The market of virtual assets in Ukraine is developing rapidly, outpacing regulatory framework. The lack of clear legislative base, conflicting judicial practice, and new fraudulent schemes create challenges for owners of digital assets and lawyers.
To discuss urgent issues and develop common approaches to legal protection of investments in cryptocurrency, lawyers and experts from various fields gathered on June 11 at the round table “Virtual Assets Market. How to Protect Investments?”, which took place at the National Bar Association of Ukraine.
The event was initiated by the NAAU Committee on Business and Investor Protection. The meeting was moderated by Council Member of the Committee Denys Nahorniuk. In his opening remarks, he emphasized the importance of cooperation between lawyers, law enforcement, government agencies, and businesses to strengthen legal guarantees in the digital assets market.
About the Role of Lawyers
Challenges faced by lawyers working on cases related to cryptocurrency or other digital assets were outlined by Committee Council Member Pavlo Shykov. According to him, the number of such cases—both criminal and civil—is constantly increasing, requiring lawyers to have specific knowledge and skills.
The speaker highlighted the peculiarities of representing clients in criminal proceedings related to illegal circulation or theft of crypto assets. He noted that despite the active work of cyber police and the presence of specialized units, there is still a lack of experts to investigate such crimes. This places an additional workload on the lawyer, including conducting blockchain analysis to form a factual basis and prepare procedural documents considering digital realities.
The lawyer also focused on civil disputes, where questions of distributing virtual assets in case of divorce or inheritance are increasingly arising. Such cases do not yet have established practices, thus requiring lawyers to pay attention to details and understand the specifics of crypto asset circulation.
About International Cooperation
The key aspects of international cooperation during the investigation of illegal activities involving virtual assets were highlighted by the First Deputy Chief of the International Police Cooperation Department of the National Police, Yevhen Panchenko. He emphasized that modern criminality in the field of crypto assets knows no borders, therefore effective prosecution of offenders requires quick and coordinated cooperation between law enforcement agencies of different countries.
Y. Panchenko stressed the need to unite efforts for international asset tracing, develop digital tools for evidence exchange, and conduct joint analysis of criminal schemes.
Roundtable participants agreed that lawyers should also consider these specifics when gathering evidence and protecting clients’ interests in cases with an international element.
About Arrest and Its Cancellation
Committee Council Member of the NAAU Aliona Radieva focused on the topic of arrest and cancellation of virtual assets in criminal proceedings. She emphasized that despite the lack of a specific law, crypto assets are increasingly being seized, creating a number of practical and legal problems for both the prosecution and the defense.
The speaker pointed out that judicial practice in this segment is still being formed and often demonstrates a preference for state interests over the rights of asset owners. An attorney representing the victim has the opportunity to initiate the arrest of crypto assets, but the success of such a motion depends on the completeness of evidence and the presence of a suspect. Therefore, lawyers must carefully substantiate motions for arrest or its cancellation.
A. Radieva emphasized that in cases where an arrest is imposed without sufficient legal basis or proper evidentiary support, there is a real prospect of challenging it. This is particularly relevant when the arrest is justified only by the need to preserve material evidence, while crypto assets have an immaterial and non-individualized nature.
About Enforcement of Decisions
The main problems faced by enforcers when enforcing recovery on virtual assets were outlined by private enforcer Ivan Zhabotynskyi. He emphasized that even with court decisions and rulings, actual enforcement remains difficult due to the lack of a clear procedure and insufficient regulation of interaction with crypto exchanges.
I. Zhabotynskyi shared his experience of requests to popular exchanges: some platforms respond only through specialized portals or forms, while others do not respond at all or require additional decisions for asset seizure or exchange into fiat money. Additionally, the requirement to prepare all documents in English adds complexity, often resulting in requests being left unaddressed.
According to him, the enforcement system in Ukraine is not yet ready to effectively work with digital assets. Legislative changes, the introduction of interaction standards with exchanges, and the creation of special tools for enforcers are needed to address this issue.
About Transaction Analysis
Vice President for Law Enforcement Contacts at GlobalLedger Vladyslav Tsvirkun presented the capabilities of specialized software for working with crypto assets. He discussed tools that allow verifying the sources of funds, detecting money laundering schemes, and conducting blockchain forensic analysis.
V. Tsvirkun emphasized that modern technologies enable finding connections between wallets belonging to the same person or organization, even if the owners try to conceal their identity. Clustering algorithms and transaction labeling are used for this purpose.
According to the expert, such software solutions are already actively used by law enforcement agencies and can become an effective tool for lawyers handling cases related to the circulation of virtual assets.
About AML Risks
Economic and legal risks for Ukraine due to the lack of proper regulation of the virtual assets market were outlined by the expert on UN projects combating money laundering, Tetiana Dmytrenko. She focused on the taxonomy of crypto assets, licensing, registration, and the development of legislation in the EU and Ukraine in the field of digital finance.
T. Dmytrenko emphasized that with the development of new technologies, potential threats are also increasing: from complex fraudulent schemes to the use of meme coins and scam projects for illegal enrichment. In particular, examples of large-scale frauds using popular topics for quick investment attraction were provided.
According to the expert, the lack of a clear and modern regulatory framework in the field of crypto assets poses significant risks to the financial stability of the state, complicates the work of Ukrainian and international experts, and increases the market’s vulnerability to the legalization of criminal proceeds.
About Regulation and Taxation
Advisor to the Chairman of the NBU Securities Commission Vita Forsiuk outlined the key directions of legislative regulation and taxation of operations with virtual assets in Ukraine. She focused on the structure of the draft law № 10225-D “On Amendments to the Tax Code of Ukraine and Some Other Legislative Acts of Ukraine Regarding the Regulation of Virtual Assets Circulation in Ukraine,” which defines the main approaches to licensing, market supervision, investor protection, and combating market abuses.
V. Forsiuk emphasized the importance of clearly defining types of tokens and service providers related to crypto asset circulation, as well as introducing requirements for transparency and reporting. The discussion of the taxation of operations with digital assets and the definition of operations subject to taxation or exempt from taxation attracted particular attention of roundtable participants.
The expert also noted that benefits for individual investors, issues of tax administration, and legal nuances of transferring ownership rights to digital assets require further elaboration and improvement to ensure financial stability and attractiveness of the Ukrainian market.
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The discussion showed that for real protection of investments in cryptocurrency, not only updating legislation and developing judicial practice are needed, but also the implementation of clear arrest and enforcement procedures regarding digital assets, establishment of international cooperation, and application of modern analytical tools. Lawyers already play a key role today in forming a factual basis, handling such cases, and protecting clients’ interests in the virtual assets market.