Cryptocurrencies have become a trillion-dollar industry. So, like any new technology, it poses ethical questions. Due to its volatile nature and the way different actors have been presenting it, several governments have taken action to regulate it. In many European countries, the law has changed, but there still needs to be a consensus on how crypto should be handled.
So, should the US government take measures, or should it remain up to each state to create legislation for already operating top US gambling sites?
Cryptocurrencies present issues for the US government. Stemming from their global nature, cryptocurrencies do not go through a well-established banking system like a traditional currency. Although some aspects may vary depending on the currency, or the laws of the countries involved in the transactions, traditional currency still has a standardized framework. This is not the case with cryptos.
Cryptocurrencies operate on decentralized networks called blockchains. There’s no central authority to overview and control the activity of blockchains, making it difficult for the US government to have any control over this activity. Moreover, most tokens have a community that participates in decision-making.
However, these communities aren’t limited by geographic borders. So, even if the US could regulate a crypto ecosystem, it would only affect its citizens and couldn’t apply to other users, making the limits useless and easy to go around. Many cryptos provide a level of privacy. This allows users to perform transactions anonymously or with a pseudonym. So, any user with enough skill to hide their online activities is impossible to track down by the government.
Due to the relative youth of crypto technology, it’s still constantly evolving and incredibly complex. It uses cryptographic algorithms, smart contracts and consensus mechanisms, all of which are already difficult to fully grasp, even for tech-savvy users.
There’s an apparent lack of technical expertise on such recent and complex technologies. It’s hard to ask a congressman to vote on something that is rapidly evolving with new applications that make any law outdated by the time it’s voted on.
Even though the US government is known for its interventionist politics, it can’t cross this virtual border. Cryptocurrencies enable peer-to-peer transactions without any financial intermediary.
Furthermore, such a transaction can happen between any person in the world, posing a jurisdictional challenge. Even if the transaction can link a US resident to an illicit object, the US government won’t be able to reach the other actors.
It would require accords with other jurisdictions. This takes even more time than when treating a local case. It’s a complex and time-consuming process. Additionally, it can fail at any time if one of the jurisdictions decides to withdraw at any time, which they can and often do.
A possible solution would require letting crypto become a widely accepted payment solution in land-based and online gambling platforms. This would provide users with a legal market and it could track the transactions from there, using the unique seed of every coin.
This would mean having casino groups, like MGM or Caesars, mark their tokens and let the government access this marking. However, it would need billions of dollars to create the necessary infrastructures and get the agreements of these private companies, especially in a country where the legality of poker varies from state to state.