Policymakers are looking at new regulations for the blockchain and crypto asset industry as it continues to grow. However, it is not enough to merely introduce new laws. Instead, regulations should ideally help keep out bad actors while giving honest people the opportunity to recover their lost or stolen digital assets.
This is the view of Bryan Daugherty (BSV Blockchain Public Affairs Director – Americas) who recently sat down to explain what lawmakers get wrong when it comes to regulating crypto assets and why Digital Asset Recovery (DAR) laws have become increasingly necessary.
We can’t look away from the burning car
‘Unfortunately, for so long, there’s been this conflation of cryptocurrency and blockchain where most of the policymakers receive their information from – the media,’ said Daugherty. He likened dodgy crypto exchanges and tokens to ‘burning cars’ which the media and regulators are unable to look away from.
‘And so my mission has been to provide some insight into how blockchain serves as an infrastructure rather than just a means to facilitate financial transfers,’ he said.
Daugherty noted that some sectors – particularly agriculture and cybersecurity – have been open to the idea of adoption, but that more needs to be done from a regulatory level to improve adoption across a wide audience. However, this also needs to be balanced so that policymakers don’t overreach and stifle adoption with too many regulations, he said.
‘Because of this misunderstanding of how the technology works, there seems to be an overreach by various organisations. So the Bank Secrecy Act is primarily one of the most prominent financial regulations that we deal with. They see where cryptocurrency is potentially untouchable as far as their ability to seize or freeze those tokens. So they’re seeking more powers.
And unfortunately, it puts our law enforcement in a precarious predicament where it forces them to utilise third parties like exchanges or other crypto-related entities that may be just as criminal as the criminals are going after.’
Digital assets are property – and need to be recoverable
Daugherty noted that digital assets are still assets and that ultimately there needs to be regulations and systems in place where they are recoverable through the legal system.
‘If a terrorist group was using a telephone network, would the government come in and shut down that telephone network? Or would they potentially use the access of that network to understand and potentially prevent a horrible event in the future,’ he said.
Daugherty said that more needs to be done to protect consumers and businesses rather than just blocking things outright. ‘Regulation and policymaking going today is just kind of banning these things. That’s just due to this idea that they cannot facilitate the actual seizing and freezing of tokens.
‘Instead, we have these huge bills that they’re trying to push through that give more authoritative power when they could just write a simple bill that requires any protocol maintainer to facilitate some means of digital asset recovery.’
BSV Blockchain and Digital Asset Recovery
Without effective mechanisms for the recovery of lost or stolen digital assets, the enforcement of property rights will remain elusive. Part of the BSV Blockchain’s stewardship delivers on the concept of Digital Asset Recovery, a protocol that aligns blockchain technology with existing legal frameworks for asset protection.
This initiative enables the recovery or freezing of digital assets in cases of loss, theft, or if they require ownership or transfer. This is essential in establishing a regulatory-compliant network and framework for digital assets, as well as for enforcement and compliance with existing property laws.
One company which specialises in the recovery of stolen digital assets is Token Recovery. Token Recovery is committed to bringing compliance, accountability, and a solution to the industry for lost or stolen digital assets.
As a member of the Crypto Valley Association, one of the oldest and most mature organisations grouping companies in the blockchain and digital asset, and the Global Blockchain Business Council, the largest organisation in the field, Token Recovery will begin by providing its solutions for recovering lost/stolen digital assets to the association members.
