Volume 20, Issue 2 - Special Issue: International Economic Law in the Era of Distributed Ledger Technology, Guest Edited by Jose Gustavo Prieto Munoz, Annamaria Viterbo and Alberto Oddenino

In January 2009, Bitcoin was launched as the first ‘cryptocurrency’, a term used to refer to a ‘digital representation of value’ operating with Distributed Ledger Technology (DLT). Commonly known as ‘Blockchain’, DLT has been an object of study in different legal disciplines, which seek to understand its financial and legal impacts. However, international law literature is still silent regarding the impacts that DLT technology could have on the different legal regimes. This article contextualizes DLT as digital governance ‘infrastructure’ that could affect the way that public authority is exercised; in this sense, cryptocurrencies are the product of such infrastructure. Taking this notion into account, it is further argued here that the concept of ‘crypto-investment’ could be useful in international investment law when certain conditions come into play.

The purpose of this article is to analyse virtual currencies, with specific regard to Bitcoins, in light of a specific human right, the right to privacy. In the first part, this contribution will reflect on the effectiveness of the Fifth European Union Anti-Money Laundering Directive (V AML Directive) in ‘regulating’ the exchange between fiat and virtual currencies for the purpose of anti-money laundering and counter-terrorist financing. In the second part, it will explore whether the General Data Protection Regulation (GDPR) is applicable or not to the virtual currencies network.

Whether it is legally treated as a digital property, a commodity or a security, bitcoin’s identity crisis is mainly caused by its contradictions as a trustless monetary project. The paper argues that bitcoin’s trustlessness is a confusing concept that accounts for its legal and monetary troubles. As explicated by monetary sociologists and economists, money is based on a complex trust architecture. By questioning the interplay between code, trust and law in the monetary realm, the paper aims to enlighten the philosophy of bitcoin’s monetary project, the current trends, and some potential developments for bitcoin and distributed ledger technologies.

The market for derivatives is substantially different after the 2007/08 financial crisis. Trust fuels business yet the financial crisis undermined this concept and customers lost faith in financial institutions. The then dichotomy, faced by innovators, was to insist with a system based on trust in financial institutions, or explore others where neither trust nor banks, as intermediaries, were indispensable for the successful and safe completion of financial transactions. The aim of this piece of research is to analyse to what extent innovative technology would change the way the ‘Over The Counter’ (OTC) market operates by providing investors with a trustworthy platform for the efficient assessment of the risk behind certain financial instruments. Consequently, the market may not be caught by surprise when another financial crisis strikes.

This article addresses the particular challenges involved in valuing various types of crypto-assets as investments under treaty-based investment arbitration. The interaction of the international investment protection regime with crypto-investments has largely remained un-examined, even though increasing amounts of foreign investments have flown into the development of crypto-assets its related markets. The existing investment treaty regime is set to face significant challenges in grappling with crypto-assets as investments due to several distinct features that differentiate them from traditional asset classes. This issue is explored further in the article from the perspective of the principles governing damages under international law.

Taking Venezuela’s complaint against the United States at the World Trade Organisation (“WTO”) as the inflection point, this Article will explore whether a characterisation of cryptocurrencies as a ‘currency’ (similar to a fiat currency) would ensure that cryptocurrencies are not covered by WTO disciplines on goods and services. Despite customary international law principles such as ius cudendae monetae and the persuasive argument that a ‘currency’ is neither a good or service – the Article answers this question in the negative. It will divide issues that can arise during such a WTO dispute into three categories: threshold, substantive and compliance issues. Threshold issues would involve interpretative challenges to determine whether the General Agreement on Trade in Services (“GATS”) and General Agreement on Tariffs and Trade (“GATT”) regulate cryptocurrencies. Since the GATS Schedule of Commitments has historically been interpreted in a technologically neutral manner, identifying cryptocurrencies as a ‘service’ may not prove to be insurmountable. However, the claim that cryptocurrencies are barter goods that will be subject to disciplines of the GATT deserves critical scrutiny – more so because the GATT regulates tangible products and contains specific provisions relating to balance-of-payments. The Article also undertakes a theoretical analysis of the heterodoxical nature of the cryptocurrency to evaluate whether it can be classified as a ‘security’ within the meaning of the GATS’ Annex on Financial Services. These threshold issues are, however, the tip of the iceberg. Once a WTO Panel commences its analysis, the substantive issues for consideration would involve determining whether a unique product such as cryptocurrencies has a ‘like product’ in the respondent Member’s market. Further, the Panel’s analysis would involve a consideration relating to ‘general exceptions’ under Article XIV, GATS or Article XX, GATT which would entail an examination of whether the measure was necessary to achieve, amongst other regulatory objectives, either compliance with domestic regulations or the maintenance of public order. If the measure adversely impacting cryptocurrencies is determined to be WTO-inconsistent, issues of compliance and suspension of concessions are imminent. WTO Panels have historically estimated the . quantum of suspensions of concessions by determining the trade volumes affected by the WTO-inconsistent measure and factoring it for a future time period. The decentralised nature of the distributed ledger technology underlying cryptocurrencies complicates any country-specific quantification of the impact on trade volumes of cryptocurrencies affected by the WTO inconsistent measure. Accordingly, determining suspensions of concessions in relation to cryptocurrencies would require significant judicial innovation by the arbitrator. Adjudicating Cryptocurrencies at the WTO: Potential Threshold and Substantive Issues.

Financial sanctions and trade control regulations are becoming increasingly relevant in the current global situation, characterized by multiple ongoing conflicts, sophisticated terrorist organizations, and serious tensions between international economic actors. The United Nations, under Article 41 of the UN Charter, the United States and Europe, in particular, regularly introduce and enforce a number of tools (e. g., financial restrictions, trade restrictions, arms embargoes, travel bans). Such tools can range from comprehensive, “territory-wide” sanctions against States to targeted sanctions on entities, including individuals, to obtain a change in policy or activity by the target country, part of the country, governments, entities, and individuals, with the ultimate aim of pursuing peace, human rights, democracy, and respect for the rule of law. Recent history proves that companies and financial institutions have adopted complex solutions to conceal transactions with sanctioned countries and entities. Blockchain technology, through the use of distributed digitalized ledgers, grants a high level of transparency, for instance providing real-time updates on the development of an export transaction, and the use of smart contracts can automatize payments, or the triggering of guarantees, etc. While blockchain technology continues to be an area of enormous promise, it is also one of risk, if not managed properly, especially in a transnational, multi-jurisdictional context. Not only might the use of blockchain-based solutions prove challenging for the enforcement of current international sanctions programs by competent authorities, but blockchain technologies developers will also need to set up solutions suitable to comply with the requirements imposed by the various sanctions in place. At the same time, businesses will need to determine which measures and due diligence practices are needed to protect against the risks of a sanctions violation, which can result in significant fines and even criminal penalties. This paper explores how blockchain solutions that may be implemented in the context of international financial and commercial transactions can interrelate (or interfere) with sanctions enforcement and sanctions compliance, highlighting the multiple legal issues that may arise in connection thereto.

Nowadays, the emergence of Distributed Ledger Technologies (DLTs) and the rapidly developing of the digital economy have the potential to transform the current international regulatory framework. Thus, the current developments of DLTs in e-commerce demand a closer analysis of the implications for global governance and international trade. While the Internet has enhanced the development of new platforms for international trade, DLTs may be instruments to unleash the potential of e-commerce. In this scenario, DLTs could drive, strength and promote e-commerce transactions by diminishing inefficiencies. For instance, it could significantly reduce intermediation costs, facilitating the use and interoperability of smart contracts and single window systems. Indeed, customs operations are very complex and involve different types of intermediaries across borders, creating unnecessary obstacles to trade that could be reduced by the application of DLTs. There is where the regulatory paradox enters into place. The operability of DLTs in e-commerce raises significant regulatory challenges posing new policy questions. For this reason, it is crucial to achieving common understandings among relevant stakeholders to identify a set of principles that guide a country’s regulatory frameworks to facilitate the interoperability of e-commerce. One of the main pieces of the puzzle of proposing a set of principles is how to deal with an appropriate level of intervention from regulators in order to promote trust in international transactions, transparency, efficiency, security and operability among regulatory frameworks. This paper will examine current developments, initiatives, and proposals from different approaches: It will start with an overview of the opportunities that DLTs will create to promote e-commerce. Then, it will explore the current international economic legal framework in light of the application of DLTs in e-commerce, taking into consideration policy recommendations from international institutions and initiatives in some specific jurisdictions. From those views, a set of principles will be identified.

The article aims at challenging the narrative that technology is inclusive with respect to states run algorithmic programmes and discusses that states resorting more frequently to technology, in particular to algorithm, are altering the traditional paradigm of the relationship between the state and the individual. Algorithm is indeed progressively twisting the traditional form of state toward a more exclusive, accountable-free and controlling form of state. The dichotomy inclusiveness/exclusiveness is at the centre of the analysis, because the state justifies resorting to algorithm by claiming that it is the suitable tool to address state’s deficiencies and making the state more efficient and effective. Hence, the state is abdicating the exercise of some important functions to the algorithm. The analysis of the most relevant algorithmic programmes implemented by states so far in the judiciary and in the welfare sector proves that the algorithm is perpetuating social bias and discrimination, thus raising significant criticalities in terms of infringements of the rule of law.

Digital platforms are the essential infrastructures of electronic commerce, online communication, and digital social relationships. They connect two interdependent groups of web users (parties offering goods, services, and digital content; and parties interested in accessing this supply) and enable their transactions. Moreover, they provide additional services such as online payment, collection of reviews and feedback, and internal instant messaging. However, the term “platform” can be misleading, since it seems to denote a virtual space or a technical tool without legal personality. In other words, platforms are masking corporations who hide behind them in order to avoid the legal responsibilities stemming from their status as social institutions. This exploits the dominant theory of the firm as a nexus of contracts and is intended to release the agents involved in the system of production from the restrictions that protect weaker parties in the age of industrial capitalism. Companies who organize production through platforms thus obtain both indirect and direct benefits. In particular, indirect benefits derive from making consumer law more complicated to apply by creating conditions that frustrate the traditional distinction between professionals and consumers. In fact, any user can provide services and sell or share their personal goods (e.g., cars, apartments, clothes, etc.) and other commodities through platforms. However, this does not mean that information asymmetries do not continue to exist, or that weaker parties do not need to be protected. This confusion benefits companies that enable these transactions, since online relationships are not burdened by informative duties. In this case, companies use the platform narrative to facilitate peer-to-peer transactions, where simple, ubiquitous exchanges yield advantages. In addition, platforms provide direct benefits by eliminating the hierarchical organization of their production system in order to adopt the least burdensome and most flexible forms of employment. Companies generally rely on ICT tools to show that the parties offering the service are independent and are not subject to their control. The platform narrative glosses over the labor exploitation issues generally referred to as “uberification”. In addressing the questions outlined in this introduction, the paper will be organized as follows. Part I will discuss how the platform economy is challenging consumer law by short-circuiting its legal grounds in ways that allow companies to benefit. Part II will focus on the direct effects of the platforms’ denial of hierarchical organization: starting from the Italian Supreme Court’s ruling in the Foodora lawsuit, we will explore emergent models for organizing the system of production and their impact on the main categories of private law.