Study Of Virtual Currency Laws

With the development of cyber-economy, virtual currency has been created as a new payment instruments by internet service providers to solve the problems by traditional payment mode, such as high transaction costs, low efficiency of transaction and then to achieve the innovation of payment mode. However, for a long term, there have been a lot of arguments over the concept and the nature of virtual currency; also, the controversy over its role has been in different understanding, and even many regulators, experts and scholars have various viewpoints on its financial risks. Thus, for regulate the development of virtual currency, the Chinese government has developed or is developing multi-laws and regulatory policies, but due to the existence of the limitations to the objective cognition of virtual currency as well as the regulatory regime that does not straighten out, the norm of virtual currency is only limited to the field of online games, and related-system design has also existed many problems.Therefore, this paper attempts through the examination of virtual currency's background to study the types of virtual currency; to clarify the relationship between virtual currency, legal tender and electronic money; to construct the concept of virtual currency; to analyze the related-legal relationship of virtual currency; to discuss the existing hot issues of virtual currency; to propose finally legal advice to the regulation of virtual currency. The paper is divided into three parts: introduction, main text, conclusions, in which the main text contains five chapters as following:The first chapter gives an overview of virtual currency. It first analyzes the necessity for innovation in payment methods from cyber-economy and virtual commodity market developments, as well as the limitations of existing conventional payment methods, and then discusses the background and causes of producing virtual currency. It next demarcates virtual currency into two types: legal tender prepaid-type and cyber activity involved-type. It further presents three different theories of virtual currency, and on this basis, it then makes a deep analysis of the relationship between virtual currency, legal tender and electronic money, and finally constructs the concept of virtual currency.The second chapter examines the legislative status of virtual currency. It gives comprehensively introduction of our existing normative documents, and on this basis, summaries five existing characteristics or problems. After that, it makes an overview of the legislative status of South Korea, Japan, the United States and the European Union. These steps provides the normative basis and measures for the study of hot legal issues and the suggestion of supervision.The third chapter studies the legal relationship of virtual currency. It firstly analyzes three elements of the legal relationship: the legal subjects including issuers, consumers and special network service providers; the legal object is the behavior of micro-capital allocation; the legal contents containing the relationship of service contracts and sales contracts between issuers and consumer and of service contracts between issuers and special cyber-service providers. It then combines with the legal nature of normative documents to analyze the validity of contracts between consumer and special cyber-service providers and between issuers and special cyber-service providers and contract risk of consumer and special cyber-service providers.The fourth chapter studies the hot legal issues of virtual currency. It selects three most important and controversial issues in theories and in judicial practice: the property attributes of virtual currency, the liability of online trading platform and the taxation for virtual currency. It analyzes he property attributes of virtual currency and value measurement criteria from judicial precedents; studies the liability mechanism of virtual currency and its problems based on legislation and legal cases; discusses the taxability of virtual currency and the feasibility of taxation for virtual currency according to the taxability theory, then achieving a conclusion that taxation for virtual currency transactions does have taxability in legal sense but does not have taxability in economical sense.The final chapter gives legal advice for virtual currency regulation. It provides three suggestions that consummating the regulatory regime and framework for virtual currency, establishing market-access system for virtual currency and enhancing the liability of online trading platform.