Babbitt Column | Deng Jianpeng: The Future of Blockchain Supervision

I. Reflection on regulatory policies

At present, China's regulatory supervision of blockchains has been achieved through the issuance of administrative normative documents by regulatory agencies. In general, these normative documents have certain effects on the one hand to control the risk in the blockchain field. On the other hand, the current regulation is only implemented by normative documents, jumping from the previous regulatory gap to the comprehensive prohibition mode. Extreme characteristics have a large negative effect. This is quite different from the regulatory policies of some financially developed countries or regions (see the detailed discussion of the following works in this regard, Deng Jianpeng, Sun Penglei: “Intermediary Chain Supervision and Compliance Response”, Mechanical Industry Press, 2019 Edition, February Version). As the researchers said, from 2013 to the present, China's blockchain finance regulation has had few relevant legislations in the past six years. As a result, the relevant entities in the blockchain finance field and their behaviors are unconstrained at the beginning of the operation, to the later stage. Then the two extremes are completely denied. This kind of motion-based supervision that is not predictable and completely dependent on administrative orders is obviously not conducive to financial technology innovation and consumer protection. Even the implementation of the value pursuit of the major financial risks of the prevention and resolution of the regulatory body is obviously unfavorable. [1]

Secondly, in recent years, the regulation of blockchain risks has been based on administrative normative documents. These normative documents are often followed by the staged outbreak of risk in the blockchain field, and non-regulators have made After comprehensive consideration, a comprehensive regulatory policy was introduced. This is pointed out by scholars in rethinking the regulation of Internet finance. First, our current routine financial regulatory system cannot cope with the risks arising from financial innovation. Second, the field of financial supervision has always presented a “regulatory cycle”. The law enforcement model shows that we have been tinkering and lacking the determination and courage to carry out the top design. The persistence of sports law enforcement indicates that we have never considered the financial market and financial system as a whole. [2] The entire financial technology, including the blockchain, requires constant and sustained long-term regulation in the Internet finance sector, rather than a simple and rude policy response after each extreme risk outbreak.

Finally, in recent years, normative documents dealing with blockchain risks are almost always characterized by a “one size fits all” ban. The normative document of this prohibition mode shows the contradictory mentality of the regulators. On the one hand, it hopes to promote the industry and grasp the trend of technology development, on the other hand, it is deeply worried about the industry risks. The “one size fits all” regulatory norm does not take into account the diversification of the blockchain financing process, and does not examine the completely different types of tokens. Although virtual tokens may trigger speculation and speculative risks, the sale of some functional ∕-consumption tokens is essentially similar to the pre-sale of general merchandise/services. Does it have to be equally “one size fits all”? Does this deviate from the original intention of the government to encourage blockchain innovation? The author thinks it is worth considering.

These normative documents will focus on financial security first in regulation and translate into the pursuit of financial security. This extreme risk aversion complex can easily negatively affect the development of the industry. In this regard, some scholars have proposed that the concept of regulating Internet finance can be divided into absolute safety concept and relative safety concept. The absolute safety concept regards safety value as the only value, pursues absolute security, forms a single control mode that regulates Internet finance, and tries to use the Internet. The development of finance is artificially controlled, ignoring the true demands of the market and the law of industrial development, and often delays development. [3] If excessive pursuit of financial security is the only one in regulation, it is bound to stifle the power of innovation. Therefore, strictly grasping the balance between technological innovation and risk control is a persistent challenge for regulators in the field of financial technology in recent years, and it is also a major problem that has to be faced.

As mentioned above, some virtual currencies are of a securities nature, and all virtual currency transactions have a typical stakeholder-type securities trading model. The researchers believe that the securities trading of the stakeholders has the following characteristics: First, these transactions can be circulated among any people, have universal exchange value, and their liquidity is almost like the official currency; Second, the parties may be completely strangers. . As a result, the potential for fraud in "securities" transactions has risen to a whole new level, making it easier for one party to be deceived and swindling thousands of people. Therefore, the requirements of securities for contract execution and rights protection mechanisms are much higher than those of general financial transactions. More reliable legal framework is needed, and constitutional protection is needed. [4] Virtual currency trading, a “segment securitization transaction” based on blockchain technology, such as air diffused in your world, its transaction and value transmission can easily break the national border quickly, and the risk of fraud is far worse. In the traditional securities market. As long as there is a country or region that is financially regulated and judicially friendly to the blockchain, it is difficult for another country to fully achieve its intended goal with a simple ban. Countries or regions that have a regulatory-friendly attitude toward the blockchain can use the “tightening and loosening” strategy to spill the virtual currency and ICO financial risks into other countries. Therefore, the blockchain sector needs a more stable and strict investor protection mechanism than a single ban.

2. References to existing regulations and international trends

The “one size fits all” ban mode has long been a flaw. [5] ICO is a financing method that is not designed for speculators. If it can be used reasonably, such as targeting a specific investor, it will be beneficial to adopt a “small public issuance exemption system” within a certain period of time. Solve the problem of difficult financing for SME blockchain ventures. As mentioned above, although China has completely banned the ICO, the ICO has apparently not stopped completely, and the ICO cross-border activities are extremely convenient. In countries where ICO is banned, it is difficult for domestic citizens to stay out of the way and cause domestic funds to flow out. We believe that when the time is ripe, ICO has the necessary restrictions in the country.

In view of the risks in the blockchain field, Chinese financial regulators should grasp the balance of financial innovation and risk prevention in the future. When discussing the virtual currency, officials of the International Monetary Fund (IMF) proposed that in order to avoid over-regulation and stifle innovation, any policy response to virtual currency needs to strike a proper balance between strong disposal of risk and abuse. The initial focus should be on the most pressing issues related to virtual currency, including financial soundness, consumer and investor protection, and tax evasion, while leaving indirect risks (such as financial stability and monetary policy) to a later stage. [6] After all, although virtual currency and ICO generate certain legal risks in facilitating money laundering, drug trafficking, tax evasion and other criminal activities, cybersecurity risks and consumer interests, [7] but blockchain technology is promoting global payments, It is of great significance to reduce remittance rates, reduce the risk of information theft, improve financing efficiency and promote innovation in traditional financial institutions. Cross-border payment methods, such as Ripple, have been introduced into the more widely used applications, which have been inspired by the Bitcoin blockchain. The central bank, including some countries such as China, plans to issue digital currency in recent years, also because it is inspired by the blockchain.

On the one hand, ICO is an extremely convenient blockchain entrepreneurial financing tool. At the same time, this financing model is of high risk. From the perspective of regulatory principles and jurisprudence, it should be placed in a limited scope (such as private placement). ICO 's fraud and other risks are mostly human factors, not objective factors that cannot be regulated. They can be strictly regulated and cautiously open, replacing the inherent method of “one size fits all”. We believe that the efficient and convenient advantages of ICO financing are both characterized by globalization, and long-term comprehensive prohibition is difficult to achieve. Regulators may wish to consider some long-term solutions while temporarily suspending ICO and virtual currency exchanges.

As the author has previously pointed out, through the global blockchain regulatory policies and practices, the supervision of the entire blockchain industry actually has strong international competition. When Chinese regulators ordered all virtual currency trading platforms to shut down in 2017, Japan issued a virtual currency exchange license almost at the same time. When China adopted a comprehensive tightening policy in the virtual currency and blockchain industries (including ICO financing), the US Commodity Futures Trading Commission announced that it approved the official launch of Bitcoin futures. [8] When China plans to take further stringent measures in 2018, the first stable currency approved by the New York State Financial Services Authority will be launched, namely the stable currency Gemini Dollar issued by Gemini and the stable currency Paxos Standard issued by Paxos. Each token corresponds to $1. [9] From a global perspective, more and more countries are responding to risk management in this area with a compliance operation rather than an absolute prohibition.

In some financially developed countries, the blockchain regulatory policies are at a very similar time point, contrary to China's policy and regulatory spirit. It is not so coincidental that it may be that they have their own thoughts. Since the beginning of 2018, more and more countries and regions such as France, Canada, Malta, Singapore, Germany and Switzerland have adopted a cautious and open policy on blockchain, while strengthening institutions to implement user identification, anti-money laundering and counter- Terrorist financing and combating financial fraud and other illegal and criminal activities, strict implementation of the bottom line supervision. For Chinese regulators, some countries' regulatory programs have constructive and reference value. [10] For example, the guidelines of the Swiss regulatory authorities have a broad definition of asset tokens, and emphasize that asset tokens are regulated as securities. In addition, Thailand issued a legal regulatory policy in May 2018 that requires virtual currency trading platforms to execute third-party hosted client assets. Combined with the many application scenarios of the blockchain and the extensive imagination space, we can judge the global trend, and the blockchain related fields will surely gain more and more living space. The ban mode is not suitable for industry trends in the near future. [11]

Three or seven points

The development of financial technology, including blockchain, has been partially reconstructing the basic framework of the financial legal system. Since the blockchain has the characteristics of peer-to-peer, borderless, non-sovereignty and no specific legal responsibility, there are tens of thousands of exchanges. The banned mode policy may have limited effectiveness, such as blocking foreign virtual currency exchange websites. As of November 7, 2018, according to incomplete statistics, the number of virtual currency exchanges in the world has reached 16,354. [12] The regulators have blocked the above-mentioned overseas websites, and the workload is huge. At the same time, the website of the exchange can be changed at any time. Therefore, it would be very difficult to rely solely on a country to regulate under such a ban.

First, we first recommend that regulators strengthen international collaboration and strengthen international regulation. In particular, it cooperates with regions with developed virtual currency markets such as the United States, Western Europe, Japan and South Korea.

Second, carry out ICO supervision sandbox park pilot to reduce ICO risk. Regulators can encourage some local governments to carry out ICO supervision sandbox gardens, through local related professional agencies for filing, review and sandbox testing. In the future specific regulatory guidelines, we propose that the central bank should design and plan the basic regulatory framework. The CSRC will lead the introduction of specific rules and regulatory operations. The local financial regulatory agencies are responsible for combating illegal criminal activities such as illegal fund-raising in this area. [13]

At present, ICO is still a prohibited area of ​​regulatory policy in China. However, for those who engage in overseas investment, it is especially important to strengthen the investor's own risk education for such high-risk projects. Most ICO projects are highly technical and have high professional thresholds. This means that the ability to reasonably assess the risks of the above projects often exceeds the level of a large number of ordinary investors. Investors need to improve their risk prevention awareness and expertise to increase their ability to identify projects. [14]

Third, the definition of virtual currency law is clearly defined and classified according to the classification . At present, the legal position of virtual currency is vague, which negatively affects regulatory policies. Some central bank officials believe that although Bitcoin is nominally called "coin", it is essentially a non-monetary virtual currency. [15] This view positions Bitcoin as a non-monetary virtual currency, similar to asset-based tokens, but ignores Bitcoin's global payment functions and application scenarios, especially in Japan as a payment instrument. [16] In the world of blockchain, only from the perspective of international vision can we understand its connotation and problems more deeply. For the legal definition of tokens issued by ICO, China may refer to the Swiss regulatory agency FINMA (and Singapore MAS) for classification based on the economic function of the tokens – payment tokens, application tokens and asset tokens. The classification is comprehensively utilized to make up for its shortcomings and can basically cover most of the ICO projects currently on the market. [17] The significance of the classification of virtual currency and various ICO tokens is that it can help regulators quickly determine the specific laws and regulations that should be followed by ICO projects. At the same time, ICO project parties can also reasonably avoid legal risks before issuing tokens. .

There are drawbacks to limiting virtual currency such as bitcoin to virtual goods. If it can be classified according to the classification, it is more suitable for targeted supervision or judicial determination. For example, for tokens with a payment nature, such tokens may be banned or restricted in order to maintain the legal status of the renminbi. For the issuance of application-type tokens, the essence is similar to the pre-sale of services, commodities or certain usage rights. The legal risk is relatively low and the supervision can be released. For asset-based securities tokens, such tokens may be suspected of illegally issuing securities. Some of these entrepreneurial projects may be considered in conjunction with the current science and technology and pilot registration system, as well as tokens that meet the characteristics of securities. Conducting class securitization supervision. These three categories of tokens basically cover most of the tokens that appear on the market. However, a token may also qualify for two or even three tokens, that is, there is some sort of mixed token. For this type of token, it can be required to comply with various legal requirements. For example, if a token meets both the characteristics of a payment token and an asset token, it can be required to comply with both the legal requirements for payment and the compliance requirements for the asset. In this regard, the corresponding international legal supervision experience can be referenced.

Fourth, in the future, the securities sector will consider increasing the small exemption system for raised funds, and at the same time, expand the concept of “securities” in legislation to adapt to changes in the times. In the Securities Law, the small exemption of raised funds has always been the direction of the securities law advocated by scholars. In order to regulate ICO financing activities, some of the tokens issued by ICO can be included in the scope of the Securities Law, while expanding the scope and concept of “securities” in law. Some researchers have previously said that the concept of "securities" in China's Securities Law is mainly based on stocks and bonds, and its scope of application is not sufficient to cope with the development of financial innovation. The "Securities Law" should draw on the concept and legislative experience of "investment contracts" in countries such as the United States and Japan, as a criterion for judging the attributes of securities, in order to expand the scope of application of securities. [18] Recently, some commentators have also proposed that expanding the concept of securities and expanding the scope of adjustment of the Securities Law will help improve the scientific nature of laws, eliminate regulatory loopholes, better protect the legitimate rights and interests of investors, and promote multi-level capital. The development of the market and the promotion of the transformation and upgrading of China's economy. The expansion of the concept of securities is in line with the basic requirements of the market economy that “make the market play a decisive role in resource allocation”. Fraud in the securities market, mostly by the market to correct and digest costs. Securitization means that investors are responsible for their own responsibility. The premise of responsibility is that there is a sound information disclosure system in the securities market. [19] However, nearly 10,000 kinds of virtual currencies that have been listed and circulated, some have no securities nature, and some have typical securities nature. At the same time, the trading mode of virtual currency exchanges is similar to the traditional securities trading model. The types of potential crimes (such as insider trading and market manipulation) are similar to or even more serious than the securities market. Because of this, the Royal Decree of Digital Assets Operation, which came into effect in Thailand in May 2018, basically applied the traditional securities law and the content of securities crimes. [20] Therefore, China's Securities Law and criminal law-related securities crimes should be moderately expanded and adjusted in the future to adapt to new technological trends.

In the revision of the Securities Law, the author believes that it can also draw on the relevant laws and regulations of Singapore and the United States to create a "small public offering exemption system." Specifically, for example, reference and according to Section 2.6.1 of the Singapore Financial Supervisory Authority (MAS) Guidelines for the Issuance of Digital Tokens, [21] introduce the provisions of the Securities Law on non-public fundraising into the concept of time-limited, For example, the funds raised in a year cannot exceed RMB 5 million or equivalent foreign currency.

Fifth, strengthen the threshold of qualified investors and investor risk education . For many years, individual qualified investors and institutional qualified investors in the blockchain field are more academic concepts of scholars' controversy and discussion, and they have been in a blank state for a long time in law. In addition to professional investment institutions, there is no clear legal requirement for individual investors to enter the market. In the past, ICO hype and virtual currency trading platforms had no threshold for investors. Individual virtual currency trading platforms have long provided (or even induced) futures contract transactions to investors who have no risk-taking ability. A large number of investors have suffered huge losses, and even triggered investors to adopt extreme rights protection events on the trading platform. In addition, some ICO financing platforms outside the country are still open to Chinese residents without distinction. Therefore, in the future, cautious opening of ICO financing or virtual currency trading requires strict setting of corresponding investor thresholds.

Investors in ICO projects should be treated differently, with professional investment institutions and high net worth individuals as the main participants, and retail investors should limit transactions. In terms of establishing a system of qualified investors and professional investors, Singapore's standards for qualified investors and professional investors can be used. In the field of high-risk investment, strengthening investor education is an important topic. As a new financing tool, ICO has different opinions on professional cognition, and it is more difficult for ordinary investors to distinguish between right and wrong. ICO investor protection requires regulation to make a difference. But in the long run, investors need their own maturity, including professional knowledge, stable emotions and rational cognition. [twenty two]

Sixth, regulators should adjust their thinking and give full legitimacy to future administrative normative documents and regulatory measures. The "Decision" of the Fourth Plenary Session of the 18th CPC Central Committee put forward: "Incorporate all normative documents into the scope of archival examination, and revoke and correct the normative documents of unconstitutional and illegal laws according to law", which puts higher requirements on the supervision of administrative normative documents. . Scholars believe that if administrative normative documents can create civic obligations, it means that the legislative and administrative powers are unified, and the harm is self-evident. It is inevitable to grant administrative powers to the executive authorities, but the executive authorities should exercise the powers granted, and should have extensive public participation to ensure public participation in the administrative legislative process to develop legislative documents, rather than formulating normative documents that lack the basis of public opinion. The principle that the rule of law should follow is that legislation must reflect public opinion. [twenty three]

The researchers pointed out that in the era of market economy, the government's functions are market supervision and macro-control. The production and operation of market entities should not be directly involved in the issuance of administrative normative documents without legal basis. For the market subject, “there is no prohibition of the law”; for the government, “the law is prohibited without authorization”, and the administrative normative documents issued without legal basis are not binding on the market subject. [24] In recent years, due to the impact of some extreme risk events, in response to financial markets, regulators issued a large number of normative documents, some of which reflect the typical thinking of regulators of mobile law enforcement. Relying on normative documents to manage the risks in the blockchain field, it is characterized by randomness, temporaryity, departmentalization and fragmentation, and even easily reflects the personal inclination and will of the heads of the regulatory agencies. The formulation process and some of its contents are in line with the modern rule of law. Violation has negatively affected the stable expectations of market players on the rule of law. The policy of “putting-management-catch” is highly volatile and greatly increases the operating costs of enterprises. Therefore, financial markets in particular need regulators to combine the cautious top-level design with public opinion participation legislation based on long-term judgments on future technological developments.

Science and technology experts believe that the 21st century is facing the singularity approaching – the rhythm of human creation technology is accelerating, and the power of technology is growing at an exponential rate, which initially grows at a very small rate and then explodes at an incredible rate. [25] In the social science concept of Fukuyama's “end of history”, the concepts of “freedom” and “democracy” are universally accepted by the world. No matter what form the society in which people live, the process of this theory cannot be changed. However, according to recent social science and technology changes, a new generation of outstanding scholars believe that the biggest problem we face now is ecological collapse and technological subversion. Liberalism does not give a clear answer. The scientific and technological revolution may soon make billions of people unemployed, creating a large number of useless classes, bringing about social and political turmoil that the existing ideology cannot cope with. [26] In my opinion, human society is experiencing “from the end of history” to “singularity approaching”. In the near future, human society will face changes far beyond history. If this judgment is established, the speed of technological advancement is surpassing that of any previous era, and its impact and impact on human society (including financial markets) will be unprecedented. The blockchain is an important chapter in the process of this change. This requires regulators to adjust their inherent thinking, to humble, learn, explore and embrace technological change, moderately tolerate risks, and improve regulatory techniques and regulatory approaches to adapt to changes in the field of financial technology.

Specific to the legal regulation and supervision of the blockchain field, on February 15, 2019, the "Regulations on the Management of Blockchain Information Services" issued by the National Internet Information Office (hereinafter referred to as the "Regulations") came into effect. This Regulation is the first time that Chinese regulators have tried to introduce long-term supervision of the blockchain industry. As we all know, the public blockchain has a multi-centered (or decentralized) feature, and anyone can participate in bookkeeping (commonly known as "mining" in the industry) to send transactions or read system data. Therefore, the subject of this blockchain information service has great uncertainty, and at the same time, the information on the public chain is irreversible. If some blocks have some illegal information, the domestic miners choose not to pack (do not record this information in the block), on the one hand, the miners will lose the income (there is no virtual currency reward for the unfinished billing), on the other hand Overseas miners will be the first to pack such blocks, resulting in the ultimate failure of supervision. For the private chain or the alliance chain, the write permission of the private blockchain network is completely controlled by an organization or organization, and the data reading authority is regulated by the organization or individual. The alliance chain is limited to the participation of alliance members. The specific nodes in the chain usually have corresponding entities or organizations. The participants jointly join the network and form a stake-related alliance to jointly maintain the blockchain operation. [27] These two types of responsible subjects are relatively clear. However, the information of the private chain or the alliance chain is not publicly announced. Even if the block records or stores illegal information, the public cannot be known without strict authorization, and such violation is very limited. In view of this, it is doubtful whether it is necessary to legislate and implement supervision of blockchain information services. The predicament of the regulation is in fact closely related to the traditional thinking of the legislators—the traditional law must have a specific subject of responsibility. When the responsible party cannot be determined, the law does not blame the public.

The blockchain's challenge to legislation and regulation requires regulators and legislators to change their mindset. As the researchers point out, with blockchain technology and smart contracts, legal and contractual terms can be translated into simple, well-defined code-based rules that are automatically executed by the underlying blockchain network. Technical rules will increasingly assume the same role and function as legal rules. Governments can use code to ensure that people comply with the law. By converting some of the laws into technical rules, the legal provisions can be implemented by the underlying technical framework, reducing the need for supervision and ongoing execution. The government's use of blockchain technology as a regulatory technology benefits both regulators and society as a whole—reducing compliance and enforcement costs, automating the law, and reducing the inherent uncertainty of legal texts. If these systems gain mainstream applications and government support, they will lead to the establishment of a new regulatory framework. [28] In addition to simple banned regulation, this idea has provided China with extremely useful inspiration. Codes that are not subject to third-party intervention can be deployed on the blockchain. If the regulator encourages the blockchain project party to convert some of the laws into codes and promote software autonomy in the blockchain domain, it can coordinate the legitimate interests of the unspecified entities. At present, blockchain technology is still far from mature. Regulators can shape new rules and influence code rules through different forms. Finally, some internal governance of blockchains can be realized through software to save regulatory resources.

Finally, based on the above considerations, the author believes that under the premise of encouraging the balance between financial technology innovation and risk control, the government should follow up in a timely manner and promote the integration of blockchain technology and regulatory technology. In addition, relevant regulatory measures include both flexible and hard regulatory. Regarding the former, for example, the regulatory agencies stationed in the location of the blockchain project; published relevant investigation reports on virtual currency transactions [29] ; proposed investor risk warnings; listed high-risk trading platforms, blockchain financing projects or sponsor lists, etc. . In addition, regulators should further promote the self-discipline construction of industry associations and industry self-discipline practices, [30] combining the “regulatory sandbox” that has been tried for several years in the world and the long-standing “pilot” mechanism in China to launch districts with Chinese characteristics. Blockchain sandbox industrial park. [31] Currently, the regulatory regulation of blockchain is based primarily on administrative normative documents. Because of the inherent lack of such normative documents. Therefore, in terms of hard regulation, regulators should seek support from the upper-level law, that is, through the comprehensive consideration of blockchain industry and risk, promote relevant legislation at the national level; directly introduce long-term regulatory rules of the system, change the current extreme The situation of simple documents in the simple response and piecemeal mode under the impact of risk events; the legislature and the judiciary should give a clear legal definition of the blockchain industry, and gradually build a complete legal and regulatory framework to promote the whole Healthy development of the blockchain industry; [32] Jointly with relevant countries, jointly develop international regulatory rules and standards guidelines, and so on.

In summary, from the maintenance of national financial security and risk prevention long-term monitoring mechanism and international experience (see Deng Jianpeng, Sun Penglei: "blockchain international supervision and compliance response", Mechanical Industry Press, 2019 edition, February edition), China should promote cautious supervision in the blockchain field as soon as possible, so as to avoid a large number of frauds involving overseas ICO projects and various types of virtual currency transactions, including false issuance, exaggeration of misleading investors and other illegal acts, and even extreme risk events and violations of China. Investor rights and interests have a negative impact on the healthy development of the emerging blockchain industry.

Author: Deng Jianpeng (Central University of Finance and Law Professor)

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[1] See Zhu Juan: “The Legal Regulation of Blockchain Finance in China—Based on the Perspective of Smart Supervision”, in Law No. 11 of 2018.

[2] See Peng Bing: “Rethinking Internet Finance Supervision”, in Financial Expo, No. 12, 2018.

[3] Xing Huiqiang: “The Legal Model and Path of Standardizing Internet Finance under the Concept of Relative Security”, in Law No. 12, 2017.

[4] Chen Zhiwu: The Logic 1 of Finance, Northwest University Press, 2014, p. 309.

[5] The typed supervision of the issuance of tokens in Switzerland and Germany and the case review of ICO financing projects are in sharp contrast with the Chinese regulatory model. See Deng Jianpeng, Sun Penglei: “The Classification of the Pass and the ICO Regulatory Enlightenment of Switzerland”, in China Finance, No. 22, 2018; Li Hai, Hu Wei: “Rethinking the First Token Bank (ICO) Supervision – Based on the German Law As a Perspective, Contains Caijing Law, No. 2, 2019.

[6] See He Dong, Carl Habermeyer, Ross Lecco: “Virtual Currency and Its Expansion: Preliminary Reflections”, in Financial Supervision Research, No. 4, 2016.

[7] See Deng Jianpeng: “The Risk and Normative Path of Bitcoin Trading Institutions”, in Internet Finance Law Review, 3rd Series, 2017, Law Press, 2017, pp. 179-190.

[8] See Deng Jianpeng: “Absolutely Prohibited or Cautiously Open – Rethinking the Financial Management Policy of Blockchain”, in Contemporary Finance, No. 6 of 2018.

[9] See https://www.jinse.com/bitcoin/248169.html, visit time: January 23, 2019.

[10] See Deng Jianpeng: “Absolutely Prohibited or Cautiously Open – Rethinking the Financial Management Policy of Blockchain”, in Contemporary Finance, No. 6 of 2018.

[11] See Deng Jianpeng: “Absolutely Prohibited or Cautiously Open – Rethinking the Financial Management Policy of Blockchain”, in Contemporary Finance, No. 6 of 2018.

[12] For data, see https://coinmarketcap.com/zh/, visit time: March 18, 2019.

[13] Deng Jianpeng: “Interpretation and Reflection on the ICO Announcement of the Seven Ministries and Commissions”, in Securities Journal, September 9, 2017, A03.

[14] See Deng Jianpeng: “ICO Risk and Regulatory Paths”, in China Finance, No. 18, 2017.

[15] Yao Qian: “Development and Supervision of Digital Money”, in China Finance, No. 14 of 2017.

[16] See Deng Jianpeng, “Legislation and Practice of Japanese Virtual Currency”, in Contemporary Mercures, No. 9 of 2017.

[17] See Deng Jianpeng, Sun Penglei: “The Classification of the Pass and the ICO Regulatory Implications of Switzerland”, in China Finance, No. 22, 2018.

[18] See Yao Haifang, “On the Expansion of the Concept of Securities and Its Implications for Financial Supervision”, in Politics and Law, No. 8, 2012.

[19] See Xing Huiqiang: “The Expansion of the Concept of Securities in China's Securities Law and Its Boundaries”, in Chinese Law, No. 1 of 2019.

[20] See Deng Jianpeng, Sun Penglei, “Intermediary Chain Supervision and Compliance Response”, Mechanical Industry Press, 2019, pp. 181-198.

[21] See A Guide to Digital Token Offerings, http://www.mas.gov.sg/~/media/MAS/Regulations%20and%20Financial%20Stability/Regulations%20Guidance%20and%20Licensing/Securities%20Futures%20and %20Fund%20Management/Regulations%20Guidance%20and%20Licensing/Guidelines/A%20Guide%20to%20Digital%20Token%20Offerings%20%2014%20Nov%202017.pdf, visit time: January 22, 2019.

[22] See Yao Qian: “Development and Supervision of Digital Money”, in China Finance, No. 14 of 2017.

[23] See Sun Shoucan: “On Judicial Review Standards for Administrative Normative Documents”, in Tsinghua Law, No. 2, 2017.

[24] Sun Shoucan: “On the Authority of Administrative Normative Documents”, in China Administrative Management, No. 8 of 2016.

[25] See [US] Ray Kuzwell: "Singularity Approaching", Li Qingcheng, Dong Zhenhua, Tian Yuanyi, Mechanical Industry Press, 2011 edition, p. 1.

[26] See [Israel] Yuval Herali, "A Brief History of Today – The Big Issue of Human Destiny", translated by Lin Junhong, CITIC Publishing House, 2018, 15-16.

[27] Deng Jianpeng: “Technical Discussion on the Draft of Blockchain Supervision”, in the “Securities Daily” A03 version of November 10, 2018.

[28] See [French] Primavera de Philippi, [America] Aaron Wright: "Regulatory Blockchain: The Rule of Code", Wei Dongliang, CITIC Publishing House, 2019, Pp. 214, 222.

[29] In September 2018, the Office of the Attorney General of the State of New York (OAG) issued a report called The Virtual Markets Integrity Initiative. OAG issued virtual market integrity initiative letters and questionnaires to 13 major virtual currency trading platforms. It has a certain deterrent effect on trading institutions, and at the same time helps to provide risk warnings to investors in the state. See https://www.bitcoinisle.com/2018/09/19/8-surprising-findings-from-new-yorks-virtual-markets-integrity-initiative/, visit time: January 6, 2019.

[30] See Deng Jianpeng: “ICO Risk and Regulatory Paths”, in China Finance, No. 18, 2017.

[31] See Huang Zhen, Zhang Xiaming, “Progress in the International Exploration of Supervision Sandbox and China's Introduction to Optimization Research”, in “Financial Supervision Research”, 2018, No. 4; Huang Zhen, Zhang Xiaming, “Reformation Pilot and Supervision Sandbox in the Background of Internet Finance Comparative Research, in Corporate Finance Research, 2017, Z1.

[32] See Deng Jianpeng: “ICO Risk and Regulatory Paths”, in China Finance, No. 18, 2017.