The Research Center of Blockchain Solutions Sent Comments on and Suggestions to the Draft Law of Ukraine “On Virtual Assets”
02.06.2020

The Research Center of Blockchain Solutions Sent Comments on and Suggestions to the Draft Law of Ukraine “On Virtual Assets”

In accordance with the report of the Ministry of Digital Transformation of Ukraine on holding a public discussion of the Draft Law of Ukraine “On Virtual Assets” dated May 18, 2020 (see Appendix 1), the specialists of the Research Center of Economic and Legal Solutions in the Area of Application of Distributed Ledger Technologies (the Research Center of Blockchain Solutions) conducted a detailed analysis of the proposed Draft Law.

According to the results of the analysis, the Working Group of the Research Center of Blockchain Solutions sent comments on and suggestions to the Draft Law of Ukraine “On Virtual Assets” to the Ministry of Digital Transformation of Ukraine. They contain the scientific and legal substantiation for an alternative approach to regulating virtual assets taking into account the identified mistakes (see Appendix 2).

Based on the fact that Ukraine currently needs not only to attract foreign investment, as evidenced by the repeated speeches of the deputies of the Verkhovna Rada of Ukraine, but also to develop new markets, the Research Center of Blockchain Solutions has decided that one of its key objectives is the creation of a favorable environment and conditions for creating a competitive economy of Ukraine through the widespread use of IT technologies and, in particular, the blockchain technology. At the same time, since December 2019, the Working Group based at the Research Center of Blockchain Solutions has been dealing with the development and systematization of terminology, a categorical apparatus of legislative acts regulating the use of the blockchain technology. This Working Group included representatives of IT companies involved in the development of information platforms based on the blockchain technology, as well as representatives of the scientific community in the field of economics and law.

The professional approach of the specialists of the Research Center of Blockchain Solutions to the consideration of this Draft Law and the comprehensive analysis allowed us to identify specific inaccuracies and mistakes that, in our opinion, should be considered in the Law of Ukraine “On Virtual Assets”. Otherwise, the real prospect of Ukraine to become a leader in ensuring the legal regulation of a new market of information resources, products and services based on blockchain technology will be unattainable, which will provide other countries with the opportunity to take advantage of the shortsightedness and unprofessionalism of the Ukrainian expert community that drew up this Draft Law, and as a result get undeniable advantages in this market with immense potential.

We would like to draw your attention to the fact that the Research Center of Economic and Legal Solutions in the Area of Application of Distributed Ledger Technologies was created on the basis of the final protocol of the panel discussion “The Future of Digital Assets: Financial and Legal Aspects” which took place as part of the III Kharkiv International Legal Forum on September 27, 2019 with the support of the National Academy of Legal Sciences of Ukraine and the Yaroslav Mudryi National Law University (see Appendix 3).

It is important to note that the issues of the need to develop and systematize terminology, as well as the categorical apparatus of legislative acts regulating the use of tools and information platforms based on the blockchain technology, were raised by us at the International Round Table of the Research Center of Economic and Legal Solutions in the Area of Application of Distributed Ledger Technologies on “Standards of Blockchain Tools”, which was held in Kyiv on December 11, 2019 (see Appendix 4).

We are convinced that the insurmountable problem in working on draft laws regarding the use of the blockchain technology is precisely the lack of standards, a regulatory framework and a uniform interpretation of the concepts of the main blockchain tools, which does not allow us to maximize the potential of this technology and leads to misinterpretation and confusion in understanding even the basic concepts. Thus, the Draft Law “On Virtual Assets” as it is now, i.e. without the comments and suggestions of the specialists of the Research Center of Blockchain Solutions taken into account, is at least a meaningless or even an absurd document.

Foreign scientific and business community specialists, who took an active part in discussions on the need to regulate the blockchain tools and knew our position, were also participants in the events held by the Research Center of Economic and Legal Solutions in the Area of Application of Distributed Ledger Technologies. And they will at least not understand the position of the Draft Law authors in case of ignoring or not accepting the fundamental mistakes indicated by us.

We believe that with your support, we will be able not only to discuss the importance of economic and legal enforcement for the sustainable development of the economic system of Ukraine, but also to take specific steps together with you!

You can find the Appendices in PDF format by following the links below:

Appendix 1. The Draft Law “On Virtual Assets” dated May 18, 2020.

https://thedigital.gov.ua/

Appendix 2. Comments on and suggestions to the Draft Law of Ukraine “On Virtual Assets” in accordance with the report of the Ministry of Digital Transformation of Ukraine on a public discussion of the Draft Law of Ukraine “On Virtual Assets” dated May 18, 2020 prepared by the Research Center of Economic and Legal Solutions in the Area of Application of Distributed Ledger Technologies.

https://www.blockchainukraine.org/zamechaniya-i-predlozheniya-k-proektu-zakona-ukrainy-o-virtualnykh-aktivakh-ru.pdf

Appendix 3. The final protocol of the panel discussion “The Future of Digital Assets: Financial and Legal Aspects” of the III Kharkiv International Legal Forum.

https://s3.eu-central-1.amazonaws.com/simcord-site/pdf/final-protocol-of-the-panel-discussion.pdf

Appendix 4. The final protocol of the International Round Table of the Research Center of Economic and Legal Solutions in the Area of Application of Distributed Ledger Technologies on “Standards of Blockchain Tools”.

https://www.blockchainukraine.org/final-protocol-international-roundtable-standards-blockchain-tools.pdf