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With a new sheriff in the “wild west” of crypto trading, blockchain lawyers and participants in the $1.7 trillion digital asset market say stronger consumer protections are needed for the emerging industry. We hope that this will lead to the spread of this technology.
Chicago-based blockchain company Jurat announced on Tuesday that law enforcement actions can now be brought directly on the blockchain, an immutable distributed ledger that records data such as transactions between crypto wallets, FOX Business reported. I learned that they are planning to debut a technology to do this.
JTC, Jurat's native coin scheduled to be listed on the Bitmart exchange on Tuesday, recovers stolen coins, freezes accounts associated with illegal activities, and enforces legal action against so-called “smart contracts” Connects to state and federal court systems using technology that can. (Digital contracts stored on blockchain and automatically executed without intermediaries).
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Many in the crypto industry believe that the slow uptake of cryptocurrencies and blockchain technology since the birth of Bitcoin in 2009 is due to fear of investing in an inherently volatile and easily manipulated asset class. , blamed numerous scams reported in the media.
In November, a New York federal jury convicted former crypto golden boy Sam Bankman Freed of using the bankrupt cryptocurrency exchange FTX to defraud customers. Bankman Fried was convicted of stealing up to $8 billion in customer funds at his cryptocurrency trading company Alameda Research and using them to hedge risky bets. The collapse of stablecoin issuer Terraform Labs and crypto finance company Celius in 2022 also contributed to tens of billions of dollars in customer losses.
FTX co-founder Sam Bankman Fried will appear in a New York court on January 3, 2023. (Photographer: Stephanie Keith/Bloomberg via Getty Images / Getty Images)
According to a 2023 Pew Research survey, 75% of Americans who have heard of cryptocurrencies have no confidence in their safety and reliability, while 75% of Americans who have invested in, traded, or used cryptocurrencies do not have confidence in their safety and reliability. Only 17% of U.S. adults say they do.
“Mainstream adoption of cryptocurrencies is hampered by the lack of an effective way to enforce legal rights for consumers,” said Mike Kanowitz, CEO of Jurat. “Stronger on-chain policing could not only tame illegal activity that scares prospective adopters and angered government officials, but could also unlock incredible utility for commerce. ”
On-chain enforcement actions may be a faster and more efficient way for victims of crypto fraud to obtain legal redress. Until now, courts have been unable to effectively enforce smart contracts between parties transacting on blockchain, or freeze digital assets without the help of intermediaries or asset managers such as centralized exchanges. They faced limited resources to make seizures.
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Meanwhile, traditional enforcement agencies such as the Securities and Exchange Commission and the Commodity Futures Trading Commission lack the resources and infrastructure to police activity on blockchains, and as a result, nearly all enforcement actions are limited to suspected crimes. It is to be filed after the occurrence.
SEC Chairman Gary Gensler, who describes himself as a “field cop” for digital assets, has brought more than 20 crypto-related enforcement actions in 2023. Gensler said the cryptocurrency industry is rife with scammers, fraudsters, and fraudsters. Persons who refuse to comply with the SEC.
SEC Chairman Gary Gensler testifies during the Senate Banking, Housing and Urban Affairs Committee's SEC Oversight Hearing on September 14, 2021 in Washington, DC. (Evelyn Hochstein Poole/Getty Images/Getty Images)
Mr. Kanowitz and his legal team believe their technology can not only help government agencies such as the SEC prevent crimes in real time, but also help retail customers recover lost or stolen funds.
Jurat has already had some success testing decentralized execution technology. In August, a U.S. District Court blocked several Russian and North Korean hackers from using Jurat's on-chain enforcement model to access cryptocurrency wallets.
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“This technology has multi-trillion dollar potential, with the current total amount of contract and partnership litigation,” said Jeremy Hogan, a lawyer and founder of the law firm Hogan & Hogan. body,” he said. “Jurat will be one of the ways he will enforce the contract when the world is ready to accept her Web3.”
But Jurato's strategy is not without criticism. So-called cryptocurrency “purists”, who strongly support decentralization, believe that on-chain monitoring and enforcement was a concept that Bitcoin inventor Satoshi Nakamoto had when he created the first blockchain database. They claim that it goes against their vision. The pseudonym Nakamoto preached a financial system controlled by the people as a whole, rather than by the government or any particular organization.
“Cryptocurrencies need to evolve to achieve mass adoption. On-chain law enforcement is an evolution. That's healthy for the entire space,” Kanowitz added.
