Digital Technologies and Law (
секция
на
английском
языке
)
______________________________________________________________________________________________________________________
196
13. ISO/TR 22100-4:2018 “Safety of machinery – Relationship with ISO 12100 –
Part 4: Guidance to machinery manufacturers for consideration of related IT-security
(cyber security) aspects”. – URL:
https://standards.iteh.ai/catalog/standards/iso/5f88408a-
14f9-40fe-9eaa-ce425de2cee9/iso-tr-22100-4-2018
14. Experts told how to prevent bank data leaks [Expert opinion Natalia Svech-
nikova on RIA Novosti]. 15.12.2020. – URL:
(accessed: 28.03.2024)
15. Bill No. 126586-8 proposed to amend Article 1225 of Part Four of the Civil
Code of the Russian Federation to include non-fungible tokens among the list of pro-
tected results of intellectual activity. – URL:
https://sozd.duma.gov.ru/bill/126586-
16. Federal Law of August 2, 2019 No. 259-FZ “On Attracting Investments Us-
ing Investment Platforms and Amending Certain Legislative Acts of the Russian Fed-
eration” //
Собрание
законодательства
Российской
Федерации
от
5
августа
2019
г
.
№
31
ст
. 4418.
17. Emelyanov D.S., Emelyanov I.S. Non-Fungible Tokens (NFTs) as an Inde-
pendent Object of Legal Regulation. Property relations in the Russian Federation. –
2021. –
№
7. – P. 66–74.
18. Medvedev believes that the protection of the digital environment is the task
of the state. September 2, 2020. – URL:
https://tass.ru/politika/9348595
19. Federal Law of July 31, 2020, No. 247-FZ "On Mandatory Requirements in
the Russian Federation" // Collected Legislation of the Russian Federation of
August 3, – 2020. –
№
31 (Part I). – Art. 5006
20. Burkova E. V. Physical Protection of Informatization Objects:
A Textbook. – Orenburg: OSU, 2017. – 157 p.
Nikolai Budnetskii,
PhD, LL.M. (Münster),
All-Russian State University of Justice
Advocate (Moscow Bar), Legal Consultant (Dubai Legal Affairs Department),
Solicitor (Senior Courts of England & Wales)
OVERVIEW OF APPROACHES TO DIGITAL ASSETS REGULATION
IN THE UAE, GERMANY AND RUSSIA
Abstract.
This article proves that the regulation of electronic property – be it
defined as) crypto/ digital/ virtual assets, cryptocurrency, etc. (or e.g. electronic money
– which is out of the scope of this article) is subject to different regulatory drivers (and
thus, approaches) and dispersed across many sources of law in Germany, Russia, and
the UAE. To suggest and implement a reasonable approach to regulation, one shall
start with understanding the electronic property–specific features and assessing the
current economic environment in a State, rather than applying usual regulatory ap-
proaches. Practice shows that a de-centralized (not to say chaotic)
ad hoc
regulation
Digital Technologies and Law (
секция
на
английском
языке
)
______________________________________________________________________________________________________________________
197
with sufficient powers granted to local authorities may in some societies be more fruit-
ful than prohibitions, or a strict adherence to traditional regulatory approaches.
Keywords:
crypto assets, digital assets, virtual assets, cryptocurrency
ОБЗОР
ПОДХОДОВ
К
РЕГУЛИРОВАНИЮ
ЦИФРОВЫХ
АКТИВОВ
В
ОАЭ,
ГЕРМАНИИ
И
РОССИИ
Аннотация.
Эта
статья
доказывает,
что
регулирование
электронной
соб-
ственности
–
будь
то
определение
ее
как
крипто/цифровых/виртуальных
активов,
криптовалюты
и
так
далее
(или,
например,
электронных
денег
,
что
выходит
за
рамки
данной
статьи)
зависит
от
различных
регуляторных
факторов
(и
таким
об-
разом,
подходов)
и
разбросано
по
многим
источникам
права
Германии
,
России
и
ОАЭ.
Чтобы
предложить
и
реализовать
разумный
подход
к
регулированию,
необ-
ходимо
начать
с
понимания
особенностей
электронной
собственности
и
оценки
текущей
экономической
ситуации
в
государстве,
а
не
с
применения
обычных
подходов
регулирования.
Практика
показывает,
что
децентрализованное
(если
не
сказать
хаотичное)
специальное
регулирование
с
достаточными
полномочиями,
предоставленными
местным
органам
власти,
может
в
некоторых
обществах
быть
более
плодотворным,
чем
запреты
или
строгое
соблюдение
традиционных
под-
ходов
к
регулированию.
Ключевые
слова:
криптоактивы,
цифровые
активы,
виртуальные
активы,
криптовалюта.
The major topics in the crypto field have recently been that cryptocurrencies
can be stolen, fraud is perpetrated on custodians of digital assets, the nature of the cli-
ent – custodian relation (fiduciary, services, agency, etc.) is often not transparent, and
there are many insolvencies of all types of parties involved in the digital assets market
[1].
Interestingly, the risk of a hostile takeover of data centres -- due to the low en-
ergy cost and some isolated incidents of anomaly in law enforcement, should be taken
into consideration when drafting a colocation services agreement in the CIS countries.
A "functional" approach would be best workable to improve the digital assets
regulations as it will be shown in the below discussion of German, Russian, and UAE
regulatory regimes. Since digital assets and cryptocurrencies are new era creatures
(and thus have totally new features -- such as smart-contracts, forks, or mining -- not
known to the "old" law), the method of analogy of law (in our case, of securities law)
or systematic method, by contrast, are not the best methods to heavily rely on in regu-
lation of the digital assets.
The German Law On Digital Securities [4, 5], effective as of 10 June 2021, be-
came a further step in regulation.
The dynamic of German regulation of bearer (
Inhaberschuldverschreibung
)
versus registered (
Namenschuldverschreibung
) digital bonds can be used for bench-
marking of German regulations effectiveness. So, under the German Law On Digital
Securities, it became possible to issue bearer bonds in a digital asset form. BaFin states
that "registered and non-negotiable securities (that is, requiring a specific assignment,
Digital Technologies and Law (
секция
на
английском
языке
)
______________________________________________________________________________________________________________________
198
not only mutual consent and transfer, to be transferred) as well as order bonds, are not
covered by the eWpG" [6]. On 26 April 2023, nearly after two years once the German
Law On Digital Securities had been passed, a German office of an international law
firm witnessed only 25 issuances of bearer bonds under this German Law On Digital
Securities (before 10 June 2021, as mentioned, it was not possible to issue bearer
bonds in a digital form). On the other hand, registered digital bonds issuances re-
mained more popular due to legal uncertainty of the new law and a more relaxed regu-
latory regime (the absence of a requirement to employ a licensed digital securities reg-
istrar for registered bonds’ issuance [7]). Conclusions of the German office of another
international law firm – who compared German Law On Digital Securities’ features to
the earlier existing regulatory landscape [8] -- are generally aligning with the above
view of the other law firm: "Not every token that has the features of a bond (interest,
repayment, etc.) is a digital bond in the meaning of the eWpG".
So, the question remains open if the increased popularity of registered digital
bonds – with registered securities by definition being designed to be more restricted in
circulation than the bearer ones [9] – over bearer digital bonds, and the resulting ex-
cuse of a lower protection standard was intended (or is just an occasional effect of a
however very labor-intensive and systematic approach to regulation).
According to Dr Gutbrod, BaFin is slow in publishing the implementing regula-
tions, and, more importantly, German regulators seem to be making it clear, in tried-
and-true German fashion, that license applications should not be filed. Generally, it is
disappointing to many lawyers that such in-depth work is no longer sufficient to create
a roadmap to issue a liveable modern finance instrument.
Cryptocurrency definition and use
The German Banking Act regulates digital assets (that embrace cryptocurren-
cy), but there is no specific statutory definition of cryptocurrency in Germany. There
are some academic discussions of the legal nature of the cryptocurrency: it is less like-
ly to be a "res corporales" and more likely to be a security [10].
In reality, one can buy and use cryptocurrencies in Germany as a means of
payment [13] in Germany.
UAE Regulations
Digital
(virtual)
assets definition
The major difference of the UAE regulatory approach is that, firstly, it is very
much investor/market-oriented (for instance, it has been made clear in discussion with
some authorities that the virtual asset issuance is possible regardless of the citizenship
of the project stakeholders and there is a sufficient spectrum of safeguards that can be
employed by the regulator in a particular high-risk scenario) and, secondly, granular in
terms of levels and intertwined regulations in the federal and local jurisdictions.
In terms of levels of regulation, there are isolated common law jurisdictions es-
tablished in the UAE, like ADGM in Abu Dhabi, that apply the laws of England as is,
with all its state-of-art precedents, and separate courts staffed by high-profile KC bar-
rister judges. Another common law jurisdiction, DIFC in Dubai, is regulated by DFSA.
As for mainland Dubai, the UAE Cabinet Decision No. 112/2022 delegates wide virtu-
al assets-related powers in Dubai to the VARA exclusively.
Digital Technologies and Law (
секция
на
английском
языке
)
______________________________________________________________________________________________________________________
199
Virtual assets types in the UAE include, among others, payment tokens (Central
Bank Circular No. 2/2024) and security tokens (DFSA Consultation Paper No. 138).
As for the issuance of security tokens or their exchange, depending on the juris-
diction of issuance and scope of virtual asset, federal (of SCA and/or of the Central
Bank) and/or local jurisdictions’ (for example, of VARA (Dubai), DFSA (DIFC free
zone), or FSRA (ADGM free zone)) licenses are likely to be required.
Remarkably, so-called utility tokens are not considered digital assets – they are
less
regulated;
their issuers are considered as DNFBPs that are subject to the UAE An-
ti-Money Laundering Law.
Cryptocurrency definition and use
Cryptocurrencies status in the mainland UAE is not clear, and although Central
Bank Circular No. 6/2020 and some other authorities classify cryptocurrencies as vir-
tual assets or have defined them in a way, there are published decisions and rulings re-
stricting their use as a means of payment. Within Emirati nationals, a high degree of
scepticism exists as the cryptocurrency is often used in illegal activities.
Like in Germany, license(s) are required to exchange fiat/ cryptocurrency.
In practice, there are many companies offering fiat/ crypto exchange and set-
tlement to the public at large.
Conclusion.
Prima facie
, the reason for unsuccessful regulation of digital assets
is the lack of systematics in regulation or misunderstanding of history of securities
regulation. For example, it is tempting to say that it would help to first clarify whether
a particular item of electronic property may be viewed as a bearer, order, or non-
negotiable security, be defined as a thing, or as a security in general (or within any
other analogous notion or typology ready-existing in a national legal
system;
the rele-
vant term coined by experts is “historic cost of regulation”).
However, after some deliberation, the misconceived perception of overarching
objectives of regulation seems to be more detrimental. Even if a difference between
bearer securities and registered securities is figured out, it might appear idle or useless
for a lawmaker because, in any event, the owner of an electronic property item will be
using electronic medium (e-wallet, crypto ramp, website, etc.) to make a transaction
and prove their title.
Much more efficient would be, generally, to develop a regulatory approach and
landscape consistent with the current social and economic demands (for example, at-
tractive for investors, or having a higher level of layman/ consumer protection) and, as
the case may be, to tailor a dispute resolution clause in the digital assets issuance pro-
spectus according to the most likely risks.
References
1. ThoughtLeaders4. Crypto Exchanges and Custodial Services: Contract, Trust,
Fraud and Insolvency [Electronic resource]. – URL:
x8OrXqtfF4E?si=W92WoZGvM8HNYrab
2. Gutbrod M. Autonomy of Will in Times of Artificial Intelligence, Blockchain
and
ICO's.
[Electronic
resource].
–
URL:
38149653/Autonomy_of_Will_in_Times_of_Artificial_Intelligence_Blockchain_and_
Digital Technologies and Law (
секция
на
английском
языке
)
______________________________________________________________________________________________________________________
200
3. Kreditwesengesetzes [Electronic resource]. – URL:
https://www.gesetze-im-
internet.de/kredwg/
4. URL:
https://www.bafin.de/DE/Aufsicht/FinTech/Geschaeftsmodelle/DLT_
Blockchain_Krypto/DLT_Blockchain_Krypto_node.html
BaFin Guidance Notice
Crypto Tokens
;
URL:
https://www.bafin.de/SharedDocs/Downloads/DE/Merkblatt/
WA/dl_wa_merkblatt_ICOs.pdf?__blob=publicationFile&v=3
5. Gesetz über elektronische Wertpapiere. [Electronic resource]. – URL:
https://www.gesetze-im-internet.de/ewpg/
6. URL: https://www.bafin.de/SharedDocs/Veroeffentlichungen/DE/Fachartikel/
7. Frankfurt School Blockchain Center. Industry Insights (CAC23A) – The Le-
gal Frameworks of Tokenized Debt in Europe. [Electronic resource]. – URL:
https://youtu.be/3l0ZemDI1qs?si=UeX6sWGmD
8. URL:
https://www.dentons.com/de/insights/alerts/2021/may/10/bundestag-
clears-the-way-for-electronic-securities
https://de.wikipedia.org/wiki/Namenspapier
10. URL:
https://www.fachanwalt-gesellschaftsrecht-hamburg.de/aktuelles-im-
bankrecht-versicherungsrecht-und-anlegerschutzrecht/bitcoin-und-kryptow%C3%A4
URL:
https://opendata.uni-halle.de/bitstream/1981185920/80367/1/
11. Concentrating on warnings to consumers. [Electronic resource]. – URL:
https://www.bafin.de/DE/Verbraucher/GeldanlageWertpapiere/verbraucher_kryptowert
12. URL: https://gesetze.berlin.de/bsbe/document/KORE223872018
13. Jens der Finanztester. Tether (USDT) kaufen & verkaufen mit Euro. Einzah-
len, Umtauschen, Versenden (bei Binance, Kucoin). [Electronic resource]. – URL:
https://www.youtube.com/watch?v=k7XhMkKpe_U
https://www.estatut.ru/download.php?trid=5087
https://www.rbc.ru/crypto/news/6697b1f79a794796605a1a81
http://publication.pravo.gov.ru/document/0001202403110010
Elena E. Gulyaeva
Diplomatic Academy of the Ministry of Foreign Affairs of Russia
COURTROOM CHRONICLES: AI AND HUMAN RIGHTS
IN INTERNATIONAL LEGAL PRECEDENTS
Abstract.
This article reviews the AI and Human Rights in International Legal
Precedents in Courtroom Chronicles. The object of the study is public relations regu-
lated by both international and national law, which include certain actions for the pro-
vision of artificial intelligence.
Keywords:
artificial intelligence, human rights, cybersecurity, international
law, legal precedents
