Browsing by Subject "crypto asset"

When the global financial market was as its worst in 2008, something new was brought to light, which was to change how the financial market was seen: the Bitcoin. Bitcoin is a digital currency which was published in October 2008 by an unknown person, who represented himself under the pseudonym Satoshi Nakamoto, and it was the first currency that was created using the “blockchain”, one version of the distributed ledger technology. The idea of the currency was that it did not exist anywhere physically, nor was it in any official records, so people could own and transfer bitcoins without anyone knowing it. Thus, bitcoins could be transferred directly from one person to another, without any intermediary in between, and all this would happen far from the reach of governmental authorities. For years the interest towards cryptocurrencies was only nominal, but the closer the 2020’s got, the greater the interest grew. Now, 2024, crypto assets have gone a long way from the 2009 when the Bitcoin currency became active, and currency is not the only digital asset anymore, which exists on the distributed ledger technology. Currently, in addition to multiple currencies, you can buy inter alia securities, smart contracts, insurances, and art, and even companies can be built on the technology. However, even though the crypto market has grown significantly in products and services during recent years, it is still largely unregulated and there is no common framework for how to regulate these markets. Choice of laws has been one unanswered subject, and a common consensus has not been reached how the applicable law should be determined in relation to crypto assets. In this researched I have tried to answer to this question and suggest choice of laws rules for crypto assets, especially concerning assets which are considered to be similar with securities. In this paper I analyse previous choice of laws rules, which are either commonly accepted or which have been enacted for different purposes, to see whether old frameworks could be suitable for new assets, or whether new choice of laws rules could be built on them. Insights have been gathered from traditional choice of laws rules, as well as from certain Regulations and Directives from the European Union and certain principles and Conventions from the Hague Conference on Private International Law. Additionally, I have considered existing suggested choice of laws solutions from different persons and entities to gain new ideas for the potential solution. Choice of laws framework which I will suggest consists of six parts, which of five are designed to certain circumstances and one is a solution which is always available. Final suggestions are Rule of the Intermediary, Rule of the System, Habitual residence of the Consumer, Habitual residence of the Victim and Habitual residence of the Seller. Finally, Choice of the Parties is always allowed, on certain conditions.