The Downsides of Digital Currency and the Limits of its Normative Regulation

Abstract

The paper reflects on the consequences of the bankruptcy of the FTX exchange in the context of cryptocurrency volatility, as for the legal anchoring of cryptocurrencies in terms of de lege lata and de lege ferenda, especially in the context of the need for agile proactive state response to criminal activities connected to the use of cryptocurrencies. The nature of cryptocurrencies predisposes the commission of criminal activities related to crypto predominantly in the online space, resonating with the necessity to increase transparency and control of cryptocurrency transactions. The anonymity of coins and the limited ability to track them gives them a clear technological advantage over the efforts of law enforcement bodies to map them or check them by regulatory authorities. The subject of the empirical part of the paper is the analysis of a case study of a regulatory offense committed by a selected service provider in the field of performing exchange activities in the Slovak Republic.