With headlines dominated by massive financial sums and courtroom dramas involving dishonest cryptocurrency executives, public perception of blockchain often resembles a constant stream of scandals.
In the latest episode of the Clear Crypto Podcast, hosts Nathan Jeffer and Gareth Jenkinson engage with Jenny Levin, the chief legal and operational officer of the Algorand Foundation. They aim to cut through the noise and discuss the realities of blockchain, highlighting that the issues at hand are often more about cryptography than outright human wrongdoing.
Same OL’s Scam
Levin emphasizes that, while mainstream media tends to focus on failing exchanges like FTX, the fraud associated with cryptocurrencies isn’t inherently tied to the technology itself. It often comes down to a complex and sometimes confusing terminology.
“Traditional finance has always seen front-line securities trading,” she explains.
“This is just a different way to engage in that using crypto. While it’s rooted in the crypto industry, the theme of fraud is found elsewhere too. There’s a technical aspect that allows for this within the crypto community.”
Many of the serious crimes in cryptocurrency involve sophisticated manipulation of blockchain protocols, often perpetrated by individuals well-versed in coding.
“If you disrupt the structure of the underlying systems, you can exploit it for personal gain,” Levin noted.
“By understanding protocol codes and the various players involved, you can gain a comprehensive insight.”
Crimes and Punishment
This technical complexity creates legal and ethical grey areas, especially when it comes to so-called white hat hackers who breach vulnerabilities but then attempt to return stolen funds. Levin is clear: “Crime is still crime,” she states.
“Claiming good intentions does not eliminate the existence of a crime. From a strict legal standpoint, prosecution remains a possibility.”
However, enforcement isn’t always straightforward. “Perhaps the DOJ or other investigators will not prioritize these white hat hacks,” she added, especially if losses are recovered or do not meet federal thresholds.
Delays in regulation continue to be problematic. Jenkinson pointed out that in some areas, regulators seem to misunderstand how blockchain functions.
“If you’re violating rules related to data management, it may seem like you need to eliminate the blockchain,” he said. “But that’s not how it actually works.”
For the full discussion, tune into the Clear Crypto podcast, available on various platforms. There’s a wealth of other topics to explore as well.
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