The world of cryptocurrency is fast-changing and gaining popularity. Today, many businesses and individuals are using crypto, especially for online trading. It has resulted in increased cybercrime since most people believe that cryptocurrency funds cannot be reversed.
When cryptocurrency disputes arise between individuals and merchants, it takes time and effort to bring everything to light.
There is an increasing demand for the need to establish certainty around the treatment of smart contracts, blockchain technologies, and cryptocurrency in the UK. With this objective, the UKJT set out an authoritative Legal Statement with a consultation to reveal all the areas which require legal clarification.
What you should know about cryptocurrency resolution
The Legal Statement under English law, crypto-assets can have proprietary status. The law also clarifies as follows:
1- The law will simply treat crypto assets like property in situations where they demonstrate certainty, definability, identifiability, exclusivity, control, and stability.
2- In most cases, crypto assets will amount to more than pure information because their commercial value is not always recorded in the data but in their ability to authenticate dealings in the crypto assets based on the system’s basic rules. This is unlike digital assets.
3 – Another clarification is that crypto-assets must not be things in procession or action to fit the definition of an asset.
4- Like in other intangible property, crypto-assets can be secured by a mortgage or an equitable charge as long as the charge has been granted as provided by proprietary interest.
5 – The holder of a private key to the crypto assets will generally be referred to as the asset’s rightful owner. This will be exempted to situations where a private key is obtained unlawfully or where the private key is held on behalf of someone else.
6 – In crypto assets, the ideology that an individual cannot transfer to someone what they don’t have or own does not apply. This is because the transfer of crypto assets is possible when it generates a new code and becomes a new asset. And the old asset ceases to exist.
If you have any issues with cryptocurrency disputes in your business, you should seek help from cryptocurrency prosecution solicitors. Your cryptocurrency investigator can help you recover any hidden or stolen funds. They work closely with law enforcement to help you recover all your funds from unscrupulous deals or cyber criminals.
Cryptocurrency dispute resolution method
There is no single method that authorities have set in solving cryptocurrency disputes between individuals and merchants. Until some universal regulation is adopted, creators, developers, and investors should always look at some of the factors which can protect themselves in case of a dispute.
The main method that is most likely to be used in finding a resolution is to navigate the blockchain-related dispute. Some of the choices are mediation, litigation, and arbitration.
In most cases, when cryptocurrency disputes are resolved, the complainant or the victim is normally compensated in cash instead of transferring the digital assets back to the owner.
1 – Out-of-court
An out-of-court method can better resolve crypto disputes, especially if both parties don’t want to go through a lengthy process. It is always important that individuals choose the best option method in dispute resolution. The method should be respected and easily upheld by the courts if the decision includes the access and transfer of real assets to counterparty.
2 – Arbitration tribunal
Arbitration is a method that gives both parties the chance to come to terms with bespoke procedures which can easily address the irrevocable smart contracts. Blockchain transactions are always anonymous, and bespoke procedures help navigate all their complexities.
The court can appoint a specialized arbitral tribunal through arbitration, which is normally the case with litigation and mediation.
3 – Confidentiality and limited disclosure
In the exercise of the arbitration method, confidentiality and limited disclosure may be followed. For instance, in cases where disputes are likely to involve sensitive information about proprietary hardware and software, it is important to include a clause that confidential arbitration will resolve the dispute.
4 – Verification of identity
Some challenges come as a result of using blockchain. Some of these challenges include foreign sanctions, money laundering, and anti-terrorism. In most cases, crypto transactions are usually designed to remain autonomous, self-executing, and anonymous.
Therefore, all parties involved must verify the identity of those they transact with and block all unlawful truncations and transfers.
Can You Chargeback Cryptocurrency?
Any cryptocurrency transaction is not subject to a chargeback. This is because the transaction is placed in escrow until both parties involved in the transaction confirm it. As soon as the transaction is completed, there is no way you can reverse it.
The inability to reverse a Bitcoin transaction comes into play by design. Bitcoin was designed to function as virtual cash, where the transactions are permanent and difficult to trace back.
This also applies to some stable coins, which are not affected by the price fluctuations due to speculation on cryptocurrency. Most merchants are attaching the value of the crypto to a stable currency like a dollar.
Is cryptocurrency able to prevent chargeback?
Cryptocurrency can prevent chargeback by simply being a method of payment that is not subject to the chargeback. When you choose to pay using cryptocurrency instead of a credit card, you agree to resolve your issues through the merchant.
Chargeback is not the primary reason most merchants find their way into cryptocurrency.
However, since the chargeback is costing businesses billions of dollars a year and still growing, this is undoubtedly a significant factor to watch out for.
Today businesses accepting cryptocurrency is no longer a proof of concept. Most large companies like Subway and Microsoft are already accepting cryptocurrency as payment.
Other small businesses all over the world are also following in their tracks.
In most cases, a central authority is not backed up by cryptocurrencies like a government or central banks. Exchanges are never carried out peer-to-peer with a blockchain serving as an objective ledger.
In the cryptocurrency blockchain system, a chargeback may seem impossible. The crypto buyer has no bank card they can use to appeal for the transaction. In case a customer wants a refund, it’s upon the merchant to decide whether they are issuing a refund or not.
However in some cases, individuals can opt for cryptocurrency investigation to help them retrieve their funds.
Crypto assets continue to change the face of fruitful financial transactions in many ways that digital transactions are similar to banking transactions. What seems to be affecting the use of cryptocurrency by merchants and individuals are the ever-changing regulations in crypto.
Therefore, both parties must seek legal advice when using crypto to settle payments. This will ensure they do not have any unintended consequences and that their related disputes are efficiently and effectively resolved.