Chander & Sun on Sovereignty 2.0

Anupam Chander (Georgetown University Law Center) & Haochen Sun (The University of Hong Kong – Faculty of Law) have posted “Sovereignty 2.0” on SSRN. Here is the abstract:

Digital sovereignty—the exercise of control over the internet—is the ambition of the world’s leaders, from Australia to Zimbabwe, a bulwark against both foreign state and foreign corporation. Governments have resoundingly answered first-generation internet law questions of who if anyone should regulate the internet—they all will. We now confront second generation questions—not whether, but how to regulate the internet. We argue that digital sovereignty is simultaneously a necessary incident of democratic governance and democracy’s dreaded antagonist. As international law scholar Louis Henkin taught us, sovereignty can insulate a government’s worst ills from foreign intrusion. Assertions of digital sovereignty, in particular, are often double-edged—useful both to protect citizens and to control them. Digital sovereignty can magnify the government’s powers by making legible behaviors that were previously invisible to the state. Thus, the same rule can be used to safeguard or repress–a feature that legislators across the Global North and South should anticipate by careful checks and balances.

Sain Jones on A Practical Approach to CryptoReg

Lindsay Sain Jones (Terry College of Business, University of Georgia) has posted “Beyond the Hype: A Practical Approach to CryptoReg” (Virginia Journal of Law and Technology, Vol. 25, 2021) on SSRN. Here is the abstract:

Most regulatory action related to cryptocurrencies is primarily aimed at preventing scams, illicit uses, and market manipulation. Although the technology that underlies cryptocurrencies is groundbreaking, these regulatory concerns are not. Nonetheless, regulators have struggled to fit cryptocurrencies into their preexisting legal frameworks. For a time, it seemed that cryptocurrencies would be classified by the Commodity Futures Trading Commission (CFTC) as a commodity, by the Financial Crimes Enforcement Network (FinCEN) as a form of money, and by the Internal Revenue Services (IRS) as property. Meanwhile, the Securities and Exchange Commission (SEC) had determined that the two most well-known cryptocurrencies, Bitcoin and Ether, were not securities. In December of 2020, however, the SEC filed an enforcement action against Ripple Labs for issuing XRP, a cryptocurrency that the SEC deemed a security. Although the future of the Ripple lawsuit is uncertain, the SEC’s unexpected action reveals the need for regulatory clarity for cryptocurrency markets. The time has come to develop a regulatory plan for cryptocurrencies that will not only provide clarity and address legitimate concerns but also allow for the continued development of cryptocurrencies. This Article proposes to minimize the SEC’s oversight of cryptocurrencies and suggests statutory amendments that would 1) strengthen the authority of the CFTC and FinCEN to effectively oversee cryptocurrency markets and 2) modernize tax policy to enable the development of cryptocurrencies as a viable payment method.