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Blockchain distributed ledgers and liability
Journal of Digital Banking,
2
(4),
298-310
(2018)
Abstract
One of the oft-noted benefits of distributed ledger technology is its security. Many commentators seem to believe that because the Bitcoin blockchain has not been hacked, somehow this means all blockchains are secure. This paper draws on recent examples to explore how risk persists when financial services are provided via distributed ledgers. We analyse the kinds of risk, how they arise and their possible legal consequences. While some technologists want to believe using blockchain will not give rise to legal liability, we demonstrate how this is not so. These liability consequences raise significant questions about how distributed ledgers should be structured, owned and, ultimately, regulated.
Keywords: Bitcoin; blockchain; distributed ledger technology; financial regulation; liabilities of blockchain; risks of blockchain
The full article is available to subscribers to the journal.
Author's Biography
Dirk A. Zetzsche holds the ADA Chair in Financial Law (inclusive finance) and coordinates the Centre for Sustainable Governance & Markets at the University of Luxembourg. His research interests include FinTech, RegTech, investment funds, corporate and banking law. He functions on ESMA’s FinTech advisory group and co-chairs the European Banking Institute’s FinTech working group.
Ross P. Buckley is the KPMG Law — King & Wood Mallesons Professor of Disruptive Innovation at UNSW Sydney. He is an Australian Research Council Laureate Fellow and leads a five-year project into the regulation of the data revolution. He chairs the Digital Finance Advisory Panel of the Australian Securities and Investments Commission. He has consulted to government departments around the world, and been a Fulbright Scholar at both Yale and Duke.
Douglas W. Arner is the Kerry Holdings Professor in Law and Director and co-founder of the Asian Institute of International Financial Law at the University of Hong Kong. He is a Hong Kong Research Grants Council Senior Fellow and a Senior Visiting Fellow at Melbourne Law School, University of Melbourne, a nonexecutive director of the Aptorum Group, and an Advisory Board Member of the Centre for Finance, Technology and Entrepreneurship.
