LEGAL REGIME OF OWNERSHIP OF VIRTUAL ASSETS

Abstract

This article examines the peculiarities of the legal regime of ownership of virtual assets as one of the latest objects of civil law, through the lens of civil law in Ukraine and Western European countries. The analysis incorporates scholarly research, the Civil Code of Ukraine, European Union legislation regulating the virtual assets market, and reports from international organizations. The article explores the challenges of applying classical civil law approaches to the regulation of ownership rights to virtual assets, which are classified as a type of digital property created, stored, and transferred in a digital environment. The primary focus is on examining ownership issues through the perspective of the technological and economic characteristics intrinsic to the circulation of virtual assets. These characteristics are associated with the use of distributed ledger technology (DLT), smart contracts, digital wallets, and the introduction of services and models, traditionally characteristic of capital markets, into the virtual assets market for clients. The study identifies that, in the context of defining ownership rights to virtual assets, the control of private keys by the owner plays a key role. Control is a factual phenomenon that has yet to find reflection in Ukraine’s civil law. It may act as an equivalent of the legal categories of possession, or ownership, applied to movable property, with the particularity that the person exercising control lacks the ability to indirectly manage the virtual asset through another party and does not physically hold it. This depends on who controls the private key – the virtual asset custody service provider or the owner themselves. The study concludes that domestic law does not fully correspond to the realities of modern digital legal relationships. To address this gap, it is proposed to introduce a new form of legal transaction in the form of entries in distributed ledgers, establish the institution of indirect and direct possession, and regulate specific aspects of property management.