Index

Citation

(2023), "Index", Baker, H.K., Benedetti, H., Nikbakht, E. and Smith, S.S. (Ed.) The Emerald Handbook on Cryptoassets: Investment Opportunities and Challenges, Emerald Publishing Limited, Leeds, pp. 383-398. https://doi.org/10.1108/978-1-80455-320-620221023

Publisher

:

Emerald Publishing Limited

Copyright © 2023 H. Kent Baker, Hugo Benedetti, Ehsan Nikbakht and Sean Stein Smith

---

INDEX

Aave

, 150

Absolute return fund

, 194

Account vs. token-based system

, 291

Account-based model

, 294

Accounting

, 13–14, 223–224

standards

, 16

Advance-fee schemes

, 205

Agrotoken

, 119

Algorithmic seignorage stablecoins

, 333–335

Algorithmic stablecoins

, 95–97, 98–99, 149

“All-in-one” solution approach

, 115

Alternative cryptocurrencies

, 52–57

Alternative Investment Management Association (AIMA)

, 27, 35

Alternative trading system (ATS)

, 222

American Fedwire system

, 49

American Institute of Certified Public Accountants

, 246

American Stock Exchange (AMEX)

, 158

Ampleforth

, 96

ANEXIO

, 63

Angelshares

, (see BitShares (BTS))

Anonymity

, 192

Anti-money laundering (AML)

, 15, 34, 110, 222, 235, 253, 342

Anti-money laundering/financial action task force (AML/FAFT)

, 297

APower

, 81, 88–89

Application programming interface (API)

, 19

Application-specific integrated circuits (ASICs)

, 126

Arbitrage

, 28

Arbitrum

, 126

Arca

, 172

ArCoin

, 172

Around-the-clock trading hours

, 62–63

Art industry

, 237

Artificial intelligence (AI)

, 193

Assets

, 48

asset-backed reserve mechanism

, 331

asset-backed stablecoins

, 330–331

asset-backed tokens

, 117

management

, 151

prices

, 190

and security tokenization platforms

, 117–118

tokenization

, 117–118

tokens

, 86

Assets under management (AUM)

, 28, 151, 158

Association for Internationally Certified Public Accountants

, 17–18

Asymmetric technology

, 203

Atomic broadcast

, 270

Atomic settlement smart contract

, 316

Atomic swaps

, 275, 345

Auditing

, 16–17

Australian securities exchange settlement (ASX settlement)

, 319

Automated Liquid Exchange (ALEX)

, 81, 88–89

Automated market makers (AMMs)

, 134, 137, 276, 329, 335, 345

BABB platforms

, 134

Balancer implemented Dapps

, 137

Bancor protocol

, 134–135

Bank of New York Mellon, The

, 37

Base money

, (see Central bank currency)

Basis Cash (BAC)

, 96

Basket trade

, 161

Beefy Finance

, 329

Bilateral clearing

, 311

Binance

, 37, 76, 136–137, 152, 164–165

Binance coin (BNB)

, 252

Binance Smart Chain

, 55, 108

Binance USD (BUSD)

, 76, 148

Bit gold

, 46

BitCNY

, 97

Bitcoin (BTC)

, 3–4, 13–14, 18, 25, 34, 46–47, 49–52, 63, 80, 100, 130–131, 141, 143, 158, 174, 189, 245, 342

blockchain

, 126

cash

, 48, 55, 245

Core project

, 130

as digital gold

, 180

gold

, 245

lightning network

, 147

network

, 331

transactions

, 63

Bitcoin futures

, 159

contract

, 160

BitEUR

, 97

BitMart hack

, 33

Bitrefill

, 101

BitShares (BTS)

, 97

Bittrex

, 136–137

BitUSD

, 95, 97

Bitwise

, 35

Bitwise 10 Crypto Index Fund

, 35

Black-Scholes options pricing model

, 152

Blacklist

, 110

Block explorers

, 100

Blockchain

, 14, 20, 116, 127, 159, 186, 200–201, 219, 246, 255–256

accounting

, 223–224

Australia–ASX CHESS project

, 319

blockchain-based applications

, 329

blockchain-based assets

, 204

blockchain-based currencies

, 48

blockchain-based technologies

, 19

compliance

, 224

cryptographic primitives

, 266

DeFi considerations

, 229–230

DeFi risks

, 230

due diligence

, 224–226

ecosystem

, 316

Estonia–Tallin Stock Exchange (now the Nasdaq Tallinn AS)

, 319

foundations of blockchains technologies

, 266–269

Germany–Deutsche Börse and Deutsche Bundesbank

, 320

governance

, 226–228

implications for

, 299

improving blockchain scalability

, 272–275

India–SEBI

, 319

Japan–Japan Exchange Group “B-POST,”

, 319

legal counsel

, 220–222

misunderstandings and misperceptions in

, 203–204

networks

, 331

operations

, 226

platform

, 108

provenance

, 236–238

reporting

, 228–229

technology

, 46, 61, 107–108, 233, 237–238, 241, 243, 315, 351

token

, 350

United States–Nasdaq Linq project

, 320

Blockdata

, 235

Bloomberg

, 38

Bonds

, 4

Borderlessness

, 143

Borrowing

, 149–150

Broker-dealer

, 116

Burn

, 100

Burning

, 84, 187

Byzantine fault

, 133

Byzantine fault tolerance (BFT)

, 46

California Consumer Privacy Act (CCPA)

, 242

controller-based processing system

, 242

Cambridge Bitcoin Electricity Consumption Index (CBECI)

, 51

Capital asset pricing model (CAPM)

, 175

Capital assets

, 222

Capitalization (cap)

, 63, 179

Cardano

, 55, 118, 144

Carry investment’s profits

, 29

Cash-led economy (payment system)

, 286

Celebrity impersonations

, 205

Central bank

currency

, 288

money

, 289

Central bank currency

, 288

Central bank digital currencies (CBDCs)

, 10, 14, 21, 49, 101–102, 200, 246, 283–302

architectural design

, 295–297

attributes of central bank money

, 289

central banks

, 285–286

comparing and contrasting

, 291

compatibility

, 299

definition of value proposition and

, 284–285

era of

, 284

implications for blockchain and cryptoassets landscape

, 299–302

infrastructure

, 297–299

interoperability

, 300–301

possible representations

, 291–295

public–private partnership of money

, 287–288

relationship between cryptoassets and

, 302

relationship between stablecoins and

, 301–302

stakeholders

, 288

Central banking systems

, 317

Central clearing

, 311

Central counterparty (CCP)

, 311

Central limit order book (CLOB)

, 276

Central securities depository (CSD)

, 310

Centralized exchanges (CEXs)

, 136, 275, 318, 335, 342–343, 346–349

Centralized finance (CeFi)

, 142, 145, 201

Cex. io

, 136–137

Chainalysis

, 242, 244

Chainlink

, 144

Checks and balances

, 226

Chicago Mercantile Exchange (CME)

, 26, 160

Chief executive officer (CEO)

, 76

Child chain

, (see Sidechain)

Classic NFT

, 15

Classical cryptosystems

, 268

Clearing

, 311

Clearing House Electronic Subregister System (CHESS)

, 319

Climatecoin

, 109

Codefi Assets

, 117

Coinbase

, 136–137, 165

CoinDesk. com

, 221

CoinMarketCap.com

, 4, 37–38, 179

CoinTelegraph.com

, 220–221

Cold storage

, 164, 236

Cold wallet

, 164, 196

Collateral protection for crypto-backed loans

, 153

Collateralized debt position (CDP)

, 98, 150

Commercial retail chain

, 82

Commodities Futures Trading Commission (CFTC)

, 159–160, 220, 238, 348

Commodity analogy method

, 189

Commodity pool operator (CPO)

, 222

Commodity trading advisor (CTA)

, 222

Commodity-based tokens

, 351

Compatibility

, 299

Compliance

, 64, 224, 349

set-up

, 115–116

Composability

, 143

Compound

, 150

Compression

, 267

Consensus protocols

, 269–271

Consensus-based oracle

, 110

ConsenSys Codefi

, 117

Consumer protection, regulatory. and supervisory domains in

, 201–202

Continental Marketing Corp. v. SEC

, 70

Contract

, 226–227

Corporate actions execution and management

, 117

Cosmos

, 143

Cost approach

, 177, 179

Cost economics

, 63

Council control

, 147

COVID-19 pandemic

, 284

Criminal prosecution, disclosing cryptoassets to avoid

, 239

Cross-chain swap with hashed time lock contracts

, 277–278

Crowdfunder

, 146

Crypto accounting

current state of

, 16–17

framework for

, 20–21

options

, 18–19

Crypto businesses

, 253, 257–260

choice of entity considerations

, 260

equity-based or token-based compensation considerations

, 261

QSBCs

, 260–261

structuring considerations

, 260

tax structuring

, 257–259

token offerings

, 259–260

Crypto ETF

, 160–162

SEC’s failure to approve

, 163–166

Crypto investing landscape

digital asset investment risks

, 31–37

digital asset valuation

, 37–39

private funds

, 28–30

public funds

, 30–31

regulatory climate for digital asset investing

, 26–27

Crypto-backed stablecoins, overcollateralized

, 331–332

Crypto-collateralized stablecoins

, 95, 149

Crypto-financial reporting

, 17–18

Cryptoassets

, 3, 13–14, 85, 125–126, 172, 185–186, 199, 233–234, 238, 242, 247, 329, 346–352

analysis

, 14

characteristics

, 127–128

contractual issues

, 241

custody

, 234–236

disclosing cryptoassets to avoid criminal prosecution

, 239

distinguishing features

, 4–5

exchange tokens

, 173

exchanges

, 136–137

factors to consider in portfolio containing

, 188–189

financial accounting and reporting

, 246–247

financial fraud and data theft

, 244

foreign asset reporting

, 245–246

fork management and governance

, 245

implications for cryptoassets landscape

, 299

Infrastructure Act

, 239–240

intended audience

, 5

IRS enforcement

, 240–241

jurisdictional issues

, 243–244

landscape

, 14–16

legal and regulatory concerns for cryptoasset investors

, 245

money laundering

, 244

owners of

, 234

portfolio and consumer protection strategies for cryptoassets

, 208–212

price

, 4

privacy concerns

, 242

provenance

, 236–238

purpose

, 4

reporting options

, 18–20

risks and threats

, 199

security token regulatory challenges

, 238–239

security tokens

, 172–173

tax accounting

, 243

tax compliance

, 238

tax implications

, 242–243

transfer of

, 234

types

, 128–129

types of cryptoasset frauds

, 205–208

utility tokens

, 173

Cryptocurrency exchanges

, 331, 341–352

benefits of CEXs

, 343–344

centralized vs. decentralized exchanges

, 342–343

CEXs and cryptoassets

, 346–349

deeper look into DEXs

, 345–346

disadvantages of CEXs

, 344

future of crypto exchanges and cryptoassets

, 351–352

regulated vs. unregulated

, 346–349

regulations around DEXs

, 349–351

Cryptocurrency markets

, 193

impact on

, 100–101

Cryptocurrency/cryptocurrencies

, 3–4, 14, 25, 45, 48–49, 79–80, 82, 86, 93, 129, 148, 171, 186, 200–201, 234, 241–242, 246, 284

alternative cryptocurrencies

, 52–57

bitcoin

, 49–52, 130–131

block explorer

, 100

credit cards

, 126

dash

, 131–132

dogecoin

, 131

exchange tokens

, 179–182

future performance of cryptocurrencies in portfolio

, 190–192

intrinsic value

, 173–174

litecoin

, 131

potential impact outside

, 101

security and utility tokens

, 174–179

space

, 242

trading

, 192

transactions

, 49

Cryptographic primitives

, 266

Cryptography

, 47, 127, 200, 246

Cryptos

, 189

current state of crypto auditing

, 17

custodians

, 236

derivatives

, 151–152

exchanges

, 97–98, 351–352

framework for crypto reporting

, 22–23

funds

, 195

future auditing considerations for

, 19–20

hedge funds and regulatory regimes

, 193–196

markets

, 347, 351

miners

, 192

space

, 258

taxation

, 257

value-added contribution to portfolios

, 188

wallet insurance

, 153

Currency tokens

, 128–129

Curve

, 137

Custodial banks

, 236

Custodians

, 234

Custody

, 114

cryptoasset

, 234

custodial banks

, 236

digital asset managers

, 236

exchanges

, 235–236

self-storage

, 235

storage keys

, 236

third-party custody

, 234

Cybersecurity policies of organizations

, 19

Dai

, 148

emergence of

, 98–99

of MakerDAO

, 95

Dash

, 131–132

Data confidentiality

, 268

Data theft

, 244

Dative digital securities

, (see Security tokens)

Decentraland

, 87–88

Decentralization

, 142

Decentralized applications (dApps)

, 126, 132, 191, 229, 328, 344

Decentralized asset managers

, 329

Decentralized autonomous organization (DAO)

, 70, 129, 203, 226–227, 328, 346

DAO 21A Report

, 70

hack

, 153

sold tokens

, 255

Decentralized contracting

, 147

Decentralized cryptocurrencies

, 20–21, 49

Decentralized currencies

, 145–146

Decentralized exchanges (DEXs)

, 136–137, 148, 161, 275, 318, 328, 335, 342–343

trading volume

, 144

Decentralized finance (DeFi)

, 6, 8, 11, 15, 37, 62, 81, 112, 126, 141, 186, 201, 222, 254, 283, 327–338, 344

accounting standards

, 21

algorithmic seignorage stablecoins

, 333–335

asset-backed stablecoins

, 330–331

challenges

, 337

characteristics

, 142–147

considerations

, 229–230

decentralized exchanges

, 335–336

decentralized lending, derivatives, and asset management

, 336–337

limitations of

, 154

overcollateralized crypto-backed stablecoins

, 331–332

risks

, 230

sector

, 18

stablecoins

, 330

stack

, 143–145

Decentralized lending

, 336–337

Decentralized payment services

, 146–147

Decentralized projects and applications

, 148

asset management

, 151

borrowing and lending

, 149–150

crypto derivatives

, 151–152

decentralized exchanges

, 148

decentralized insurance

, 153

insurance

, 152–153

limitations of DeFi

, 154

loans collateralized by cryptoassets

, 150

payments

, 153–154

scalability trilemma

, 154

stablecoins

, 148–149

uncollateralized cryptoasset loans

, 150–151

Degree of transparency

, 48

Delivery versus payment (DvP)

, 310

Depository trust and clearing corporation (DTCC)

, 310–317

Depository trust company (DTC)

, 310

Derivatives contracts

, 151

Diem & Co.

, 99–100

Digital artwork

, 15

Digital asset investing

, 28

regulatory climate for

, 26–27

Digital asset investment risks

, 31

digital asset custody

, 33–34

fund counterparties and service providers

, 36–37

portfolio development

, 34–36

Digital asset managers

, 236

Digital asset offerings under regulation of Securities Act

, 256

Digital asset valuation

, 37

digital assets traded on an exchange

, 38–39

illiquid investments

, 39

Digital assets

, 25, 249, 252, 254

and estate planning applied to portfolios

, 196

Digital blockchain dollars

, 55

Digital cash

, 50

Digital currencies

, 87

Digital currency/electronic payment (DC/EP)

, 102

Digital footprint

, 187

Digital gold

, 50

Digital ledger

, 165

Digital Ledger Services program

, 223

Digital money

, 284

Digital thieves

, 34

Digital tokens

, 81, 86–87

Direct ownership

, 18–19

Directed acyclic graph (DAG)

, 273

Dissent statement

, 166

Distributed denial-of service attack (DDoS attack)

, 275

Distributed ledger technology (DLT)

, 10, 108, 127, 173, 201, 265, 283, 314

Distributed ledgers

, 47

Dodd-Frank Act

, 166

Dogecoin

, 55, 131

Domestic corporation

, 250

Double taxation

, 250

Double-spending problem

, 46

Drains

, 84

Due diligence

, 224

new issues

, 225–226

rug pulls

, 225

dYdX

, 126, 132

e-gold

, 130

E-money

, 85

Early investors

, 251

Eastern Standard Time (EST)

, 152

Economic incentive system

, 47

Economic realities test

, 74

Ecosystem assembly

, 114–115

Electronic Data Gathering, Analysis, and Retrieval system (EDGAR)

, 64, 172

Electronic money

, 74

Endowments

, 4

Enterprise solutions

, 126

Entity

, 250

choice of entity considerations

, 260

Entrepreneurs

, 250

Enzyme Finance

, 151

EOS. IO

, 133

Equity

, 151

Equity-based compensation considerations

, 261

ERC-1400 standard for STOs

, 75

Estonia–Tallin Stock Exchange (now The Nasdaq Tallinn AS)

, 319

ETH virtual machine (EVM)

, 126, 144

Ether (ETH)

, 63, 80–81, 89, 94, 191, 203

EtherDelta

, 350

Ethereum (ETH)

, 14, 54, 80, 89, 108, 118, 126, 132–133, 143, 187, 191, 229, 272

blockchain

, 81

Ethereum Classic (ETC)

, 55, 204

Ethereum Virtual Machine (EVM)

, 75, 272

European Banking Authority (EBA)

, 201

European Insurance and Occupational Pensions Authority (EIOPA)

, 201

European Securities and Markets Authority (ESMA)

, 201

European Supervisory Authorities (ESAs)

, 201

European TARGET2 system

, 49

European Union (EU)

, 74

Excel (tool)

, 239

Exchange tokens

, 27, 85, 173, 179–182

Exchange-traded funds (ETFs)

, 8, 30, 50, 157–158, 188, 348

breakthrough moment in history

, 166–168

crypto ETF

, 160–162

dissenting view

, 166

potential changes

, 166

regulators

, 159–160

SEC’s failure to approve Crypto ETF

, 163–166

Exchanges

, 235–236

Exclusion of third-party intermediaries

, 127–128

Executables

, 75

Execution

, 311

Exodus

, 172

Expenses

, 31

Externally owned account (EOA)

, 136–137, 272

Extrinsic value

, 173–174

Fair sequencing order

, 338

Fake prizes, giveaways, and sweepstakes

, 205

Farming

, 84

Federal Reserve

, 127

Federal Reserve system (Fed system)

, 187

Federal securities law

, 254–255

Federal Trade Commission (FTC)

, 220

Fees

, 31

Fiat currencies

, 301–302

Fiat-collateralized stablecoins

, 148–149

Fidelity investments

, 162

Fifth Anti-Money Laundering Directive (5AMLD)

, 74

Filecoin

, 81, 87

Financial accounting and reporting

, 246

Financial Accounting Standards Board (FASB)

, 16

Financial Action Task Force (FATF)

, 101

Financial Advisors Act (FAA)

, 73

Financial Conduct Authority (FCA)

, 27, 74, 81

Financial Crimes Enforcement Network (Fin-CEN)

, 220, 222, 245, 350

Financial fraud

, 244

Financial Industry Regulatory Authority (FINRA)

, 204, 238, 252

Financial institutions

, 4, 14, 160, 219

Financial instruments

, 74

Financial reporting

, 14

Financial supervision

, 200

Financial supervisors

, 204

Financial technology (FinTech)

, 186

FinTech

, 204

51 percent hack

, 165

51 percent attack

, 203

Flash liquidation

, 150

Flash loan

, 150, 329

Foreign asset reporting

, 245–246

Foreign exchange (FX)

, 313, 343

Fork attack

, 316

Forking

, 130

Founder control

, 147

Fractional ownership

, 63

Fraud

, 200

portfolio and investor protection

, 200–205

Fraudsters

, 205–206

Frax

, 96

FTX

, 152

Funding risk

, 176

Funds

, 160

counterparties

, 36–37

managers

, 27

structure

, 31

Future contracts

, 160

Gemini

, 136–137

Gemini Cryptocurrency Exchange

, 161

Gemini USD

, 98

General data protection regulation

, 110

Germany–Deutsche Börse and Deutsche Bundesbank

, 320

Gigabyte-month (GB-Mo)

, 177

Gilded (tool)

, 239

Gitcoin

, 132–133

Global financial crisis

, 191

Google BigQuery

, 47

Governance

, 226

DAOs and

, 227

mechanisms

, 147

risk

, 230

traditional cryptocurrencies and

, 227–228

Granger-causal effects

, 101

Graphics processing units (GPUs)

, 126

Grayscale Bitcoin Trust (GBTC)

, 162

GrayScale Trust

, 188

Greedy heaviest observed subtree protocol (GHOST protocol)

, 271

Gross domestic product (GDP)

, 177

Hackers

, 33–34, 165

Hacking

, 32

Hard forks

, 55, 153

Harvesting period

, 29

Hash

, 46, 127

Hash function

, 266

Hash time lock contracts (HTLCs)

, 277

Hash tree

, (see Merkle tree)

Hashcash

, 46

HashLock key

, 345

Headline risk

, 36

Hedge funds

, 4, 28

High-quality liquid assets (HQLAs)

, 301

Hong Kong Stock Exchange

, 37

Horizon

, 114

Host ideas

, 190

Hot storage

, 236

Hot wallets

, 34, 164, 196

Howey test

, 70–72, 173, 347

Hybrid consensus

, 270

Hybrid tokens

, 86

IBM

, 238

Idiosyncratic risk

, 208

Illiquid investments

, 39

Illiquid private funds

, 29–30

Impairment losses

, 16

Impermanent loss

, 336

Income approach

, 175–176, 179

India–Securities and Exchange Board of India (SEBI)

, 319

Individual investors

, 4

Infrastructure Act

, 239–240

Initial coin offerings (ICOs)

, 6, 81, 88, 112, 146, 178, 186, 200, 222, 254

implications for portfolio construction

, 186–188

Initial DEX offerings (IDOs)

, 81

Initial exchange offerings (IEOs)

, 6, 66, 83, 112, 146

Initial public offerings (IPOs)

, 146, 167, 186, 206

Innovation abuse hypothesis

, 206

implications of

, 204–205

Innovativeness

, 142–143

Instantaneous settlement

, 63

Institutional investors

, 31, 33, 37, 193

Institutions

, 233, 245

Insurance

, 152–153

policies

, 19–20

Intangible assets

, 128

Intellectual property risk

, 176

Intermediaries

, 312

Intermediated model

, 294

Internal resources

, 224

Internal Revenue Service (IRS)

, 16, 136, 220, 238, 257

enforcement

, 240–241

International Accounting Standards Board (IASB)

, 16

International Financial Reporting Standards (IFRS)

, 16

International Monetary Fund (IMF)

, 201, 234, 285

Internet of things (IoT)

, 135

Interoperability

, 62, 64, 143

Intrinsic value

, 173–174

Investment Company Act of 1940

, 26, 157, 159–160

Investment contracts

, 173

Investment period

, 29

Investment-related scams

, 205

Investors

, 28, 32, 84, 249, 251–252

protection

, 200–205

INX

, 172

IOTA

, 135–136

Japan Exchange Group “B-POST,”

, 319

Japan Stock Exchange

, 37

JP Morgan Chase

, 37

Jumpstart Our Business Startups Act (JOBS Act)

, 72

Jurisdictions

, 73–74

Keccak256

, 127

Key generation

, 268–269

Know your customer (KYC)

, 15, 34, 110, 235, 253, 296, 342

data

, 237

process

, 94

Kraken

, 136–137

KuCoin

, 33, 38

Legal concerns for cryptoasset investors

, 245

Legal counsel

, 220

legal resources

, 220–222

Lehman Brothers

, 33

Lending

, 149–150

Liberty Reserve of e-gold

, 95

Libra

, 99–100

Limit-order book protocol (LOB protocol)

, 137

Limited liability company (LLC)

, 250

Limited partnership agreement (LPA)

, 30

Liquid democracy

, 147

Liquid hack

, 33

Liquid private funds

, 28–29

Liquidity

, 31, 328

risk

, 310

Liquidity pools (LP)

, 134, 149, 276, 329

LiquidShare

, 114

Litecoin (LTC)

, 47, 55, 130–131

Loans collateralized by cryptoassets

, 150

London Stock Exchange

, 37

Long/short managers

, 28

Machine learning (ML)

, 193

Majors v. South Carolina Securities Commission

, 70

MakeDAO’s DAI token

, 129

Maker (MKR)

, 98

MakerDAO

, 97–98, 328

Mana

, 88

Margin trading

, 311–312

Market approach

, 174–175, 177, 179

Market depth

, 63

Market forces

, 17

Market share

, 178

Market size

, 178

Marketplace

, 159

MAS

, 73

Mastercard

, 82, 134

Mastercoin project’s omni network

, 331

Materiality

, 19

Memory-hungry algorithm

, 131

Merkle tree

, 46, 267

MetaMask

, 126, 136–137

Metaverse

, 81

Metcalfe’s law

, 179

and network effects

, 180–181

MicroStrategy Incorporated

, 223

Miners

, 46–47, 50, 89, 126

Mixing

, 48

Modular approach

, 115

Monero (XMR)

, 55

Monetary Authority of Singapore (MAS)

, 62

Monetary unit assumption

, 228

Money laundering

, 244

Money services businesses (MSBs)

, 222

Multi-sig-wallets

, (see Multi-signature wallets)

Multi-signature wallets

, 126

Multi-strategy

, 29

Multiple CBDC models (m-CBDC models)

, 299

Nakamoto consensus

, 270

Nasdaq

, 37

Nasdaq-listed MicroStrategy, Inc.

, 50

National Commerce Act (2000)

, 241

National Futures Association (NFA)

, 222

National Securities Clearing Corporation (NSCC)

, 314

Neo

, 133

Net asset value (NAV)

, 31

Netting transactions during trade settlements

, 311–312

Network economics

, 80

Network effects

, 80, 146, 189

Network-value-to-transactions (NVT)

, 179, 181

New York Stock Exchange (NYSE)

, 30, 37, 62, 110, 167

Nivaura

, 114

“No harm” principle

, 102

Nodes

, 127

level

, 267

Noise

, 172

Non-collateralized stablecoins

, 149

Non-fungible asset

, 189

Non-fungible tokens (NFTs)

, 15, 37, 88, 128, 165, 189, 240, 246

accounting rules and standards

, 21

holder

, 16

Non-malleability

, 267

Non-tokenized assets

crypto business structuring considerations

, 260–261

digital asset offerings under regulation of Securities Act

, 256

marketing and securities law considerations

, 254–256

NY BitLicense

, 261–262

players

, 250–253

promises

, 262

regulatory licenses and registrations

, 261

structuring crypto businesses

, 257–260

tokenomics

, 253–254

Wyoming

, 262

Northern Trust

, 37

NY BitLicense

, 261–262

Object

, 192

Off-chain

, 144

settlement

, 75

swap on CEXS

, 276

Offering memorandum (OM)

, 28

Office of the Comptroller of the Currency (OCC)

, 20, 220

Offshore

, 349

OKEx

, 152

OMG Network

, 134

On-chain

, 144

settlement

, 75

swaps with DEXs

, 276–277

Open-source methodology

, 127

OpenSea

, 132

Operation mode

, 192

Operational due diligence (ODD)

, 31

Operational risks

, 31

Oracle risk

, 110, 230

Oracles

, 95, 108–110, 144, 230, 329

Order books

, 345

Ouroboros protocol

, 271

Outsources resources

, 224

Over-the-counter (OTC)

, 26, 161, 270

PACTE LAW

, 86

PAX Gold

, 148

Paxos

, 98, 114, 321

Paxos Gold

, 95

Payment Services Act (PS Act)

, 73

Payments

, 153–154

channel

, 273

for order flow

, 338

tokens

, 86

Pearson correlation coefficients

, 56

Peer-to-peer (P2P)

, 79, 109, 234, 328

basis

, 127

capabilities

, 192

matching

, 150

network

, 142, 227

payment systems

, 192

system

, 141

trading

, 342

transactions

, 46

People’s Bank of China

, 102

Permissionless blockchain systems

, 315

Phishing

, 164

Plasma blockchain

, 274

Platform tokens

, 129, 132

(see also Transactional tokens)

EOS.IO

, 133

Ethereum

, 132–133

Neo

, 133

Platforms

, 176–177

Players

, 250

investors

, 251–252

issuer

, 250

regulators

, 252

service providers

, 253

Poisson point process

, 50

Polkadot

, 143

Poly Network

, 33, 165

Polygon

, 108

Polymath

, 114, 117–118

Polymesh

, 118

Pooled collateralized debt markets

, 150

Portfolios

, 200–205

and consumer protection strategies for cryptoassets

, 208–212

crypto hedge funds and regulatory regimes

, 193–196

cryptos’ value-added contribution to

, 188

development

, 34–36

digital assets and estate planning applied to

, 196

factors to consider in portfolio containing cryptoassets

, 188–189

future performance of cryptocurrencies in

, 190–192

ICO implications for portfolio construction

, 186–188

related issues

, 192–193

Pre-funding

, 311–312

Pre-image resistance

, 267

Pre-paid cards

, 82

President’s Working Group (PWG)

, 22

Price-to-utility ratio

, 179

Pricing

, 174, 189

Prime brokerages function

, 312

Principal risk

, 310

Privacy coins

, 48, 242

Private funds

, 28

illiquid private funds

, 29–30

liquid private funds

, 28–29

Private key

, 268, 342

cryptography

, 50–51

Private placement memorandum (PPM)

, 28

Privately issued stablecoins

, 21

Programmable functions

, 192

Proof-of-burn (PoB)

, 271

Proof-of-stake (PoS)

, 126, 133, 271, 315

Proof-of-work (PoW)

, 46, 126, 228, 270, 315

Proshares Bitcoin Strategy ETF (BITO)

, 30, 167

Proshares Trust

, 166–167

Provenance

, 238

blockchain provenance uses

, 237–238

cryptoasset

, 236

Pseudo-anonymity

, 48

Pseudo-randomness

, 267

Public blockchains

, 52

Public Company Accounting Oversight Board

, 246

Public funds

, 30–31, (see also Private funds)

Public key (pk)

, 268

cryptography

, 50–51

encryption

, 268

Publicly traded trusts

, 30

Public–private partnership of money

, 287

Quadriga CX trading platform

, 164

Qualified purchasers

, 26

Qualified small business corporations (QSBCs)

, 260–261

Quantitative managers

, 29

Quantity theory of money (QTM)

, 177–179

practical application of QTM for utility tokens

, 179

Quorum

, 118

Real-time settlement

, 312–314

Realcoin

, 148, 331

Rebasing

, 96

Reddit

, 190

Redundancy

, 47

Reental

, 118

Regulated Activities Order (RAO)

, 81, 85

Regulators

, 159–160, 252, 322

Regulatory activity

, 220

Regulatory concerns for cryptoasset investors

, 245

Report of Foreign Bank and Financial Accounts (FBAR)

, 245

Reporting

, 228–229

Research and development (R&D)

, 102, 284

Retail model

, 294

Retail payment system

, 192

Reward/risk ratio

, 188

Ring signatures

, 48, 55

RingCT

, 55

Ripple

, 135, 147, 154

Risk capital test

, 71

Risk tolerance

, 190

Rollups

, 144, 274

Rug pulls

, 225

Rule 504

, 72–73

Rule 506

, 72–73

Rules

, 75

Rumors

, 190

S-curve

, 181

Santander Bank

, 119

Scalability trilemma

, 154

Scrypt

, 131

SEC v. W. J. Howey Co

, 70

Secure hash algorithm (SHA)

, 127

Securities Act

, 251

digital asset offerings under regulation of

, 256

Securities Act of 1933

, 26, 70, 158–159, 173

Securities and Futures Act (SFA)

, 73

Securities Exchange Act of 1934

, 70, 159, 173, 348

Securitize Markets

, 114, 118

Security

, 108

Security token creation

, 115

Security token offerings (STOs)

, 6, 62, 64–66, 254

conducting

, 72–73

ERC-1400 standard for

, 75

Security tokenization

, 63, 117–118

Security tokens

, 4, 27, 62, 82, 85, 110, 172–179, 318, 351, (see also Utility tokens)

Binance

, 76

conducting STOs

, 72–73

economic rationale

, 62–64

empirical patterns

, 66–69

ERC-1400 standard for STOs

, 75

jurisdictions

, 73–74

law of

, 69–74

as smart contracts

, 74–75

STOs

, 62, 64–66

technology

, 74–76

Seed phrase

, 32, 342

Seigniorage

, 288

shares

, 95–97

Self-storage custody

, 235

Semi-strong form efficiency

, 57

Service providers

, 36–37, 253

Set Protocol

, 151

Setl.io

, 114

Settlement

, 75

and custody

, 311

time and risks in current system

, 312–313

Shadow payment systems

, 192

Shanghai Stock Exchange

, 37

Sharding schemes

, 273

Shards

, 273

Shared ledger

, 46

Sharpe ratio

, 188

Shielded transactions

, 55

Short message service (SMS)

, 165, 344

Short selling

, 152

Sidechain

, 134, 274

Silver Hills Country Club v. Sobieski

, 71

Simple agreement for future equity (SAFE)

, 75

Simple agreement for future tokens (SAFT)

, 259

Single-key cryptosystems

, (see Classical cryptosystems)

Small and medium sized enterprises (SMEs)

, 72

Smart contracts

, 17, 19, 54, 61, 95, 112, 116, 186–187, 229, 241, 271–272, 310, 316, 328, 330

algorithms for

, 142

cover

, 153

interaction

, 110

oracle

, 334

security tokens as

, 74–75

technology features

, 62

wallet

, 236

Solana (SOL)

, 55, 108, 118, 144

Solver

, 188

Sovereign money

, (see Central bank currency)

Special-purpose depository institution (SPDI)

, 261

Spider

, 158

Square

, 147

Stablecoins

, 4, 14, 18, 21, 55, 82, 93–94, 148–149, 246, 301–302, 318, 330

adoption

, 97–98

algorithmic stablecoins and seigniorage shares

, 95–97

creation

, 328

history and functioning

, 97–100

issuers

, 222

market impact

, 100–101

taxonomy

, 94–97

trends, challenges, and central bank digital currencies

, 101–102

Stakeholders

, 288

Staking programs

, 84

Standard & Poor’s 500 Composite Stock Price Index (S&P 500®)

, 158, 194

Standard and Poor’s Depository Receipts (SPDRs)

, 158

Startups

, 146

State Street

, 37

State-machine replication (SMR)

, 272

Stealth addresses

, 55

SteemUSD

, 97

Stellar

, 108, 135

Stock clearing corporation

, 310

Stock Exchange Act

, 74

Stock Exchange Ordinance

, 74

Stock-to-flow approach

, 189

Stocks

, 4

Storj

, 177

Strong collision resistance

, 267

Sub-portfolios

, 192

Subscriber identification module (SIM)

, 344

Supervisory technology (SupTech)

, 200, 203

Sushiswap

, 335

Swap cryptoassets

, 114

cross-chain swap with hashed time lock contracts

, 277–278

off-chain swap on CEXS

, 276

on-chain swaps with DEXs

, 276–277

technologies used to

, 275–278

Swiss Banking Act

, 74

Swiss Financial Market Authority

, 74

Swiss Financial Market Infrastructure Act

, 74

Swiss Financial Market Supervisory Authority (FINMA)

, 81, 86

Swiss National Bank

, 288

Sybil

, 132

attack

, 270

Symmetric cryptosystems

, (see Classical cryptosystems)

Synthethix protocol (SNX)

, 337

Synthetic instruments

, 338

Synthetic token

, 329

Synthetix

, 126, 328

Systematic risk

, 212

Tangible assets

, 128

Tax accounting

, 243

Tax structuring

, 250, 257–259

Taxpayers

, 239, 243

Technology for cryptoassets

, 265–278

consensus protocols

, 269–271

foundations of blockchains technologies

, 266–269

improving blockchain scalability

, 272–275

smart contracts

, 271–272

technologies used to swap cryptoassets

, 275–278

Templum

, 114

Terra

, 108

TERRA-UST

, 99

Tesla, Inc.

, 50, 76, 223

Tether

, 55, 94, 97–98, 207–208

emergence of tether competitors

, 98

higher trading volumes

, 100

positive returns on

, 101

Tether Gold

, 95

Tezos

, 118

Third-party custody

, 235

“Tier 2” offerings

, 256

Time-stamping

, 46

TimeLock key

, 345

Token Offerings Research Database (TORD)

, 66

Tokenization

, 107–108, 128

asset and security tokenization platforms

, 117–118

current tokenized assets and securities projects

, 118–119

potential benefits of tokenizing traditional assets and securities

, 111–114

process

, 114–117

tokenized securities

, 109–111

Tokenized assets

crypto business structuring considerations

, 260–261

digital asset offerings under regulation of Securities Act

, 256

marketing and securities law considerations

, 254–256

NY BitLicense

, 261–262

players

, 250–253

promises

, 262

regulatory licenses and registrations

, 261

and securities

, 82, 108

structuring crypto businesses

, 257–260

tokenomics

, 253–254

Wyoming

, 262

Tokenized funds

, 63

Tokenized instruments

, 108

Tokenized securities

, 4, 109–111, 318

Tokenomics

, 252–254

design

, 80, 83–85

Tokens

, 48, 81–82, 107–109, 128–129, 176–177

distribution

, 116

as investment contracts

, 70

investors

, 252

offerings

, 259–260

token-based compensation considerations

, 261

token-based model

, 294

Tokeny

, 114

Traceability

, 108

Trade settlements

, 309–323

blockchain technology projects

, 319

blockchain technology’s value proposition for

, 315

blockchain’s risks in

, 315–316

current system’s cost

, 313–314

different alternatives

, 318

implications for cryptoassets

, 317–318

implications of blockchain

, 317

intermediaries

, 312

netting transactions during, margin trading, and pre-funding

, 311–312

Paxos

, 321

process

, 310–311

projection–DTCC case study

, 320

proposition by DTCC and implementation

, 314–315

recent developments

, 322

regulation

, 321–322

settlement time and risks in current system

, 312–313

smart contracts

, 316

Trading strategy

, 192

Traditional asset-backed stablecoins

, 94–95

Traditional assets

, 16

Traditional cryptocurrencies and

, 227–228

Traditional NFT

, 15

Transaction cost theory

, 46

Transaction layers

, 144

Transactional tokens

, 129, 135

IOTA

, 135–136

ripple

, 135

stellar

, 135

Transactions

, 47

Transition periods

, 204

Transparency

, 108, 143

Trends

, 15

True USD

, 98

Turing complete

, 272

24-hour market

, 192

Twitter

, 147

Two-factor authentication (2FA)

, 344

tZero

, 114, 117

UK’s Financial Conduct Authority (FCA)

, 202

Unaccredited investors

, 72

Unavailable blockchain address

, 84

Uncollateralized cryptoasset loans

, 150–151

UniSwap

, 132, 137, 222, 335, 349

United States–Nasdaq Linq project

, 320

Units of value

, 144

US Department of Justice (DOJ)

, 136

US dollars (USD)

, 94, 126

US Generally Accepted Accounting Principles (GAAP)

, 16, 18, 20

US Securities and Exchange Commission (SEC)

, 26, 30, 62, 135, 157–160, 172, 188, 202, 207, 220–221, 238, 246, 252, 255, 310, 348

failure to approve crypto ETF

, 163–166

mission and strategic goals

, 163

risks

, 163

rule approval

, 166

SEC Form S-1

, 158

security issues

, 163–166

USD Coin (USDC)

, 55, 98

USDT

, 98

Utility tokens

, 4, 18, 27, 79–80, 82–83, 86, 129, 134, 173–179, 318

BABB platforms

, 134

Bancor protocol

, 134–135

examples

, 87–89

forms

, 85–87

France

, 86

ICOs

, 81

OMG Network

, 134

Switzerland

, 86

tokenomic design

, 83–85

United Kingdom

, 85

United States

, 86–87

Validators

, 144

Valuation discounts

, 181–182

Valuation process

, 171–172

Vampire attack

, 335

VanEck SolidX Bitcoin Trust

, 162

Venture capital (VC)

, 28, 175, 251

Venture financing

, 146

Virtual currencies (VCs)

, 201

Visa

, 49, 82, 134

Volatility

, 16–17, 22

Volume-weighted average price (VWAP)

, 38

Wall Street Journal, The

, 349

Wallets

, 145, 342

Weak collision resistance

, 267

White-collar fraudsters

, 204–205

White-hat hacker

, 165

Whitelist

, 110

Wholesale model

, 294

Wholesale payment system

, 191

Winklevoss capital management

, 161–162

Wyoming SPDI

, 262

XCoin

, 131

Yearn Finance

, 329, 337

Yield aggregators

, 151

Zcash (ZEC)

, 55

“Zero lower bound” problem (ZLB problem)

, 286

Zero-knowledge proofs

, 48

ZK-rollup

, 126

Zk-SNARKS

, 55

Zodia

, 114