptocurrency production activity (“mining”) and transactions with it and determine whether it is possible to recognize these operations as the types of business activity, and also to suggest in which areas economic law and respective legislation may be further developed. As demonstrated by the analysis of cryptocurrency production activity (“mining”) and transactions with it, individuals and their groups and organizations which produce (“mine”) cryptocurrency and make transactions with it have an essentially similar legal status. If we consider the five signs characterizing a business entity as an entity subject to law, we will see the four signs fully inherent in such individuals and groups, with the fifth sign being mostly subjective. The article shows that in fact, participants of the cryptocurrency market activities have a certain organizational unity and a well-outlined organizational and legal form (although in most cases it is not formalized), standalone assets, and a set of rights and obligations relating to business activity, and are liable for the results of their activities. And they are unable to go through the legitimation process only due to legislative prohibitions. The author proves that the activity of cryptocurrency “miners” and other cryptocurrency market participants is, in essence, business activity, since it is carried out in the social production domain and aims at the production and sale of products, works or services which have value and a certain price. A significant part of cryptocurrency purchase and sale transactions are business transactions intended to generate income. The article states that if the State officially recognizes that cryptocurrency “mining” is a legitimate type of business activity and cryptocurrency purchase and sale transactions are business transactions, and at the same time introduces the duty of “miners” to get officially registered as a business entity, and applies the taxation legislation to all participants of the relations on the cryptocurrency market and criminal, administrative, and economic liability to offenders, this will allow eliminating the uncertain or hybrid legal status of such entities and their operation regime, as well as the existing gaps in law and legislation. The State will receive additional revenues to the budget and the ability to regulate and control individual operations with cryptocurrency.

 

Keywords business entity; business activity; cryptocurrency, “mining”; gap in law; signs of business entities; cryptocurrency exchange; taxation
References

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