Meet the New Boss, Same as the Old Boss: How Federal Agencies Have Leveraged Existing Law to Regulate Cryptocurrency
Cryptocurrency and its increasingly varied uses present a new regulatory frontier. As is the case with many new technologies, criminals proved among the first adopters of cryptocurrency. For a time, it was not clear how the government would impose discipline on what seemed a lawless environment. Absent legislation on the subject, the Internal Revenue Service (IRS), the Financial Crimes Enforcement Network (FinCEN), the Commodity Futures Trading Commission (CFTC), and the Securities and Exchange Commission (SEC) have all leveraged existing laws to bring cryptocurrencies within their jurisdiction. These laws typically include a criminal element, though the agencies have generally opted for civil enforcement over referral to the Department of Justice (DOJ) for criminal prosecution.
In light of the above, this contribution provides a survey of how different agencies have regulated cryptocurrencies under their existing laws, and considers some criminal implications of this regulatory action. Part I provides background information on blockchain technology and initial coin offerings. Part II addresses actions that the IRS, CFTC, and FinCEN have taken to regulate this new technology. Part III focuses on the SEC’s approach, as the agency has thus far served as the industry’s primary regulator. The article concludes by identifying questions as to how this regulatory framework will function going forward.Subscribe to ACLR