We have already noted that virtual assets, that is, those that exist in digital form and can be transferred, stored and processed with the help of information technology, are a new phenomenon in the market of financial instruments.
The incorporeal form of their existence makes virtual assets extremely convenient to use: a person who intends to realize his right to own assets needs only to have an electronic access key to them. The possibility of easily transferring such an access key to the creditor as a guarantee of the fulfillment of obligations led to the emergence of such an institution as secured virtual assets.
National legislation only superficially regulates secured virtual assets. They received more detailed regulation in the draft Principles on Digital Assets and Private Law, which will soon be adopted by the International Institute for the Unification of Private Law.
According to the mentioned principles, any negotiable virtual asset can be secured. The creditor and the debtor under the contract, by their own agreement, determine its type and value in relation to the main current, future or contingent obligation.
The security function of such assets can be manifested both in the direct control over them by secured creditors and in the contractual establishment of special procedures for exercising the right of ownership of virtual assets by creditors and creditors jointly (the ability to publish the encumbrance of the asset, its registration, the obligation to warn about the intention of disposal assets, ensuring mutual access of the parties to the secured contract to the digital asset, etc.)
National legislation, EU law and principles recommended by the International Institute for the Unification of Private Law provide for a number of ways and methods of securing transactions with virtual assets. Dynasty Law & Investment professionals will help you choose the right and most effective one.
Oleksiy Hrachov, attorney at Dynasty Law & Investment