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| Article title | On the Comparison of Business Activity with Cryptocurrency Production (“Mining”) and Transactions with It | ||
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| 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.
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| Keywords | business entity; business activity; cryptocurrency, “mining”; gap in law; signs of business entities; cryptocurrency exchange; taxation | ||
| References |
List of legal documents
Legislation 1. Hospodarskii kodeks Ukrainy [The Economic Code of Ukraine] vid 16 sichnia 2003 r. № 436-IV. Vidomosti Verkhovnoi Rady Ukrainy. 2003. № 18-22. St. 144 (in Ukrainian). 2. Pro Natsionalnyu bank Ukrainy [On the About the National Bank of Ukraine]: Zakon Ukrainy [the Law of Ukraine] vid 20 travnia 1999 r. № 679-ХІV. URL: http://zakon2. rada.gov.ua/laws/show/679-14 (accessed: 13.05.2018) (in Ukrainian). 3. Roziasnennia shchodo pravomirnosti vykorystannia v Ukraini “virtualnoi valiuty/ kryptovaliuty” Bitcoin [Clarification on the Lawfulness of Using Bitcoin’s Virtual Currency/Cryptocurrency in Ukraine]: Roziasnennia Natsionalnoho banku Ukrainy [Clarification of the National Bank of Ukraine] vid 10 lystopada 2014 r. URL: https://www.bank.gov.ua/control/uk/publish/article?art_id=11879608 (accessed: 13.05.2018) (in Ukrainian).
Bibliography Edited books 4. Shelukhin M (red), Hospodarske pravo: navchalnyi posibnyk u skhemakh i tablytsiakh [Economic Law: a Manual in Charts and Tables] (Tsentr navchalnoi literatury 2006) (in Ukrainian).
Jornal articles 5. Bryzhan I ta Minyaylenko I ta Metelytsya A, ‘Rol kryptovaliuty u rozvytku mist maibutnoho [‘Cryptocurrency Role in the Development of Future Cities’] (2018) 21 Hlobalni ta natsionalni problemy ekonomiky 572 (in Ukrainian). 6. Derevyanko B ta Turkot O, ‘Pro vyznannia vydobutku (“mayninhu”) kryptovaliuty vydom hospodarskoi diialnosti’ [‘About Legalization of Exhaust (“Maining”) Cryptocurrency by the Type of Economic Activity’] (2018) 1 Ekonomika ta pravo (in Ukrainian). 7. Derevyanko B, ‘Ryzyky zdiisnennia operatsii z kryptovaliutoiu (bitkoinamy) hromadian i subiektiv hospodariuvannia Ukrainy’ [‘Risks of Operations with Cryptocurrency (Bitcoins) for Citizens and Economic Entities of Ukraine’] (2017) 3 Forum prava 33 (in Ukrainian). 8. Zarutska O ta Prokhorets T, ‘Osoblyvosti funktsionuvannia platizhnykh system v Ukraini’ [‘Features of the Functioning of Payment Systems in Ukraine’] (2017) 10(50) Molodyi vchenyi 882 (in Ukrainian). 9. Kompaniyets V, ‘Razvitiye i budushcheye ekonomiki na osnove tsifrovykh tekhnologiy: kriticheskoye osmysleniye’ [‘Development and Future of the Economy Based on Digital Technologies: Critical Thinking’] (2018) 61 Visnyk ekonomiky transportu i promyslovosti 36 (in Russian). 10. Makovoz O ta Perederiy T, ‘Blokchein yak zaporuka valiutnoii bezpeky’ [‘Blokchean as a Pledge of Currency Security’] [2018] 1(12) Skhidna Yevropa: ekonomika, biznes ta upravlinnya 359 (in Ukrainian). 11. Yarova K, ‘Kryptovaliuta: vyznachennia pravovoho statusu v Ukraini’ [‘Cryptocurrency: Definition of Legal Status in Ukraine’] [2017] 10(50) Molodyi vchenyi 1117 (in Ukrainian).
Conference papers 12. Radutnyi O ta Hanzha O, ‘Kryptovaliuta yak nova dotychna finansovoho i kryminalnoho prava’ [‘Cryptocurrency as a New Tangent of Financial and Criminal Law’] v Hetman A ta Kucheriavenko M ta Latkovska T ta inshi (redkol), Voronovski chytannia (Spivvidnoshennia materialnoho ta protsesualnoho v rehuliuvanni finansovykh vidnosyn): materialy mizhnar nauk-prakt konf (m Chernivtsi, 4-5 zhovtnia 2017 r.) (Asotsiatsiia finansovoho prava Ukrainy 2017) 166 (in Ukrainian). 13. Riadinska V, ‘Finansovo-pravova pryroda Bitcoin ta yikh obih v umovakh pravovoi nevyznachenosti’ [‘The financial and legal nature of Bitcoin and their circulation in terms of legal uncertainty’] v Hetman A ta Kucheriavenko M ta Pryshva N ta inshi (redkol), Voronovski chytannia (Finansove pravo: suchasnyi stan ta perspektyvy): materialy mizhnar nauk-prakt konf (m Kyiv, 5 zhovtnia 2016 r.) (Asotsiatsiia finansovoho prava Ukrainy 2016) 204 (in Ukrainian).
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