As the Western Balkans emerge as a significant player in the global digital assets landscape, few legal professionals have been as instrumental in shaping the region's cryptocurrency regulatory framework as Marko M. Milutinović. As founding partner of Advokatska Kancelarija Milutinović and one of Serbia's leading attorneys specializing in digital assets law, Marko brings a unique perspective to the rapidly evolving intersection of blockchain technology and legal compliance.

Since beginning his legal practice in 2016, Marko has established himself as a pioneer in digital assets law, specializing in criminal law, commercial law, and litigation while building particular expertise in cryptocurrency and blockchain regulation. His role as an arbitrator at UBIK (Croatian Blockchain and Crypto Association) - UBIKourt, the specialized arbitration institution "in the blockchain space for the blockchain space" - positions him at the forefront of cross-border crypto dispute resolution in the region.

Serbia's position as one of the first jurisdictions globally to adopt comprehensive digital assets legislation with the Law on Digital Assets (effective June 30, 2021) has placed the country alongside early regulatory leaders like Switzerland, Estonia, Cyprus, and Malta. This pioneering approach has created both opportunities and challenges that Marko navigates daily in his practice, representing clients across the spectrum of virtual asset service providers (VASPs), initial coin offerings (ICOs), and blockchain-based businesses.

In this comprehensive discussion, Marko shares insights from his specialized practice, examining the practical realities of operating under Serbia's digital assets framework, the growing importance of blockchain arbitration in resolving cross-border disputes, and the evolving opportunities for cryptocurrency and blockchain businesses in the Western Balkans region. His perspective offers valuable insights for legal professionals, compliance officers, and business leaders seeking to understand the regulatory landscape in one of Europe's most progressive digital assets jurisdictions.

As digital assets continue to reshape the legal landscape across the Western Balkans, Marko's experience in both traditional legal practice and cutting-edge blockchain arbitration provides essential guidance for navigating this complex and rapidly evolving regulatory environment.

Question 1: Digital Assets Legal Framework and Arbitration in the Balkans‍

As one of the few attorneys in Serbia specializing in digital assets law and serving as an arbitrator at UBIK (Croatian Blockchain and Crypto Association), how are you navigating the developing legal landscape for cryptocurrency and blockchain technologies in the Western Balkans region? What are the key regulatory challenges you're seeing for crypto businesses operating across Serbia, Croatia, and neighboring countries, and how does your role in blockchain arbitration inform your approach to structuring compliant digital asset operations? What trends are you observing in cross-border crypto disputes in the region?

Serbia has been developing its legal framework for cryptocurrencies and blockchain technologies for several years. It should be emphasized that, on a global scale, the Republic of Serbia was among the first jurisdictions to adopt a comprehensive legal framework for digital assets. The Law on Digital Assets, which entered into force on June 30, 2021, regulates digital asset services, establishes licensing requirements for virtual asset service providers (VASPs), and defines the competent authorities—namely, the National Bank of Serbia (NBS) for virtual currencies and the Securities Commission for digital tokens. By enacting this legislation, the Republic of Serbia joined the small group of early jurisdictions that recognized the necessity of comprehensive regulation in this field, a group that at the time included only Switzerland, Estonia, Cyprus, and Malta. However, in practice, some of the most significant regulatory challenges stem from the competent authorities themselves.

Procedures such as conducting an initial coin offering (ICO) or obtaining a VASP license are often perceived as unnecessarily burdensome and complex. Instead of simplifying the path toward regulatory compliance, the authorities appear to be complicating it further. This irony is perhaps best illustrated by the fact that the Bitcoin whitepaper—the foundation of the largest cryptocurrency by market capitalization—would likely not meet today’s regulatory standards. If one attempted to launch a new virtual currency today under existing rules, it would be virtually impossible to do so legally while remaining anonymous. Yet Bitcoin, created by the still-unknown Satoshi Nakamoto, continues to dominate the market.

Of course, regulation and transparency are essential for the stability and security of financial markets. Nevertheless, there would be significant benefits if the competent authorities were to simplify certain procedures and provide clearer guidance. For example, under the Decision on Conditions of Information-Communication System Management for Virtual Currency Service Providers, a service provider is required to establish and adequately separate test and production environments. However, the term “adequate” is left open to interpretation, creating uncertainty for service providers who are striving for compliance. I also consider specialized arbitration mechanisms to be an absolute necessity when it comes to resolving disputes related to digital assets. Traditional judicial proceedings often lack the necessary speed, flexibility, and, most importantly, the technical expertise required to properly address issues arising from blockchain-based transactions.

Disputes in this sector frequently involve complex technological aspects such as smart contracts, tokenomics, consensus mechanisms, and cybersecurity vulnerabilities—areas where the average court may not have sufficient knowledge or experience. Arbitration offers several advantages in this context. First, it allows parties to appoint arbitrators with specialized expertise in blockchain technology, digital assets, and financial regulation, ensuring that disputes are resolved by individuals who understand the technical and legal complexities involved. Second, arbitration procedures are typically more flexible and efficient than traditional litigation, which is crucial given the fast-paced nature of the digital asset industry. Finally, the cross-border nature of many crypto-related disputes makes arbitration particularly attractive. Digital assets do not recognize national boundaries, and conflicts often involve parties from different jurisdictions. Arbitration, with its internationally recognized enforcement framework provides a more practical and predictable solution than relying on potentially conflicting national court systems.

Question 2: Criminal Law Implications in Cryptocurrency Cases‍

Given your extensive background in criminal law proceedings and your specialization in digital assets, what criminal law risks do you see emerging for individuals and businesses involved in cryptocurrency transactions in Serbia? How do you advise clients on compliance with anti-money laundering requirements and avoiding potential criminal liability related to crypto activities? What are the most common criminal law issues you encounter in the digital assets space, and how does Serbia's criminal justice system currently handle cryptocurrency-related offenses?

It is often repeated that digital assets are primarily used to finance illegal activities and to facilitate payments on the black market. However, this perception is becoming increasingly outdated, particularly in light of the evolving legal frameworks. In Serbia, the regulation of digital assets has its roots in the country’s main preventive legislation in the field of anti-money laundering and countering the financing of terrorism (AML/CFT). The Law on the Prevention of Money Laundering and the Financing of Terrorism was, in fact, the first legal act in Serbia to explicitly reference digital assets—long before the adoption of the Law on Digital Assets. This, in itself, is telling when it comes to the state’s approach to preventing money laundering and other criminal activities.

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In the digital asset industry, maintaining absolute compliance and transparency is essential. Whether one is operating as a virtual asset service provider (VASP) or preparing to launch an initial coin offering (ICO), the regulatory requirements are strict, and any association with illicit activity or reputational damage can be fatal for business prospects. This is especially true in Serbia, where public trust in digital assets is still developing. Any incident involving criminal charges or misconduct not only undermines the credibility of the individual project but can also negatively impact the perception of the entire market. Fraud remains by far the most common criminal act encountered in the digital asset space in the Republic of Serbia. While it should be acknowledged that cryptocurrencies are still occasionally used to facilitate payments on the black market, this has become increasingly difficult due to the country’s developed legal framework.However, a significant challenge lies in the capacity of Serbia’s justice system to effectively handle crypto-related offenses. Prosecutors, judges, and law enforcement personnel often lack sufficient understanding of fundamental concepts such as distributed ledger technology, the distinction between a wallet password and a seed key, or the technical nuances of blockchain transactions. This knowledge gap can have serious consequences, as misinterpretation or mishandling of cases involving digital assets may lead to flawed investigations, wrongful accusations, or ineffective prosecutions. Strengthening the expertise of the judicial system in this area is therefore critical to ensuring that criminal activity involving digital assets is addressed efficiently, accurately, and in a manner that maintains public trust in both the legal system and the digital asset market.

Question 3: International Business and Immigration for Crypto Entrepreneurs‍

With your experience in commercial law and immigration matters (including work permits and residency for foreign nationals), how are you advising international crypto entrepreneurs and blockchain companies looking to establish operations in Serbia? What are the key legal considerations for foreign digital asset businesses seeking to obtain the necessary permits and licenses to operate in Serbia, and how does the country's regulatory environment compare to other jurisdictions in attracting blockchain investment? What immigration pathways do you recommend for crypto professionals wanting to relocate to Serbia for business purposes?

I believe that the Republic of Serbia presents a promising opportunity for establishing a cryptocurrency or blockchain-related business. The country has an established legal framework which, while not without imperfections, provides a level of stability and predictability for entrepreneurs and investors considering setting up operations locally. Moreover, there is a growing recognition among the Serbian population of the potential for investment in investment tokens, and many startups are increasingly raising initial capital through the issuance of such tokens. This indicates a developing market, accompanied by a rising understanding of blockchain technology, legal requirements, and investment opportunities. The combination of a regulated environment and an emerging investor base makes Serbia an increasingly attractive jurisdiction for crypto-related ventures. In addition, Serbia offers significant tax incentives for research and development (R&D) activities, which are particularly advantageous for blockchain projects. For example, an employer conducting R&D activities in Serbia is exempt from paying 70% of the calculated and withheld tax on wages for employees directly engaged in such activities, in proportion to the time these employees dedicate to R&D relative to full-time work. Furthermore, such employers are exempt from paying 100% of the contributions for mandatory pension and disability insurance for employees directly involved in R&D, again in proportion to the time spent on R&D tasks. Given this supportive legal and fiscal environment, the Republic of Serbia represents an excellent destination for anyone looking to relocate with a blockchain R&D project.

In summary, the Republic of Serbia offers a unique and promising environment for cryptocurrency and blockchain-related businesses. While the legal framework is not without its imperfections, it provides stability, predictability, and a foundation for compliance that is increasingly recognized both by startups and investors. The growing interest in investment tokens and the expanding knowledge of blockchain technology among the local population signal a developing and dynamic market.Moreover, Serbia’s supportive fiscal policies, particularly the generous tax incentives for research and development, further enhance its attractiveness. Employers engaged in R&D can benefit from substantial exemptions from wage taxes and pension contributions for employees directly involved in research activities, providing a significant financial advantage for blockchain and technology-focused projects. Taken together, the combination of a regulated environment, an emerging investor base, and favorable R&D incentives makes the Republic of Serbia an excellent destination for entrepreneurs and researchers looking to establish or relocate a blockchain-focused business.

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