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Everything You Need to Know About Cryptocurrency Regulation

Originally posted on UpCounsel by Gary Ross.



What are cryptocurrencies?



What is blockchain?



Regulation in the US – Utility Tokens v. Investment Tokens


Security Tokens


  1. An ​investment of money
  2. in a ​common enterprise
  3. with an ​expectation of profits
  4. predominantly from the efforts of others



Utility Tokens





State Regulation


Regulation Abroad – The Ever-Shifting Jurisdictional Question


Suspending Cryptocurrencies



Regulating Cryptocurrencies


Cryptocurrencies as Commodities




Monero: The Dark Coin

Lately I have been investing more and more into some of the popular alt-coins. One of my favorite websites is called This site allows me to look up a list of the top currencies on the market right now and sort with different filters. The list is defaulted on the market cap of the coin. This is important because this is basically the valuation of the entire currency in the default of USD after conversion. You can also sort by price, volume, circulating supply and 24 hour change. Numbers are updated in real time. This is a very powerful tool for doing swap research.

While on this site I kept seeing a coin called Monero(XMR). It has been in the top 10 for a while now and currently has the 11th highest market cap of all the coins around $7b and a coin price of $460.

Monero has been around since April 2014 and has a heavy focus on Privacy and decentralization. The coin is mineable and records transactions publicly via ledger. Monero’s main objective is to obscure the sender to receiver and the amount transferred. This gives a more traceless system. Some argue that this could be dangerous giving the transaction agents a mask. This brings controversy because people assume it will be used for illegal activities.

Monero basically blew up in 2016 and experienced a ton of growth in its market cap and volume because it was adopted in the darkNet site MarketAlphaBay, which was later closed in July 2017 due to criminal activity.

How it works: Monero uses uses uses stealth addresses, confidential transactions and stealth hidden ring signatures to hide the origins, transaction amounts and destinations of coins. A holder still gets all the benefits of a normal decentralized cryptocurrency just with an added layer of anonymity. The coin also cannot be blacklisted based in its previous activity and can be mutually interchangeable.

Monero has been accepted in many dark places on the web due to its attraction to dark/illicit activity. Because of its visibility in the marketplaces and ability to shield users identity it is less speculative than other popular and similar coins. Monero will be capped at 18 million coins and will rely on supply and demand of the coin to determine price and mining will take another 8 years to reach total coins mined.

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Lately the coin has had tremendous growth during the past few weeks. There have been many rumors in the US about which coins are contenders to be added to the widely popular coin exchange app Coinbase and Monero due to its market cap and volume definitey seems to be a contender.








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Bitcoin: Back to Basics, A History And Summary

 This past week Bitcoin reached a high of approximately $19,500. Seems like “bitcoin” is the internets newest mainstream buzz word.

Let me take you back a little:

On May 22, 2010, a developer bought two pizzas using 10,000 units of a then-little-known digital currency called bitcoin” (Price, 2017). A developer, Laszlo Hanyecz, used 10,000 Bitcoins to purchase two large pizzas from a Papa Johns. Although it was a very simple transaction, the event had started the cryptocurrency craze around the world because it showed the idea of cryptocurrency was in fact possible. In the early stages of bitcoin, people were skeptical about the possibilities. To many, it seemed like monopoly money with no true value. The skepticism was about whether Bitcoin and other cryptocurrencies were going to be accepted and if there were truly any benefits.

Bitcoin is the most well-known cryptocurrency in today’s world. “On October 2008, A person, or perhaps a group of people, going by the name Satoshi Nakamoto published a paper outlining a peer-to-peer electronic cash system” (Abridged, 2017). The idea of Bitcoin was born and developers continued to work on making the idea a reality. In 2008 the idea of creating a currency that no government had control over was unthinkable. People from all different demographics shared an equal amount of concern about the digital currency. The bases of currency and money is trust. The two parties participating in a transaction must trust and agree upon the true value of the paper with the number “5” written across the top. In the United States, the citizens all trust and agree upon the value of the money we use; however, many citizens were concerned about how bitcoin was going to change the currency system. The developers continued along with the new idea and by 2010, Bitcoin was able to be used to purchase goods; however, the value of one bitcoin was worth less than one cent and many stores didn’t accept it as a form of currency.  As time went on, the progression of Bitcoin continued.

Bitcoin is part of a larger type of currency called “digital currency” or “cryptocurrency”. With paper currency and money in every country around the world, the government controls it. The government is able to oversee the process of transactions and sets guidelines for the use of the money; however, this is different for cryptocurrency. Cryptocurrency is, “divorced from governments and central banks”(Weller, 2017). With paper money, the government is in charge of regulating the “value” of money and trying to control the economy with it; however, cryptocurrency is very different from that. The idea of cryptocurrency is that there is no government attachment to the currency. No government owns cryptocurrency, this means that there is no third-party regulation of the coin. The one thing that controls the digital currency are the users of it. Cryptocurrency is based on peer-to-peer interaction. The users regulate themselves through technology set in place by the developers like blockchains and smart contracts. To many, cryptocurrency seems to be a useless and corrupting; however, the introduction of cryptocurrency will change how the world handles transactions of money and currency.

The word “cryptocurrency” has a secretive and illegal connotation and the idea of no third-party regulations scares many people from supporting the digital currency; however, the technology behind cryptocurrency, blockchain, allows for peer-to-peer interaction, giving more transparency to the movement of money. Marvin (2017) writes, “Think of blockchain as a historical fabric underneath recording everything that happens exactly as it occurs. Then the chain stitches that data into encrypted blocks that can never be modified and scatters the pieces across a worldwide network”. The Blockchain allows for every transaction to be recorded at the exact moment it happens with no third-party altercations. Meaning no one has complete power over the information being recorded. The Blockchain also has a public ledger that gives everyone the right to see the transactions, increasing the transparency. And finally with the information being stored on different networks all across different networks, there is no single point of failure. If one computer’s information gets hacked, the network removes that computer from the system and reconnects with other computers that are safe. With the implemented technology set into place, third party regulation is no longer needed, restoring the democracy in money.

Blockchain technology has many other uses besides cryptocurrency. Blockchain is simply a way to record any type of digital transaction that exists between two peers. The technology can be incorporated into many other uses, for example banking and accounting. Ittay Eyal, a researcher in the Department of Computer Science at Cornell University, states “The fact that there is a single agreed-upon chain onto which all transactions are placed means that one cannot double-spend the same coin in two conflicting transactions”(Eyal, 2017). Since digital currency is a set of algorithms and codes, there is a chance for counterfeiting that is hard to detect. This is the largest problem with cryptocurrency; however, the blockchain corrects this. When the same bitcoin or digital currency is used again, the blockchain recognizes this since every previous transaction is recorded on one public ledger. There is no confusion because all the information is on a single ledger. Also, the basis of this technology can be incorporated into online banking and accounting. The reason many accounting companies don’t prefer digital accounting is because of the ease of alterations by unauthorized users; however, the blockchain prevents this from happening. Since the blockchain is encrypted and stored on a network of computers throughout the world, there is no single point of access. This protects the business’s accounting information.

There are many pros and cons within the cryptocurrency world. In the video called, “Bitcoin: Pros, Cons and Coins” created by Forbes, both Bitcoin merchants and investors weigh in on the topic of the pros and cons of cryptocurrency. The pros presented throughout the video were ease of transferability. Since cryptocurrency is digital and peer-to-peer, the digital currency doesn’t have to go through a third-party when completing a transaction. This means that there are no fees attached to the transfer of the currency. Also with no third-party control, like countries, there is no need to exchange for a new type of currency when doing a transfer of currency. Another pro to cryptocurrency is developers and hackers are invited to test the limits of the security around the coin. The developers see the flaws in the system and making updates to the technology; however, cons are present. One of the cons of cryptography is the fluctuating prices. The volatility makes it very hard to price and keep track of the values of transactions since the values are always changing. The price constantly changes because of user’s actions. Since the users of bitcoins constantly buy and sell bitcoins, the value changes. The changing values make it difficult to continually update the values of one’s cryptocurrency.Another downfall is security of the currency. In order for the security of the currency to work, the developers must stay ahead of the speed of computers.

The two large pizzas that were purchased with 10,000 units of bitcoin would now be worth $100,000,000. As cryptocurrency becomes increasing popular, many people are taking to investing in it. Since the values of the currency continues to go up because of supply and demand, people purchase the digital currency and hold on to it. Skoyles (2015) writes an article about the process of investing. Skoyles writes, “At the moment the most common approach to investing in bitcoin is to just buy some.” The biggest problem with investing in cryptocurrency is the volatility of the currency. The value of the currency can decrease by a dramatic amount.

The words “bitcoin” and “cryptocurrency” have been thrown around the last few years. Although many people share fear of the idea of a digital currency with no regulations, the introduction of  digital currencies into the new world of technology will have many benefits. In the world of money, peer-to-peer transactions allows for an increase in transparency between the two parties. This is all possible with taking out the third-party and having the blockchain. There is no regulation; however, the blockchain gives the users a secure platform for transactions by recording every transaction at the exact moment and by storing the information on different networks throughout the entire world. The blockchain technology can be implemented into the world of banking and accounting. Digital currencies and the technology behind the currencies will influence the way world controls money.




An Abridged History of Bitcoin (2017, November 19). In New York Times. Retrieved October 30, 2017.

Eyal, I. (2017). Blockchain Technology: Transforming Libertarian Cryptocurrency Dreams to Finance and Banking Realities. Computer (00189162), 50(9), 38-49. doi:10.1109/MC.2017.3571042

Soppe, Taylor. “Bitcoin: Pros, Cons and Coins.” Forbes, 2014. Accessed 13 Nov. 2017.


Price, R. (2017, May 22). Someone in 2010 bought 2 pizzas with 10,000 bitcoins — which today would be worth $20 million. In Business Insider. Retrieved October 30, 2017.

Skoyles, J. (2015, Apr). Should I invest in bitcoin? New Statesman, , 21. Retrieved from

Treleaven, P., Gendal Brown, R., & Yang, D. (2017). Blockchain Technology in Finance. Computer (00189162), 50(9), 14-17. doi:10.1109/MC.2017.3571047

Weller, Chris. “Bitcoin is going wild — here’s what the cryptocurrency is all about.” Business Insider, 27 May 2017. Accessed 1 Nov. 2017.

IOTA Moves to the Top 5 in Market Cap Thanks to Microsoft.

I have been fooling around with cryptocurrencies for a while now and a few days ago one really just caught my attention. IOTA. The coin a which is a play off the phase “IoT or Internet of Things” is a coin/cryptocurrencies created to be traded between different machines on the “Internet of Things”. This coin caught my attention because it does not use classic Blockchain technology that we have seen on other very popular cryptocurrencies such as Bitcoin, Ethereum or LiteCoin, instead it uses Directed Acyclic Graph technology, which is a blockless ledger. IOTA refers to its DAG technologie as “tangle”.  Confirmation times are fast and transactions are basically free. As of Dec. 2017. The market cap made it the 4th largest cryptocurrency by market cap, which is around $12 billion. IOTA was created in 2015. These coins are not able to be mined so there was a set amount that was created 2,779,530,283,277,761. In May 2017 IOTA was listed on its first exchange: Bitfinex and is now also listed on Binance as well.

I follow a lot of tech/coin personalities on Instagram and this was getting a lot of attention. At the time the coin was selling for approx. $3 dollars and in a day or two went to $5.5 and has since retracted to mid $3’s. Since I first started trading crypto I had only used the widely popular american exchange “coinbase”. Because this currency doesn’t sell as a fiat currency pair such as IOTA/USD I had to first convert my USD to ETH or BTC and then trade indirectly on a separate exchange “Binance” which is a UK based platform. Binance is one of the top 5 crypto trading platforms in the world according to

Another big reason this coin has become popular is because in the past week Microsoft made a big announcement that they were going to collaborate and partner with IOTA coin. This made the currency grow in value with a 90% increase in market cap basically launching it into the 4th position. IOTA has previously partnered with large companies such as Samsung, Cisco, and Volkswagen. Tangle will help with the large process of trading information Business-to-Business between these large corporations using the technology. The tangle system is designed to allow users to create transactions by validation (making sure all transactions are secure, immutable and without fees). The no-fee part of the technology model is huge for information sharing between businesses because tiny micropayments for information between businesses cannot be handled well and complicates the transactions on a large scale. IOTA hopes their technology and the tangle structure will allow a widespread of micropayments for data between companies. This will allow for the transfer of data and information from all kinds of IoT devices with little to no fees to give a greater feeling of interconnectedness between smart technology machines.


Top 5 Cryptocurrencies by Market Cap










The Next Big Thing in Crypto: Asset Tokenization







