Juscutum: The Best Thing That Any State Can Do For The Development Of Crypto Business Is Do Nothing
In this interview co-founder in the law agency Juscutum, Artem Afyan talks about the innovative projects in the field of Ukrainian legal practice, legislative promotion of the cryptocurrencies and mining status. He also discusses the cooperation with the leading companies that provide services based on the blockchain technology.
The Juscutum law firm was founded in 2008, it currently participates in the development of governmental bills for the IT sphere and provides the protection for miners and business rights. The agency is a part of the international World IT Lawyers association and has repeatedly topped the lists of the best law agencies.
Recently you started to work with the Bitfury company. They’ve chosen you as their official representative in Ukraine. Why?
You have touched the inflamed ego of any lawyer in your question. It's a joke, of course. But there is a fair amount of truth. They thought that we can provide the best level of the law service. We are the best in this sphere among Ukrainian law agencies. We have been offering our services for many years. Bitfury is growing very rapidly, and we represent this company not only in Ukraine but globally. I believe that Bitfury has one of the most interesting and long-term strategies among companies in the crypto field. They entered the industrial mining stage when everyone was engaged in amateur mining. Bitfury switched to software development when everyone rushed after them into industrial mining. Now, Bitfury prepares to represent several surprises. It is extremely interesting to work with them. They have a certain vision in the blockchain sphere.
You also have your own project. You started an application for an immediate call of a lawyer in a crisis situation. Did you ever use it?
This project has been existed for several years and it was named as the best legal innovation. We are not just a lawyer company, we also have a technological part. We produce our own software products. We will release a test version of the product based on the blockchain in Legal tech. We are already preparing an announcement.
Do you also use the blockchain technology?
It is impossible not to try the cake in the confectionery store.
What are the legal problems for miners, investors and developers?
There are some difficult and controversial situations. We provide recommendations on how to protect yourself and your business, protect the rights on intellectual property and product. Any actions within the legal framework related to the new technologies raise numerous questions, since we do not have a clear state regulation.
Mining now is going through bad times. It hovers between heaven and earth in the legal field. Nowadays there is neither prohibition nor legalization. But I think the mining will be transformed and mixed with the processing of streaming data.
What does our country need for development?
The state needs to define the status of the cryptocurrencies and mining urgently. We need at least nominal safe zones for the further business development. Blockchain in Ukraine has a great prospect, because it solves the current issue of trust for the Ukrainian government. Moreover, foreign investors are impressed by the pace of development of the Ukrainian segment. We are moving well. But I wish to see even faster and better development of the Ukrainian projects.
We are moving well, but are there any problems?
Yes, the first problem turns to be the excessive attention from law enforcement institutions. All businesses of Ukraine have passed through this. The IT industry was the last sphere which entered this stage. Now the IT business segment has become familiar to officials, everyone is proud of it.
The second big problem is that the banking system do not understand what the cryptocurrencies are and how to use them. There are approximately five variants of the interpretation of this concept, but state needs to determine it. In addition, there is no taxes regulation in this area. Many companies can not officially have cryptocurrencies on their balance.
Can the legislative confirmation of cryptocurrencies be implemented soon in Ukraine?
The situation is quite curious. The state has made the best decision for the development of any industry. It does not deal with cryptocurrencies at all. I will sound old-fashioned, but for the survival of crypto business in Ukraine we have to clarify the rules of the game. Now we are talking about the acquisition of licenses for major players. It will become easier to make the operations of crypto-to-fiat, and this market will soon become closer to the classical fiat financial sphere. The state cannot ignore crypto field for long, it will have to take measures. But you will have to go through limb before that, and it begins in 2018. The persecution of ICO projects has already begun. There is a site where the Whistle Blow program works. If you find a scam ICO, you can claim 10% of the penalty collected from its founder. It could be millions of dollars. Write down 20 letters and get all you need for the rest of your life.
But do we have any bills at all?
There are two main bills in Ukraine. But they are very different and use a various terminology, which indicates the dampness of the development.
The first law sounds like that: "Bill No. 7183 on the cryptocurrencies circulation, dated October 6, 2017", according to which the cryptocurrency is the program code that is an object of ownership, it can be used as a means of exchange, the records of which are stored in the blockchain system as accounting units of the streaming system in the form of data. In this definition, everything is logical, except that the program code is the intellectual property directly at a legal point of view.
The second law is called "Bill No. 7183-1 of 10/10/2017 on the stimulation of the cryptocurrency market and its derivatives". It says that the cryptocurrency is a decentralized digital measurement of value that functions as a means of exchange, preservation of value or a unit of accounting based on mathematical estimates, is their result, and that it has cryptographic protection of accounting.
This is a terrible definition. But it is the most closest to the right one. Now the disparity of these bills harms all the crypto community of Ukraine.
A Deputy Alexei Mushak has taken the initiative into his hands and formed a governmental group to unite all these bills into one and somehow work out a compromise version. I know that this initiative group is under heavy pressure from government officials.
Why do some experts have fear that the cryptocurrency sphere will convergence with the securities market?
Because the market of ICO projects and cryptocurrencies have developed the traditions that directly contradict the Wall Street philosophy. This year will be dedicated to protection of investor`s rights. We have already received four requests from investors since the beginning of the year. I have information that the Ukrainian law enforcement agencies have received a number of requests related to ICO projects. I really want the community to stay cautious. I want to say that ICO is still possible and the crypto business is legal. But we must wait for a safer time.
What steps we need to take in order to clarify the situation?
We have to determine the legal status of tokens and cryptocurrencies, determine taxation rules, determine the relations between the fiat and the cryptocurrencies, create a legal field for mining, register it as an activity, create secure conditions for investors and developers, and set rules and definitions for exchanges. After that the crypto environment can easily integrate with our economy.