Bitbon in the Economic and Legal Field

“Digital asset” is a method patented by SIMCORD LLC that envisions the ability to manage property through access to this property, including to control its use through a social network and conduct accounting of its use in the system based on distributed ledger[i] technology (blockchain[i]). Property right to a “digital asset as the method of property management” is registered for SIMCORD LLC in various utility model patents in a number of countries. Everything stated above has written proof on the following websites: https://www.simcord.com, https://www.bitbon.space/. Thus, the Bitbon[i] digital asset[i] is the realization by SIMCORD LLC of its property right to its patented method of property management.

The Bitbon digital asset provides access to the functionalities of the Bitbon System infrastructure[i], and Bitbon units[i] are a finished software product, which represents a User’s[i] right to access the Bitbon System Social Network[i] and contains a certain scope of access.

The following points are key for describing the features of the Bitbon digital asset in the economic and legal field:

1. Bitbon digital asset as an object of legal relations

Bitbon digital asset in its form is a component of a software product in the form of a code for activation of the IT Service of the Bitbon System[i], which according to civil law is considered as software.

This software was created by SIMCORD LLC in accordance with the international ISO 9001:2015 standard in the field of research and development and production of highload software solutions for distributed computing and storage based on the distributed ledger technology as part of the infrastructure of the Bitbon System Social Network.

According to civil law, software is an object of intellectual property. Intellectual property rights belong to SIMCORD LLC.

An object of intellectual property for the purposes of accounting in accordance with the International Financial Reporting Standards (IAS 38) is defined as an intangible asset (IA).

Bitbon digital asset by its content is a digital representation of the right to use the nonmonetary asset “Components and Services of the Bitbon System Infrastructure” in accordance with the procedure established by the information resource “Bitbon System Infrastructure Access Set”[i]. This information resource is derivative of the nonmonetary asset “Components and Services of the Bitbon System Infrastructure” kept on the balance sheet of SIMCORD LLC as noncurrent property owned by SIMCORD LLC.

For the purposes of accounting in accordance with the International Financial Reporting Standards (IAS 38), an information resource is defined as an intangible asset (IA). Thus, SIMCORD LLC is the creator and owner of the Bitbon digital asset, which is an intangible asset by its nature.

2. Bitbon units

Bitbon unit is a finished software product as an instrument for accounting of the right to use the initial asset[i] for Bitbon in accordance with the procedure established by the original asset[i] for Bitbon, which represents a User’s right to access the Bitbon System Social Network and a Participant’s[i] mandatory attribute. A Bitbon unit provides access to the functionalities of the Bitbon System Social Network, has an exchange value and is an element of all transactions on circulation of tokenized assets[i] of Users in this social network. SIMCORD LLC issued 100,000,000 Bitbon units, which corresponds to 100% of the scope of access to the Bitbon System Social Network. Additional issue of bitbons is impossible.

Bitbon unit in its form is a software element that according to civil law is an object of intellectual property right. Intellectual property rights belong to SIMCORD LLC.

An object of intellectual property right for the purposes of accounting in accordance with the International Financial Reporting Standards (IAS 38) is defined as an intangible asset (IA).

Bitbon unit by its content is an instrument for authorizing the execution of a deal in the Bitbon System[i] as well as determining the scope of access (right of access) to the nonmonetary asset “Components and Services of the Bitbon System Infrastructure” kept on the balance sheet of SIMCORD LLC as noncurrent property owned by SIMCORD LLC, and access to the information resource “Bitbon System Infrastructure Access Set” kept on the balance sheet of SIMCORD LLC.

For the purposes of accounting in accordance with the International Financial Reporting Standards (IAS 38), an information resource is defined as an intangible asset (IA).

3. Regulation of legal relations the object of which is Bitbon digital asset

The Bitbon System Social Network allows its Users to build relations within the regulations of the law of obligations[i], namely by means of contracts based on blockchain (as a modern improved accounting system) in the form of tokenized asset protocols[i], which are an information resource[i], the final document of the asset[i] tokenization procedure, which determines certain attributes and properties of a tokenized asset, terms and conditions of its creation and circulation in the Bitbon System Social Network, as well as the procedure for executing the tokenized asset protocol. Meanwhile, the Bitbon digital asset, being a system-forming digital asset created by SIMCORD LLC as a result of tokenization of the nonmonetary asset “Components and Services of the Bitbon System Infrastructure” (initial asset for Bitbon), is an instrument for implementing accounting in the Bitbon System. That is due to the fact that the Bitbon digital asset has an exchange value for equivalent exchange of other tokenized assets in the Bitbon System Social Network and other types of activity in the Bitbon System Social Network. Thus, as a result of operation of the Bitbon System Social Network, legal relations arise, which are realized in digital space and fall under the category of obligations with full record of their content (rights and duties) in a distributed ledger (blockchain).

Thus, relations that arise when realizing property right to the Bitbon digital asset are subject to regulation by the norms of the law of obligations, which ensures circulation of the Bitbon digital asset in the legal field. This approach is due to the fact that the Bitbon digital asset, being a digital representation of the right to use the nonmonetary asset “Components and Services of the Bitbon System Infrastructure” in accordance with the procedure established by the information resource “Bitbon System Infrastructure Access Set”, contains all information about rights, duties and responsibilities of parties on fulfillment of mutual obligations and information about the creator of the Bitbon digital asset and circulates in blockchain in the form of a unique identifier. In turn, the law of obligations is a subbranch of civil law that is part of the structure of national legal systems and essentially establishes regulatory requirements for the movement of values[i].

Meanwhile, the information resource “Bitbon System Infrastructure Access Set” and the Bitbon digital asset as its component (access to the services of the Bitbon System) are the regulators of legal relations between Bitbon System Participants, where the Bitbon digital asset is the object, and its owners are the subjects. Thus, we can state that the Bitbon digital asset is a confirmation of the right of its owner to mutual use of a value — information resource “Bitbon System Infrastructure Access Set”. In turn, the existence of a value as the foundation for the Bitbon digital asset is determined by the fundamental principle of operation of the Bitbon System, Right to the right[i], which allows Bitbon System Users to operate access to the information resource derivative of the right to a value as an object of relations, while the value itself remains in possession of its owner.

The use of the Bitbon digital asset as a regulator of relations in the Bitbon System Social Network does not contradict the principles of law and current legislative norms of legal systems, which allows establishing the Bitbon digital asset in the international legal field. This ensures the ability to simplify the mechanisms of business and civil circulation due to the use of the Bitbon digital asset as an intangible asset (IA) and does not require adopting a field-specific legislation aimed at regulating relations between subjects that arise when using the Bitbon digital asset.