Implications of the settlement model used for crypto derivatives on their qualification as financial instruments

Abstract

The article analyses the implications of the settlement model adopted for crypto derivatives for their qualification as financial instruments. The article begins with an analysis of the scope of the notion of derivatives constituting financial instruments. The article then focuses on the issue of settlement of such derivatives. Indeed, it is argued that the current legal framework of the Act on Trading in Financial Instruments does not cover in its scope some crypto-asset derivatives that are settled with other crypto assets. The article analyses the possible settlement methods of crypto-asset derivative transactions against their legal qualification. The article is concluded with findings and de lege ferenda proposals which aim to strengthen the protection of financial market participants.