blockchain - IVIR

Trust in context: The impact of regulation on blockchain and DeFi external link

Bodó, B. & Filippi, P. de

Regulation & Governance, 2024

Abstract

Trust is a key resource in financial transactions. Traditional financial institutions, and novel blockchain-based decentralized financial (DeFi) services rely on fundamentally different sources of trust and confidence. The former relies on heavy regulation, trusted intermediaries, clear rules (and restrictions) on market competition, and long-standing informal expectations on what banks and other financial intermediaries are supposed to do or not to do. The latter rely on blockchain technology to provide confidence in the outcome of rules encoded in protocols and smart contracts. Their main promise is to create confidence in the way the blockchain architecture enforces rules, rather than to trust banks, regulators, and markets. In this article, we compare the trust architectures surrounding these two financial systems. We provide a deeper analysis of how proposed regulation in the blockchain space affects the code- and confidence-based architectures which so far have underwrote DeFi. We argue that despite the solid safeguards and guarantees which code can offer, the confidence in DeFi is still very much dependent on more traditional trust-enhancing mechanisms, such as code governance, and antifraud regulation to address some of the issues which currently plague this domain, and which have no immediate, purely software-based solutions. What is more, given the risks of bugs or scams in the DeFi space, regulation and trusted intermediaries may need to play a more active role, in order for DeFi to gain the trust of the next generation of users.

Bibtex

Article{nokey,
	title = {Trust in context: The impact of regulation on blockchain and DeFi},
	author = {Bodó, B. and Filippi, P. de},
	url = {https://onlinelibrary.wiley.com/doi/abs/10.1111/rego.12637},
	doi = {https://doi.org/10.1111/rego.12637},
	year = {2024},
	date = {2024-10-06},
	journal = {Regulation & Governance},
	abstract = {Trust is a key resource in financial transactions. Traditional financial institutions, and novel blockchain-based decentralized financial (DeFi) services rely on fundamentally different sources of trust and confidence. The former relies on heavy regulation, trusted intermediaries, clear rules (and restrictions) on market competition, and long-standing informal expectations on what banks and other financial intermediaries are supposed to do or not to do. The latter rely on blockchain technology to provide confidence in the outcome of rules encoded in protocols and smart contracts. Their main promise is to create confidence in the way the blockchain architecture enforces rules, rather than to trust banks, regulators, and markets. In this article, we compare the trust architectures surrounding these two financial systems. We provide a deeper analysis of how proposed regulation in the blockchain space affects the code- and confidence-based architectures which so far have underwrote DeFi. We argue that despite the solid safeguards and guarantees which code can offer, the confidence in DeFi is still very much dependent on more traditional trust-enhancing mechanisms, such as code governance, and antifraud regulation to address some of the issues which currently plague this domain, and which have no immediate, purely software-based solutions. What is more, given the risks of bugs or scams in the DeFi space, regulation and trusted intermediaries may need to play a more active role, in order for DeFi to gain the trust of the next generation of users.},
	keywords = {blockchain, Regulation, trust},
}

Beyond financial regulation of crypto-asset wallet software: In search of secondary liability external link

Barbereau, T. & Bodó, B.

Computer Law & Security Review, vol. 49, num: 105829, 2023

Abstract

Since Bitcoin, the blockchain space considerably evolved. One crucial piece of software to interact with blockchains and hold private-public key pairs to distinct crypto-assets and securities are wallets. Wallet software can be offered by liable third-parties (‘custodians’) who hold certain rights over assets and transactions. As parties subject to financial regulation, they are to uphold Anti-money Laundering and Combating the Financing of Terrorist (AML/CFT) standards by undertaking Know-Your-Customer (KYC) checks on users of their services. In juxtaposition, wallet software can also be issued without the involvement of a liable third-party. As no KYC is performed and users have full ‘freedom to act’, such ‘non-custodial’ wallet software is popular in criminal undertakings. They are required to interact with peer-to-peer applications and organisations running on blockchains whose benefits are not the subject of this paper. To date, financial regulation fails to adequately address such wallet software because it presumes the existence of a registered, liable entity offering said software. As illustrated in the case of Tornado Cash, financial regulation fails to trace chains of secondary liability. Alas, the considered solution is a systematic surveillance of all transactions. Against this backdrop, this paper sets forth an alternative approach rooted in copyright law. Concepts that pertain to secondary liability prove of value to develop a flexible, principles-based approach to the regulation of non-custodial wallet software that accounts for both, infringing and non-infringing uses.

Bibtex

Article{nokey,
	title = {Beyond financial regulation of crypto-asset wallet software: In search of secondary liability},
	author = {Barbereau, T. and Bodó, B.},
	url = {https://www.sciencedirect.com/science/article/pii/S0267364923000390},
	doi = {https://doi.org/10.1016/j.clsr.2023.105829},
	year = {2023},
	date = {2023-06-22},
	journal = {Computer Law & Security Review},
	volume = {49},
	number = {105829},
	pages = {},
	abstract = {Since Bitcoin, the blockchain space considerably evolved. One crucial piece of software to interact with blockchains and hold private-public key pairs to distinct crypto-assets and securities are wallets. Wallet software can be offered by liable third-parties (‘custodians’) who hold certain rights over assets and transactions. As parties subject to financial regulation, they are to uphold Anti-money Laundering and Combating the Financing of Terrorist (AML/CFT) standards by undertaking Know-Your-Customer (KYC) checks on users of their services.
In juxtaposition, wallet software can also be issued without the involvement of a liable third-party. As no KYC is performed and users have full ‘freedom to act’, such ‘non-custodial’ wallet software is popular in criminal undertakings. They are required to interact with peer-to-peer applications and organisations running on blockchains whose benefits are not the subject of this paper. To date, financial regulation fails to adequately address such wallet software because it presumes the existence of a registered, liable entity offering said software. As illustrated in the case of Tornado Cash, financial regulation fails to trace chains of secondary liability. Alas, the considered solution is a systematic surveillance of all transactions.
Against this backdrop, this paper sets forth an alternative approach rooted in copyright law. Concepts that pertain to secondary liability prove of value to develop a flexible, principles-based approach to the regulation of non-custodial wallet software that accounts for both, infringing and non-infringing uses.},
	keywords = {blockchain, Crypto-assets, decentralised finance, non-custodial wallet, Regulation, secondary liability},
}

Maintaining trust in a technologized public sector external link

Bodó, B. & Janssen, H.

Policy and Society, 2022

Abstract

Emerging technologies permeate and potentially disrupt a wide spectrum of our social, economic, and political relations. Various state institutions, including education, law enforcement, and healthcare, increasingly rely on technical components, such as automated decision-making systems, e-government systems, and other digital tools to provide cheap, efficient public services, and supposedly fair, transparent, disinterested, and accountable public administration. The increased interest in various blockchain-based solutions from central bank digital currencies, via tokenized educational credentials, and distributed ledger-based land registries to self-sovereign identities is the latest, still mostly unwritten chapter in a long history of standardized, objectified, automated, technocratic, and technologized public administration. The rapid, (often) unplanned, and uncontrolled technologization of public services (as happened in the hasty adoption of distance-learning and teleconferencing systems during Corona Virus Disease (COVID) lockdowns) raises complex questions about the use of novel technological components, which may or may not be ultimately adequate for the task for which they are used. The question whether we can trust the technical infrastructures the public sector uses when providing public services is a central concern in an age where trust in government is declining: If the government’s artificial intelligence system that detects welfare fraud fails, the public’s confidence in the government is ultimately hit. In this paper, we provide a critical assessment of how the use of potentially untrustworthy (private) technological systems including blockchain-based systems in the public sector may affect trust in government. We then propose several policy options to protect the trust in government even if some of their technological components prove fundamentally untrustworthy.

Bibtex

Article{nokey,
	title = {Maintaining trust in a technologized public sector},
	author = {Bodó, B. and Janssen, H.},
	doi = {https://doi.org/https://doi.org/10.1093/polsoc/puac019},
	year = {0519},
	date = {2022-05-19},
	journal = {Policy and Society},
	abstract = {Emerging technologies permeate and potentially disrupt a wide spectrum of our social, economic, and political relations. Various state institutions, including education, law enforcement, and healthcare, increasingly rely on technical components, such as automated decision-making systems, e-government systems, and other digital tools to provide cheap, efficient public services, and supposedly fair, transparent, disinterested, and accountable public administration. The increased interest in various blockchain-based solutions from central bank digital currencies, via tokenized educational credentials, and distributed ledger-based land registries to self-sovereign identities is the latest, still mostly unwritten chapter in a long history of standardized, objectified, automated, technocratic, and technologized public administration. The rapid, (often) unplanned, and uncontrolled technologization of public services (as happened in the hasty adoption of distance-learning and teleconferencing systems during Corona Virus Disease (COVID) lockdowns) raises complex questions about the use of novel technological components, which may or may not be ultimately adequate for the task for which they are used. The question whether we can trust the technical infrastructures the public sector uses when providing public services is a central concern in an age where trust in government is declining: If the government’s artificial intelligence system that detects welfare fraud fails, the public’s confidence in the government is ultimately hit. In this paper, we provide a critical assessment of how the use of potentially untrustworthy (private) technological systems including blockchain-based systems in the public sector may affect trust in government. We then propose several policy options to protect the trust in government even if some of their technological components prove fundamentally untrustworthy.},
	keywords = {blockchain, frontpage, Technologie en recht, trust},
}

The rise of NFTs: These aren’t the droids you’re looking for external link

Bodó, B., Giannopoulou, A., Quintais, J. & Mezei, P.

European Intellectual Property Review, 2022

Abstract

Non-fungible tokens (NFTs) are hailed as revolutionary tools that will empower artists and revolutionize copyright management and remuneration. This article explores their copyright relevance, and it describes how copyright might apply in relation to NFT creation and trading. In doing so, it provides an overview of the ecosystem of actors built around NFTs, and it analyzes the role of these actors according to the European copyright normative framework.

Bibtex

Article{nokey,
	title = {The rise of NFTs: These aren’t the droids you’re looking for},
	author = {Bodó, B. and Giannopoulou, A. and Quintais, J. and Mezei, P.},
	url = {https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4000423},
	year = {0104},
	date = {2022-01-04},
	journal = {European Intellectual Property Review},
	abstract = {Non-fungible tokens (NFTs) are hailed as revolutionary tools that will empower artists and revolutionize copyright management and remuneration. This article explores their copyright relevance, and it describes how copyright might apply in relation to NFT creation and trading. In doing so, it provides an overview of the ecosystem of actors built around NFTs, and it analyzes the role of these actors according to the European copyright normative framework.},
	keywords = {blockchain, Copyright, digital art, frontpage, non-fungible tokens},
}

Putting Data Protection by Design on the Blockchain external link

Giannopoulou, A.

European Data Protection Law Review, vol. 7, num: 3, pp: 388-399, 2021

Abstract

The principle of data protection by design, as it is enshrined in article 25 of the GDPR, is difficult to apply in blockchains. This article will assess how the reliance on asymmetric encryption and other privacy enhancing technological architectures -necessary in a blockchain-based system- approach both user control and data protection by design compliance from the single scope of anonymization and unlinkability. Data subjects’ rights, accountability, and the potential shortcomings of applied technological constraints are thus sidelined. Ultimately, this limited understanding of technological privacy, acts as a misguiding set of principles for technological co-regulation through standardisation in blockchains. The standardization of these choices without a holistic analysis of data protection by design imperatives could ultimately weaken the position of data subjects, whose trust in the technological protections of personal data might prove to be relatively misplaced.

Bibtex

Article{Giannopoulou2021,
	title = {Putting Data Protection by Design on the Blockchain},
	author = {Giannopoulou, A.},
	doi = {https://doi.org/10.21552/edpl/2021/3/7},
	year = {1022},
	date = {2021-10-22},
	journal = {European Data Protection Law Review},
	volume = {7},
	number = {3},
	pages = {388-399},
	abstract = {The principle of data protection by design, as it is enshrined in article 25 of the GDPR, is difficult to apply in blockchains. This article will assess how the reliance on asymmetric encryption and other privacy enhancing technological architectures -necessary in a blockchain-based system- approach both user control and data protection by design compliance from the single scope of anonymization and unlinkability. Data subjects’ rights, accountability, and the potential shortcomings of applied technological constraints are thus sidelined. Ultimately, this limited understanding of technological privacy, acts as a misguiding set of principles for technological co-regulation through standardisation in blockchains. The standardization of these choices without a holistic analysis of data protection by design imperatives could ultimately weaken the position of data subjects, whose trust in the technological protections of personal data might prove to be relatively misplaced.},
	keywords = {anonymity, blockchain, Data Protection by Design, encryption, EU General Data Protection Regulation, frontpage, Privacy},
}

The Rise of Non-Fungible Tokens (NFTs) and the Role of Copyright Law – Part II external link

Quintais, J., Bodó, B., Giannopoulou, A. & Mezei, P.

2021

Bibtex

Online publication{Quintais2021c,
	title = {The Rise of Non-Fungible Tokens (NFTs) and the Role of Copyright Law – Part II},
	author = {Quintais, J. and Bodó, B. and Giannopoulou, A. and Mezei, P.},
	url = {http://copyrightblog.kluweriplaw.com/2021/04/22/the-rise-of-non-fungible-tokens-nfts-and-the-role-of-copyright-law-part-ii/},
	year = {0422},
	date = {2021-04-22},
	keywords = {blockchain, Copyright, frontpage, NFT},
}

The Rise of Non-Fungible Tokens (NFTs) and the Role of Copyright Law – Part I external link

Quintais, J., Bodó, B., Giannopoulou, A. & Mezei, P.

2021

Bibtex

Online publication{QuintaisetalNFTPartI,
	title = {The Rise of Non-Fungible Tokens (NFTs) and the Role of Copyright Law – Part I},
	author = {Quintais, J. and Bodó, B. and Giannopoulou, A. and Mezei, P.},
	url = {http://copyrightblog.kluweriplaw.com/2021/04/14/the-rise-of-non-fungible-tokens-nfts-and-the-role-of-copyright-law-part-i/},
	year = {0414},
	date = {2021-04-14},
	keywords = {blockchain, Copyright, frontpage},
}

Blockchain and the Law: A Critical Evaluation external link

Quintais, J., Bodó, B., Giannopoulou, A. & Ferrari, V.

Stanford Journal of Blockchain Law & Policy, vol. 2, num: 1, 2019

Bibtex

Article{Quintais2019b,
	title = {Blockchain and the Law: A Critical Evaluation},
	author = {Quintais, J. and Bodó, B. and Giannopoulou, A. and Ferrari, V.},
	url = {https://stanford-jblp.pubpub.org/pub/blockchain-and-law-evaluation},
	year = {0116},
	date = {2019-01-16},
	journal = {Stanford Journal of Blockchain Law & Policy},
	volume = {2},
	number = {1},
	pages = {},
	keywords = {blockchain, frontpage},
}

Blockchain and smart contracts: the missing link in copyright licensing? external link

Bodó, B., Gervais, D.J. & Quintais, J.

International Journal of Law and Information Technology, vol. 2018, num: 4, pp: 311-336, 2018

Abstract

This article offers a normative analysis of key blockchain technology concepts from the perspective of copyright law. Some features of blockchain technologies—scarcity, trust, transparency, decentralized public records and smart contracts—seem to make this technology compatible with the fundamentals of copyright. Authors can publish works on blockchain creating a quasi-immutable record of initial ownership, and encode ‘smart’ contracts to license the use of works. Remuneration may happen on online distribution platforms where the smart contracts reside. In theory, such an automated setup allows for the private ordering of copyright. Blockchain technology, like Digital Rights Management 20 years ago, is thus presented as an opportunity to reduce market friction, and increase both licensing efficiency and the autonomy of creators. Yet, some of the old problems remain. The article examines the differences between new, smart-contract-based private ordering regime and the fundamental components of copyright law, such as exceptions and limitations, the doctrine of exhaustion, restrictions on formalities, the public domain and fair remuneration.

Bibtex

Article{Bodó2018d,
	title = {Blockchain and smart contracts: the missing link in copyright licensing?},
	author = {Bodó, B. and Gervais, D.J. and Quintais, J.},
	url = {https://www.ivir.nl/publicaties/download/IJLIT_2018.pdf
https://academic.oup.com/ijlit/advance-article/doi/10.1093/ijlit/eay014/5106727},
	doi = {https://doi.org/10.1093/ijlit/eay014},
	year = {0927},
	date = {2018-09-27},
	journal = {International Journal of Law and Information Technology},
	volume = {2018},
	number = {4},
	pages = {311-336},
	abstract = {This article offers a normative analysis of key blockchain technology concepts from the perspective of copyright law. Some features of blockchain technologies—scarcity, trust, transparency, decentralized public records and smart contracts—seem to make this technology compatible with the fundamentals of copyright. Authors can publish works on blockchain creating a quasi-immutable record of initial ownership, and encode ‘smart’ contracts to license the use of works. Remuneration may happen on online distribution platforms where the smart contracts reside. In theory, such an automated setup allows for the private ordering of copyright. Blockchain technology, like Digital Rights Management 20 years ago, is thus presented as an opportunity to reduce market friction, and increase both licensing efficiency and the autonomy of creators. Yet, some of the old problems remain. The article examines the differences between new, smart-contract-based private ordering regime and the fundamental components of copyright law, such as exceptions and limitations, the doctrine of exhaustion, restrictions on formalities, the public domain and fair remuneration.},
	keywords = {blockchain, Copyright, frontpage, Licensing, smart contracts},
}

Keyword: blockchain

Trust in context: The impact of regulation on blockchain and DeFi external link

Abstract

Links

Bibtex

Beyond financial regulation of crypto-asset wallet software: In search of secondary liability external link

Abstract

Links

Bibtex

Maintaining trust in a technologized public sector external link

Abstract

Links

Bibtex

The rise of NFTs: These aren’t the droids you’re looking for external link

Abstract

Links

Bibtex

Putting Data Protection by Design on the Blockchain external link

Abstract

Links

Bibtex

The Rise of Non-Fungible Tokens (NFTs) and the Role of Copyright Law – Part II external link

Links

Bibtex

The Rise of Non-Fungible Tokens (NFTs) and the Role of Copyright Law – Part I external link

Links

Bibtex

Blockchain and the Law: A Critical Evaluation external link

Links

Bibtex

Blockchain and smart contracts: the missing link in copyright licensing? external link

Abstract

Links

Bibtex