From headlines about multimillion-dollar losses to courtroom dramas involving disgraced crypto executives, the general public notion of blockchain can typically look like a reel of endless scandals.
Within the newest episode of The Clear Crypto Podcast, hosts Nathan Jeffay and Gareth Jenkinson reduce 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.
Similar 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, generally complicated names.
“Entrance-running securities trades occurs on a regular basis in conventional finance,” she stated.
“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 throughout the technical facets of the crypto neighborhood.”
In reality, a lot of as we speak’s most damaging crypto crimes are extremely technical exploits of blockchain protocols, typically dedicated by folks with deep data of the code.
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“If you happen to mess with the underlying system and the ordering of blocks, then sure, you should use that to your benefit,” Levin stated.
“It takes realizing the protocol code, realizing the completely different gamers, and having the ability to have a very deep understanding.”
Crime and punishment
That technical depth has created authorized and moral grey zones, particularly in instances of so-called white hat hackers, who exploit vulnerabilities, then return the stolen funds. “Against the law is a criminal offense is a criminal offense,” Levin famous.
“Claiming good intent doesn’t negate the crime or the weather of the crime. From a strictly authorized standpoint, you may nonetheless be charged.”
Nonetheless, enforcement isn’t at all times so black and white. “Maybe the DOJ or different investigators don’t put all 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 knowledge, you might need to delete the blockchain,” he stated. “But it surely doesn’t fairly work like that.”
To listen to the entire dialog on The Clear Crypto Podcast, hearken to the total episode on Cointelegraph’s Podcasts web page, Apple Podcasts or Spotify. And don’t overlook to take a look at Cointelegraph’s full lineup of different exhibits!
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