下面为大家整理一篇优秀的paper代写范文- The regulation of the CrytoCurrency Market,供大家参考学习,这篇论文讨论了对货币市场的监管。在数字货币中,加密技术被用于监管货币单位的生成,并验证资金的转移,独立于央行进行操作。在过去四年里,加密货币交易员的数量急剧增加,与加密货币市场相关的法律问题也增加了。蓬勃发展的加密货币市场吸引了众多投资者涌入市场,但加密货币并非由中央银行发行,也没有任何政府机构担保,因此,许多政府都对投资发出了警告。尽管美国和欧盟都有最好的监管规定,但加密货币协议的固有性质允许它以假名在世界任何地方或从任何地方转移,因此,非法交易不会通过监管完全消除。
Chapter 1. Introduction to the CrytoCurrency Market
Oxford Dictionaries.com has defined the cryptocurrency as "a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank." According to the “Coin Market Cap.com” there are 2,090 cryptocurrency trading in the market as of Oct 17, 2018, the total market Cap in the cryptocurrency market is $210,563,016,976, and 24 hour trading volume is $12,270,813,501 (Coin Market Cap.com, 2018). The Bitcoin as the earliest invented cryptocurrency accounted for 53.8% of the total market. The Bitcoin was designed by a Japanese Professor whose name is Satoshi Nakamoto in 2009, the initial intention to design the cryptocurrency is to eliminate other payment platform also known as the “middleman” from payment transactions (Nakamoto, 2009). With the elimination of the “middleman” allow individuals to sent payment directly to payee without any extra charge from payment platform as transaction fees and no personal information need to get exchanged as usual money transfer from the banks.
All cryptocurrency relied on Blockchain technology to support the computing algorithm and storage of the recording ledger, Bitcoin was able to be generated through “mining” in the early days, as the amount of Bitcoin remained as a fixed number, trading in the public platform became a more viable option (investopedia, 2018). Among the 2,090 cryptocurrencies that were trading, the price ranged from several cents to over six thousands dollars, Bitcoin has the highest monetary value hiking over $6,500 dollars. According to the Business insider (2017), the value of cryptocurrency has raised over 400% for the past year, as for the Bitcoin, the trading price reached a historical peak of $5,856.10 on October 13, 2017 and kept climbing. With hiking trading prices the cryptocurrency has attracted many investors into the market, the number of cryptocurrency trader has been drastically increased for the past four years and legal issues associated with cryptocurrency market have been increased as well.
Chapter 2. Legal issues and Risk in the Cryptocurrency Market
The unique feature of cryptocurrency allow individuals to make payments, transfers and trading online, while remain anonymous, this feature indeed protected privacy of the trading individuals but also raise many more legal concerns at the same time. Forbes reported that the surging passion on cryptocurrency also caught regulators around the world off-guard, which resulted in grey areas from legal perspective (Forbes, 2018). In this section, a number of legal issues in the cryptocurrency market would be discussed.
1. The argument on definition of cryptocurrency and investment concerns
U.S. Treasury has recognized Bitcoin and other cryptocurrency as a currency, however, not everyone agreed with such definition, for example the Former Federal Reserve Chairman Alan Greenspan claimed that Bitcoin prices are unsustainably high after surging 89-fold in a year and that the virtual money isn’t currency (White, 2015). The surging cryptocurrency market has attracted numerous investors flood into the market, but the cryptocurrency was not issued by a central bank nor guaranteed by any government agencies, therefore, many governments have issued warning regarding to investments. According to Reuters, all cyrptocurrency exchanges in Japan were asked to perform an internal audit in 2017 to review all risks associated with its operation and the internal audit report on their system risk management to Japanese financial regulators (Reuters, 2017). This request was made shortly after Coincheck reported over half a billion dollars loss caused by security breach that related to hacking.
Japan was not along on issue warnings to investment in the cryptocurrency markets, according to a legal survey conducted by U.S. Global Legal Research Center on governmental law and regulation on Cryptocurrency around the world, it reflected that most countries have identified the shortfalls of investments in in the cryptocurrency markets (U.S. Global Legal Research Center, 2018). Those warnings were issued by central banks in most countries, the purpose of such warnings including educate citizens about cryptocurrency and its differences with other investment products and actual monetary assets that were issued and guaranteed by the states.
2. ICO and other Frauds
ICO also known as “Initial Coin Offering”, which is similar to “Initial Public Offering” in financial investment market, but unlike “Initial Public Offering” where investors would receive stocks, investors would receive new cryptocurrency instead with “Initial Coin Offering”. Similar to the reasons why investors would purchase stocks in “Initial Public Offering”, investors purchase cryptocurrency in hopes that the cryptocurrency would perform well and provide exceptional return on investment in the future. Unlike “Initial Public Offering”, it has been well regulated by Securities and Exchange Commission (SEC) and other related agencies, “Initial Coin Offering” has not yet been regulated by law and has no government agencies oversee such process, thus, “Initial Coin Offering” can be used to bypass highly regulated capital-raising process required by Securities and Exchange Commission (SEC) or banks.
The U.S. Securities and Exchange Commission (SEC) has issued a warning at the end of 2017 to investors regarding to the concerns on the cryptocurrency and ICO markets because there is limited investors protections in the market with huge opportunities for fraud and manipulation.
From News report on Fortune, on Oct 1st 2017, U.S. Securities and Exchange Commission (SEC) has filed its first fraud charges against two “Initial Coin Offering”, the two cryptocurrency marketed as “REcoin” and “DRC” by Maksim Zaslavskiy, these two cryptocurrency were claimed backed by Real Estate and investments in diamonds respectively. According to statement released by U.S. Securities and Exchange Commission (SEC), there were no investment made on behalf of investors and SEC argues that the cryptocurrency they were selling “Des not really exist” , this statement means that the two cryptocurrency marketed as “REcoin” and “DRC” were not really ICOs, because they were not running on the blockchains. This is a case similar to one famous global scam –OneCoin, and U.S. Securities and Exchange Commission (SEC) decided that “Initial Coin Offering” and other trading cryptocurrencies also securities, thus fraudulent cryptocurrency issuers would also be prosecuted in U.S. , but not all other countries announced similar regulations yet.
3. Money Laundering
The culture of laundering money in the Bitcoin network is so prevalent there is even a website called bitlaunder.com. The company bitlaunder.com claims they are "experts at laundering Bitcoin" and they "use the most sophisticated methods available to completely anonymize your Bitcoins and obscure their history from forensic tracing”.
The U.S. Government Accountability Office reported that the pseudonymity in VCs makes it difficult for the government to detect money laundering and other financial crimes, and it may be necessary to rely on international cooperation to address these crimes. Similarly, the European Banking Authority claimed that regulations should strive for "global coordination, otherwise it will be difficult to achieve a successful regulatory regime". In spite of the best regulations from the United States and the European Union, the inherent nature of the Bitcoin protocol allows for pseudonymous transfers of Bitcoins to or from anywhere in the world, so illegal transactions will not be completely eliminated through regulations.
Many of the warnings issued by various countries also note the opportunities that cryptocurrencies create for illegal activities, such as money laundering and terrorism. Some of the countries surveyed go beyond simply warning the public and have expanded their laws on money laundering, counterterrorism, and organized crimes to include cryptocurrency markets, and require banks and other financial institutions that facilitate such markets to conduct all the due diligence requirements imposed under such laws. For instance, Australia, Canada, and the Isle of Man recently enacted laws to bring cryptocurrency transactions and institutions that facilitate them under the ambit of money laundering and counter-terrorist financing laws.
4. Taxation
One of the many questions that arise from allowing investments in and the use of cryptocurrencies is the issue of taxation. In this regard the challenge appears to be how to categorize cryptocurrencies and the specific activities involving them for purposes of taxation. This matters primarily because whether gains made from mining or selling cryptocurrencies are categorized as income or capital gains invariably determines the applicable tax bracket. The surveyed countries have categorized cryptocurrencies differently for tax purposes, as illustrated by the following examples:
Israel → taxed as asset
Bulgaria → taxed as financial asset
Switzerland → taxed as foreign currency
Argentina & Spain → subject to income tax
Denmark → subject to income tax and losses are deductible
United Kingdom: → corporations pay corporate tax, unincorporated businesses pay income tax, individuals pay capital gains tax
Mainly due to a 2015 decision of the European Court of Justice (ECJ), gains in cryptocurrency investments are not subject to value added tax in the European Union Member States.
In most of the countries surveyed for this report that have or are in the process of devising taxation rules, the mining of cryptocurrencies is also exempt from taxation. However, in Russia mining that exceeds a certain energy consumption threshold is taxable.
Chapter 3. Regulation of cryptocurrency market in U.S, E.U. and China
China
In 2013, China was one of the biggest drivers of the bitcoin price, when it was trading just over $1,000. This was of course before many of the new digital tokens — of which there are over 1,000 now — had come to market. The Chinese saw it at the time as an alternative investment to the stock market and housing market that were becoming increasingly risky. In 2017, China outright banned initial coin offerings (ICOs). The group of regulators that issued the ban provided a list of 60 major ICO platforms for local financial watchdogs to inspect. That same year, China’s biggest cryptocurrency exchanges halted trading for domestic customers at the behest of the government. At the beginning of 2018, China moved to block foreign trading platforms operating in China.
U.S.
The U.S. approach to regulating the crypto-industry has been to work within its current laws rather than introduce new ones, as well as highlighting the risks of people involved in ICOs and trading.
E.U.
Chapter 4 Future Expectation of the CrytoCurrency Market
Growth of Blockchain technology
The CrytoCurrency Market relied on the Blockchain technology, and the Blockchain currently have two major applications at current stage, the first application is digital cryptocurrency such as the Bitcoin and the second major application is decentralized privacy and data protection as Blockchain use peer-to-peer nodes in the network. After Nakamato announced invention of Bitcoin in 2008, several other digital crypto currencies were introduced, such as Certcoin by Fromknet and Namecoin based on Bitcoin’s blockchain with modification, as the director of the Financial Crimes Enforcement Network - Jennifer Shasky Calvery suggested that CrytoCurrency could become a significant player in the financial system (2013). While the future usage of Bitcoin is still in debate, because there is a up limit of Bitcoin as a currency, Nassim Taleb believes that the framework of Bitcoin, which is Blockchain technology would have better application, where he stated “Bitcoin is the beginning of some-thing great, as Bitcoin is a currency without a government, something necessary and imperative and it would take a long time to establish confidence” in a new payment method system (2013).
With existing scholar and business have confidence in the Blockchain system, some business have plans to apply Blockchain in its business, as NASDAQ have announced its NASDAQ Private Market platform will adopt a Blockchain digital-ledger technology to manage equities in the platform for its client (Orcutt, 2015). Moreover, U.S. Federal Reserve System (2015) announced they plan to adopt Blockchain as a payment system in its system as well, which they call a “digital value transfer vehicle” to process interbank payments in the U.S. banking system. With U.S. Federal Reserve’s initiatives more company in the U.S. are more likely to use Blockchain technology in the finance industry and in digital payment services. Also with the initiative from U.S. Federal Reserve more attention will be draw to Blockchain technology and its application in financial service industry.
Technology companies like Amazon and Google could provided banking services through block chain technology (Bloomberg, 2018). As the block chain technology was able to protect private information and used a decentralized information transmission model that limited possibilities for phishing and other types of fraudulent acts. Current Scholar researched showed confidence in the Block chain technology and the adoption, some business also eager to apply the technology in its business. NASDAQ have announced its NASDAQ Private Market platform will adopt a Block chain digital-ledger technology to manage equities in the platform for its client (Orcutt, 2015). U.S. Federal Reserve System (2015) also made announcement on its plan to adopt Block chain as a payment system in its system as well, which they call a “digital value transfer vehicle” to process interbank payments in the U.S. banking system. With U.S. Federal Reserve’s initiatives on use Blockchain technology in the finance services industry and in digital payment services, more attention will be draw to Blockchain technology and its application.
Future Legal Expectation
Given the anonymous feature of cryptocurrency and its reliance on the supporting Blockchain technology, concerns regarding to hacking and breach of Internet security protection.
Chapter 5 Conclusion
CrytoCurrency like Bitcoin still experiencing massive debates on its usages and legitimacy, the controversy and legal issues related with the currency itself and supporting technology needs systemic regulations to support the future growth.
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