FEATURES OF ADMINISTRATIVE-LEGAL IMPACT ON THE VIRTUAL ASSETS MARKET

Abstract

This paper clarifies the specifics of administrative and legal influence on the
virtual asset market. Such influence is understood as a distinct form of legal
impact in which authorized public authorities (and, in some cases, civil society
institutions) purposefully and systematically guide both the processes and
participants of the virtual asset market. This is achieved through the application
of administrative and legal norms, methods, and procedures, with a focus on the
legal organization and development of the market, balancing the interests of its
participants, society, and the state, and preventing offenses and other risks arising
from the technological complexity and cross-border nature of these assets.
Building on the definitions and special features of “legal influence” and
“administrative and legal influence,” the paper outlines the main groups of
characteristics associated with administrative and legal influence in this area.
General features include, for example, its inseparability from broader social
influence; its implementation by specified entities responsible for state policy on
virtual asset market development and operation; its dual focus on market participants’ awareness and external behaviors; its grounding in legal principles
and regulations that establish equilibrium between the interests of market
stakeholders, society, and the state; its role in structuring relationships central to
the virtual asset market; and its reliance on general legal mechanisms such as
legal norms, legal relationships, and acts of law enforcement. Sector-specific
(administrative and legal) features of this influence reflect its public character and
the way it manifests in relationships governed by subordination and the
authoritative role of state agencies. Such influence employs methods and tools
from the administrative sphere, with a view to ensuring the efficiency of public
administration in the market. It is also operationalized through procedures
outlined in administrative legislation, whose provisions govern the administrative
and legal influence on virtual asset activities. The institutional features of
administrative and legal influence on this market highlight several considerations.
First, there are special tasks, such as clarifying the legal status of market actors,
safeguarding public interests, and reconciling market control and growth with
free-market principles. Second, governmental authorities responsible for
regulating virtual assets must have the human and expert capacity to understand
blockchain technologies, smart contracts, and related innovations. Third, because
the virtual asset market extends beyond Ukrainian borders, its regulation must
account for global dynamics. Fourth, the rapid pace of development in the virtual
asset sector demands responsive and adaptive legal frameworks. Finally, this
influence is exercised in regulatory, supervisory, and informational-educational
contexts. The article’s conclusions summarize these findings.