By this time, everyone knows that Cryptopia, a crypto exchange notorious for being hacked twice this year, which led to massive losses, is now in the process of filing for bankruptcy. The victims of Cryptopia’s hacks are now turning to legal authorities in a desperate bid to recover their lost funds. This leads to a question: should legal authorities be the only way for victims of exchange hacks and other crypto-related incidents to find justice and recover their funds?
The crypto market is still in its adolescency, so it’s obvious that the traditional legal system is not sufficient when it comes to crypto-related criminal activity — the police simply doesn’t have the knowledge or tools necessary for giving any substantial help to exchange hack victims. The other important point is that right now crypto’s legal status is quite ambiguous at best. As of right now, Cryptopia’s victims can only be given our sincere condolences.
This problem has two possible solutions — either the space moves on to being fully decentralized and self-regulated, or it adopts the best experiences from already existing regulatory tools and practices.
The former is quite dangerous; it might lead to anarchy. In these conditions, cases like Cryptopia’s have a chance to happen again, which will create problems in the way of major players entering the market, thus hindering crypto’s mass adoption.
The latter, in the meantime, seems most logical — the crypto community has all the possibilities and tech necessary for making crypto truly a safe and secure environment, e.g. validator nodes, the Proof-of-Stake algorithm, various approaches to consensus, so on, and so forth. Besides, many countries are already moving towards giving crypto a legal status.
We will see what path the crypto space takes and it’ll be interesting to see the result. Remember — crypto is meant to make our lives easier, not complicate them further. We need to find and maintain the fragile balance between preserving our independence and keeping crypto safe.
Originally published at https://changenow.io on May 31, 2019.