A state task force with a mandate to evaluate state policy on cryptocurrencies acknowledges that digital assets “offer a significant opportunity to improve the efficiency and effectiveness of a wide range of human activities, including financial services,” in New Hampshire. I’m here. However, when the opportunity presents itself, he warns that there is also the risk of “greed, jealousy, arrogance, ignorance, incompetence, carelessness and innocence.”
The Governor’s Commission on Virtual Currencies and Digital Assets report, released Jan. 19, provides policy recommendations to strengthen the use of cryptocurrencies in Granite State while protecting consumers. These technology-based currencies.
“This is an important technology that offers real potential,” says Concord attorney Bill Erdinger, chairman of the committee. “The current legal system is so uncertain about innovation and development and sound regulation that it needs to be clarified.” Road Infrastructure Regulations. “
The task force group met seven times between April and September to hear from cryptocurrency experts. These include Meltem Demirors, a New Hampshire resident who is considered a veteran of digital asset investments, and Matt Higginson, who is seen as a leader in distributed ledger technology and business development initiatives. .
Report suggestions include:
• Establishment of legal procedures to create so-called ‘decentralized autonomous bodies’. These DAOs are popular among cryptocurrency enthusiasts and blockchain technologists and take a bottom-up management approach to making decisions.
• Establish and fund New Hampshire’s state court system to resolve disputes over blockchain activity.
• Establishment and funding of a task force to investigate whether and how blockchain technology could be used to improve the current system of filing and storing official government records.
• Establishment of a Legislative Standing Committee to examine important issues arising under current New Hampshire securities law and developments in federal law.
• Establishment and funding of the Blockchain Quality Assurance Center at the Interoperability Lab at the University of New Hampshire.
“The Commission believes that these technologies and applications are dynamic and transformative before our eyes, and that this report will help improve New Hampshire law, strengthen innovation and economic development, and protect rights and policies. We acknowledge that this is only the first step in a long process of formulating the interest of the citizens of New Hampshire,” Erdinger wrote in the report’s opening letter to Governor Chris Sununu.
public education
Cryptocurrency is a broadly applied term for digital currencies, which are alternative payment methods created using cryptographic algorithms. Bitcoin is an example. A blockchain is essentially a digital ledger of transactions replicated and distributed across a network or chain of computer systems.
The report emphasizes defining 16 terms related to cryptography. Instead of speaking on a computer, we use terminology that everyone can understand. Those definitions were not included in other reports from other states looking into cryptography, so that aspect was important to Erdinger.
“It’s not in other reports,” says Ardinger.
“Explaining in English some of the key concepts involved in this field is an attempt and perhaps just the beginning. And I think it will only get better, but someone has to start it.” I did.
Another key emphasis of the report was the need to educate the public, especially policy makers, to create productive and protective policies.
“In order to propose and adopt effective legal rules, policymakers need a thorough understanding of the activities that may be subject to regulation,” said the report. “These new technologies are so specialized and complex that few policy makers will have the necessary knowledge to formulate legal rules that adequately balance society’s conflicting goals. .”
Angela Strosewski, Executive Vice President and Chief Operating Officer of NH Mutual Bancorp, joined the task force on behalf of the NH Bankers Association.
Early in the deliberations, she stressed the need for the task force to promote comprehensive education of cryptocurrency investors and consumers, according to the report.
“The key to supporting crypto literacy is developing a culture that supports full and understandable transparency and disclosure about the risks of investing in crypto assets,” the report states.
Erdinger said many aspects of Internet technology were initially difficult to understand, but people have learned and adapted.
“Think of the ways in which the application of the computer network technology we call the Internet has changed people’s lives. I think people continue to work on it,” Ardinger told NH Business Review.
“I doubt this blockchain technology will be ready in a year or two. I have to,” he said.
Attorney Erdinger, who led Russ, Young & Pignatelli’s tax practice group in Concord for nearly 30 years, helped state policymakers create state trust regulations.
In February, Sununu named him chairman of a 12-member cryptocurrency commission, tasked with developing a “virtual currency and digital asset economy and an appropriate regulatory regime” for the state.
In the preamble to his letter, Ardinger refers to “criminal fraud resulting in the loss of billions of dollars in client assets.” His reference goes to Sam Bankman-Fried, former CEO of crypto exchange FTX, who is facing federal fraud charges for misleading investors and using billions of dollars from his clients for his own purposes. I am referring to
The New Hampshire case (not specifically mentioned in the report) involved Keane’s Ian Freeman, who operated an unlicensed bitcoin exchange and was involved in romance scams and other Internet crimes. He was convicted in December of laundering more than $10 million in fraudulent proceeds.
new state law
Thanking the task force for their work, the governor said: Help law enforcement to clarify current laws and protect New Hampshire consumers and investors. “
Now state law on books related to crypto was the work of New Boston Republican Rep. Keith Amon, member of the Crypto Task Force. A libertarian associated with the New Hampshire Free State Project, Amon currently serves as Vice Chair of the House Committee on Commerce and Consumer Affairs.
His HB 103 from Congress in 2022 exempts developers, sellers or facilitators of open blockchain token exchanges from some state securities laws. To qualify for the exemption, submissions must be made to the Secretary of State by developers, sellers, or persons facilitating the exchange of open blockchain tokens.
The Task Force looks at the political and ideological push-and-tag between centralized and decentralized control of technology-based assets.
“Many proponents of blockchain technology and cryptoassets describe themselves as libertarians with considerable reservations about the role of central governments and other centralized institutions in society,” the report said. said.
“The problem for policy makers is that laws and regulations that clarify key uncertainties or provide basic ‘roads’ as to how cryptocurrency activities at scale should be It’s always a matter of “bad” or “good”. Because it promotes more effective innovation and development. “
Erdinger believes that just as the internet is decentralized and largely unregulated by governments, digital assets have the same potential as long as “traffic rules” protect users. .
One example of that potential is banking.
He notes that a large portion of the population is what he calls “unbanked” in that they are unbanked.
“It’s never the bank’s fault,” says Ardinger. “I am only saying that the technology that currently underlies the banking infrastructure around the world is as inaccessible as possible to all citizens. This technology, a cryptographically secure database, is a distributed network of computers It’s maintained in a very secure way throughout, I wouldn’t say it’s happening yet, but banks — traditional banking, traditional finance, and even future structures that haven’t been created yet — provide an opportunity to make money transfers accessible to everyone.Borders.”
