As an attorney, Law professor and researcher in the areas of constitutional law and fundamental rights, it is more than evident that my approach to the study of bitcoin and cryptocurrencies, is mainly from the legal perspective, however it is impossible to do so regardless of the aspects generally considered by the forum such as its economic valuation and its price variation, especially its volatility that would make it an instrument that generates high expectations of earnings, as well as its technical approximation, within the understandable for us that do not have education on this matters, especially on algorithms and cryptography used for the verification of transactions or the ideas of centralized, decentralized and distributed networks.
Although as I mentioned my approach to the phenomenon logically tends to be to its legal dimension, is will not be understood that «legal» aspect as a blind submission to which «regulatory authorities» through «laws” impose on citizens who must submit docilely to such designs, but from a critical perspective, more from the philosophy and theory of law, as well as philosophy and political theory, from the very justification of the existence of the State, their officers and their performance.
By only doing a very brief and preliminary investigation into the legal aspects surrounding the bitcoin, which although it is extensible to cryptocurrencies in general, is the original bitcoin considering its precedents and nature that deserves our main attention. The pages, articles, comments and observations about countries where it is legal or illegal, tax implications, aspects about “licenses” or “authorizations” needed for “exchanges”, custodians of digital assets through of “wallets”, the “similarity” to the banking system and consequently the application of similar supervision criteria to avoid financial crises, and of course, there will be no lack of opinions by those who in their clarifications will indicate that the potential of bitcoin to promote illicit activities of terrorism, corruption and drug trafficking, as well as the money laundering, all used to support the argument in favor of the necessary «regulation» of bitcoin, cryptocurrencies, crypto assets in general and related activities. We also will find those that without the intention to attack bitcoin, but pretending to support it, advocate in favor of its «regulation» in order to provide “legality”, especially in countries where there are no special «legislation» on the matter, arguing that would give veil of legitimacy and acceptance.
It is not usually my appreciation of these issues to be peaceful in terms of being blindly obeying, not only about cryptocurrencies, on the contrary my appreciations tend to be expressly critical and frontal, so I can point out what it is my personal criterion, not inviting anyone to support it, on the contrary also to criticize it and make observations. I strongly believe that incur in serious mistake those who advocate the necessary “regulation” of bitcoin, either because they consider it outside the law or that does not exist special norm and in that sense is «illegal», and also those that supporting bitcoin, consider that “regulation” will enhance its usability and “legitimacy”, here some of my very personal opinions:
On the «regulators» and the «regulatory» powers of the States, and the thoughts we can make on this matter also applies to other government actions and claims, it is necessary to make clear from the beginning that there are human actions, individual and social, that are not only prior to the existence of the States, they are pre-state and that exist independently of them, any State, these actions exist and are valid, generating consequences even beyond and against what a State may create or believe to be able to do so, they are simply material realities, factual truths with a dimension and projection beyond law, they are meta-legal, and they cannot be considered creation of States or that they must be “regulated”, and that the lack of “regulation” will make them unlawful or “licit», which is very different that not being considered by an special “Act”.
Considering the existence of factual and material situations and the creation of the States, or better said, of the idea of the States, all this since they do not exist in nature but as a legal fiction, these realities and truths don’t need to be «regulated» but instead «recognized». Difference between regulation or recognition that is not simply a subtlety or a merely linguistic matter, something that is real and material, a human creation, cannot be wrongly considered to be «regulated», «ordered», «adjusted», «limited», «restricted» as a form of impossition without the participation of affected sectors through a fiction such are the States, when in any case what they could do is to «recognize» these situations and «guarantee» their consequences by legislation as creation of the State witch, contrasts to “regulate” it.
Let’s consider an example that takes us closer to the central matter we are studying, let’s think on securities, letters of credit, promissory notes, bills of exchange and even the check, and we ask to ourselves, do they exist because they are “regulated” in a specific legislation of a country, or on the contrary, are they contained in a specific legal system of any State because of the recognition of the reality of the natural trading between people using these instruments and then the States using the law as a creation of the States guarantee the consequences of such trades and relationships?
Back again with the matter of our main concern such is the specific case of cryptocurrencies, especially bitcoin and its legal dimension, we can point out and strongly affirm that the fact that certain actions, activities or conducts are not especially and expressly “normed” or «regulated» by a State through “Law”(Act), this does not make them in any way «illegal» or “illegitimate”, because for something to be illegal and even more so, to be considered «infringement” or «crime”, that situation must be expressly provided as such by formal law, and not any act emanating from authorities other than the legislative body.
In the history of mankind, as a result of spontaneous interaction of the human being, very important inventions arose, one of the most important was the securitization of assets, more specifically the securitization of credit and debt, and even more important, the guarantee of right of private property, which meant an exponential advance in human and society development that allowed greater growth of commercial and cultural exchange.
Result of that development and exchange was the Renascence that allowed us to leave the darkness of middle ages and from there to the Enlightenment era that set the path for individual liberties, an exponential phase in development that occurred among other things with the dematerialization of these titles.
Currently we are facing a new exponential jump, the digitalization of the titles and with that a new pahse for humanity, a phase of mayor exchange, with no space frontiers, nor ideological, nor linguistic, and of course without state borders that could justify the existence of multiple legal systems and the “regulation” of these free human relations.
We previously referred that there are realities and material truths that are meta-legal and regardless the idea of the State, these realities and truths do exist because they are the product and creation of free human interaction, more specifically of civil society, and in the particular case of the bitcoin phenomenon, more than any other digital asset, it is a product and creation of what important authors refer as the Global Civil Society.
Many discussions have arisen concerning the legal nature of bitcoin and other digital and cryptographic assets, and much attention has been placed on trying to locate it in specific areas of law considering this debated nature: will it be considered “regulated” by public or private law? Will it be financial law? Commercial or banking? Or maybe civil law? Could it be that it only obeys a financial economic dimension or a technological area in which nothing has to do with law?
Well, to add some exotic ingredients to this not easy debate, I dare to point out that the phenomenon has mainly a dimension and content of human and fundamental rights, and not even of those that have tried to be called rights of the fourth generation, on the contrary and although it might seem a paradox, it would be that dimension of those human rights considered first generation or original human rights recognized by the States and that inspired the Declaration of the Rights of Man and the Citizen of 1789 which today is well worth remembering.
Affirms the declaration of 1789 in its articles 2, 4 and 5, that (i) «The goal of any political association is the conservation of the natural and imprescriptible rights of man. These rights are liberty, property, safety and resistance against oppression«, (ii) «Liberty consists of doing anything which does not harm others: thus, the exercise of the natural rights of each man has only those borders which assure other members of the society the fruition of these same rights. These borders can be determined only by the law» and (iii) «The law has the right to forbid only actions harmful to society. Anything which is not forbidden by the law cannot be impeded, and no one can be constrained to do what it does not order. «
That more than the perfect succession and the content of the ideas of these universal rights, especially the Freedom in terms of being able to do everything without any other limit than the right of others, and that it is only through legislation that can expressly state what is prohibited, all of which is fully identified with the underlying nature of the bitcoin philosophy of freedom and its relationship with the State, any State, and the idea of sovereignty, cryptocurrencies as a general concept, but specifically bitcoin as the creation of the Global Civil Society and not by any agent of power, political, ideological or economic power, none of these could validly “regulate” it, especially since it is not necessary to be contained, neither expressly considered in an specific legal Act of any country in order to be “legitimate”.
Indeed, considering this phenomenon through the legal system of the States would broaden and generalize its acceptance, that is nothing more than another material reality in the increasingly united global society. If the securities did it and humanity prospered exponentially, with no less reason it will happen with this disruptive invention of bitcoin in particular, and all cryptocurrencies in general, and especially with all the technology that lies behind them and on which they are supported. In society it will be a before and after this creation, so States instead of “regulate” should «recognize» that reality and incorporate into their legal system the consequences of free trade through this mean, which does not necessarily have to be done by special legislation or Acts but can be enclosed in ordinary law, common law, which is totally different from the claims of «regulating», which usually entails not very democratic intentions, but instead are used as instruments in favor of dictatorial regimes.
We also must notice that the previous thoughts are formulated from an abstract assessment and without reference to any specific State, on one side, because we are in the presence of a global phenomenon that transcends the national borders of countries, societies and cultures, on the other side, because to elaborate a critical dissertation of how the phenomenon has affected certain State or society, we believe that a task like that should be addressed by those who have direct experiences of the effects and interactions among the members of a particular society.
In my personal case, as mentioned in the beginning, being an attorney and professor in Venezuela, the research would be directed to the study of how the idea of cryptocurrencies has had a sui generis dimension and scope, specifically how those ideas are being manipulated in a situation of total lack of rule of law, in a police State, a failed State, a country with the highest known world inflation in the 21st century and with the intention of implementing the so-called “petro” as a supposed cryptocurrency created to avoid international sanctions and designations, using that idea of “petro” and cryptocurrencies just as another demagogue instrument to which the totalitarian regime self called «socialism of the twenty-first century» and «Bolivarian revolution» resorted to establish one of the first cases of what we could call «cryptopopulism”, a matter that is not a bad idea to dedicate a specific essay. Let me think about it.
(*) The original draft of this article is in Spanish.