Blockchain Papers

Vaibhavi Rathod

No abstract is available for this record.

Valerio Lo Monaco, Paul P. Momtaz, Silvio Vismara

• We study governance mechanisms in decentralized autonomous organizations (DAOs). • Regression discontinuity design on contested proposals overcomes endogeneity concerns. • Distributed governance mechanisms increase tokenholders value. • Proposal passage increases DAO token returns by 4.7 % at the margin. • Effect amplified by voter participation, DAO democratization, and DAO decentralization. Distributed governance mechanisms increase tokenholders value in decentralized autonomous organizations (DAOs) when decision-making is contested. Using a comprehensive dataset of proposals voted on within blockchain-based DAOs from 2020 to 2024, we exploit a regression discontinuity design on proposals that pass or fail by a close margin around the majority threshold. Local average treatment effects indicate that proposal passage increases DAO token returns by 4.7 % at the margin. Further, a one standard deviation increase in vote participation amplifies this effect by 2.2 %. Proxies for democratization and decentralization also increase the value-creating effect of contested decision-making in DAOs. Our findings contribute to understanding how distributed governance structures create value in digital organizations.

Jing Wu

The healthcare corruption has aroused heated discussions in China recently.From the beginning of 2023 to the present, at least 155 hospital directors have been investigated that the number is more than twice that of last year.The healthcare corruption was not only a matter of physician morality but also reflected the defects of China's medical system. 1 Since the establishment of China's Urban Employee Basic Medical Insurance (UEBMI) in 1998, China has formed a fragmented health insurance system in urban areas.Fragmentation hindered the mutual aid function of health insurance.Therefore, from 2009 to 2020, China carried out the health financing reform of UEBMI which adjusted the pooling level from the county to the municipal level.However, the increasing financialization of the healthcare system would result in physicians weakening accountability to the public. 2Horizontal integration and vertical management of fiscal power enabled the municipal governments to concentrate and allocate health funding, but the administrative decentralization led to laxity of spending supervision by county governments.This flawed system was a tough test for physicians.Without supervision, physicians might induce patients to increase healthcare services for the purpose of maximizing income. 3Figure 1 was the framework of Unified Pool arrangement in China.The paper aimed to discuss whether the unified pool reform would trigger healthcare corruption.Treating the pooling level adjustment reform of UEBMI as a quasi-experiment, the study tried to interpret the empirical results based on Chinese health insurance regulations, and explored the reasons for the high incidence of healthcare corruption in China.Instead of focusing solely on patients' utilization of healthcare services, the paper considered the behaviors of healthcare provider (eg, hospitals, physicians) and healthcare policy executor (eg, county governments, medical insurance bureau) by a quasi-experiment.The effects of the unified pool reform on outpatient expenditure were examined by using the staggered DID model, and the moderating effects of physician density were examined by using DDD model.The micro data in the study were from the China Health and Retirement Longitudinal Study (CHARLS) in 2011, 2013, 2015, and 2018 The macro data were from China City Statistical Yearbook.The documents were from on the official websites of the municipal-level governments, the Medical Insurance Bureau, and the Human Resources and Social Security Bureau.After excluding the samples with missing information and the samples of municipalities directly under the central government, this paper finally obtained panel data for 4 periods, 573 respondents who were continuously tracked, and a total of 2292 observations.Table 1 showed that the treatment effects on outpatient reimbursement expenditure were significant at a 5% significance level, no matter whether control variables were added.The implementation of unified pool reform would lead to a significant increase in outpatient reimbursement expenditure, rather than copayment expenditure.The treatment effects on outpatient expenses were also mainly caused by the increase in outpatient reimbursement expenditure.We utilized the parallel trend test

Arianna Trozze, T. Davies, Bennett Kleinberg

Fraud across the decentralized finance (DeFi) ecosystem is growing, with victims losing billions to DeFi scams every year. However, there is a disconnect between the reported value of these scams and associated legal prosecutions. We use open-source investigative tools to (1) investigate potential frauds involving Ethereum tokens using on-chain data and token smart contract analysis, and (2) investigate the ways proceeds from these scams were subsequently laundered. The analysis enabled us to (1) uncover transaction-based evidence of several rug pull and pump-and-dump schemes, and (2) identify their perpetrators’ money laundering tactics and cash-out methods. The rug pulls were less sophisticated than anticipated, money laundering techniques were also rudimentary and many funds ended up at centralized exchanges. This study demonstrates how open-source investigative tools can extract transaction-based evidence that could be used in a court of law to prosecute DeFi frauds. Additionally, we investigate how these funds are subsequently laundered.

Daniela Penela

Bitcoin is a virtual currency that provides a completely decentralized secure alternative to the currencies currently used. Nakamoto, the creator of this cryptocurrency, published an article on an encryption mailing list in 2008 with the title “Bitcoin: A Peer-to-Peer Electronic Cash System”, thus giving the creation of this virtual currency. This study aims to analyze the Bitcoin and what factors can influence its price, in the context of a pandemic. This work will focus on the bitcoin price and on five different factors likely to have an influence on his price, such as: Hash Rate, Mining Difficulty, Volatility Index, Google Search and Transaction Cost. The period for this research ranges from 15/03/2020 to 14/11/2021, a total of 96 weeks, to integrate the covid-19 factor into the study. The results show that the variables fsCoinCirculation and fsTransationCost are both necessary conditions for an increase on the bitcoin price, but for low values of bitcoin price there are no necessary conditions. Additionally, findings suggest that Hash Rate influences the price of bitcoin. Finally, fsVix variable was found to be a variable with an important implication in price, namely, in its volatility.

Authors unavailable

No abstract is available for this record.

Sean Foley, Bart Frijns, Alexandre Garel, Tai‐Yong Roh

We examine the relationship between national culture and a country's Bitcoin activity. Given that Bitcoin is a high-risk currency/investment that is frequently used for illegal purposes and whose market is relatively opaque, we focus on the cultural dimension of individualism, which has been related to financial market participation, risk-taking behavior, and overconfidence. Using unique data that includes the originating country for Bitcoin transactions, we examine the relationship between individualism and a country's Bitcoin activity for a sample of 80 countries between 2009 and 2020. We find a significant and positive relationship between a country's individualism and its use of Bitcoin consistent with cultural values affecting the demand for such high-risk currency/investments.

Christian Leuprecht, Caitlyn Jenkins, Rhianna Hamilton

Purpose This study aims to explain how cryptocurrency is leveraged for illicit purposes across the global financial system. Specifically, it establishes how cryptocurrency has been changing the nature of transnational and domestic money laundering (ML). It then assesses the effectiveness of conventional anti-money laundering (AML) policy and legislation against the proliferation of crypto laundering, using Canada as a critical case study. Design/methodology/approach Data was collected from court cases and secondary sources to build cross-case trends of cryptocurrency use in ML. Illicit International Political Economy forms the theoretical foundation for this study, whose contribution is situated in the current literature on crypto-ML. Findings This study finds that Bitcoin is common among crypto-money launderers, though most also use some form of alt-coin, and that the use of third-party currency exchanges is a prevalent method to create illicit funds and conceal proceeds of crime. The findings validate two hypotheses that illicit use of crypto is prevalent in the first two stages of ML, and that crypto is most often used in conjunction with other fiat currencies. Although law enforcement is improving on monitoring and understanding popular cryptocurrencies such as Bitcoin, alt-coins pose a significant challenge for criminal intelligence. New regulations for third-party currency exchanges are having a positive impact on curtailing crypto-laundering but are shown to be insufficient per se to contain the use of crypto in criminal activity. Originality/value This study contributes to a more robust understanding of the use of virtual currency in transnational and domestic ML. It contributes to an emerging body of literature on the role of technological change in enabling the global flow of illicit funds. It also informs public policy on virtual currency in general, and on AML regulation in Canada in particular.

Amin Sadiqin

In the development of information and communication technology, there are many developments that occur. One of them is the emergence of NFTs as the latest trend in digital trading. This, of course, is a new breakthrough in the digital world. However, this can also be a loophole in committing money laundering crimes. In this research, we are using a qualitative descriptive approach with analytical methods. The result of this analysis is thatThe main problem with money laundering via NFTs and cryptocurrencies is the lack of understanding of the role of cryptocurrencies in financial crimes. As long as this misunderstanding is not addressed, the potential for the use of NFTs as a new method of financial crime will increase sharply to the point of endangering national security.

Adrianit Ibrahimi, Besa Arifi

Cryptocurrency has become ubiquitous and is evolving constantly. The question is if our legal framework is catching up with it. Therefore, this article analyzes the arguments on the legitimacy and legality of cryptocurrency in order to emphasize the relation between corruption and cryptocurrency. The research has enlightened some cogent arguments on the possibility of perpetrators committing corruption acts through cryptocurrency. These arguments basically refer to some of the unique characteristics of cryptocurrency such as the quick value fluctuation, the difficulties in tractability and the lacking current legislation. The unique features of it may headline cryptocurrency as an immensely attractive environment for corruption activities. Hence the world has already faced some tangled scamming scandals with cryptocurrency specified herein. Therefore, the aim of this article is to highlight the possibility for corruption acts to be committed through cryptocurrency as a form of corruption unknown before.

Shak Bahadur Budhathoki

The Commission for the Investigation of Abuse of Authority (CIAA) annual report points out that complaints related to the education sector for financial misuses occupy the largest share consistently in the past few years. In this context, the paper aims to draw on types and patterns of educational corruption in Nepal in the context of education decentralization since 2000. Further, it interprets how it takes place and its associated factors. Undertaking the qualitative content analysis of annual reports of CIAA and Office of the Auditor General (OAG) of Nepal between 2010 and 2015, this article portrays financial irregularities taking place consistently under construction work, teacher salary, and student-related grants - showing or allocating more funds, releasing additional teacher salary and inflating student numbers. The existing literature on education decentralization and corruption entails various factors for financial mismanagement - lack of local capacity, elite capture of public funds, etc. Using education decentralization as a theoretical lens (Mc Ginn & Welsh, 1999), this paper argues that poor monitoring and lack of policy implementation are major factors for the misuse of education finance in Nepal, coupled with complex procedural aspects of the public fund flow system. Thus, an adequate support system, especially during the early phase, can facilitate the decentralization of education and combat corruption.

Georgios Dimitropoulos

Abstract Blockchain is a new general-purpose technology that poses significant challenges to policymaking, law, and society. Blockchain is even more distinctive than other transformative technologies, as it is by nature a global technology; moreover, it operates based on a set of rules and principles that have a law-like quality—the lex cryptographia. The global nature of blockchain has led to its adoption by international organizations such as the United Nations and the World Bank. However, the law-like nature of the technology makes some of its uses by international organizations questionable from an international law and foreign affairs perspective. In this light, the article examines the effectiveness and legitimacy of the use of blockchain for international policymaking.

Su Nan

Grassroots corruption is one of the difficult problems in grass-roots governance. At present, local government continues to decentralize power to grassroots departments, and a large number of public services and public goods are provided by the grass-roots governments, match with public finances. However, with the expansion of the scale of public finance expenditure at the grass-roots level, it should be especially vigilant about the ineffective expansion caused by the corruption at the grass-roots level. This paper aims to explore the logical relationship between grassroots corruption and fiscal expenditure through literature review, and then put forward some suggestions.

Deven R. Desai, Mark A. Lemley

No abstract is available for this record.

Daehan Kim, Mehmet Hüseyin Bilgin, Doojin Ryu

Abstract This study analyzes the impact of a newly emerging type of anti-money laundering regulation that obligates cryptocurrency exchanges to report suspicious transactions to financial authorities. We build a theoretical model for the reporting decision structure of a private bank or cryptocurrency exchange and show that an inferior ability to detect money laundering (ML) increases the ratio of reported transactions to unreported transactions. If a representative money launderer makes an optimal portfolio choice, then this ratio increases further. Our findings suggest that cryptocurrency exchanges will exhibit more excessive reporting behavior under this regulation than private banks. We attribute this result to cryptocurrency exchanges’ inferior ML detection abilities and their proximity to the underground economy.

Petr Wawrosz, Jan Lánský

The paper focuses on the links between cryptocurrencies and corruption. After providing an overview of the literature dealing with the topic, it presents an outline of possible scenarios for how cryptocurrencies can be used in corruption-tainted contracts. The scenarios imply that cryptocurrencies can reduce the costs and risks related to a corruption-tainted contract and make it easier to transfer the corruption-based benefits on an anonymous basis. Their existence also allows corruption-tainted contracts to expand to areas where this did not bring any economic advantages in the past. The paper then explores whether there are any empirical correlations between cryptocurrencies and corruption in different countries. The numbers of Bitcoin automated teller machines (ATM) and cryptocurrency users were used as a proxy for cryptocurrencies and the Corruption Perception Index (CPI) as a proxy for corruption. Although we did not find any clear relationships, we discovered that the largest number of owners or users of cryptocurrencies is in countries with a high prevalence of corruption, but the level of corruption in them did not exceed the critical limit (around the value of 30 points of the CPI index).

Isabelle Adam, Mihály Fazekas

Information and Communication Technology (ICT) is often thought of as a uniformly positive tool making governments more transparent, accountable, and less corrupt. However, the evidence on it is mixed and often misunderstood. Hence, this article carries out a systematic stocktaking of ICT tools’ impact on corruption, offering a nuanced and context-dependent assessment. The tools reviewed are digital public services, crowdsourcing platforms, whistleblowing tools, transparency portals, distributed ledger technology, and artificial intelligence. We scrutinise the evidence both on ICTs’ anticorruption effectiveness and misuse for corruption. Drawing on the commonalities across technologies, we find that ICT can support anti-corruption by impacting public scrutiny in numerous ways: enabling reporting on corruption, promoting transparency and accountability, facilitating citizen participation and government-citizen interactions. However, ICT can also provide new corruption opportunities through the dark web, cryptocurrencies, or the misuse of technologies such as centralised databases. The introduction of ICT tools does not automatically translate into anti-corruption outcomes; rather, impact hinges on the matching between ICT tools and the local context, including support for and skills in using technology.

Marijan Zubalj, Vesna Buterin, Denis Buterin

The aim of this paper is to present the manipulation possibilities in the operation of information technology. Many authors have already dealt with cryptocurrencies and their investment potential, with special emphasis on bitcoin. Therefore, the aim of this paper is to identify possible manipulative activities in the segment of information technology about bitcoin as a possible means of fraud in the financial market, especially if it is analysed the trend of its movement and potential financial risk. In this paper, the authors investigate in detail the characteristics of securities by linking them to market manipulations. The authors analyse bitcoin as a relative market and financial unknown, explain its origin and the most significant characteristics, and define the risks in terms of possible market manipulations. Finally, the authors analyse the financial bubble that is created around bitcoin and its impact on the economy. The authors analyse that bitcoin and other cryptocurrencies are still suitable for fraudulent activities in financial markets and emphasize the importance of institutions in reducing potential risks. Keywords: bitcoin, institutions, bubble

Matthew J. Davis, Thomas Taro Lennerfors, Daniel Tolstoy

Purpose The purpose of the study is to explore, with anchorage in theories about the normalization of corruption, under what conditions blockchain technology can mitigate corruptive practices of multinational enterprises (MNEs) in emerging markets (EMs). Design/methodology/approach By synthesizing a technological perspective and theory on corruption, the authors examine the feasibility of blockchain for fighting corruption in MNEs’ business operations in EMs. Findings Blockchain technology is theorized to have varying mitigating effects on the rationalization, socialization and institutionalization of corruption. The authors provide propositions describing the effects and the limitations of blockchain for mitigating corruption in EMs. Social implications This paper offers a perspective for how to tackle acute business problems and social problems pronounced in international business but also prevailing elsewhere. Originality/value The study contributes to literature in international management by systematically exploring how and under what conditions blockchain can mitigate the normalization of corruption.

Zhang Zize

Bitcoin is extremely easy to be used in corruption cases due to its pseudonym, easy circulation, easy cross-border and other characteristics. As a decentralized electronic account book, the circulation of regulatory funds is jointly confirmed by each node in the bitcoin network, which can ensure the authenticity of the criminal evidence and is not easy to be lost or damaged. It provides great convenience for evidence collection in bitcoin corruption cases. However, there are also shackles in criminal governance, such as how to prove the subjective intent of the bribe takers, the impact of fluctuations in market value on the identification of the case and, most importantly, how to effectively recover stolen goods across borders. Therefore, the difficulty of bitcoin-related cases does not lie in the “anonymity” that some scholars believe, but lies in the determination of subjective intent, the determination of the amount of the crime and the international judicial assistance in recovering the stolen money.

Danielle Mendes Thame Denny, Emre Kazim, Adriano Koshiyama, Philip Treleaven · 5 authors

No abstract is available for this record.

Andrew Isaak, Suleika Bort, Michael Woywode

Research has shown that cognitive, normative, and regulative legitimacy are important for new market emergence. Little known, however, are the conditions and dynamics under which these three forms of legitimacy interact over time and in different institutional settings. In this study, we investigate the emergence and development of the new market for cryptocurrencies (i.e., Bitcoin) using a comprehensive dataset on trading in 49 countries between 2010 and 2020. Our study reveals that all three forms of legitimacy drive Bitcoin trading. Surprisingly, we also found increases in trading volume when Bitcoin was declared illegal and when normative support preceded, rather than followed, regulative legitimacy. Our results shed light on the relationship between cognitive, normative, and regulative legitimacy and their interactions in the emergence and development of a new contested market over time.

Sean Foley, Bart Frijns, Alexandre Garel, Tai‐Yong Roh

We examine the relationship between national culture and a country’s Bitcoin usage. Given that Bitcoin is a high-risk currency/investment that is frequently used for illegal purposes and whose market is relatively opaque, we focus on the cultural dimension of individualism, which has been related to risk-taking behavior and overconfidence. Using unique data that includes the originating country for Bitcoin transactions, we examine the relationship between individualism and a country’s Bitcoin usage for a sample of 80 countries between 2009-2018. We find a significant and positive relationship between a country’s individualism and its use of Bitcoin consistent with cultural values affecting the demand for such high-risk currency/investments.

Ferrán Vendrell-Herrero, Christian K. Darko, Yancy Vaillant

No abstract is available for this record.