LEGAL FOUNDATIONS OF FINANCIAL MONITORING IN THE CIRCULATION OF VIRTUAL ASSETS

Abstract

The article examines the legal foundations of financial monitoring in the field of virtual asset circulation in the context of the digital transformation of the financial system and the growing risks of the use of crypto-assets in illicit financial schemes. Virtual assets are considered as a new object of financial and legal regulation that combines the features of digital technologies and financial instruments and requires a special regulatory regime. It is substantiated that financial monitoring in this area is a key element of the system for preventing money laundering and terrorist financing, as well as a tool for ensuring the financial security of the state.

Particular attention is paid to the regulatory framework governing the circulation of virtual assets in Ukraine, as well as to international standards developed by the Financial Action Task Force (FATF).

The paper summarizes scholarly approaches emphasizing the fragmented nature of legal regulation, the complexity of identifying participants in cryptocurrency transactions, the lack of a clear classification of virtual assets, and the limited effectiveness of traditional financial control mechanisms in the context of decentralized technologies. It is established that existing legal frameworks do not fully take into account the specifics of the blockchain economy and the cross-border nature of digital financial transactions.

The key problems in the field of financial monitoring are outlined, including insufficient harmonization of national legislation with international standards; the absence of a unified classification of virtual assets; shortcomings in mechanisms for identifying ultimate beneficial owners; and the limited use of modern technological solutions for transaction monitoring.

The conclusions propose directions for improving legal regulation, in particular the unification of approaches to the classification of virtual assets, strengthening requirements for virtual asset service providers, the implementation of regulatory technologies and blockchain analytics, and the enhancement of international cooperation in the field of anti-money laundering and counter-terrorist financing. It is substantiated that the development of an effective system of financial monitoring in the field of virtual assets is a necessary condition for ensuring the stability of the financial system and minimizing the risks of the use of digital assets for criminal purposes.