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Blockchain and cryptocurrencies: a cross-border conundrum

Michael L. Spafford (Paul Hastings LLP in Washington, DC)
Daren F. Stanaway (Paul Hastings LLP in Washington, DC)
Sabin Chung (Paul Hastings LLP in Washington, DC)

Journal of Investment Compliance

ISSN: 1528-5812

Article publication date: 21 August 2019

Issue publication date: 16 October 2019

Abstract

Purpose

To analyze the CFTC’s approach to regulating cryptocurrencies and blockchain technologies in light of their cross-border nature, limitations on the CFTC’s extraterritorial authority, and the CFTC’s prerogative to work cooperatively with foreign regulators.

Design/methodology/approach

Discusses the principles set forth in CFTC Chairman Christopher Giancarlo’s White Paper regarding cross-border swap regulation; analyzes the similar nature of cross-border issues arising from regulation of cryptocurrencies and blockchain technologies; examines regulations and guidance implemented by foreign authorities in the blockchain and cryptocurrency space; and assesses the limitations of the CFTC’s extraterritorial authority.

Findings

The principles set forth in Chairman Giancarlo’s White Paper regarding cross-border swap regulation apply equally to blockchain technologies and cryptocurrencies, and as such, the CFTC may wish to pursue an analogous approach to regulating cryptocurrencies and blockchain technologies.

Practical implications

The CFTC should exercise deference to and cooperate with foreign counterparts to regulate cryptocurrencies and blockchain technologies that traverse international borders, thereby avoiding overlapping and potentially conflicting regulation while fostering an innovative growth environment for emerging technologies.

Originality/value

In-depth analysis and insight from experienced professionals in the CFTC and cross-border investigations and enforcement space.

Keywords

Acknowledgements

Editor’s Note: Special thanks from the authors to Paul Hastings Foreign Exchange Professional Lara Kaplan for her assistance.

Citation

Spafford, M.L., Stanaway, D.F. and Chung, S. (2019), "Blockchain and cryptocurrencies: a cross-border conundrum", Journal of Investment Compliance, Vol. 20 No. 3, pp. 10-19. https://doi.org/10.1108/JOIC-05-2019-0027

Publisher

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Emerald Publishing Limited

Copyright © 2019, Paul Hastings LLP.