From headlines about multimillion-dollar losses to courtroom dramas involving disgraced crypto executives, the general public notion of blockchain can typically seem to be a reel of unending scandals.
Within the newest episode of The Clear Crypto Podcast, hosts Nathan Jeffay and Gareth Jenkinson lower by means of the noise with visitor Jennie Levin, chief authorized and operations officer on the Algorand Basis, to discover what’s actually occurring and why it’s typically much less about crypto and extra about human misconduct.
Identical ol’ scams
Whereas mainstream protection typically fixates on collapsed exchanges like FTX, Levin factors out that the underlying misconduct often isn’t distinctive to crypto; it simply options new, typically complicated names.
“Entrance-running securities trades occurs on a regular basis in conventional finance,” she mentioned.
“That is only a manner of doing it utilizing the crypto trade. It’s native to the crypto trade, however the theme of the fraud taking place occurs elsewhere as nicely. There are simply methods to do it now inside the technical points of the crypto neighborhood.”
The truth is, a lot of right now’s most damaging crypto crimes are extremely technical exploits of blockchain protocols, typically dedicated by folks with deep information of the code.
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“If you happen to mess with the underlying system and the ordering of blocks, then sure, you need to use that to your benefit,” Levin mentioned.
“It takes understanding the protocol code, understanding the completely different gamers, and with the ability to have a very deep understanding.”
Crime and punishment
That technical depth has created authorized and moral grey zones, particularly in circumstances of so-called white hat hackers, who exploit vulnerabilities, then return the stolen funds. “Against the law is against the law is against the law,” Levin famous.
“Claiming good intent doesn’t negate the crime or the weather of the crime. From a strictly authorized standpoint, you possibly can nonetheless be charged.”
Nonetheless, enforcement isn’t at all times so black and white. “Maybe the DOJ or different investigators don’t put some of these white hat hacks first on their record,” Levin added, particularly when the losses are recovered or don’t meet federal thresholds.
Nonetheless, regulation continues to lag behind. Jenkinson famous that in some jurisdictions, regulators misunderstand how decentralized techniques work.
“If you happen to’re breaking the principles when it comes to holding information, you may need to delete the blockchain,” he mentioned. “But it surely doesn’t fairly work like that.”
To listen to the entire dialog on The Clear Crypto Podcast, take heed to the total episode on Cointelegraph’s Podcasts page, Apple Podcasts or Spotify. And don’t neglect to take a look at Cointelegraph’s full lineup of different exhibits!
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