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Abstract

Details

An Introduction to Algorithmic Finance, Algorithmic Trading and Blockchain
Type: Book
ISBN: 978-1-78973-894-0

Article
Publication date: 1 December 2020

Gary Low and Terence Tan

To address recent cases and the applicable legal principles relating to cryptocurrency, and to contribute to legal thought in this developing area of law.

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Abstract

Purpose

To address recent cases and the applicable legal principles relating to cryptocurrency, and to contribute to legal thought in this developing area of law.

Design/methodology/approach

This article considers recent cryptocurrency related cases in Singapore, Canada and the United Kingdom, and then considers the implications of the developing law in relation to proper causes of action and issues of practical asset recovery relating to the enforcement of judgments.

Findings

The intangible and highly movable nature of cryptocurrency places a premium on decisive asset recovery. The cases also suggest that injunctions remain a useful and effective debt recovery tool, especially when coupled with quick investigative action to trace cryptocurrency payments. However, the law remains unsettled as to the most appropriate cause of action for a claim in cryptocurrency or how a debt in cryptocurrency can be subject to execution. These issues raise the fundamental question of the nature of cryptocurrency, whether it belongs to an existing category of property, or if it is sui generis.

Practical implications

Cryptocurrency remains relatively novel and usage is increasing but not widespread. Users of cryptocurrency and lawyers involved in transactions or disputes involving cryptocurrency would benefit from a broader understanding of the legal issues

Originality/value

This article provides expert analysis from experienced litigation lawyers familiar with the concepts behind cryptocurrency.

Details

Journal of Investment Compliance, vol. 21 no. 2/3
Type: Research Article
ISSN: 1528-5812

Keywords

Article
Publication date: 2 July 2018

Vadim Avdeychik and Justin Capozzi

This paper aims to provide an overview of recent US Securities and Exchange Commission (SEC) Division of Investment Management staff (“Staff”) guidance related to…

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Abstract

Purpose

This paper aims to provide an overview of recent US Securities and Exchange Commission (SEC) Division of Investment Management staff (“Staff”) guidance related to investment funds registered under the Investment Company Act of 1940 that seeks to provide exposure to cryptocurrencies or cryptocurrency-related products.

Design/methodology/approach

This paper provides analysis regarding the Staff’s view on registered investment companies that intend to invest in cryptocurrencies or cryptocurrency-related products, including an overview of the questions posed by the Staff with respect to registered investment companies that seek to hold cryptocurrencies or cryptocurrency-related products, which are divided into five categories: valuation, liquidity, custody, arbitrage (for exchange-traded funds) and potential manipulation and other risks.

Findings

The Staff is asking for additional information from industry participants to fully analyze and evaluate registered investment companies that seek to invest in cryptocurrencies.

Practical implications

The industry should continue to provide information to the Staff with the short-term goal of fostering an open dialogue and with the long-term goal of launching a registered investment company that invests in cryptocurrencies or cryptocurrency-related products.

Originality/value

This paper provides practical guidance from experienced lawyers of the Investment Company Act and Securities Act.

Article
Publication date: 23 November 2022

Peterson K. Ozili

The purpose of this study is to discuss the role of central bank digital currency (CBDC), Fintech and cryptocurrency for financial inclusion and financial stability.

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Abstract

Purpose

The purpose of this study is to discuss the role of central bank digital currency (CBDC), Fintech and cryptocurrency for financial inclusion and financial stability.

Design/methodology/approach

This study used critical discourse analysis to identify the benefits and risks of CBDC, Fintech and cryptocurrency for financial inclusion and financial stability.

Findings

Fintech, CBDC and cryptocurrency can increase financial inclusion by providing an alternative channel through which unbanked adults can access formal financial services. CBDC and Fintech services have the potential to preserve financial stability, while cryptocurrency presents financial stability risks that can be mitigated through effective regulation. This paper also identified some problems of CBDC, Fintech and cryptocurrency for financial inclusion and financial stability. This paper offered some insight about the future of financial inclusion and the future of financial stability.

Practical implications

Although CBDC, Fintech or cryptocurrency can extend financial services to unbanked adults and offer cost-efficient advantages, there are risk considerations that need to be taken into account when using CBDC, Fintech and cryptocurrency to increase financial inclusion and to preserve financial stability.

Originality/value

The literature has not identified the combined role of CBDC, Fintech and cryptocurrency for financial inclusion and financial stability. To the best of the author’s knowledge, this paper is the first paper to assess the combined role of CBDC, Fintech and cryptocurrency for financial inclusion and financial stability.

Details

Digital Policy, Regulation and Governance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2398-5038

Keywords

Article
Publication date: 11 October 2022

Aishath Muneeza, Saeed Awadh Bin-Nashwan, Magda Ismail Abdel Moshin, Ismail Mohamed and Abdelrahman Al-Saadi

This paper aims to examine the existing practice of accepting zakat payments using cryptocurrencies and crypto assets by discussing its Shariah issues.

Abstract

Purpose

This paper aims to examine the existing practice of accepting zakat payments using cryptocurrencies and crypto assets by discussing its Shariah issues.

Design/methodology/approach

This is qualitative research in nature, as unstructured interviews with experts in the field were conducted to understand the existing practice regarding zakat on cryptocurrencies/crypto assets while literature on the topic was reviewed to derive conclusions.

Findings

It is found that there are divergent views among contemporary Shariah scholars on the Shariah permissibility of cryptocurrency and crypto assets. As such, by evaluating the existing practices of some companies, this study has concluded that there is room to pay zakat using cryptocurrencies and from investments made on crypto assets. As long as they have been screened and classified as Shariah-compliant, they can be qualified to be part of one’s wealth from which zakat shall be paid. However, the findings of this research shall be subject to the fatwa and rules adopted in the specific jurisdiction in which the zakat payer resides. Laws made by the ruler to benefit the public ought to be considered in upholding the masalih (public interests) of all, which is in line with the legal maxim of “tasarruf al imam manut bi al-maslahah” (the ruler’s decision is dictated in favor of the people).

Originality/value

It is anticipated that the findings of this research will benefit zakat organizations and zakat payers in understanding how they should deal with cryptocurrencies and crypto assets in the collection and payment of zakat.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8394

Keywords

Article
Publication date: 6 October 2022

Yousra Trichilli and Mouna Boujelbéne

The purpose of this paper is to explore the relationship between Dow Jones Islamic Market World Index, Islamic gold-backed cryptocurrencies and halal chain in the presence…

Abstract

Purpose

The purpose of this paper is to explore the relationship between Dow Jones Islamic Market World Index, Islamic gold-backed cryptocurrencies and halal chain in the presence of state (regime) dynamics.

Design/methodology/approach

The authors have used the Markov-switching model to identify bull and bear market regimes. Moreover, the dynamic conditional correlation, the Baba, Engle, Kraft and Kroner- generalized autoregressive conditional heteroskedasticity and the wavelet coherence models are applied to detect the presence of spillover and contagion effects.

Findings

The findings indicate various patterns of spillover between halal chain, Dow Jones Islamic Market World Index and Islamic gold-backed cryptocurrencies in high and low volatility regimes, especially during the COVID-19 pandemic. Indeed, the contagion dynamics depend on the bull or bear periods of markets.

Practical implications

These present empirical findings are important for current and potential traders in gold-backed cryptocurrencies in that they facilitate a better understanding of this new type of assets. Indeed, halal chain is a safe haven asset that should be combined with Islamic gold-backed cryptocurrencies for better performance in portfolio optimization and hedging, mainly during the COVID-19 period.

Originality/value

To the best of the authors’ knowledge, this paper is the first research on the impact of the halal chain on the Dow Jones Islamic Market World Index return, Islamic gold-backed cryptocurrencies returns in the bear and bull markets around the global crisis caused by the COVID-19 pandemic.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8394

Keywords

Article
Publication date: 5 September 2022

Tareq Na’el Al-Tawil

The purpose of this paper is to provide a high-level analysis of the intersection emerging cryptocurrency sector with anti-money laundering (AML) regulations and…

Abstract

Purpose

The purpose of this paper is to provide a high-level analysis of the intersection emerging cryptocurrency sector with anti-money laundering (AML) regulations and risk-based AML diligence systems maintained by financial institutions.

Design/methodology/approach

The analysis begins with a description of cryptocurrencies, focusing specifically on how the supporting technologies and applications increase vulnerabilities. The information will lay the foundation for examining the vulnerabilities existing in the architecture of cryptocurrency technology, as well as potential targets for regulations. The second part of the analysis will then shift focus to defining the scope of the money laundering problem associated with cryptocurrencies. An in-depth understanding of the problem is necessary to inform tailored AML legislation and regulations. The third part of the analysis will explore emerging AML regulations that govern cryptocurrencies, focusing specifically on those being developed and implemented in the United Arab Emirates (UAE). The UAE regulations will then be compared to those of the USA and European Union (EU) for comparative analysis and best practices.

Findings

The UAE has a robust legal system aimed at bolstering AML efforts while supporting widespread integration of crypto assets into business and government operations. A review of the UAE’s legislative framework reveals critical issues. First, the current regulations do not cover decentralized finance (DeFi) and non-fungible tokens (NFTs). The absence of clear regulations for DeFi and NFT protocols has created a leeway for money laundering and related criminal activities. Second, there is a high level of fragmentation in the UAE’s legislative landscape. The UAE does not have uniform, national laws that apply to all the Emirates. Fragmentation is not unique to the UAE but a major global problem that affects the USA and EU. Therefore, it is necessary to adopt a tailored approach where standard rules and regulations are responsive to the diverse aspects of cryptocurrencies. The strategy is vital, as it will be impractical to create a single legislation or law that will cover all the crypto assets, including their diverse applications. Furthermore, the Financial Action Task Force (FATF) should develop a global standard that will support a unified/harmonized application of AML/counter-terrorist financing (CTF) laws and regulations related to cryptocurrencies and the blockchain technology.

Originality/value

The borderless nature of digital currency and exchanges means that the existing laws and regulations are inadequate to address cross-border money laundering activities. Thus, there is an urgent need of harmonizing global regulations to ensure uniformity in applications. The quest for harmonization should be a priority as the FATF works towards developing a global standard. The global standard will support a uniform application of AML/CTF laws and regulations related to cryptocurrencies and the blockchain technology.

Details

Journal of Money Laundering Control, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 19 September 2022

Christian Leuprecht, Caitlyn Jenkins and Rhianna Hamilton

This study aims to explain how cryptocurrency is leveraged for illicit purposes across the global financial system. Specifically, it establishes how cryptocurrency has…

Abstract

Purpose

This study aims to explain how cryptocurrency is leveraged for illicit purposes across the global financial system. Specifically, it establishes how cryptocurrency has been changing the nature of transnational and domestic money laundering (ML). It then assesses the effectiveness of conventional anti-money laundering (AML) policy and legislation against the proliferation of crypto laundering, using Canada as a critical case study.

Design/methodology/approach

Data was collected from court cases and secondary sources to build cross-case trends of cryptocurrency use in ML. Illicit International Political Economy forms the theoretical foundation for this study, whose contribution is situated in the current literature on crypto-ML.

Findings

This study finds that Bitcoin is common among crypto-money launderers, though most also use some form of alt-coin, and that the use of third-party currency exchanges is a prevalent method to create illicit funds and conceal proceeds of crime. The findings validate two hypotheses that illicit use of crypto is prevalent in the first two stages of ML, and that crypto is most often used in conjunction with other fiat currencies. Although law enforcement is improving on monitoring and understanding popular cryptocurrencies such as Bitcoin, alt-coins pose a significant challenge for criminal intelligence. New regulations for third-party currency exchanges are having a positive impact on curtailing crypto-laundering but are shown to be insufficient per se to contain the use of crypto in criminal activity.

Originality/value

This study contributes to a more robust understanding of the use of virtual currency in transnational and domestic ML. It contributes to an emerging body of literature on the role of technological change in enabling the global flow of illicit funds. It also informs public policy on virtual currency in general, and on AML regulation in Canada in particular.

Details

Journal of Financial Crime, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1359-0790

Keywords

Article
Publication date: 5 October 2022

Joseph Ejike Ojih, Parikshit Joshi, Ashish Mohture and Sushil Kumar Gupta

The purpose of this paper is to explore and address the possible reasons for the hesitancy in accepting cryptocurrency as an asset class by the world governments and…

Abstract

Purpose

The purpose of this paper is to explore and address the possible reasons for the hesitancy in accepting cryptocurrency as an asset class by the world governments and central banks. The behaviour of delaying the acceptance or using cryptocurrency has been termed as crypto-hesitancy.

Design/methodology/approach

To establish the conceptual understanding of crypto-hesitancy, the bibliometric analysis was performed through Bibliometrix and VOSviewer. Through keyword search technique this study has located 507 useful studies in Scopus database, which were used for the bibliometric analysis.

Findings

The findings of the study reveal that the government of developed and developing nations and central banks hesitate to regulate and accept cryptocurrency due to the following reasons: cryptocurrency’s ties to illegal activity, speculation and cryptocurrency’s capacity to circumvent government-imposed capital controls. The findings of this study can be used as platform to develop the construct – crypto-hesitancy – further and explore the empirical insights of it.

Originality/value

To the best of the authors’ knowledge, the construct crypto-hesitancy has not been evolved yet, which makes this study the first attempt to theoretically understand the concept and its evolution.

Details

Journal of Indian Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1755-4195

Keywords

Article
Publication date: 30 September 2022

Hajam Abid Bashir and Dilip Kumar

This paper aims to examine the impact of investor attention due to the COVID-19 pandemic, Twitter-based sentiment towards uncertainty and public sentiment on the…

Abstract

Purpose

This paper aims to examine the impact of investor attention due to the COVID-19 pandemic, Twitter-based sentiment towards uncertainty and public sentiment on the performance of cryptocurrencies.

Design/methodology/approach

The authors employ the simple linear regression, quantile regression (QR), the exponential generalised autoregressive conditional heteroskedasticity (EGARCH) model, and sentiment analysis to examine this phenomenon. The authors utilise the daily closing price of the 20 leading cryptocurrencies, the Google search volume index of the “Coronavirus” keyword, the Twitter-based economic uncertainty index, and textual data collected from the Reddit social media platform.

Findings

The results show that investor attention and Twitter uncertainty have a negative (positive) effect on cryptocurrency returns (volatility). The QR results indicate a heterogeneous effect of investor attention and Twitter economic uncertainty on cryptocurrency returns with a higher effect in the lower quantiles. The findings indicate that cryptocurrencies fail to act as a safe haven during this pandemic.

Originality/value

The study is amongst the very few studies that capture the impact of investor attention/sentiment due to COVID-19 on the performance of cryptocurrencies.

Details

Managerial Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0307-4358

Keywords

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