Risks of Virtual Financial Assets Turnover

The existence of the virtual financial assets market in Ukraine is an objective phenomenon, attempts at state regulation of which have been carried out since 2014. However, even today there is no legislative framework for such regulation. The implementation of a risk-based approach to regulating the circulation of virtual financial assets requires the development of a classification of circulation risks based on the criteria of risk subjects and their degree. The paper analyzes the works of domestic and foreign scientists on the risks inherent in the circulation of virtual financial assets, and proposes to improve the classification by separating risk subjects, namely owners of virtual financial assets; the financial system and the state and supranational bodies. From the perspective of risk-based regulation, the highest level of risk is posed by risks for the state and supranational bodies, primarily the risk of using virtual assets for criminal transactions, financing of terrorism and money laundering. The risks of capital outflow from the country and the lack of taxation of transactions with virtual assets are also significant, which leads to a deterioration in the state of the country's economy. The risks for the country's financial system are moderately risky, arising mainly as a result of the competition of virtual assets with the national currency and intermediaries providing services for the circulation of financial resources (banks and payment systems). The largest group of risks is for owners of virtual assets, and they can be divided into two subgroups – the first subgroup is associated with the essence and technological features of transactions with virtual assets, namely the risks of high volatility and the risks of losses from both fraudulent actions and loss of access to the crypto wallet. The second group of risks is associated with the shortcomings of the current legislative framework, primarily the lack of a concept and strategy for state regulation of the virtual financial assets market. Reducing the risks of trading virtual financial assets is possible through the development and adoption of coordinated legislative acts that will take into account the degree of risk and the diversity of risks, and determining the organizational structure, mechanisms and instruments of the system of state regulation of the virtual financial assets market.