Specifics of virtual assets as an object of execution in enforcement proceedings

• Published in: Науковий вісник Ужгородського національного університету. Серія Право Vol. 2; no. 88; pp. 336 - 342
• Main Author: Haiduchok, O. O.
• Format: Journal Article
• Language: English
• Published: 20.05.2025
• ISSN: 2307-3322; 2664-6153
• DOI: 10.24144/2307-3322.2025.88.2.45

The article examines the peculiarities of virtual assets as objects of enforcement in executive proceedings, focusing on the legal and practical aspects of their use in the context of modern digital transformations. The evolution of cryptocurrencies is explored, starting with the creation of the «Hashcash» system in the 1990s, which laid the foundation for the development of Bitcoin—the first decentralized cryptocurrency utilizing blockchain technology. The study highlights Bitcoin’s decentralized ledger system, which ensures transparency and immutability of data, offering a significant advantage over traditional financial systems. The article delves into the role of cryptocurrencies in the modern world, particularly in the context of financial crises and the growing interest in alternative payment systems independent of government and banking influence. Ukraine, as a country with a high level of digital literacy among its population, holds a leading position in the global index of crypto asset usage. Approximately 14.52% of Ukrainians own crypto assets, underscoring their popularity and relevance to the country’s financial system. A significant portion of the research is dedicated to analyzing the legislative regulation of crypto assets in Ukraine. Specifically, the Law of Ukraine «On Virtual Assets,» adopted in March 2023, is examined as a foundational step toward legalizing the cryptocurrency market. However, the law’s entry into force has been delayed due to the lack of corresponding amendments to national legislation and the need for alignment with the European Union’s Markets in Crypto-Assets Regulation (MiCA). The author emphasizes the importance of refining the regulatory framework to ensure transparency and oversight in this domain. Special attention is given to the challenges associated with the use of virtual assets in the enforcement of court decisions. Currently, Ukraine lacks clear mechanisms for the seizure and realization of virtual assets, creating significant obstacles for enforcement proceedings. While virtual assets are recognized as objects of civil rights under current legislation, allowing for their potential seizure, the practical implementation of this provision is hindered by the absence of specific procedures and tools for identifying, freezing, and transferring crypto assets to claimants. The article also addresses the use of crypto assets in bankruptcy proceedings. The current Bankruptcy Code of Ukraine lacks precise mechanisms for the realization of virtual assets, complicating the process for stakeholders. The only available tool is the blocking of assets, which can be initiated by crypto exchanges or through court orders. However, such blocking does not guarantee the transfer of assets to claimants, limiting its effectiveness. The risks associated with the lack of clear regulation in the crypto asset market are also explored, particularly the potential for fraudulent schemes. The case of the «BitCapital» service is examined as an example of how insufficient legal regulation and low digital literacy among the population can lead to the emergence of pseudo-financial services that deceive consumers and violate their rights. In conclusion, the article underscores that Ukraine possesses all the prerequisites for implementing effective mechanisms to regulate crypto assets and integrate them into legal practice. To achieve this, it is essential to accelerate the process of legislative refinement, taking into account international experience and contemporary challenges of the digital era. Recommendations are proposed, aimed at establishing clear procedures for the seizure of virtual assets, ensuring transparency in the cryptocurrency market, and protecting consumer rights.