Abstract
What would happen if the existing laws were actually enforced on the rich and powerful? Social reformers often clamour for new rules but ignore the huge changes that might happen if our existing rules were applied equally to all. And in the brave new world of ICOs and thousand percent cryptocurrency inflation, the rich and powerful are the bitcoin exchanges. What would happen if FinCEN regulations and the laws against money laundering were applied to them, and extended by sensible case law? We argue that this could mitigate most of the worst excesses of cryptocurrency world, and turn a dangerous system into a much safer one. The curious thing about this change is that it would not involve changing the protocol. It would not even necessarily involve changing the law. It might be enough to take some information that’s already public, publishing it again in a more easily understood format.
When you come to a fork in the road, take it – Yogi Berra
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Notes
- 1.
Slightly over 72% of all bitcoin accounts with a nonzero balance are taint-free.
- 2.
Monetary law over the centuries has had the same ambivalent attitude about whether money consists of the physical goods that used to embody it, such as coins or notes, or the value they embody – just as bitcoin promoters claim that cryptocurrencies are money or goods depending on which will best help them escape regulation.
- 3.
The maintenance of the taintchain could and should be open, which in itself gives rise to interesting questions of governance, which will lead to protocol design questions too.
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Acknowledgements
We acknowledge helpful discussions with David Fox, Shehar Bano, Tyler Moore, Nicolas Christin, Rainer Böhme, Johann Bezuidenhoudt, Lawrence Esswood, Joe Bonneau and various attendees at Financial Cryptography 2018 where we presented some of the ideas here at a rump session talk.
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Anderson, R., Shumailov, I., Ahmed, M. (2018). Making Bitcoin Legal. In: Matyáš, V., Švenda, P., Stajano, F., Christianson, B., Anderson, J. (eds) Security Protocols XXVI. Security Protocols 2018. Lecture Notes in Computer Science(), vol 11286. Springer, Cham. https://doi.org/10.1007/978-3-030-03251-7_29
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