As an attorney for America's largest digital asset industry association, I am deeply aware of the role of the American judicial system in shaping the law.
However, the role of the judicial system when applied to new legal issues related to digital asset technology is very important, as regulators continue to enforce existing laws in ways that do not take into account the paradigm shift that blockchain technology brings. It gets bigger.
The future of digital assets could be in the hands of the courts as the Washington government scrambles to catch up to this nascent industry.
Today, digital assets are at the cutting edge of technology, finance, and law. It is already clear that blockchain has the potential to form the new backbone of the Internet. Cryptography has been around for decades, but its modern application in a truly decentralized way is new. Historically, financial regulation has been built on a single premise: the existence of intermediaries. Intermediaries involve certain risks, which can be appropriately managed through disclosure, reporting and enforcement regimes.
Digital asset technology changes this archetype.
While there are some intermediaries within the digital asset ecosystem, the technology itself is neutral and true, in the same way that I would hand over cash to tip my manicurist instead of using my card. enables peer-to-peer digital transactions.
Please see the Opinions section for more information. Small regulations are the biggest enemy of virtual currency
With this in mind, any attempt to regulate all Similarly, the Securities and Exchange Commission's approach makes little sense in the digital asset ecosystem. Financial use cases within digital assets also require new approaches. Because our regulatory system relies on the presence of intermediaries, regulating unintermediated assets is outside much of the current regulatory scope (of course, prohibiting activities such as fraud and market manipulation) (The exception is the law that does.)
Gaps remain, and government agencies such as the SEC and the U.S. Treasury Department's Office of Foreign Assets Control are taking enforcement actions against participants in the ecosystem in the absence of regulatory clarity.
These lawsuits, whether brought by the government or by participants seeking redress, could bring much-needed additional clarity.
For example, the SEC's enforcement actions against the three largest digital asset exchanges, Binance, Coinbase, and Kraken, as well as the aggressive lawsuit brought against the SEC by the Crypto Freedom Alliance of Texas and LEJILEX, all raise important questions. I'm trying to answer. Does the SEC's characterization of the investment contract analysis (Howey test) comply with the law? The SEC outlined a “totality of circumstances'' view of Mr. Howey that incorporates certain assumptions.
Both the SEC's “test” itself and the assumptions underlying the test are at issue in each of these four cases. The results could have a major impact on how entrepreneurs and developers innovate in the future, or whether they are even allowed to innovate with this technology at all.
Next, let's look at three Tornado Cash cases. The two cases are civil lawsuits brought by plaintiffs who claim their constitutional rights were violated by OFAC's sanctions designation of the Tornado Cash software. The other is a criminal case filed by the Department of Justice against two developers of the Tornado Cash software. All three cases involve questions about how the government can impose mandatory reporting and monitoring obligations on software developers, a new issue expected to be decided soon by a federal judge. is.
And, of course, how securities laws apply to artists and content creators, whether requirements to report wallet address information violate the Fourth Amendment, and to what extent a dispersed group of individuals constitutes an organization. There are many other conclusive cases that answer questions such as:
American courts have the power to set precedent and protect core constitutional rights, including the right to a hearing, the right to be free from unreasonable search and seizure, and the right to speak and associate freely.
When policymakers fail to create well-tailored regulations or simply try too hard, courts can provide the necessary checks and balances that are essential for innovation to flourish in the field of emerging technologies. can be fulfilled.
As Senior Advisor to the Blockchain Association, Marisa helps develop and advocate policy positions on behalf of the crypto industry, as well as manage long-term legal projects and strategic litigation. Prior to joining the Institute, Marisa represented corporate clients in regulatory enforcement activities, internal investigations, and civil litigation matters at Covington & Burling and O'Melveny & Myers. She also served as a federal law clerk for the United States District Court for the Central District of California. Marisa received her bachelor's degree from Brandeis University and her Juris Doctorate from Loyola School of Law in Los Angeles.
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