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 minimize by way 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 mentioned.
“That is only a manner of doing it utilizing the crypto business. It’s native to the crypto business, however the theme of the fraud taking place occurs elsewhere as properly. There are simply methods to do it now inside the technical facets of the crypto group.”
In reality, a lot of at present’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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“When you mess with the underlying system and the ordering of blocks, then sure, you should use that to your benefit,” Levin mentioned.
“It takes figuring out the protocol code, figuring out the totally different gamers, and having the ability to have a extremely 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 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’ll be able to nonetheless be charged.”
Nonetheless, enforcement isn’t all the time so black and white. “Maybe the DOJ or different investigators don’t put a lot of these white hat hacks first on their record,” Levin added, particularly when the losses are recovered or don’t meet federal thresholds.
However, regulation continues to lag behind. Jenkinson famous that in some jurisdictions, regulators misunderstand how decentralized programs work.
“When you’re breaking the foundations when it comes to holding knowledge, you may need to delete the blockchain,” he mentioned. “But it surely doesn’t fairly work like that.”
To listen to the whole dialog on The Clear Crypto Podcast, hearken to the complete episode on Cointelegraph’s Podcasts page, Apple Podcasts or Spotify. And don’t overlook to take a look at Cointelegraph’s full lineup of different reveals!
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