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During blockchain conferences and blockchain discussions over the past two years, I have had many chances to hear about the encryption of new crypt gurus. Being a technology law student for over 20 years, I was initially intrigued, but the intrigue has given way to disappointment quickly.
I was baffled by a simplistic understanding of the law, which prevailed and by the total ignorance of over 100 years of legal studies on the regulation of new technologies. Not surprisingly, there was not a single legal scholar on the stage. Instead the consultants, the young lawyers became lobbists and the technology gurus had their opinion.
It is easy to present the law as a formal system of rules, which can be replaced by a set of algorithms and software code. A simplistic representation of the law leaves no room for morality or justice. The law is therefore much more than a formal system of rules, as complex as these.
Call me an idealist, but the law is a delicate and discouraging act of balancing the virtues (principles) of fairness and justice, freedom and freedom, equality, individual rights, equity, pluralism, conservation of common goods, etc. It is based on formal rules, customs, prevailing cultural and moral norms, the spirit of time and the legal conscience (feeling of justice) of jurists who interpret the law and make decisions.
Adjust the technology the wrong way
The biggest problem with the formal law is that it is done by politicians, and increasingly by the more powerful (richer) parties and their lobbyists, and only very rarely by real jurists or even more rare by legal scholars! Note that the most fundamental laws, which are relevant for hundreds of years, are made by legal scholars, rather than none of the first.
Although it is still considered a legal frontier and a young legal discipline, technology regulation is a fascinating and productive subject of legal scholarship. During the last century he developed many useful insights and principles. In many cases, he acknowledged that the basic legal principles are technology independent and universal, so the law is able to address new fields based only on these principles.
In other cases, a paradigm shift is needed. Rebalancing principles and virtues, or sometimes new principles are widely discussed in the legal scholarship and frontier technologists. In this way, the law was able to do well with railways, automobiles, radios, TVs, computers, software, cyberspace, biotech, etc.
Of course, there are many bad examples of regulation of new technologies. The commonality of these is that attention has focused on solving narrow problems, while values and principles have been ignored. In many cases, the pursuit of opportunistic political or commercial objectives or even real legal problems prevailed.
The database regulatory initiatives in the EU, which led to the directive 96/9 / EC of 11 March 1996 on the legal protection of databases, made in complete ignorance of the legal scholarship on the subject , I'm a good example. He created a vague Sui generis database rights, which have been a headache for courts and lawyers for more than thirty years. Also the reports of the official committee of the European Parliament in 2015 they considered them an impediment to the development of a European data-driven economy and asked to abolish Directive 96/9 / EC.
How encryption is going
This is what is happening with the encryption and the broader debate on cryptology. Ignoring the past lessons in the regulation of new technologies, the newly mistered "regulatory experts" support government regulatory action to be promoted token sales, or miraculous solutions of blockchain to legal problems in contracts, in the resolution of disputes and even in slow justice.
The red flag of legal opportunism is evident in the Fintech 2018 action plan of the European Commission, which notes that the 13 Member States of the EU have established "Regulatory sandboxes […] an environment in which supervision is adapted to innovative businesses or services". How does the supervision coordening and supervise a good thing?
Previous studies have already highlighted the risks of the regulatory acquisition"that occurs when a regulatory agency created to act in the public interest acts instead in favor of the commercial or special interests that dominate the industry or the sector that is in charge of regulating. In other words, government money ends up putting people's pockets with little to show for it and taxpayers are left to hold the bag. "
Looking for regulatory solutions to restricted problems (such as the evasion of securities rules for crypto investments), which will be irrelevant in the long run, new influencers in the cryptic world put the whole technology in regulatory chains and forget completely the basic virtues of justice, freedom, freedom, public interest, etc.
Nobody knows all the possible types, features and applications for encrypted tokens, yet they are willing to submit all this to the regulation and bureaucracy of narrow-minded titles!
The immediate result is the limitation of the legal definitions of cryptographic tokens. Probably the next is a dark rule for smart contracts or digital organizations since then there are consultants willing to submit them to the regulation because someone needs "legal clarity", that is to say the laws of the consumer or of competition.
Such opportunistic regulation, in many cases based on personal interest, is at risk of continuous innovation in the ecosystem. Certainly backfire against the long term. Said EU legal experiments with the Sui generis the database rights in the directive have effectively destroyed database innovation in Europe, what could have contributed to the blockchain – the revolutionary database technology – find the school and the original house elsewhere. By odd coincidence, the blockchain pioneer, Nick Szabo, has published his original ideas on smart contracts at about the same time as the European Union passed Directive 96/9 / EC.
Experts can not even recognize the best "normative" success cases of their relatives. The Linux and open source ecosystem has been able to grow and prosper precisely because it has not resorted to government regulation, although over the years I have listened to dozens of proposals to legislate on open source.
Richard Stallman was a genius not to look for politicians and lobbyists to carve out the rules. Instead, he chose to self-regulate – to create value-based rules independently (GPL) and based on existing legal principles. But above all, it has not blocked the ecosystem with its version of the rules. He consciously consented to create other sets of rules (different licenses) and to use them where applicable. The rules created by the government basically prevent this from happening.
The self-regulation that is – create your own rules, which consciously deal with difficult issues like KYC (know your client), AML (anti-money laundering), risk taking, fraud, misleading advertising, etc., In my opinion, is an opportunity for the crypto ecosystem. Compliance with these rules (such as compliance with the GPL license) must be regulated by the ecosystem itself through branding and excluding non-compliant opportunists.
It is crucial that self-defined rules are based on principles and principles, but be careful to leave the field open for different approaches and follow-up innovation. There is nothing that can prevent or prevent this from happening in Western legal systems. On the contrary, they promote self-regulation, since self-regulation is the true exercise of free will, freedom of contract, personal rights and freedoms.
The question is if the crypto ecosystem has enough responsibility and courage to do so, and to resist the glare of opportunist regulation? Learning from the mistakes of the past and the wisdom of other frontiers has been for centuries a path of legal innovation, and it is the only path to a better future.
