[2019-01-03] 7 Legal Questions That Will Define Blockchain in 2019

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Quote from: Lucius on January 05, 2019, 08:57:13 AM

Will the SEC define ‘sufficient decentralization?
Will a crypto ETF be granted?
Can blockchain systems comply with privacy regulations?
Will international regulators work together?
Will (and can) privacy coins be banned?
Will we be able to regulate decentralized exchanges?
Will developers be held responsible for violations of law?

1. No
2. Also no
3. No, unless the developer they turn it into strictly permissioned blockchain
4. Yes, but only to the some extent and because they have common enemy
5. Yes, unless they figure out criminal won't be affected by it or realize they could set honeypot on services/exchange which accept privacy coins
6. No, unless we're talking about fake DEX such as IDEX which require KYC and block IP from VPN, Tor, etc.
7. Yes, in fact it already happen and the victim was one of EtherDelta developer

Quote from: squatter on January 07, 2019, 03:03:17 PM

I figure Zcash must be more transparent (easier to analyze). I know that shielded transactions are rarely used on the network, so maybe that factors into it.

Additionally, AFAIK all exchange only generate transparent address and make analysis attempt easier.

They also have valid reason to do it since generate shielded transaction is far longer than transparent transaction.

Quote from: squatter on January 07, 2019, 03:03:17 PM

Coins like XMR will probably be relegated to the lower tier and offshore/unregulated exchanges.

DEX, atomic-swap & P2P trading as well

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Quote from: gentlemand on January 07, 2019, 02:45:40 PM

Quote from: squatter on January 07, 2019, 02:41:58 PM

I assumed the issue would be depositing from shielded addresses since that would hide previous transaction history and possibly raise AML policy issues. Why would Gemini/Coinbase care about withdrawing to shielded addresses? Couldn't customers just use shielded transactions after the initial withdrawal, or does that compromise their privacy?

Yup. I don't get it either. It seems like the wrong way round to me. I presume there's a reason for it. No idea what it is.

What is revealing is that neither have mentioned any interest in listing Monero. Kraken do though.

I figure Zcash must be more transparent (easier to analyze). I know that shielded transactions are rarely used on the network, so maybe that factors into it.

Both Gemini and Coinbase obviously make a legal distinction between shielded and unshielded transactions. Since Monero mandates anonymous transactions at the protocol level, I assume this means Gemini and Coinbase will never list it. Coins like XMR will probably be relegated to the lower tier and offshore/unregulated exchanges.

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Quote from: squatter on January 07, 2019, 02:41:58 PM

I assumed the issue would be depositing from shielded addresses since that would hide previous transaction history and possibly raise AML policy issues. Why would Gemini/Coinbase care about withdrawing to shielded addresses? Couldn't customers just use shielded transactions after the initial withdrawal, or does that compromise their privacy?

Yup. I don't get it either. It seems like the wrong way round to me. I presume there's a reason for it. No idea what it is.

What is revealing is that neither have mentioned any interest in listing Monero. Kraken do though.

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Quote from: gentlemand on January 07, 2019, 02:11:25 PM

Quote from: squatter on January 07, 2019, 01:58:43 PM

I was really surprised Gemini had the balls to list Zcash last year. Who knows, with Coinbase hinting at an altcoin/token listing spree, maybe they'll add a privacy coin themselves.

https://blog.coinbase.com/buy-and-sell-zec-on-coinbase-ccd0bbb642a9

"Initially, customers can send ZEC to Coinbase from both transparent and shielded addresses, but only send off Coinbase to transparent addresses. In the future, we’ll explore support for sending ZEC to shielded addresses in locations where it complies with local laws."#

https://medium.com/gemini/gemini-is-now-the-worlds-first-licensed-zcash-exchange-dfa7da992816

"At launch, Gemini will support deposits from unshielded or shielded addresses, but will only support withdrawals to unshielded addresses. We are working to support withdrawals to shielded addresses in the future."

Looks like it's privacy lite but all the same since it got the NYDFS stamp of approval it's an interesting development. My guess is they'll allow shielded withdrawals never, but the more interesting one is allowing shielded deposits from the off.

Ah, I didn't even notice Coinbase listed Zcash too.

I assumed the issue would be depositing from shielded addresses since that would hide previous transaction history and possibly raise AML policy issues. Why would Gemini/Coinbase care about withdrawing to shielded addresses? Couldn't customers just use shielded transactions after the initial withdrawal, or does that compromise their privacy?

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Quote from: squatter on January 07, 2019, 01:58:43 PM

I was really surprised Gemini had the balls to list Zcash last year. Who knows, with Coinbase hinting at an altcoin/token listing spree, maybe they'll add a privacy coin themselves.

https://blog.coinbase.com/buy-and-sell-zec-on-coinbase-ccd0bbb642a9

"Initially, customers can send ZEC to Coinbase from both transparent and shielded addresses, but only send off Coinbase to transparent addresses. In the future, we’ll explore support for sending ZEC to shielded addresses in locations where it complies with local laws."#

https://medium.com/gemini/gemini-is-now-the-worlds-first-licensed-zcash-exchange-dfa7da992816

"At launch, Gemini will support deposits from unshielded or shielded addresses, but will only support withdrawals to unshielded addresses. We are working to support withdrawals to shielded addresses in the future."

Looks like it's privacy lite but all the same since it got the NYDFS stamp of approval it's an interesting development. My guess is they'll allow shielded withdrawals never, but the more interesting one is allowing shielded deposits from the off.

Looking into whether these things have back doors is a journey into FUD hell so I can't be arsed.

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Quote from: gentlemand on January 06, 2019, 09:34:53 AM

Quote from: LeGaulois on January 06, 2019, 07:02:32 AM

To ban the privacy coins is something impossible to do unless they have access to the exchanges as they have with banks. How to do otherwise?

That's already happening in Japan and South Korea. It'll probably happen elsewhere.

Regulators will 'suggest' exchanges may want to delist privacy coins. If the suggestion isn't followed then they come back again with a rather firmer stance.

I was really surprised Gemini had the balls to list Zcash last year. Who knows, with Coinbase hinting at an altcoin/token listing spree, maybe they'll add a privacy coin themselves.

The Japanese government is known for having an authoritarian streak. It'll be interesting to see how things play out in the states by comparison.

Quote from: LeGaulois on January 07, 2019, 11:44:57 AM

We will always see a country who doesn't give a f**k to privacy coins, some countries will become the paradise to establish a crypto exchange.

In the context of fiat exchanges, governments like the US can always come after rogue exchanges through the banking system. But crypto-only exchanges in unfriendly jurisdictions are much harder to target since the US has no way to get its hands on the money. This is the ideal context for privacy coins until DEX protocols are more robust.

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Quote from: gentlemand on January 06, 2019, 09:34:53 AM

Quote from: LeGaulois on January 06, 2019, 07:02:32 AM

To ban the privacy coins is something impossible to do unless they have access to the exchanges as they have with banks. How to do otherwise?

That's already happening in Japan and South Korea. It'll probably happen elsewhere.

Regulators will 'suggest' exchanges may want to delist privacy coins. If the suggestion isn't followed then they come back again with a rather firmer stance.

Most countries/regulators already struggle with cryptos in general so imagine when they will then take care of the privacy coins.
We will always see a country who doesn't give a f**k to privacy coins, some countries will become the paradise to establish a crypto exchange.

There is also the DEXs, people will move to it. If you think about it, look at Binance I am sure its DEX is an anticipation

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Quote from: LeGaulois on January 06, 2019, 07:02:32 AM

To ban the privacy coins is something impossible to do unless they have access to the exchanges as they have with banks. How to do otherwise?

That's already happening in Japan and South Korea. It'll probably happen elsewhere.

Regulators will 'suggest' exchanges may want to delist privacy coins. If the suggestion isn't followed then they come back again with a rather firmer stance.

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Actually, only 2 of those are blockchain-related, the rest only apply to "cryptocurrency", some of which aren't even ysing blockchain, some which only has a blockchain but resemble proper crypto like Bitcoin in no other aspect.

I think the privacy aspect of public blockchains like Bitcoin's are overstated. You choose to use it, then yes, you should be aware of all the data stored, but none of that is stored by any central entity without your knowledge.

If you don't want a transparent ledger, you simply don't use it, or use a layer or privacy option, which Bitcoin won't disallow.

Regulations are actually aimed at businesses and corporations, not individuals freedoms to use their choice of money and certainly not open source initiatives.

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Want to kill the cryptocurrency industry? Answer YES to all the questions.
The most interesting question is about the blockchain systems and privacy regulations, I have never think about it. To ban the privacy coins is something impossible to do unless they have access to the exchanges as they have with banks. How to do otherwise?

Also, even if countries work together, not all countries will be able to spend millions and not all have the same resources and interests.
We could think about the G20 or Europe, they will just give directives but it will be up to the country to decide. Perhaps not with Europe since European laws are now stronger than the national laws.

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Quote from: Lucius on January 05, 2019, 08:57:13 AM

Will international regulators work together?[/li][/list]

So far the only international regulator I know working together is the European Union they are currently in their early stages of creating their cryptocurrency regulation, the organization of course consist of 28 European countries which I assume they will all follow not unless their own domestic law is stepping in the way. Hopefully the United Nations will come up something good for the rest of the world. If not the only possible thing to happen is countries will independently mirror other successful crypto countries like Japan and Korea.

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Quote from: Kakmakr on January 06, 2019, 03:58:56 AM

~ The SEC are looking for ways to "deny" Bitcoin ETFs, so they will define it to suite their agenda.

i don't think that's where they're coming from. their mission is to enforce the nanny state re: securities. of course they don't like opaque and loosely regulated offshore exchanges dictating the price of assets they oversee. so they obviously won't approve an ETF.

Quote from: Kakmakr on January 06, 2019, 03:58:56 AM

~ Yes, that is why Satoshi is not here anymore. Grin

you really think so? i remember peter todd being very paranoid about being termed a "developer" of any altcoins. he was very careful to be just an "advisor" with viacoin, zcash, etc. he said that's the advice he got from his lawyer.

i wonder what could happen.... Lips sealed

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Quote from: Lucius on January 05, 2019, 08:57:13 AM

7 Legal Questions That Will Define Blockchain in 2019

Will the SEC define ‘sufficient decentralization?
Will a crypto ETF be granted?
Can blockchain systems comply with privacy regulations?
Will international regulators work together?
Will (and can) privacy coins be banned?
Will we be able to regulate decentralized exchanges?
Will developers be held responsible for violations of law?

~ The SEC are looking for ways to "deny" Bitcoin ETFs, so they will define it to suite their agenda.
~ Nope
~ Nope
~ Yes, they all want to protect their own little empire.
~ Yes, but people will find ways to bypass these measures.
~ Who are "we"? Why do we want to regulate it?
~ Yes, that is why Satoshi is not here anymore. Grin

I hope this answers most of those burning questions. Tongue

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Even etf approves the regulations of dugital cryptocurrency
We need to wait two to three year form now how make strong produce how to use BLOCKCHAIN
And how to improve BLOCKCHAIN use from it to crypto transaction regulation to identify users

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Quote from: Lucius on January 05, 2019, 08:57:13 AM

Interesting questions and interesting comments on possible solutions, but do you think that all of them can bring final answers in 2019 or it will take years for that? I think we are still quite far from some global agreements when it comes to blockchain and cryptocurrency.

It will definitely take years. I believe the reason why regulators are so slow is the same why businesses, institutions and users aren't jumping on the crypto train - people still not sure if it's a legit thing or just a bubble. Maybe regulators think that the hype around ICO's and tokens will die on its own, so it's a waste of time to work on it now.

As for the questions of the article, they are so broad that the answer to them depends on the specific details.

Quote

Will we be able to regulate decentralized exchanges?

Some (many?) decentralized exchanged are not completely decentralized.

Quote

Can blockchain systems comply with privacy regulations?

There are tons of blockchain systems.

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7 Legal Questions That Will Define Blockchain in 2019

Will the SEC define ‘sufficient decentralization?
Will a crypto ETF be granted?
Can blockchain systems comply with privacy regulations?
Will international regulators work together?
Will (and can) privacy coins be banned?
Will we be able to regulate decentralized exchanges?
Will developers be held responsible for violations of law?

The SEC delivered some of its most important regulatory guidance of 2018 through conferences, interviews and personal statements. With each pronouncement, the SEC representative stated their views did not necessarily reflect the views of the SEC.

Looking back at the greatest hits, from “Every ICO I’ve seen is a security” to “If the network on which the token or coin is to function is sufficiently decentralized … the assets may not represent an investment contract” and “current offers and sales of ether are not securities transactions,” the SEC has not officially confirmed any of these statements and has instead clarified that staff views are non-binding and create no enforceable legal rights.

https://www.coindesk.com/7-legal-questions-that-will-define-blockchain-in-2019

Interesting questions and interesting comments on possible solutions, but do you think that all of them can bring final answers in 2019 or it will take years for that? I think we are still quite far from some global agreements when it comes to blockchain and cryptocurrency.

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