Head of International Corporate Law and Fintech Practice
Expert in fintech, crypto, and international corporate law with over 20 years of experience. Specializes in crypto licensing (VASP/CASP), iGaming business support, and international structuring, asset protection, and OSINT analytics for risk assessment and due diligence.
Cryptocurrency investment agreement
An investment agreement in the field of cryptocurrency is a civil law construction that records the agreements of the parties regarding the contribution of funds/cryptoassets, the model of their management and the distribution of the result (profit/loss), but requires special attention to the legal status of cryptoassets and the evidentiary base. In Ukrainian practice, it is important to correctly name and structure such an agreement, because the courts have emphasized: the very fact of the name “investment” does not mean the automatic application of the Law “On Investment Activities”, especially when it comes to cryptocurrency as an object.
What is an “investment agreement” in crypto?
In everyday life, an “investment agreement” in the cryptosphere is often called an agreement between an investor and a trader/manager, between an investor and a project (token sale/SAFT-like models), or between partners who jointly finance a crypto business or trading strategy. In Ukrainian law enforcement, there are cases where the court directly stated: the parties did not conclude an investment agreement within the meaning of the Law “On Investment Activities”, and their agreement acts as an ordinary agreement between the parties. Therefore, “investment” here is more of an economic meaning, and legally, civil law mechanisms (obligation, return, liability, evidence of actual transactions) most often work.
Legal framework in Ukraine: why is the structure important?
In parallel, Ukraine has the Law “On Virtual Assets” (№2074-IX), which defines the framework for regulating relations related to the circulation of virtual assets and declares the rights/obligations of market participants. At the same time, analytics and publications from practice emphasize that a complete and “seamless” regulatory framework for cryptocurrency and its status (as well as tax rules) has long remained incomplete, which increases legal risks for investors and executors. The judicial position cited by specialized publications also drew attention to the fact that the circulation of cryptocurrency is not fully regulated, and individual crypto-transactions may not be subject to the regimes usual for consumer legal relations.
Key conditions that should be included in the contract
For an investment contract in crypto to work, it should not “promise profit”, but describe in detail the mechanics: what exactly is transferred, how it is managed and how it is returned (or not returned). In practice, the critical blocks are as follows:
- Subject: cryptoasset/fiat, network, token, wallet addresses, transfer confirmation rules (txid, exchange statements).
- Risks and liability: volatility, drawdowns, liquidations, force majeure, technical failures, fraud, limits of manager liability.
- KYC/AML and compliance: who and how confirms the source of funds, what are the restrictions on sanctions/PEP, the procedure for interacting with exchanges/providers.
- Evidence and communications: what is considered proper proof of transactions (screenshots are not always sufficient), how instructions are recorded (correspondence, acts, reports).
- Dispute resolution: law, jurisdiction/arbitration, interim measures (e.g., the procedure for “freezing” assets, if technically and legally possible)
Trust Management Agreement
A trust management agreement is one of the most reliable tools for structuring cryptocurrency investments, as it allows you to transfer crypto assets (tokens, coins or a portfolio) to a professional manager without losing ownership – the investor remains the title owner, and the manager acts as a trustee with clearly defined powers described in the agreement. This structure fixes the subject of the agreement (wallet addresses, transaction txids, management strategy – for example, staking, trading or HODL), fees, reporting and early termination conditions, providing transparency for AML/KYC and enhanced protection against fraud risks. Advantages include simplified legal protection in the event of a manager’s failure to fulfill his duties, but the choice of a licensed provider (VASP/MSB) and the detailing of volatility or force majeure risks are critical to avoid classifying the agreements as gray schemes.
Typical risks and mistakes
The most common mistake is replacing the legal form with marketing: the agreement is called “investment”, but it does not have a transparent subject, management algorithm and clear evidence of contributions/transactions. The second problem is weak evidence of asset movement: without txid/exchange confirmations and formalized reports, it is more difficult for the parties to prove the fact of transfer/volume of obligations. The third is ignoring compliance: even if “this is a private agreement”, in a real dispute, issues of the origin of funds, sanctions and interaction with services that live by AML rules arise.
The law firm “Prikhodko and Partners” positions itself as a team that comprehensively solves legal issues for business and private clients, in particular in corporate and tax support (which is relevant for investment agreements and structuring crypto transactions). In its public materials, the company also talks about the practice of assisting in crypto cases related to fraud, analysis of blockchain transactions through partners, and algorithms for actions if funds end up on the exchange (with subsequent legal steps for arrest/return). Separately, their video materials claim to provide advice and support for crypto activities, including tax burden issues, jurisdiction selection, and work with crypto licenses (VASP/MSB) — which is often part of the “investment” infrastructure when the contract is related to business or managed strategies.
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