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45 W. St. U. L. Rev. 1 (2017-2018)
Cryptocurrency Regulations and Enforcement in the U.S.

handle is hein.journals/wsulr45 and id is 7 raw text is: Cryptocurrency Regulations and Enforcement in the U.S. By Scott D. Hughes* ABSTRACT Decentralized cryptocurrencies are a new type of technology that can be used in several applications, such as transferring money, recording data, and investing. Unlike most businesses that can be invested in, decentralized cryptocurrencies do not have a specific legal entity that is responsible for consumer protection. The virtual and decentralized nature of this technology makes the application of traditional legal frameworks untenable. Furthermore, the absence of a specific legal entity makes enforcement of any new legal framework tenuous. For these two reasons, the current regulatory status of decentralized cryptocurrencies, or digital currencies, is enigmatic. This article contributes to the increasingly important discussion on the patchwork body of U.S. law pertaining to virtual currencies and blockchain technology. The main contribution of this article is to provide a systematic literature review of the governmental guidance releases, agencies, task forces, and proposed and approved bills pertaining to virtual currencies. This article explores the various definitions of virtual currencies provided by local, state, and federal governing bodies. Also, an in- depth review of the enforcement actions taken is documented for the following agencies: the Commodity Futures Trading Commission, Financial Crimes Enforcement Network, Securities Exchange Commission, Department of Justice, Internal Revenue Service, and the Federal Trade Commission. The current legal status in five states that has pioneered the path to regulating Bitcoin and other virtual currencies is examined. These states include New York, California, Washington State, Florida, Hawaii, and Arizona. The difficult challenge for lawmakers is to design laws that stimulate innovation while protecting consumer welfare and satisfaction. This article hopes to help solve this challenge by synthesizing the large body of disparate literature on virtual currency regulation in the U.S. TABLE OF CONTENTS INTRODUCTION ............................................................. 2 I. AN OVERVIEW OF CRYPTOCURRENCIES AND THE BLOCKCHAIN TECHNOLOGY ...................................................... 3 A . Cryptocurrencies ............................................... 4 B . B lockchains .................................................... 6 HI. THE LEGAL DEFINITIONS OF CRYPTOCURRENCY AND BLOCKCHAIN ..... 7 * Scott D. Hughes is a licensed civil and criminal attorney in California practicing in State and Federal Court. He is a graduate of the Blockchain Academy in London and regularly litigates cases before various government agencies.

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