(Pro) Crytocurrency: Rule of Law

Crypto regulation necessary to protect the rule of law

Hanke & Serkerker, 10-1, 21, National Review, 10-1 21, Crypto’s Legal White Space: Fact or Fiction?, https://www.nationalreview.com/2021/10/cryptos-legal-white-space-fact-or-fiction/, Steve H. Hanke is a professor of applied economics at the Johns Hopkins University in Baltimore. He is a senior fellow and the director of the Troubled Currencies Project at the Cato Institute in Washington, D.C. Matt Sekerke is a fellow at the Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise

With its disdain for the law and human institutions, crypto strikes at the heart of the market order. In a world in which the only governing institutions are coded protocols with ambiguous authorship, there would be truly no backstop for market exchange, whether in the law or in the more diffuse and human “bourgeois virtues.” Crypto proponents will say that this is precisely the point, and that their system is needed because the human institutions of the government and the financial system cannot be trusted. Whatever the merits of such a view in the abstract might be, such reasoning should fall on the deaf ears within government. The government itself must be completely invested in the continued existence and improvement of its institutions. Government must, therefore, force crypto into the existing rubrics of its laws and regulations, based on the functions for which crypto is manifestly used. Anything less would grant the crypto industry an enormous privilege in the true sense of the word and make a sham of the rule of law. Likewise, “rewarding” the heavily regulated financial system by granting a lightly regulated parallel system its imprimatur would be a performative contradiction for the government. If a protection is necessary, then everyone must comply. Substance must prevail over form. In U.S. tax law, the substance-over-form doctrine established in Gregory v. Helvering holds that when a “transaction upon its face lies outside the plain intent of the statute,” to respect the form of the transaction over its obvious economic substance “would be to exalt artifice above reality and to deprive the statutory provision in question of all serious purpose.”

Rule of law critical to avoid violence

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