Cryptoassets : the structural coupling between law and technology torwards the configuration of B-property and its relevance for the international law

다국어 초록 (Multilingual Abstract)

Abstract

In January 2018, ten years after the disruption of Bitcoin, the total market capitalization of virtual currencies reached more than $800 billion dollars and materialized the global expansion of a new category of property enabled by technology means, instead of legal arrangements enforced by trust-based centralized systems. Whether the rise of cryptoassets and automized systems for ownership validation entail a significant impact to the contemporary legal system, and whether this phenomena embodies a special relevance for the international law are still unresolved issues.

Based on Luhmann contributions on the social systems theory and the autopoiesis of law, this research states that cryptoassets represent a particular expression of the “structural coupling” between law and technology towards the configuration of what this study calls B-property, a new LegalTech institution, which expresses the adjustive resonance between law and technology in a particular level of structure to communicate ownership and property in contemporary society.

Some legal scholars have attempted to analyze the impact of cryptoassets in the international and domestic legal system. Nonetheless, available contributions explore the subject in an isolated manner, under narrow perspectives and particular legal regimes, without a proper recognition of the subject in its global scale and significance for the legal system as a whole. As a result, the scarcity of systemic approaches is remarkable, while the current literature provides a fragmented assistance for international legal scholars in the analyzis of the subject.

Rooted in the concept of blockchain and property, B-property refers and embodies the legal argumentation upon this emerging category of property, enabled by technological means instead of centralized legal arrangements to validate, distribute, and administrate ownership. This emerging institution, thus, represents a new step towards a larger process of transformation of the legal system: the automation of law and the legal practice, whereby states are called to perform a central functionality to bring certainty and enforcement upon the substantive and procedural content of rights and obligations held by individuals and corporations in such novel technological settings.

B-property denotes the activation of practical responses of the legal system in the international and domestic spheres, and the adjustment of normative structures through the progressive codification of bespoke legal schemes thereof. Thus, the development and evolution of the B-property, as novel legal institution, primarily concerns the positive law and the detectable state practice related to the codification of these special schemes to regulate the matter.

The findings of this study suggest that B-property is a new legal institution identifiable since 2018, rather than 2008, the year of arisen of cryptoassets as disruptive technology, after a process of ‘structural coupling’ between law and technology placed between 2015 to 2019. The study found that during 2013 to 2019 three different stages of development complete this evolutionary process of law: (i) First, from 2013 to 2017, when states and international organizations were engaged with the subject though the firsts official statements on cryptoassets; (ii) second, from 2017 to 2018, when states and international organizations moved forward the elaboration of the first guidelines, high level counseling groups, legal studies, public consultations, and the establishment of special authorities to the subject, (iii) third, from 2018 to 2019, the period when the first bespoke regulations on cryptoassets are detectable across several states all over the world.

목차 (Table of Contents)

• Table of Contents
• Abstract iii
• Acknowledge v
• Table of Contents ix
• List of Figures and Tables xiii
• List of Abbreviations xiv
• Chapter 1. Introduction 1
• Background of the Study and Central Legal Issues Concerning the Rise of Cryptoassets 1
• Purpose and Hypothesis of the Study 7
• Theoretical Underpinning of the Study 7
• Brief Literature Review 10
• Structure and Methodology of the Study 13
• Chapter 2 – Cryptoassets and its Relevance to the Contemporary Legal System 18
• I. Cryptoassets Conceptual Underpinnings 18
• II. Relevant Definitions and Legal Issues 20
• 1. Blockchain and Distributed Ledger Technology 20
• 1) Consensus and Blockchain Networks v Trust-Based Financial Models 21
• 2. Bitcoin, Coins, Tokens, and Virtual Currencies 23
• 1) Coins and Tokens 25
• 2) Assets Creation 27
• 3) Cryptocurrencies 27
• 3. Stable-Coins 30
• 1) China, the Crypto-Yuan and Sovereign Cryptocurrency Projects 32
• 4. Blockchain Wallets 36
• 1) Cold Wallet 37
• 2) Hot Wallet 37
• 3) Robo-Coins 38
• 5. Exchange Platforms and Robo-Coins 39
• 6. Public and Private Keys 42
• 7. Cryptoassets and Digital Assets 45
• 1) Evolution of Relevant Concepts 47
• 2) Close and Permisionless Cryptoassets Networks. 48
• Concluding Remarks 51
• Chapter 3. The Practice of International Organizations Concerning Cryptoassets 53
• I. The Relevance of Practice of International Organization to the Formation of New Rules in the International Law 54
• II. The Practice of most Relevant International Organizations Concerning Cryptoassets 57
• 1. The G20 Leaders Declaration 2018 and 2019. 57
• 1) The Argentina G20 Leaders’ Declaration 2018 58
• 2) The Osaka G20 Leaders’ Declaration 2019 59
• 3) Future Outlook 60
• 2. The Financial Action Task Force 61
• 1) Guideline on Virtual Currencies Key Definitions and Potential AML/CFT Risk, 2014 62
• 2) Guidance for Risk-Based Approached. Virtual Currencies, 2015 - 2019 62
• 3) Future Outlook 64
• 3. The International Monetary Fund and World Bank 65
• 1) Bali Fintech Agenda 66
• 2) Future Outlook 68
• 4. The World Trade Organization 69
• 1) First WTO Report: Can Blockchain Revolutionize International Trade? 69
• 2) Second WTO Report: Blockchain and DLT in Trade. A Reality Check 71
• 3) Future Outlook 72
• Concluding Remarks 73
• Chapter 4 - The Theory of Law as a Social Systems and its Relevance for Contemporary Legal Developments towards the Configuration of B-Property 74
• I. Luhmann Theory of Law as a Social System 77
• 1. Law as an Autopoietic System 80
• 2. The Normative Closure of the Legal System 83
• 3. Self-Reference 85
• II. The Evolution of Law under Luhmann Theory 86
• 1. The Function of Law Under the Social System 88
• 2. The elements of the evolution of law: variation, selection and stabilization 90
• III. The structural coupling under Luhmann theoretical developments 94
• 1. Modernity and technology as sources of legal development 95
• Concluding Remarks 98
• Chapter 5 - The B-Property and the Structural Coupling between Law and Technology. The Rise of Cryptoassets 100
• I. Variation, Selection and Stabilization in the Rise of B-Property 103
• II. Variation in the Co-relation of law and technology. Decentralization, depersonalization and global scalation of crypto assets 105
• 1. Decentralization 106
• 2. Depersonalization 109
• 1) Pseudonymization 110
• 2) Autonomous Systems and Electronic Person 113
• 3. Global Scalation 114
• III. Selection in the Co-Relation of Law and Technology. The Rise of B-property 116
• 1. Property as a legal structure 117
• 2. Crypto assets beyond contemporary discussions on property 122
• IV. Stabilization in the Co-Relation of Law and Technology. The B-Property and the Positive Law 123
• 1. B-property and the Positive Law 124
• Concluding Remarks 127
• Chapter 6 – The B-Property as an Emerging Legal Institution. 130
• The Practice of State 130
• I. The Relevance of State Practice to the Formation of New Rules in the International Law, and the B-Property 130
• II. The Rise of B-Property across the World 136
• III. Case Studies. The State Practice on B-Property Across Selected Jurisdictions 149
• 1. Abu Dhabi 150
• 1) First Official Statement 150
• 1) Definition 150
• 2) Relevant Regulations and Legal Approach 151
• 3) Future Outlook 152
• 2. Bermuda 153
• 1) First Official Statement 153
• 2) Definition 153
• 3) Relevant Regulations and Legal Approach 154
• 4) Future Outlook 156
• 3. European Union 157
• 1) First Official Statement 157
• 2) Definition 158
• 3) Relevant Instruments and Legal Approach 158
• 4) Future Outlook 162
• 4. France 164
• 1) First Official Statement 164
• 2) Definition 164
• 3) Relevant Regulations and Legal Approach 165
• 4) Future Outlook 167
• 5. Gibraltar 169
• 1) First Official Statement 169
• 2) Definition 169
• 3) Relevant Regulations and Legal Approach 170
• 4) Future Outlook 171
• 6. Japan 172
• 1) First Official Statement 172
• 2) Definition 173
• 3) Relevant Regulations and Legal Approach 174
• 4) Future Outlook 178
• 7. Malta 179
• 1) First Official Statements 179
• 2) Definition 180
• 3) Relevant Regulations and Legal Approach 181
• 4) Future Outlook 184
• 8. Russia 185
• 1) First Official Statement 185
• 5) Definition 185
• 6) Relevant Regulations and Legal Approach 186
• 7) Future Outlook 188
• 9. Republic of Korea 189
• 1) First Official Statement 189
• 2) Definition 189
• 3) Relevant Regulations and Legal Approach 190
• 4) Future Outlook 193
• 10. Switzerland 194
• 1) First Official Statement 194
• 2) Definition 194
• 3) Relevant Regulation and Legal Approach 195
• 4) Future Outlook 197
• 11. Other Relevant Official Statements across The World 198
• 1) Algeria 199
• 2) China 200
• 3) Germany 201
• 4) United Kingdom 202
• 5) United States 203
• IV. Common Features on the State Practice Concerning the Regulation of B-Property 203
• V. Judicial Decisions on B-Property 207
• 1. Cryptopia Case – Hight Court of New Zealand (2020) 207
• 2. B2C2 ltd v Quoine Pte Ltd Case – Singapore International Commercial Law (2019) 210
• 3. Mt. Gox Ltd v Z1 - Tokyo District Court, Civil Division (2015) 212
• VI. How to Regulate B-Property 214
• Concluding Remarks 215
• Chapter 7 - Conclusions 219
• References 226