Principles for Crypto Legislation
A general introduction to “crypto,” both the underlying technology as well as the larger ecosystem, and a set of principles for legislating in this area to ensure that American rights...
Research Report
Broad, Ambiguous, or Delegated: Constitutional Infirmities of the Bank Secrecy Act
The Bank Secrecy Act (BSA) allows the Secretary of the Treasury to demand transaction surveillance and reports of personal information from a category of entities defined as “financial institutions.” Originally...
Dilution and its discontents: Quantifying the overtaxation of block rewards
Newly created cryptocurrency tokens dilute the holdings of existing token owners. If block rewards are taxable income at their fair market value at the time acquired, token holders’ income will...
Estimating Bitcoin Electricity Use: A Beginner’s Guide
Summarizing complexities and pitfalls in analyzing the electricity demand of new information technology, focusing on Bitcoin, the mostly widely used cryptocurrency
The rapid emergence of Bitcoin and other cryptocurrencies has taken many in the energy sector by surprise. This report summarizes complexities and pitfalls in analyzing the electricity demand of new...
A Duty to Answer: Six Basic Questions and Recommendations for the IRS on Crypto Taxes
U.S. taxpayers lack answers to basic questions about the federal tax and reporting effects of transactions involving cryptocurrencies.
U.S. taxpayers lack answers to basic questions about the federal tax and reporting effects of transactions involving cryptocurrencies. Although the Internal Revenue Service has been examining issues related to the...
Electronic Cash, Decentralized Exchange, and the Constitution
An extension of the Bank Secrecy Act to software developers and individual users would be unconstitutional.
Regulators, law enforcement, and the general public have come to expect that cryptocurrency transactions will leave a public record on a blockchain, and that most cryptocurrency exchanges will take place...
Why Private Peer-to-Peer Payments are Essential to an Open Society
Cash is more than a method of payment. It is a fundamental tool for individual privacy and autonomy, and it is necessary for an open society. This paper shows that...
Framework for Securities Regulation of Cryptocurrencies
We lay out the case for treating some cryptocurrencies as securities—and some not.
This report, originally published in 2016 and updated in 2018, presents a framework for securities regulation of cryptocurrencies— e.g. Bitcoin and derivative projects or “alt-coins.” The framework is based on the...
The Need for a Federal Alternative to State Money Transmission Licensing
A plan for policymakers to clear one of the biggest obstacles to financial innovation.
The several states rather than the federal government are the primary regulators of money transmitters. State-by-state money transmission licensing is inefficient because transmitters provide a networked good that inherently crosses...
The Bank Secrecy Act, Cryptocurrencies, and New Tokens: What is Known and What Remains Ambiguous
Are compliance obligations triggered when the developers of a new decentralized token protocol sell them to U.S. persons?
This report summarizes how various activities performed with cryptocurrencies and similar tokens have thus far been characterized by FinCEN and other authorities for the purposes of determining the compliance obligations...