Defining and Regulating Cryptocurrency: Fake Internet Money or Legitimate Medium of Exchange?
![handle is hein.journals/dltr17 and id is 71 raw text is: DEFINING AND REGULATING
CRYPTOCURRENCY: FAKE INTERNET MONEY
OR LEGITIMATE MEDIUM OF EXCHANGE?
SUSAN ALKADRIt
ABSTRACT
Digitalization makes almost everything quicker, sleeker, and
more efficient. Many argue cryptocurrency is the future of money
and payment transfers. This paper explores how the unique nature
of cryptocurrencies creates barriers to a strict application of
traditional regulatory strategies. Indeed, state and federal
regulators remain uncertain if and how they can regulate this
cutting-edge technology. Cryptocurrency businesses face
difficulty navigating the unclear regulatory landscape, and
consumers frequently fall prey to misinformation. To reconcile
these concerns, this paper asserts cryptocurrency functions as
currency or money and should be treated as such for
regulatory purposes. It also proposes each state implement a
uniform cryptocurrency-specific framework following the
Uniform Regulation of Virtual-Currency Business Act. Such a
harmonious approach would reduce compliance costs for
cryptocurrency businesses, protect consumers, and provide
satisfactory state and federal oversight.
INTRODUCTION
In the final weeks of 2017, cryptocurrencyl mania skyrocketed,
garnering widespread media attention and consumer interest. As a result,
t Duke University School of Law, J.D. expected May, 2019; B.S. in Psychology,
University of California, Davis, June, 2015.
1 This paper uses the term cryptocurrency to refer to decentralized virtual
currencies utilizing a cryptographic protocol that manages the creation of new
units of the currency through a peer-to-peer network ... [where creation] happens
through a process called mining. For a straightforward explanation and
comparison of centralized and decentralized virtual currencies, see TEX. DEP'T OF
BANKING, SUPERVISORY MEMORANDUM 1037, REGULATORY TREATMENT OF
VIRTUAL CURRENCIES UNDER THE TEXAS MONEY SERVICES ACT (2014)
[hereinafter Memorandum 1037]. Original terminology, such as digital or
virtual currency, is retained in any statutory or proposed definitions. The
Financial Action Task Force (FATF), an independent inter-governmental body
that investigates and recommends global anti-money laundering (AML) and
counter-terrorism financing (CTF) standards, has also issued a useful report
defining types of virtual currencies. FIN. ACTION TASK FORCE, FATF REPORT:](ViewImageLocal?handle=hein.journals/dltr17&div=4&collection=&method=preview&ext=.png&size=3)
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Defining and Regulating Cryptocurrency: Fake Internet Money or Legitimate Medium of Exchange?
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