<b><i>Traditional financial audits</i></b> have long served as the primary instruments for oversight, disclosure assurance, and risk assessment in regulated financial systems. These mechanisms, however, were designed for centralized institutions, periodic reporting cycles, and human-paced transaction environments. In blockchain-based systems—particularly those supporting stablecoins, tokenized real-world assets (RWAs), and decentralized finance (DeFi)—risk materializes continuously and often irreversibly. This paper presents a structural comparison between traditional audit models and the Crystal Validator™ (CV), a pre-execution enforcement architecture designed for real-time regulatory compliance. We demonstrate that post-fact auditing is structurally incapable of preventing modern on-chain failures, regulatory breaches, and systemic collapses. We argue that effective blockchain regulation requires a shift from retrospective verification to deterministic, pre-transaction authorization enforced at the protocol level.
The GENIUS Act's prudential framework protects against systemic risk that flows in one direction: from stablecoin failure into traditional banking risk. The empirical record of crosstagion, the bidirectional contagion between traditional finance and decentralized finance, demonstrates that the transmission channel runs the other way as well. When traditional financial stress destabilizes payment stablecoin reserves, as occurred when Silicon Valley Bank's failure briefly unpegged USD Coin in March 2023, the cascade into decentralized markets falls into a jurisdictional gap that neither GENIUS nor the CLARITY Act resolves. The Office of the Comptroller of the Currency owns the stablecoin issuer; the Commodity Futures Trading Commission owns the derivative markets where the cascade lands; and a depegged stablecoin may simultaneously fall under the Securities and Exchange Commission's jurisdiction as a potential investment contract under the Howey test. No statute allocates liability or mandates coordination among these three agencies when the transmission crosses their respective boundaries, and no mechanism exists for assigning jurisdictional primacy before all three assert competing claims. DAO governance failure compounds the problem by creating a distinct transmission mechanism operating at blockchain speed, with no identifiable counterparty and no circuit breaker. This Article argues that closing the crosstagion gap requires not new prudential requirements but a designated tri-agency coordination mechanism, triggered by observable stress indicators, that assigns jurisdictional primacy and activates a classification standstill before a crisis rather than after.
ii ABSTRACT Survival in the Stigmatized Industry (Bitcoin ATM) Brooks McAdam This paper examines how companies can survive in a stigmatized industry where the same message may attract customers while simultaneously generating skepticism. The study posed the following research question using the Bitcoin ATM industry as the context: Does the message presented on company websites influence the degree of exit risk in a market characterized by moral concerns, exposure to fraud, and unstable regulation? The answer is clear. Messaging is important; however, not every message is equally important. Fee-related messaging emerged as the most consistent predictor of exit risk. Messaging emphasizing ease of use showed a recurring but less consistent association with elevated exit risk, while security messaging demonstrated only limited evidence of a protective effect among the 71 operators analyzed. The message about freedom or privacy did not have a significant impact. These findings change the agenda of the survival research not only to the broad characteristics of firms but also to the assertions that firms wish to make publicly.
Tokenisation has made substantial technical progress, yet tokenised securities remain peripheral to mainstream capital markets. This paper argues that the central problem is not whether distributed ledger technology can record and process issuance, transfers, pledges or lifecycle events. It can. The harder question is whether the resulting instrument is institutionally usable: capable of being held, settled, financed, serviced, risk-managed, reconciled and relied upon by issuers, investors, dealers, custodians, central securities depositories, auditors and market authorities. The paper develops a market-structure framework distinguishing four levels of record: technical state, operational record, authoritative market record and market utility. Technical state is what the ledger says. The operational record is what a platform or institution administers. The authoritative market record is the record that market actors can rely on for entitlement, transfer, custody, collateral and asset servicing. In legal language, this often corresponds to the legal register or account record; the broader market term is used here because capital-market adoption depends on more than formal legal validity. Market utility asks whether the instrument creates economic value at scale. The paper introduces the concept of Institutional Finality: the condition in which a financial record is not only technically valid, but relied upon across the full capital-market chain. Institutional Finality is broader than settlement finality. Settlement finality asks when a transfer is irrevocable and unconditional. Institutional Finality asks whether the relevant record can be used without bespoke reconciliation or exceptional explanation by the institutions through which markets operate. The paper analyses a recurring architecture in which a distributed ledger platform seeks to operate the primary digital record while an incumbent market infrastructure participates as access layer, validator, custodian, investor central securities depository or distribution channel. Such arrangements raise a record-authority problem: if the incumbent must enforce ledger state, the ledger has market-infrastructure consequences; if it need not, the ledger remains an operational record rather than the authoritative one. The paper labels the unstable form of this arrangement borrowed trust: a configuration in which the platform claims master-record status while the incumbent supplies institutional credibility without acquiring institutional control. The paper proposes a collateral-recognition test: where an asset is pledged or locked on-ledger, will the institutions controlling transfer, custody and settlement prevent inconsistent disposition of the asset? If yes, the ledger has genuine market effect. If no, or if the answer is uncertain, the tokenised asset may be useful for workflow automation but has not achieved Institutional Finality. The conclusion is asset-class specific. Tokenisation is most credible where it is anchored in an accountable record operator and where the authoritative record can be redesigned without disrupting established market infrastructure. Funds, loans and private credit are therefore more natural early candidates than mainstream bonds or listed equities. For mainstream securities, distributed ledger technology may add substantial value as workflow, lifecycle and collateral infrastructure, but claims to master-record status require a much stronger institutional and economic case.
The tokenization of real-world assets (RWAs) has emerged as a transformative application of blockchain technology, with market projections estimating trillions of dollars in tokenized assets within the coming decade. However, a fundamental challenge remains unaddressed: physical assets such as precious metals, stored commodities, and warehoused goods incur structural negative carry -- custody, insurance, and audit costs that accumulate over time. While existing tokenization models have successfully established the market for digital gold and treasuries, they typically manage operational costs at the issuer level. The FRS introduces a framework to bring these economics directly on-chain, avoiding mechanisms such as token rebasing that compromise fungibility and composability with decentralized finance (DeFi) protocols. This paper proposes the Fungible Reserve Standard (FRS), a deterministic token design framework that encodes carrying costs transparently into on-chain logic. The FRS introduces an asset-per-token variable q(t) that decreases according to a predefined annualized carrying cost rate, coupled with a supply reconciliation mechanism that preserves holder balances and ERC-20 composability. While mathematically inspired by the daily expense ratio accrual in traditional asset management -- which often embed centralized profit margins -- the FRS design specifically encodes actual operational carrying costs to provide pure institutional-grade accounting clarity without compromising DeFi compatibility. The framework is asset-agnostic and applicable to any real-world asset with positive, predictable holding costs.
The legal nature of tokens, cryptographic assets recorded on distributed ledgers and capable of performing multiple economic functions simultaneously or successively, remains one of the most contested and consequential unresolved questions in contemporary financial law. The dominant regulatory response, principally the application of securities law analysis through the investment contract test established in SEC v W J Howey Co , has generated a body of case law characterised by inconsistent outcomes, pervasive uncertainty, and perverse incentives to structure token offerings so as to fall outside the regulatory perimeter. The property law, monetary law, and contractual rights frameworks each capture an important dimension of the problem, but none is adequate, standing alone, to provide a comprehensive and coherent account of the legal nature of tokens across the full range of contexts in which that question arises. This article advances the thesis that the persistent attempt to assign a fixed and singular legal nature to tokens is both theoretically unsatisfactory and practically counterproductive. It is theoretically unsatisfactory because it seeks a degree of ontological stability in an asset class whose defining characteristic is functional versatility; it is practically counterproductive because it produces regulatory arbitrage, legal uncertainty, and market fragmentation. The appropriate response, it is submitted, is a dynamic functional typology: a framework that determines the legal nature of a token by reference to the economic function it performs at any given moment in its lifecycle, payment, investment, access, governance, or representational, and that assigns legal consequences in property, contract, insolvency, and regulation accordingly. Drawing on doctrinal analysis, comparative law, and normative legal theory, the article establishes five economic functions as the organising categories of the framework, proposes four criteria for the identification of the operative function in any given case — the reasonable expectations of the acquirer, the observable economic characteristics of the token, the degree of decentralisation of the network, and the stage of the token's lifecycle — and demonstrates the framework's application to the principal categories of token and to the hardest contested cases, including non-fungible tokens, algorithmic stablecoins, decentralised autonomous organisations, hybrid tokens, and decentralised finance protocols. The comparative analysis examines the regulatory frameworks of the European Union (MiCA), the United States (the Howey test and the proposed FIT21 Act), the United Kingdom, Switzerland, Liechtenstein, Singapore, and Japan, demonstrating that the functional approach is not merely a theoretical construct but the direction in which the most sophisticated legislative initiatives are converging. The article culminates in the articulation of a five-stage Dynamic Classification Framework, comprising preliminary identification, function determination, consequence assignment, lifecycle monitoring, and reclassification, supported by a Dynamic Classification Matrix that maps the legal consequences of each operative function across property, insolvency, and regulatory dimensions. Two regulatory safe harbours are proposed: a transitional safe harbour for issuance-stage tokens and a decentralisation safe harbour for tokens that have achieved sufficient network decentralisation. The article further proposes a token register as the international harmonisation instrument through which the framework's outputs are made publicly accessible across jurisdictions. The framework is designed to be jurisdiction-neutral and compatible with the principal existing legislative architectures, including MiCA, MiFID II, the UNIDROIT Principles on Digital Assets and Private Law, and the UK Law Commission's recommended data object category. Note: A slightly shorter Spanish version is currently under review for the edited volume "Los bienes digitales", led by the PRIVATECH Observatory, Universidad Externado de Colombia.
Decentralized Autonomous Organizations (DAOs) face a fundamental decentralization paradox: the characteristics that make them theoretically superior to existing hierarchical structures simultaneously undermine their practical effectiveness. This thesis investigates whether and how this paradox can be addressed through a multi-level analysis that encompasses price stability, market performance, and philanthropic implications. In doing so, this thesis aims to provide critical insights into DAOs, which are considered a new form of digital enterprise that facilitates collective action in managing digital commons. The thesis comprises three interconnected essays, each underpinned by a specific research question.<br><br>The first essay investigates how non-traditional performance indicators impact DAO volatility. Unlike some DAOs, which issue decentralized stablecoins to maintain stable token prices, most DAOs are built on a native token basis, whose value depends entirely on the effectiveness of governance and the protocolâs future adoption. This means their prices are more exposed to speculative trading, making volatility a central concern for these DAOs. Under these circumstances, native DAOs that are not built on a stable mechanism must rely on relevant performance indicators to assess token price stability from an investment perspective. However, non-traditional performance indicators, such as social media and wealth inequality, are not typically included when measuring the riskiness of crypto assets. Based on several econometric models and robustness checks (e.g., MM-type, GMM, and entropy balancing), the findings show that both social media dominance and wealth inequality significantly reduce DAO volatility. Drawing on herding behavior and equity theories, the concepts of digital elites and stability pacts demonstrate that strategic recentralization enhances price stability and enables the development of novel DAO risk assessment frameworks. This essay recognizes the relevance of social media dominance and wealth inequality as non-traditional performance indicators for predicting DAO volatility and can help establish a risk assessment framework that crypto investors can rely on when making informed decisions. <br><br>The second essay examines the impact of ownership concentration and duration on the performance of DAO markets. Using several econometric models and robustness checks (e.g., GLS, GMM, and PSM), the findings reveal a positive and significant impact of ownership concentration and duration across categories on DAO market performance. Furthermore, the findings indicate that the average ownership duration has a significant positive impact, whereas ownership concentration has a significant negative impact on DAO market performance. Drawing on participatory governance and social exchange theories, this essay proposes an optimal governance equilibrium model to enhance and sustain DAO market performance. Overall, this essay offers novel insights into how the token-holdersâ commitment mitigates decentralization's operational inefficiencies.<br><br>The third essay examines the application of DAOs in the charity sector and aims to deepen the understanding of crypto donors' perceptions of this technology. Improving transparency and trust in the charity sector is crucial, as donors increasingly seek new ways to monitor and verify their contributions. Specifically, this essay examines Maxity, the world's first Web3 Social Impact protocol that contributes to the 17 UN SDGs. By adopting a netnography approach and using UMAP, HDBSCAN, and BERTopic â three unsupervised machine learning models â this essay identified four latent dimensions related to DAO-based charitable activities. These findings reveal how donors perceive DAO as an effective channel for contributing to charitable causes, enabling greater transparency, faster donation delivery, cost-effectiveness, and increased trustworthiness. Furthermore, the concept of sociotechnical governance was introduced to theorize how DAO-enabled NFTs reshape institutional trust and refine traditional charity governance paradigms. This essay contributes to the expanding discussion on DAOs as an innovative channel for organizing and responding rapidly to humanitarian crises.
This paper examines the recurring dynamics of financial crises through a comparative case study of the Dotcom bubble, the 2008 global financial crisis, and the ongoing cryptocurrency era. The objective is to investigate whether cryptocurrencies represent a genuine financial revolution or a repetition of past speculative manias. Using a qualitative methodology, the study applies a behavioral finance framework to analyse biases such as herding, overconfidence, and FOMO, and combines this with the evaluation of market data, including IPO trends, interest rates, and volatility indices. The results reveal strong equivalents across all three cycles. In each case, investor sentiment amplified volatility, and speculative assets obscured true risk. Weak regulation left markets vulnerable to collapse. Today’s ICOs are a reflection of IPOs in the Dotcom bubble, meanwhile the regulatory faults in 2008 find similarities in decentralized finance (DeFi). Moreover, the evidence challenges the Efficient Market Hypothesis, which markets illustrate collective perceptions instead of objective fundamentals. The findings suggest that financial markets repeat inefficiencies in new forms. Cryptocurrencies risk becoming another phase in the history of financial instability without coordinated regulation, investor education, and macroprudential monitoring.
Decentralized Finance (DeFi) has become a key innovation within blockchain technology by enabling permissionless and programmable financial services without traditional intermediaries. This thesis examines how yield is generated in DeFi and provides a systematic comparison of the main implementation models that enable it. The study focuses on three core mechanisms—liquidity mining, interest-bearing token systems, and automated vault strategies—and explores how they operate in practice through case studies of Aave, Uniswap, and Yearn Finance. The research aims to classify these models, analyze their technical foundations, and evaluate their governance structures and associated risks. The analysis is based on a literature review and protocol documentation from leading DeFi platforms. Each model is assessed across several dimensions, including reward structure, capital efficiency, user accessibility, and exposure to risks such as smart contract exploits, impermanent loss, and market volatility. The case studies demonstrate how different design choices lead to variations in yield generation: Aave emphasizes lending-based interest mechanisms, Uniswap relies on trading fees, and Yearn Finance automates strategy allocation across protocols. The findings show that no single model is universally superior; instead, each involves trade-offs between sustainability, complexity, and yield potential. Governance also emerges as a central factor in long-term stability, as the governance mechanisms influence strategy design, risk management, and protocol evolution. Overall, the study highlights a shift in DeFi from rapid growth toward more sustainable and structured yield frameworks.
Decentralized Finance (DeFi) is not merely a new competing technology as it challenges the core principle of traditional banking by eliminating the bank's role as an intermediary in financial services. This thesis establishes a foundation by examining DeFi technology and analyzing the specific areas of banking where its disruptive impact is most significant. Through a literature review and case examples, the study examines the strategic responses traditional banks have developed to address the disruption caused by DeFi technology. The research indicates that the threat of banks being displaced is unfounded; rather, the most likely scenario is strategic adaptation. Banks have responded to the DeFi challenge in various ways, including developing their own private blockchain-based platforms and tokenizing assets (Real-World Asset tokenization). Meanwhile, central banks have begun researching and developing the launch of Central Bank Digital Currencies (CBDCs). Additionally, regulatory authorities have responded to DeFi disruption by tightening the associated regulatory environment. The thesis concludes that banks are not competing directly with open DeFi; instead, they are integrating its technological benefits, such as automation and efficiency, into their regulated operations. The future financial system appears as a model of coexistence that combines the technological innovation of DeFi with the institutional trust of banks.
The integration of Bitcoin into corporate treasuries constitutes a critical strategic choice, motivated by its capacity to bolster liquidity and serve as an inflation hedge, while simultaneously being encumbered by pronounced financial volatility and regulatory ambiguity. This investigation examines sectoral variations in Bitcoin adoption, with particular attention to the manner in which financial risks, regulatory structures, and decentralized governance mechanisms shape corporate conduct across the technology, cryptocurrency mining, retail, healthcare, and e-commerce sectors. Drawing on a cross-sectional dataset encompassing 102 publicly traded firms collectively holding 1,001,861 BTC, the analysis employs MAD-based volatility, Firth logistic regression incorporating a U.S. regulatory dummy to account for the BITCOIN Act of 2025, and heatmap visualization to evaluate risk profiles and adoption patterns. Results demonstrate marked sectoral disparities: the technology and mining sectors command predominant holdings yet confront heightened risk exposure, whereas retail and healthcare sectors proceed with greater caution, guided by considerations of cost-value efficiency and regulatory adherence. The U.S. regulatory dummy is significant, indicating the BITCOIN Act facilitates high Bitcoin adoption, while recent transactional activity is marginally significant. The heatmap accentuates the technology sector’s pre-eminence in aggregate Bitcoin reserves and illuminates the differential influence of regulatory frameworks in non-U.S. jurisdictions. Anchored in Institutional Theory, the Technology Acceptance Model, and Transaction Cost Economics, the study advances the field by quantifying sector-specific risks and visually representing regulatory impacts, thereby furnishing actionable insights for treasury risk management and regulatory policy formulation within a decentralized financial ecosystem.
This study examines insider trading within decentralized capital markets, focusing on its legal implications. The primary objective is to understand how insider trading affects market integrity, investor trust, and the broader regulatory environment in decentralized finance (DeFi). Using a qualitative approach, the research analyzes case studies of reported insider trading incidents in blockchain-based platforms and evaluates existing legal frameworks governing such activities. Data is collected through literature reviews, legal document analysis, and expert interviews. The findings reveal significant gaps in the regulatory oversight of insider trading in decentralized markets due to the pseudonymous nature of blockchain and the absence of centralized regulatory authorities. Furthermore, the study highlights that while blockchain technology offers transparency, it also poses challenges in identifying and prosecuting offenders. The research concludes that strengthening international cooperation and creating adaptive legal frameworks are essential to mitigate insider trading risks in decentralized markets. Such measures will enhance investor protection, foster trust, and promote fair market practices in the rapidly growing DeFi ecosystem.
Ovaj završni rad bavi se analizom utjecaja regulatornih okvira na tržište kriptovaluta, pri čemu se posebna pozornost posvećuje razlikama u zakonodavnim pristupima pojedinih država i nadnacionalnih tijela. U fokusu rada su Europska unija, Sjedinjene Američke Države, Kina te druge značajne jurisdikcije koje kroz različite modele regulacije pokušavaju odgovoriti na izazove koje donosi brzo rastuće i tehnološki kompleksno kriptotržište. Istraživanje je provedeno kroz pregled relevantne literature, analizu zakonodavnih dokumenata i komparativnu analizu pravnih okvira, a rezultati upućuju na niz ključnih problema s kojima se regulatori suočavaju. Među njima se ističu pravna nesigurnost, nedovoljna zaštita potrošača, visoki rizik od zloupotrebe u svrhu financijskog kriminala, te fragmentiranost regulacije na međunarodnoj razini. Posebna se pažnja pridaje europskoj regulativi MiCA (Markets in Crypto-Assets), koja predstavlja prvi pokušaj stvaranja sveobuhvatnog zakonodavnog okvira za kriptoimovinu unutar Europske unije. Također se razmatra uloga samoregulacije i potreba za ravnotežom između podrške inovacijama i osiguravanja stabilnosti financijskog sustava. Na temelju analize, rad nudi preporuke za daljnji razvoj regulatorne politike u području kriptovaluta, s naglaskom na važnost usklađivanja zakonodavnih rješenja, institucionalne suradnje i prilagodljivosti pravnog okvira u skladu s dinamičnim razvojem tehnologije. Zaključno, ističe se važnost izgradnje dosljednog, transparentnog i učinkovitog sustava regulacije, osobito u kontekstu Europske unije i Republike Hrvatske.
Nikola Vukić, Veljko Petrović, Дину Драган, Dušan Gajić
Traditionally, smart contract auditing has been conducted using analysis tools and manual review processes. However, these tools often struggle to detect complex vulnerabilities and novel attack vectors. Advancements in Large Language Models (LLMs) have introduced new possibilities for enhancing smart contract audits by using their contextual understanding and reasoning capabilities. This paper provides a review of existing LLM-based smart contract auditing tools. We analyze key methodologies, strengths, and limitations of six such tools. While LLM-based tools demonstrate significant potential in detecting complex vulnerabilities, challenges such as false positives and token length limitations persist. Our comparative evaluation highlights performance differences, showcasing the potential of LLMs to complement traditional auditing tools. Finally, we discuss current challenges and future directions for improving LLM-based auditing, aiming to enhance security in blockchain ecosystems.
With the emergence of the metaverse, some problems relating to trader responsibility, which had previously long been addressed, have now resurfaced and come back to life. One of these problems is the question of who should be held accountable for harm inflicted by defective or counterfeit products sold by third-party vendors in metaverse marketplaces. Under the common law, liability for defective or counterfeit products rests with the immediate seller of the product. But, unique aspects of the metaverse may make holding sellers liable unwise, difficult, or even impossible. The law confronted a similar question after online platforms emerged. Currently, common law principles of negligence and product liability still assume liability rests with the seller. But, in some cases, courts have modified the law to impose contributory liability on online platforms in addition, as these platforms are viewed as the cheapest cost avoiders and are in the best position to distribute the damage. As the metaverse, an augmented reality platform, gains momentum, it poses new problems for products liability. Imposing liability on these augmented reality platforms does not necessarily follow the same rationales as imposing liability on e-commerce platforms. This is because, unlike traditional e-commerce platforms, metaverse platforms are operated on the blockchain and are governed by decentralized autonomous organizations (DAOs) enabled by algorithms. Metaverse platforms do not reside on a single server. Instead, content is distributed across an infinite number of servers in a peer-to-peer network. This means metaverses have no single point of authority making it essentially impossible to assign liability to the platforms. Even if it were possible to assign liability to individual DAO members, there would be tenuous economic justification for assigning such liability, as members on the metaverse lack the ability to monitor transactions on the platform. As such, unlike typical online platforms such as Amazon, metaverse members are likely not the cheapest cost avoiders. Applying the law for e-commerce platforms to metaverse platforms risks generating an accountability gap resulting from diffusion of responsibility where many entities are involved in a transaction and none of them act to prevent harm. This also risks leaving victims of defective products or fraudulent transactions without recourse. For these reasons, holding metaverse platforms responsible for the merchandise sold on them may be undesirable as a policy matter. In this Article, we propose a “know your trader” rule for marketplaces. Under this new approach to the long-standing financial trading rule of “know your customer,” traditional online marketplaces and innovative metaverse marketplaces would have to verify the identity of their traders before the traders could enter the system. The marketplace would confidentially maintain traders’ identities to protect the anonymity that draws many to the metaverse in the first place. However, a plaintiff could pierce the veil of anonymity when they present prima facie evidence that their case could survive a motion to dismiss. This idea builds on several statutory proposals and laws in the European Union and the United States that require online marketplaces to identify and verify traders. The Article explains why this rule would be more effective and more efficient than the current application of the rule. Finally, the Article addresses potential free speech objections based on trader anonymity, concluding that the proposed framework is permissible under the First Amendment.
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>.