Entangled in Cryptoassets’ Legal Nature and Governance: Searching for Clear Boundaries or Working for their Removal?

Abstract

The increase in the number of disputes before courts and regulatory authorities requires legal scholars to finally question the legal nature of cryptoassets. The few legislative frameworks already in force show the limits of a state-based regulation addressed both to captivate the FinTech industry through the ‘intangible asset’ of legal certainty and to avoid stifling the development of distributed ledger technology (DLT) and blockchains. However, these aims can conflict with regulatory capital market objectives, especially with market integrity and investor protection. ‘Exchange platforms’ and initial coin offerings can cause fraud and scams. Currently, these concepts affect ‘only’ private and commercial law, but what will happen when public law dimension is also affected? It is likely that the wait to find out will not be long if we consider the emergence of securities tokenization. Thus, the time has come to decide whether to clarify the legal boundaries between cryptoassets and fiat money, securities and commodities or to use this new technology to have more efficient and less costly financial markets by removing the legal border between crypto space and the ‘physical world economy’. Considering this aspect, the involvement of international organizations should be encouraged.

Keywords: Cryptoassets, ICO, STO, DLT, Blockchains, crypto space, FinTech, financial instrument, legal nature, governance, capital markets regulation

JEL Classification: G18, G28, K10, K22