In the first half of 2022, Bitcoin lost over half its value, and the correlation with the stock market jumped to over 60%. These patterns are both remarkable and hard to explain. Why do monetary policy, the economy, or wars matter for the value of cryptocurrencies? Why do cryptocurrencies behave like tech stocks? From an… Read More »
Decentralized fundraising through Initial Coin Offerings (ICOs) for early-stage ventures is one important new business model that has only become viable through blockchain technology and smart contracts. Utility tokens, voucher-like assets providing access to a service or product that a venture promises to provide in the future, are generally considered as perfectly disintermediated peer-to-peer transactions,… Read More »
For the past several years, investors around the world who are interested in owning and holding certain cryptoassets for the long term have had the opportunity to deposit their assets with various companies and protocols and earn interest. One such company is CoinLoan, based in Europe and regulated under applicable EU financial law. It offers… Read More »
Cryptocurrency Regulation in China In September 2021, China’s central bank, its highest court and procuracy, as well as seven other national government departments and agencies jointly enacted a legally binding Notice on Further Preventing and Disposing of the Risks of Speculative Trading in Virtual Currencies (“Notice”), marking the culmination of China’s yearslong war against cryptocurrencies.… Read More »
Imagine a company that invests in a portfolio of long-term financial assets. This company’s asset portfolio is, relative to the asset management industry, highly concentrated—a circumstance which naturally heightens the appetite of the company’s own investors to know more details of the assets in the portfolio. The company operates in an adolescent industry, and neither… Read More »
The following is an edited comment letter that was submitted to the Commodity Futures Trading Commission (CFTC, or Commission) on May 11th in regards to the Commission’s request for comment on FTX’s request to amend their derivatives clearing organization order to permit it to clear non-intermediated, margined products. All submitted comments can be viewed here. We are law professors… Read More »
The financial media provides information to investors by monitoring firms for malfeasance, such as fraud and excessive CEO pay (Miller, 2006; Core, Guay, and Larcker, 2008). The media also helps investors monitor more mundane corporate activities, such as periodic earnings announcements. However, it is unclear why certain firms get extensive media coverage, along with the resulting benefits,… Read More »
There is no lack of interest in new technologies such as distributed ledger technology (DLT) or smart contract technology (SCT). For enthusiasts, DLT and SCT are full of promise. Thanks to technology, the future is meant to be frictionless and more decentralized. However, interest in the “plumbing” underneath, which is required to implement the vision… Read More »
For the last year, participants in the growing financial technology (FinTech) sector have been anticipating new regulation for digital assets. On March 9, 2022, President Biden signed an executive order to begin the process of developing a new supervisory regime that will help the United States be a leader in the space and resolve the challenges associated… Read More »
I recently had the opportunity to testify before the U.S. Senate Committee on Banking, Housing and Urban Affairs in a hearing on “Understanding the Role of Digital Assets in Illicit Finance.” My testimony focused on the ways cryptocurrency is increasingly being used to facilitate existing and new crimes, as well as the challenges that cryptocurrency… Read More »
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