Despite regulatory advancements, insider trading remains a persistent challenge, particularly when linked to organized crime, which exacerbates financial fraud, money laundering, and market manipulation. This study explores the regulatory gaps that allow criminal organizations to exploit financial loopholes and collaborate with corporate insiders to evade detection. The primary research question examines the extent to which insider trading is facilitated by organized crime and the effectiveness of existing enforcement mechanisms in countering these threats. Using a comparative legal analysis, this study evaluates enforcement frameworks across jurisdictions, focusing on the U.S. SEC’s stringent policies, the EU’s Market Abuse Regulation (MAR), and India’s SEBI Regulations, 2015. It examines whistleblower protections, AI-driven surveillance, and international regulatory cooperation as critical tools in mitigating insider trading risks. Findings indicate that while robust regulatory structures exist, enforcement challenges, jurisdictional disparities, and technological advancements continue to create vulnerabilities. Strengthening cross-border cooperation, enhancing AI-based financial monitoring, and reinforcing corporate governance are essential to improving market integrity. This research contributes to financial crime prevention by providing policy recommendations and emphasizing the need for future studies on the impact of decentralized finance (DeFi) and blockchain technologies in insider trading regulation.
The blockchain technology, which first gained recognition for enabling cryptocurrencies such as Bitcoin, is now emerging as a transformative technology with applications extending far beyond digital currencies. Its decentralized, unchangeable, and transparent characteristics make it appropriate for a variety of fields, including as voting systems, healthcare, banking, supply chain management, identity verification, and intellectual property protection. In this research paper usage of blockchain technology in different areas is shown depicting the features such as operational efficiency, security, and transparency. It also explores the foundational role of blockchain in cryptocurrency, focusing on how the consensus mechanism, mining process, and cryptographic principles secure transactions and maintain decentralization. Through an analysis of real life use cases, this paper identifies the possibilities, shortcomings, and emerging potential of blockchain technology. Blockchain’s capacity to generate tamper-proof and decentralized digital accounts is perhaps its most groundbreaking feature. Blockchain’s future will keep unfolding as industries pursue higher levels of security and efficiency, as its role will expand.
The Open Network (TON), designed to support Telegram's extensive user base of hundreds of millions, has garnered considerable attention since its launch in 2022. FunC is the most popular programming language for writing smart contracts on TON. It is distinguished by a unique syntax compared to other smart contract languages. Despite growing interest, research on the practical defects of TON smart contracts is still in its early stages. In this paper, we summarize eight smart contract defects identified from TON's official blogs and audit reports, each with detailed definitions and code examples. Furthermore, we propose a static analysis framework called TONScanner to facilitate the detection of these defects. Specifically, TONScanner reuses FunC compiler's frontend code to transform the FunC source code into FunC intermediate representation (IR) in the form of a directed acyclic graph (DAG). Based on this IR, TONScanner constructs a control flow graph (CFG), then transforms it into a static single assignment (SSA) form to simplify further analysis. TONScanner also integrates Data Dependency, Call Graph, Taint Analysis, and Cell Construct, which are specifically tailored for TON blockchain's unique data structures. These components finally facilitate the identification of the eight defects. We evaluate the effectiveness of TONScanner by applying it to 1,640 smart contracts and find a total of 14,995 defects. Through random sampling and manual labeling, we find that TONScanner achieves an overall precision of 97.49%. The results reveal that current TON contracts contain numerous defects, indicating that developers are prone to making errors. TONScanner has proven its ability to accurately identify these defects, thereby aiding in their correction.
The rapid evolution of financial markets, coupled with the limitations of traditional regulatory mechanisms, poses significant challenges in detecting and preventing insider trading. This study introduces an AI-driven trade surveillance framework integrated with blockchain-based compliance mechanisms to enhance SEBI’s regulatory oversight. The proposed approach leverages deep learning models (CNN + LSTM) for real-time anomaly detection in trading activities, while blockchain-powered smart contracts ensure secure, transparent, and tamper-proof trade records. Additionally, Explainable AI (XAI) improves the interpretability and legal admissibility of AI-generated evidence, addressing concerns related to regulatory transparency and judicial scrutiny. The findings indicate that AI-powered surveillance significantly enhances the accuracy of insider trading detection, while blockchain strengthens compliance, auditability, and cross-border regulatory cooperation. Integrating AI and blockchain into SEBI’s enforcement framework can accelerate regulatory interventions, bolster whistleblower protections, and uphold financial market integrity. Future research should explore extending AI-driven surveillance to decentralized finance (DeFi) ecosystems and refining blockchain-based governance models to align with global financial regulations.
A última década testemunhou a consolidação das Finanças Descentralizadas (DeFi) e a busca por maior eficiência nos mercados de capitais através da tokenização de Ativos do Mundo Real (RWA). Este artigo propõe o Unified Structured Finance Protocol (USFP), uma arquitetura DeFi híbrida projetada para a tokenização e negociação de produtos estruturados (como Debêntures, ETFs e COEs) no contexto regulatório brasileiro. O problema de pesquisa central é: Como desenvolver um <i>framework</i> de protocolo DeFi que preserve a eficiência e a liquidez da descentralização, ao mesmo tempo em que acomoda os requisitos rigorosos de <i>Anti-Money Laundering</i> (AML), <i>Know Your Customer</i> (KYC), e relatórios regulatórios exigidos para a tokenização de valores mobiliários no Brasil? Os objetivos são: 1) Propor o <i>Unified Structured DeFi Note</i> como um meta-ativo tokenizado. 2) Detalhar uma arquitetura de protocolo que integra um Módulo de Compliance (<i>RegTech</i>) e um AMM Regulado (RL-AMM). 3) Analisar o encaixe conceitual dessa arquitetura no panorama regulatório brasileiro (CVM/BACEN). A contribuição principal (Tese) é que a viabilidade de protocolos DeFi para o mercado de capitais brasileiro reside na separação funcional entre a liquidação descentralizada (<i>trustless</i>) e o acesso permissionado (<i>trusted</i>) [8]. Esta abordagem define um novo modelo de Infraestrutura de Mercado de Capitais Programável (<i>D-CMI – Decentralized Capital Market Infrastructure</i>), essencial para a tokenização de RWA regulamentados. A centralização intencional dos pontos de controle de acesso (KYC/AML) e de relatórios permite que o regulador mantenha a supervisão, enquanto as operações de <i>payoff</i> e negociação se beneficiam da eficiência <i>on-chain</i>.
A última década testemunhou a consolidação das Finanças Descentralizadas (DeFi) e a busca por maior eficiência nos mercados de capitais através da tokenização de Ativos do Mundo Real (RWA). Este artigo propõe o Unified Structured Finance Protocol (USFP), uma arquitetura DeFi híbrida projetada para a tokenização e negociação de produtos estruturados (como Debêntures, ETFs e COEs) no contexto regulatório brasileiro. O problema de pesquisa central é: Como desenvolver um <i>framework</i> de protocolo DeFi que preserve a eficiência e a liquidez da descentralização, ao mesmo tempo em que acomoda os requisitos rigorosos de <i>Anti-Money Laundering</i> (AML), <i>Know Your Customer</i> (KYC), e relatórios regulatórios exigidos para a tokenização de valores mobiliários no Brasil? Os objetivos são: 1) Propor o <i>Unified Structured DeFi Note</i> como um meta-ativo tokenizado. 2) Detalhar uma arquitetura de protocolo que integra um Módulo de Compliance (<i>RegTech</i>) e um AMM Regulado (RL-AMM). 3) Analisar o encaixe conceitual dessa arquitetura no panorama regulatório brasileiro (CVM/BACEN). A contribuição principal (Tese) é que a viabilidade de protocolos DeFi para o mercado de capitais brasileiro reside na separação funcional entre a liquidação descentralizada (<i>trustless</i>) e o acesso permissionado (<i>trusted</i>) [8]. Esta abordagem define um novo modelo de Infraestrutura de Mercado de Capitais Programável (<i>D-CMI – Decentralized Capital Market Infrastructure</i>), essencial para a tokenização de RWA regulamentados. A centralização intencional dos pontos de controle de acesso (KYC/AML) e de relatórios permite que o regulador mantenha a supervisão, enquanto as operações de <i>payoff</i> e negociação se beneficiam da eficiência <i>on-chain</i>.<br>
In recent years, security incidents stemming from centralization defects in smart contracts have led to substantial financial losses. A centralization defect refers to any error, flaw, or fault in a smart contract's design or development stage that introduces a single point of failure. Such defects allow a specific account or user to disrupt the normal operations of smart contracts, potentially causing malfunctions or even complete project shutdowns. Despite the significance of this issue, most current smart contract analyses overlook centralization defects, focusing primarily on other types of defects. To address this gap, our paper introduces six types of centralization defects in smart contracts by manually analyzing 597 Stack Exchange posts and 117 audit reports. For each defect, we provide a detailed description and code examples to illustrate its characteristics and potential impacts. Additionally, we introduce a tool named CDRipper (Centralization Defects Ripper) designed to identify the defined centralization defects. Specifically, CDRipper constructs a permission dependency graph (PDG) and extracts the permission dependencies of functions from the source code of smart contracts. It then detects the sensitive operations in functions and identifies centralization defects based on predefined patterns. We conduct a large-scale experiment using CDRipper on 244,424 real-world smart contracts and evaluate the results based on a manually labeled dataset. Our findings reveal that 82,446 contracts contain at least one of the six centralization defects, with our tool achieving an overall precision of 93.7%.
This study examines the legal challenges associated with the commercialization of non-fungible tokens (NFTs) in Europe and Brazil. This paper provides a comprehensive analysis of the European and Brazilian legal frameworks, identifying key legal challenges related to intellectual property rights, consumer protection, taxation, and anti-money laundering (AML) regulations. Through a comparative analysis, we highlight the similarities and differences between the two jurisdictions, as well as best practices for addressing these legal challenges. The paper also discusses recent developments and court decisions, demonstrating the evolving legal landscape for NFTs in both regions. The findings of this paper have significant implications for the future of NFTs in Europe and Brazil, as well as for the broader digital economy, and offer valuable insights for policymakers, legal professionals, and market participants. Additionally, the paper identifies areas for further research, including the impact of technological advancements, the role of smart contracts, cross-jurisdictional issues, and the relationship between NFTs and traditional intellectual property rights.
The entry of new technological infrastructures into the financial markets poses serious concerns about the misuse of the economic system for illicit purposes, such as money laundering and financing of terrorism. Although there are cases in which this connection has already been discovered by malicious actors, distributed ledger technologies can nevertheless represent a powerful tool at the disposal of competent authorities to trace illicit flows and to better monitor risks in financial markets. However, this possibility may go through an interdisciplinary analysis of the phenomena. The search for alternative systems to move funds, rather than the traditional financial intermediaries, such as banks, is not a new circumstance and not necessarily for criminal purposes. Nevertheless, some of the already-known value transfer systems may benefit from the use of distributed ledger technology and make their detection more difficult. The European institutions are discussing the needed legislative packages to enforce the current regulations and to extend their application to the crypto space, as well as the establishment of a new competent authority.
Geleneksel olarak sahiplik kanıtı kâğıt üzerinde olan sektörlerin, özellikle gayrimenkul sektörünün, hızla artan işlem hacmi ve dijital dönüşümle birlikte, dijital varlıklar ve blok zinciri teknolojileri kullanılarak daha şeffaf, güvenli ve verimli bir hale gelmesi kaçınılmaz olmuştur. Bu yeni yaklaşım, gayrimenkul sahipliğinin dijital ortamda aktarılması ile yatırımcıların gayrimenkul varlıklarına daha kolay ve hızlı erişim sağlamalarına olanak sağlayabilir. Non-Fungible Tokens (NFT'ler) ve onların daha özeleştirilmiş karşılığı olan Fractional Non-Fungible Tokens (F-NFT'ler) gibi yeniliklerin ortaya çıkmasına yol açmıştır. F-NFT'ler, varlıkların kesirli mülkiyetini sağlayarak, NFT'lerin güvenli ve şeffaf özelliklerini gayrimenkul uygulamaları için gerekli olan likidite ve demokratik yönetimle birleştirebilir. Bu çalışmada, F-NFT'leri dijital senetler olarak kullanarak ortak mülkiyeti doğrulayan ve böylece yönetişimi iyileştirip varlık yönetimini demokratikleştiren bir sistem önermektedir. Önerilen çerçeve, blok zincir teknolojisini, akıllı sözleşmeleri ve merkezi olmayan otonom organizasyonları (DAO'lar) entegre ederek, geleneksel gayrimenkul sistemlerinin yüksek giriş engelleri, likidite eksikliği ve karmaşık yönetişim mekanizmaları gibi verimsizliklerini ele almaktadır. F-NFT'lerin kapsamlı teorik ve pratik uygulamasını sağlayarak, çalışmamız geleneksel mülkiyet modellerinin verimsizliklerini vurgulamakta ve gayrimenkul işlemlerinde yenilikçi bir değişim sunmaktadır. Çalışma, sistem içindeki karmaşık süreçleri ve etkileşimleri aydınlatan ve yaklaşımımızın otomatik, şeffaf ve verimli doğasını vurgulayan yenilikçi dizilim ve sınıf diyagramlarının kullanımı ile öne çıkmaktadır. Bu diyagramlar, gayrimenkul varlıklarının ihraç edilmesi ve parçalanması, F-NFT'lerin dağıtımı, mülkiyetle ilgili kararların yönetimi ve kira işlemlerinin yürütülmesinde hükümet, akıllı sözleşmeler ve mülk sahipleri gibi kilit aktörlerin rollerini göstemektedir. Bulgular, F-NFT'lerin gayrimenkul yatırımlarına erişimi demokratikleştirebileceğini, likiditeyi artırabileceğini ve daha kapsayıcı yönetişim mekanizmalarını kolaylaştırarak merkezi olmayan ve verimli bir gayrimenkul piyasasının yolunu açabileceğini önermektedir. Ancak, düzenleyici çerçevelerin oluşturulması ve likidite mekanizmalarının iyileştirilmesi konularında zorluklar devam etmektedir. Gelecek araştırmalar, F-NFT'leri geleneksel pazarlarla entegre etmeye, güçlü ikincil pazarlar geliştirmeye ve dijitalleşmiş, merkezi olmayan bir gayrimenkul ortamının potansiyelini tam olarak gerçekleştirmek için yenilikçi kullanım durumlarını araştırmaya odaklanacaktır. Bu çalışma, tek varlık sahipliğinden işbirlikçi ve dijitalleşmiş bir yaklaşıma geçişi önererek, gayrimenkul yatırımlarının erişilebilir, adil ve blok zincir teknolojisinin yenilikleriyle yönetildiği bir geleceğin temelini atmaktadır.
In recent years, particularly with the Ethereum blockchain’s advent, smart contracts have gained significant interest as a means of regulating exchanges among multiple parties via code. This surge has prompted the emergence of various smart contract (SC) programming languages, each possessing distinct philosophies, grammatical structures, and components. Conse-quently, developers are increasingly involved in SC programming. However, these languages are platform specific, implying that a transition to another platform necessitates the use of different languages. Additionally, developers require a certain level of control over SCs to address encountered bugs and ensure maintenance. To address these developer-centric challenges, this paper presents SCEditor, a novel Eclipse Sirius-based prototype editor designed for the visualization, design, and creation of SCs. The editor proposes a means of standardizing the usage of SC programming languages through the incorporation of graphical syntax and a metamodel conforming to Model-Driven Engineering (MDE) principles and SC construction rules to generate an abstract SC model. The efficacy of this editor is demonstrated through testing on a voting SC written in Vyper and Solidity languages. Furthermore, the editor holds potential for future exploitation in model transformation and code generation for various SC languages.
Douglas J. Cumming, Johannes Fuchs, Paul P. Momtaz
Abstract We explore the risk–return trade‐off in international regulation of cryptocurrency markets using a unique sample of regulations implemented between July 2018 and April 2023. Various regulation types have reduced risk in cryptocurrency markets while having differential impacts on raw and risk‐adjusted returns. Given the legal challenges for national jurisdictions in regulating international markets, we develop a digital asset regulatory strength index (DARSI) and study the impacts of national regulatory enforcement quality on the risk and return effects of cryptocurrency regulations. We find that strong enforcement quality, measured based on the strength of formal institutions, amplified the regulations' intended effects. The amplification effect is more pronounced for regulations announced by a financial regulator and for more liquid tokens. Consistent with the view that normative compliance‐seeking facilitates the adoption of norms, we also find that cultural uncertainty avoidance amplifies regulations' intended effects.
Corporate governance encompasses a set of processes, customs, policies, laws, and institutions that affect how a corporation is directed, administered, or controlled. Technology both enhances and disrupts the traditional board-centric corporate governance system, enhancing efficiency and transparency while introducing new challenges and risks. In this work we examine three key themes comprehensively: the redefinition of information and information asymmetry through the generation of and access to big data; blockchain technology’s transformative potential for aggregating preferences and exercising shareholder voting rights while blurring the line between securities and tokens; and the impact of smart contracts and their underlying infrastructure on the expansion of contracts and the implementation of decentralized governance through decentralized autonomous organizations. These innovative technological solutions empower stakeholders to exercise governance rights effectively, but their complexity also gives rise to new barriers and inequalities. As technology evolves, collaboration among researchers, policymakers, and practitioners is imperative to ensure that corporate governance remains effective and responsive to the current dynamic business environment.
Cryptocurrency, powered by blockchain technology, has revolutionized the financial landscape, captivating the attention of investors, technologists and governments worldwide. This paper provides a comprehensive exploration of cryptocurrency and its underlying technology, blockchain. It delves into the structure and functioning of blockchain, highlighting its decentralized and secure nature. The impact of cryptocurrency on finance is dissected, showcasing how it disrupts traditional financial systems by reducing intermediaries, promoting financial inclusion, enhancing security and transparency and empowering individuals with financial sovereignty. Challenges and regulatory developments are also discussed, reflecting the ongoing evolution of this transformative technology. Cryptocurrency investment and speculation are explored, emphasizing the differences between long-term investment and short-term speculation and the unique risks and opportunities associated with each approach. The integration of cryptocurrencies into diversified investment portfolios is examined, offering insights into their potential role as a hedge and a source of uncorrelated returns. A SWOT analysis summarizes the strengths, weaknesses, opportunities and threats within the cryptocurrency space, highlighting its disruptive potential and the complexities it faces in a dynamic financial landscape. In conclusion, this paper underscores the transformative power of cryptocurrency and blockchain technology while acknowledging the need for responsible adoption and regulation to shape their future impact on finance.
Purpose This study aims to, firstly, develop a red flag checklist for cryptocurrency Ponzi schemes and, secondly, to test this red flag checklist against publicly available marketing material for Mirror Trading International (MTI). The red flag checklist test seeks to establish if MTI’s marketing material posted on YouTube ® (in the form of a live video presentation) exhibits any of the red flags from the checklist. Design/methodology/approach The study uses a structured literature review and qualitative analysis of red flags for Ponzi and cryptocurrency Ponzi schemes. Findings A research lacuna was discovered with regard to cryptocurrency Ponzi scheme red flags. By means of a structured literature review, journal papers were identified that listed and discussed Ponzi scheme red flags. The red flags from the identified journal papers were subsequently used in a qualitative analysis. The analyses and syntheses resulted in the development of a red flag checklist for cryptocurrency Ponzi schemes, with five red flag categories, containing 18 associated red flags. The red flag checklist was then tested against MTI’s marketing material (a transcription of a live YouTube presentation). The test resulted in MTI’s marketing material exhibiting 88% of the red flags contained within the checklist. Research limitations/implications The inherent limitations in the design of using a structured literature review and the lack of research regarding the cryptocurrency Ponzi scheme red flags. Practical implications The study provides a red flag checklist for cryptocurrency Ponzi schemes. The red flag checklist can be applied to a cryptocurrency investment scheme’s marketing material to establish if it exhibits any of these red flags. Social implications The red flag checklist can be applied to a cryptocurrency investment scheme’s marketing material to establish if it exhibits any of these red flags. Originality/value The study provides a red flag checklist for cryptocurrency Ponzi schemes.
Abstract The new EU Markets in Crypto-Assets Regulation (“MiCA”) emphasises the prevention of market abuse as one of its five main objectives. This paper critically analyzes MiCA’s provisions on market abuse (Title VI), applying the new rules to the primary categories of crypto-asset market integrity risks to provide a coherent interpretation. In doing so, we consider both the pre-existing legal framework for protecting market integrity, chiefly the Market Abuse Regulation (“MAR”), and the unique features of crypto-asset markets. We find that by largely replicating MAR, MiCA presents “new wine in old bottles” challenges, as crypto-assets introduce novel issues that the legislator attempts to address with a subset of existing tools. The extent to which “decentralized finance” (DeFi) activities will incur liability under MiCA’s anti-market abuse provisions remains unclear, particularly regarding various blockchain network participants. Furthermore, classifying MEV strategies as market abuse may prove difficult. The absence of certain safe-harbor provisions present in MAR, such as those for self-insiders and buy-back and stabilisation schemes, may create uncertainty and potentially chill legitimate market behavior under MiCA.