In the United States we've largely adopted a paradigm of only evaluating whether a law has been broken or not. Basically in our daily lives all the small things that bring people into court - with our ever increasing list of laws - has created a necessity to move things along quicker. Essentially for all petty things that don't require a jury of peers, you go admit submission to the state and beg for a better sentence. But if you challenge the accused status then you get a flat question from the judge that's basically rhetorical – designed to break your will - “did you or did you not break the law”. To which the answer is almost always yes, and those in denial don't receive any reduction in sentencing. That's all the court is doing, making sure you understand a yes or no question. What they are not there for is to interpret a possible reason for breaking the law. Perhaps under circumstances wildly beyond your control they may forgive you; if you get the chance to explain. In extremely exceptional & rare cases they may have to make law. And that modus operandi is the preferred paradigm for the judicial system.

 

The MO of small court isn't really a problem, but the paradigm to which we have all largely accepted isn't compatible with technology that has far reaching scopes beyond existing law. To simplify the outlook when some new creation comes up, it seems to go like this: No.1, does it break a law we have; No.2, should we apply existing laws we have to it; No.3, should we make new laws – and only if we are pressed into by absolute force. With that, let us step back a moment to consider the judicial & legislative systems.

 

The legislative branch is there to create laws that “establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our posterity.” Basically make provisions that protect our rights listed in the constitution. The Judicial system is there to interpret the laws, as needed to be applicable to all the unique cases. They exist to best protect the interest of citizens & government, as established.

 

So the question with cryptos becomes are they doing that? No, so far they have not been. This is because of the paradigm that orders No. 1, 2, and 3. To illustrate how the paradigm is essentially working backwards from the “mission statement”, money-transmission laws are a perfect example. Early on as financial institutions moved away from having actual printed money representing the entirety of the fiat, it became very important to regulate & safe guard MSB's (money service businesses). While a single entity could be audited, perhaps the most curious point was transferring funds that did not exist in a physical manner. If one bank “sent” money to another it was no more complicated than scratching it off their books, and the other bank writing it down on theirs – you can see how easy it is to cheat such a system. For that reason any entity that is involved in money transmission has local state licensing requirements. The regulation makes perfect sense. But when you use cryptos they don't. Imagine if cryptos came first, they are impossible to double spend with, which means regulatory laws for money transmission would have never existed. But cryptos have been falling under the purview of money transmission laws so far, since to the laymen they cannot easily see the difference from traditional digitized fiat.

 

Here's an example of what it is like to transfer a crypto: Bank A drives a truck full of gold to Bank B. Where as a fiat transfer is like calling your cousin and telling them you gave them $100.

 

Let's work forward now. No.3: Do cryptos need a law for money transmission to fulfill the mission statement - no they do not. No.2: Do they need classification of current laws - in this order there would be no need. No.1: Do they break any current laws - yes. If the reason for law is fulfilled by No.3 is it necessary to worry about No.1?  Obviously the judicial system should be able to see this, and pass judgment of non-application. But as it stands now it's a painful struggle for a system full of people who aren't use to truly new, to even start the process. Sadly countless know-it-alls - that didn't hear about cryptos until a few months ago - have taken it upon themselves to tell you how things are under the current paradigm. They are patting themselves on the back while informing you of the (non-applicable) laws which they have jurisdictioned to cryptos. Which in turn has led to a pathetic adoption of clauses by different states & gov entities with no oversight towards applicable application. Even court cases have been won against people breaking non-applicable laws.

 

It's bad enough already that major players have left the US; and new crypt businesses don't seek to start in the US. Keeping with the current paradigm will only continue that trend. While you may not expect small court to address the applicable nature of law when you roll through a stop sign in the middle of a desert…. we can work towards making it clear that this paradigm approach for cryptos is unconstitutional at best, and country crippling at worst. Change the way you talk about it. Don't take the stance of sitting on your hands waiting for permission; remember that cryptos are a peer-regulated & maintained digital ledger network. The entire reason government entities are concerned with it is because they don't understand the risk level of some power not being in their hands – so speak that way.