MISUSE OF DIGITAL ASSETS: CURRENT LEGISLATION, CHALLENGES AND RECOMMENDATIONS
In 2020, the Republic of Serbia adopted the Law on Digital Assets (Official Gazette of the Republic of Serbia no. 153/2020). Legal regulation of the issuance, use and circulation of digital assets is present in a very small number of European countries. Although the 2020 European Union Proposal for a Regulation on Markets in Crypto-assets encourages the regulation of the crypto-assets market at the national level of member states, the question can be raised whether the available mechanisms and means are effective enough in preventing the abuse of digital assets and in protecting the integrity of crypto-assets market. Bearing in mind that the international standards in the field of abuse prevention have been adopted recently, while some are still in the process of being established, we start from the assumption that it will be necessary to additionaly improve both legislation and institutional capacities in the mentioned area at the national level. In the first part of the paper, we first point out the emerging forms of abuse of digital assets, and then we will look at the international standards that define potential prevention mechanisms. After that, the legislation of the Republic of Serbia in the field of prevention of abuses related to digital assets and the crypto-assets market will be analysed. Therefore, the method of content analysis and the dogmatic method dominate in this paper. By applying the mentioned methodology, we try to give recommendations for improving the mechanisms of prevention of abuses at the national level.
Keywords: digital assets, abuse prevention, legislation, challenges, improvement.
Burrus, J. 2018. Fighting Financial Crime in the Age of Cryptocurrencies. Available at: https://www.refinitiv.com/content/dam/marketing/en_us/documents/expert-talks/world-check-expert-talk-fighting-financial-crime.pdf (1. 7. 2023).
Collins, J. 2022. The Global Initiative against Transnational Organized Crime. Geneva. Available at: https://globalinitiative.net/wp-content/uploads/2022/06/GITOC-Crypto-crime-and-control-Cryptocurrencies-as-an-enabler-of-organized-crime.pdf (1. 7. 2023).
EUROPOL (2021) Cryptocurrencies: Tracing the Evolution of Criminal Finances, Luxembourg: European Union Agency for Law Enforcement Cooperation 2021. Available at: https://www.europol.europa.eu/cms/sites/default/files/documents/Europol%20Spotlight%20-%20Cryptocurrencies%20-%20Tracing%20the%20evolution%20of%20criminal%20finances.pdf (1. 7. 2023).
FATF 2012-2023. International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation, FATF, Paris, France. Available at: www.fatf-gafi.org/recommendations.html (1. 7. 2023).
FATF 2022. Targeted Update on Implementation of the FATF Standards on Virtual Assets/VASPs, FATF, Paris, France. Available at: www.fatf-gafi.org/publications/fatfrecommendations/documents/targeted-update-virtual-assets-vasps.html (1. 7. 2023).
Houben, R. & Snyers, A. 2018. Cryptocurrencies and Blockchain Legal Context and Implications for Financial Crime, Money Laundering and Tax Evasion, Brussels: Policy Department for Economic, Scientific and Quality of Life Policies European Parliament. Available at: https://www.europarl.europa.eu/RegData/etudes/STUD/2018/619024/IPOL_STU(2018)619024_EN.pdf (1. 7. 2023).
Kostić, J. 2018. Izazovi harmonizacije krivičnopravne zaštite tržišta kapitala sa pravom Evropske unije – primer italijanskog zakonodavstva. Strani pravni život, 62(2), pp. 119-137. https://doi.org/10.5937/spz1802119K
Kostić, J. & Jelisavac Trošić, S. 2020. Inadequate Criminal Protection of the Capital Market in the Republic of Serbia. In: Duić, D. & Petrašević, T. (eds.), EU 2020 – Lessons from the Past and Solution for the Future. Osijek: Faculty of Law, Josip Juraj Strossmayer University of Osijek, pp. 589-620. https://doi.org/10.25234/eclic/11918
Murtezić, A. 2021. Kriptovalute: Izazov u prenenciji finansijskog kriminaliteta, In: Kostić, J., Stevanović, A. & Matić Bošković, M. (eds.) Institutions and Prevention of Financial Crimes, Thematic Conference Proceedings of International Singnicance, pp. 29-37.
Nicholls, J., Kuppa, A. & Le Khac, N. A. 2021. Financial Cybercrime: A Comprehensive Survey of Deep Learning Approaches to Tackle the Evolving Financial Crime Landscape, IEEE Access, 1(1). https://doi.org/10.1109/ACCESS.2021.3134076
Novaković, M. 2021. Da li stepen rizika i korišćenja kritpovaluta za pranje novca i finansiranje terorizma opravdava njihovu zabranu, In: Kostić, J., Stevanović, A. & Matić Bošković, M. (eds.). Institutions and Prevention of Financial Crimes, Thematic Conference Proceedings of International Significance. pp. 93-108.
Novaković, S. M. 2021. The Reform of the Crypto Licenses System in Estonia and the Regulation on Markets in Crypto-Assets Proposal, Strani pravni život, 65(4), pp. 688-690. https://doi.org/10.5937/spz65-35127
Proposal for a Regulation of the European Parliament and of the Council on Markets in Crypto-assets, and amending Directive (EU) 2019/1937. Available at: https://eur-lex.europa.eu/resource.html?uri=cellar:f69f89bb-fe54-11ea-b44f-01aa75ed71a1.0001.02/DOC_1&format=PDF (1. 7. 2023).
Proposal for a Regulation on information accompanying transfers of funds and certain crypto-assets (recast), Brussels, 20.7.2021 COM(2021) 422 final. Available at: https://eur-lex.europa.eu/resource.html?uri=cellar:08cf467e-ead4-11eb-93a8-01aa75ed71a1.0001.02/DOC_1&format=PDF (1. 7. 2023).
The Law on Digital Property, Official Gazette of the Republic of Serbia no. 153/2020.