The logic of legal regulation of encrypted digital assets

The cryptographic digital assets discussed in this paper are virtual property or property interests based on distributed networks, blockchain technology and other cryptographic technologies, and relying on community consensus or coalition consensus.

The logic of legal regulation of encrypted digital assets

To open the door, the cryptographic digital assets discussed in this article refer to virtual property or property interests based on cryptographic technologies such as distributed network and blockchain technology, and relying on community consensus or coalition consensus.

  1. Has the new technology brought new legal challenges

We have to solve a premise: whether there is a difference in legal sense between crypto digital assets and virtual property such as Q-coins, if there is no difference in abstract law there is no basis for reformulating laws for regulation. In other words, there is no difference in terms of the legal consequences and the approach to regulation, whether a person is hit with a hammer or a robot.

Therefore, we must screen whether there is a legal qualitative difference between the two. Sara believes that there are differences between crypto-digital assets and virtual property such as Q-coins: 1) the source of rights of the former is consensus rather than authoritative authorization; 2) the former is not easily tampered with and can be traced; 3) the latter is legally characterized as “property rights”, while the former may be debt documents, intellectual property mapping or property rights.

2、Establish a multi-level legal regulation system

Civil law, administrative law and criminal law should all be involved to protect the legal rights and interests of new technologies and new things, and at the same time, prevent and combat the tendency and behavior of “pan-financialization”, and treat this historical opportunity of blockchain technology development with the cautious attitude of “like cooking a small dish”.

In 2021, Article 127 of the Civil Code will come into force, and “Where the law provides for the protection of data and network virtual property, it shall be in accordance with its provisions.” The protection of virtual property is provided in a forward-looking manner. Although the Notice on Regulating the Risk of Bitcoin issued by the Central Bank and five other ministries and commissions in 2013 established China’s characterization of BTC Bitcoin as a “specific virtual commodity”, it can be deduced that China’s civil law protects Chinese people holding Bitcoin as a specific virtual commodity. However, given the low legal status of the five ministries’ notice, it does not reach the level of “law” under the Civil Code, but is at best a regulatory document, not even a departmental regulation. In light of this, civil and commercial laws do not give full legal rights to digital currencies such as Bitcoin, but according to Mu Changchun, he believes that the objective fact that Chinese people hold Bitcoin cannot be banned (for the same reasons as the technical characteristics), which means that there is a tacit agreement between the official and private sectors about the reality of Chinese people holding crypto-digital currencies.

At the administrative law level, there are actually regulations on illegal fund raising, regulations on the management of the RMB, and the Commercial Banking Law, which evaluate the “illegality” of cryptocurrencies and their financial derivatives. Looking at the response of countries to the crypto-digital assets trend, they have similar laws and jurisprudence to regulate them, with the major difference being the different definition of the concept of “securities” in the Securities Law, resulting in the issuance of crypto-digital tokens in China being unable to be included in the regulatory compliance track and being qualified as “illegal public financing” after 5:00 p.m. on September 4, 2017. The issuance of crypto digital tokens in China could not be included in the regulatory track, and was qualified as “illegal public financing” after 5:00 pm on September 4, 2017. In contrast, China’s Hong Kong region and the United States, represented by jurisdictions with broad securities outreach, have included ICOs in securities law for strict regulation, using means such as the Howey test to discriminate.

Criminal law is a safeguard law for other sectoral laws and is necessarily involved in the adjustment of social relations. Everyone is said to be modest, and in the case of crypto-digital assets, the principle of modesty is still objectively adhered to in terms of the degree of caution of the authorities handling the case (although it may be because it is indeed too difficult to identify the price of crypto-virtual property).

(1) If crypto digital assets are recognized as property interests, theft and fraud of crypto digital assets would constitute a crime of misappropriation of property.

(2) Given that the right to authenticate crypto assets comes from community consensus, the criteria for determining “proceeding” and “attempt” are different from those for the same type of crime of ordinary property.

(3) The uncertainty of the antecedent law, which leads to the unclear and dynamic development of the line between crime and non-crime in statutory offences.

(4) private keys, which makes it more difficult to collect encrypted assets.

Therefore, we find that in judicial practice, it is more common to treat crypto-digital tokens as “robots” to beat people, that is to say, the emergence of new technology is just a new “criminal means” for the previous crimes (new wine in old bottles). With “bitcoin”, “ethereum”, “USDT”, “firecoin”, ” white paper”, “public chain”, “coin speculation”, “e-wallet”, “blockchain “”decentralization”” “crypto assets” “cryptocurrency” and other keywords, the search was conducted in Waco first and Beida Faber, and the related criminal verdicts are nearly more than 2,500, mainly involving crimes against the socialist market economic order, crimes against property, and crimes against the social management order. As for specific crimes, the top ten crimes with the highest number in the database are fraud, organizing and leading pyramid schemes, theft, opening casinos, illegal absorption of public deposits, computer crimes, concealing and concealing the proceeds of crime, smuggling, trafficking, transporting and manufacturing drugs, gambling, and illegal business crimes. What is worth studying is whether the legal characteristics of crypto digital assets affect the crime and non-crime, this crime and the other crime, attempt and completion, and the possibility of recognizing illegality.

A little personal reflection of Sister Za, which does not constitute investment advice or legislative suggestion. The above is what I share today, thanks to the readers!!!

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/the-logic-of-legal-regulation-of-encrypted-digital-assets/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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