ADMINISTRATIVE DISCRETION IN VIRTUAL ASSET MARKET REGULATION

Abstract

The article provides a comprehensive study of administrative discretion in the regulation of the virtual asset market in Ukraine under conditions of fragmented legal regulation and the transformation of the digital economy. It is substantiated that the current state of legal regulation of virtual asset circulation is characterized by a legal paradox, which consists in the state’s recognition of the existence of this market at the political level in the absence of an effective regulatory framework. This situation leads to an increased role of administrative discretion as a tool for the prompt response to emerging challenges related to the dynamic development of blockchain technologies and the transnational nature of crypto transactions. It is established that administrative discretion in this area acquires new features associated with the use of analytical algorithms, financial monitoring tools, and digital risk assessment instruments, which transforms traditional managerial discretion into a complex hybrid of legal and technological decision-making. At the same time, it is argued that the absence of clear criteria for the exercise of discretionary powers results in legal uncertainty, unpredictability of law enforcement, and risks of violation of the rights of market participants, particularly the right to property and freedom of economic activity. Special attention is paid to the analysis of the European approach to virtual asset regulation, particularly the provisions of the MiCA Regulation, which combines regulatory certainty with the preservation of a certain level of administrative discretion. It is demonstrated that even within a harmonized legal framework, there remains significant space for interpretative discretion of regulators, as confirmed by contemporary academic research. The study concludes that the effective implementation of administrative discretion is possible only through its institutionalization, which involves the legal definition of its limits, criteria, and decision-making procedures, as well as the establishment of effective judicial control. An approach is proposed for transforming discretion into a structured and regulated mechanism that ensures a balance between the flexibility of public administration and the principles of the rule of law. It is concluded that the development of an effective model of administrative discretion in the field of virtual assets is a necessary prerequisite for creating a transparent, predictable, and investment-attractive legal environment compatible with European Union law.