Kyiv to Host Roundtable on Bitcoin’s Legal Status in Ukraine
In late May, Ukraine‘s capital of Kyiv will host a roundtable dedicated to discussing and finding common grounds in legal perception of cryptocurrency. ForkLog talked with one of the roundtable’s initiators, Nestor Dubnevych, to find out what legal problems the industry faces in the light of regulatory framework’s absence.
Notably, KUNA Agency’s leader Mike Chobanian recently stated he abandoned his attempts to develop a draft law legalizing Bitcoin, which he had announced in January 2016. However, shortly after his statement, other community members, this time law experts, decided to take the initiative.
FL: In your opinion, how cryptocurrency regulation issues should progress on the national scale?
Nestor Dubnevych: Here’s a real-life example of cryptocurrency regulation. A developer has agreed with the customers, that ready code lines will be repaid in bitcoin. The dishonest counterparty refused to pay after receiving the software, thus causing damage to the coder. What next? Where should the coder go then? To a court that thinks bitcoin is a virtual asset not subject to judicial protection? Or, even worse, to the police that would immediately consider the actions as issuance of money surrogates and initiate a case according to clause 200 of the criminal code?
I’m not offering any bitlicenses that would scare cryptocurrency business away, just like it happened in the state of New York. Technologies like those are vulnerable to a lawmaker’s stroke of the pen. So, seeking to avoid the American government’s mistakes, and not to get into trouble with criminalizing cryptocurrencies, as it happens in Russia, we should approach regulation issues very carefully.
Defining bitcoin’s legal status on bylaw level is the most optimal place to start. Exchanges would come out of shadows, users and crypto-businesses would effect real contracts, and accountants of such legal entities would not have to take tranquilizers fearing fiscal authorities. Finally, law enforcement wouldn’t be able to visit bitcoin companies with the National Bank’s two-years-old letter threatening to hold them liable.
FL: What Bitcoin regulation initiatives coming from the community do you know about?
Dubnevych: Mike Chobanian earlier said he was creating a working group on preparation of a draft law on bitcoin legalization in Ukraine. There was a draft of Ukraine’s bitlicense submitted for comments. That’s all, I believe. There are different opinions of lawyers and industry leaders as to the proposals. By late May, there will be a roundtable seeking to define a uniform approach to cryptocurrencies as legal relations object.
FL: Can it happen that bitcoin would form a rank-and-file market that regulator will eventually have to accept as a matter of fact, and just establish some rules? Could Bitcoin share its fate with PayPal, which, as we know, is still not there?
Dubnevych: There already is a rank-and-file market. All we have to do is wait until there are enough users to form a critical mass. If there’s an incident similar to MtGox, when thousands of investors cried over their cryptocurrency savings, the rank-and-file market will demand for regulation itself. That’s when the government will start dictating its own rules of the game.
As for PayPal, we should remember that the payments system tries to enter Ukraine’s market with its own established rules. As there is a conflict between the company’s policy and the National Bank’s instruments, the service is unavailable to us as yet. Bitcoin is different, as relations in cryptocurrency are built on math and cryptography. That’s why there is a legal vacuum that law enforcement misuses, and that threatens property rights of cryptocurrency holders.
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