Who is Liable if a Cryptocurrency Protocol Fails?

23 Pages Posted: 23 Jul 2019 Last revised: 6 Sep 2019

Date Written: July 21, 2019

Abstract

Cryptocurrencies have entered the economy as alternative money, speculation objects, and utility tokens for digital platforms. Cryptocurrencies are based on cryptography-based asset disposals broadcast peer-to-peer to be validated according to consensus mechanisms in compliance with consented protocols. There several risks associated with the protocols, which may eventually result in the failure of a cryptocurrency. The question is then if anyone can be held liable for such a failure. Such liability is important for both victim compensation as well as the promotion of robust protocols. The paper discusses who can be held liable, possible legal bases for liability, and some legal gaps are identified.

Keywords: Blockchain, Cryptocurrencies, Liability, Open Source

JEL Classification: E42, G28, K13, K24

Suggested Citation

Østbye, Peder, Who is Liable if a Cryptocurrency Protocol Fails? (July 21, 2019). Available at SSRN: https://ssrn.com/abstract=3423681 or http://dx.doi.org/10.2139/ssrn.3423681

Peder Østbye (Contact Author)

Norges Bank ( email )

P.O. Box 1179
Oslo, N-0107
Norway

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