Otto: The Pyramids of Crypto

I. Introduction

Cryptocurrencies, also called “virtual currencies” according to Art. 1 (2) lit. d point 18 of the Directive (EU) 2018/843[1], means a digital representation of value that is not issued or guaranteed by a central bank or a public authority, is not necessarily attached to a legally established currency and does not possess a legal status of currency or money, but is accepted by natural or legal persons as a means of exchange and which can be transferred, stored and traded electronically. This includes popular cryptocurrencies such as bitcoin and ether. In contrast, the term “crypto-assets” is much broader, including virtual currencies and other means of a “digital representation”.[2]

Cryptocurrencies, in the view of some, were part of a mission to make the world a better place. Cryptocurrencies were supposed to offer people an innovative alternative in view of the financial crisis, where trust was not necessary and thus could not be disappointed. But cryptocurrencies did disappoint.[3] This article aims to show that cryptocurrencies are associated with a significant potential for harm that is detrimental to most participants in blockchain-based crypto networks, especially those who have joined most recently.

The potential for harm is based on the fact that these crypto networks rely on financial incentives implemented with the respective network cryptocurrency. Those who support the network and its cryptocurrency are rewarded. Also, pump-and-dump manipulations are in the network’s interests, which is why they happen regularly. However, the signs are mounting that the growth and continued existence of crypto networks is limited.[4] The signs are more than clear that not all network participants can profit.[5]

The dynamics around the crypto networks are reminiscent of a – forbidden – pyramid promotional scheme: The ECJ^[6] describes^[7] a pyramid promotional scheme as apparent if the sustainability of the system requires an ever increasing number of new participants in order to fund the compensation paid to existing participants.^[8] In the ECJ’s view, this means that the participants who joined last are least likely to receive compensation for their contribution.^[9] Such a system collapses when the number of new participants, which theoretically would have to increase to infinity for the system to continue, is no longer sufficient to finance the compensation promised to all participants.^[10]

Most crypto network participants are consumers.[11] However, the biggest, currently unresolved problem is that, primarily due to the anonymity-like pseudonymity of participants in crypto networks, the existing bans on pyramid promotional schemes often cannot be enforced against malicious actors, and thus the consumer protection purpose of the laws is often not achieved. In addition, market abuse regulations regularly do not apply. In contrast, a limited ban on the use of crypto-assets underpinning crypto networks, as proposed here, could allow for legal enforcement. It could avoid the influx of new crypto network participants, especially children[12], who or whose parents are at risk to suffer total loss due to the scheme. The restriction of the proposed ban is intended to leave a door open to innovations in the financial sector without comparable damage potential. The developers and participants of crypto networks are thus free to adapt to the legal situation.

II. Background knowledge on blockchain and cryptocurrencies

To better understand the proposal of the limited ban on the use of certain cryptocurrencies without extensive research work, essential basic knowledge is summarized below:

1. „The blockchain“

“Blockchain” describes on the one hand a special kind of data collection and database structure, i.e. data packets called blocks that are chronologically chained together. On the other hand, “blockchain” stands for a way of joint database management and thus communication in a network consisting of a variable number of participating computers operated by individuals or groups. Consequently, the term encompasses both “construct” and “method”, different ones in fact. The shared database management needs clear rules on how the database is updated, i.e., how another block is added to the block chain. Since democratic voting procedures are time-consuming and timely updating of the shared database would be impossible, so-called consensus algorithms[13] replace the voting process. Consensus algorithms, while ensuring a certain degree of randomness, are used to select “suitable” decision-makers from among eligible network managing participants[14]. These selection procedures are defined in the protocols of the individual blockchain networks and may therefore differ from one another.

The data collection will only become more extensive, as deletions are basically not provided for. It inevitably ends as soon as the data collection is “too big” to be processed by computers called full archive nodes (or full nodes). Before that, the number of full archive nodes is gradually decreasing because fewer and fewer node operators can acquire the necessary technology. So-called light node clients enable participation in the network even if the necessary storage space and computing power cannot be provided. Light nodes store only a lightweight miniature of the blockchain. Though dependent on the database managing participants and limited in participation and participation rights, light nodes support the network through new database entries (so-called transactions). For subsequent changes to the blockchain database, e.g., deletions, a majority of the database managing participants is required. This means that a controlling majority decides on database existence, state, and continuation. The controlling majority and how this control is exercised is basically determined by the protocol – which can also be changed by a majority.

In a nutshell: Blockchain technology is a network technology with a predictable but also (limited) deferrable end. It networks computers and computer users with each other, who have different roles and participation rights. They are called (crypto) network participants in this article.

2. Tokens and cryptocurrencies

Bitcoin and ether are so-called “coins”, also called “native tokens”. They are not only considered assets that can be reallocated through transactions, but they also serve, for example as transaction fees, network management purposes. Although tokens, as the smallest element of a computer program, can be created in infinite numbers, they are supposed to be limited in number by programming[15]. This alleged artificial scarcity is intended to create economic value. Allegations of a “store of value” or “digital gold” are popular.[16]

On the one hand, however, the proclaimed artificial scarcity is opposed by the ever increasing and infinite number of decimal places.[17] On the other hand, the “value” of a crypto-asset like a cryptocurrency is linked to the value ascribed to it by a dominant group. This group does not necessarily include only persons, but also, for example, network addresses[18] used by the same person as well as bots. However, a crypto-asset such as bitcoin or ether does not include a claim to payment of a certain equivalent value in money. The “value” attributed to it rather fluctuates constantly[19] and is therefore characterized by a considerable risk of loss. The dependence of “value” on groups is reflected in the fluctuations often triggered by so-called „pump-and-dump“ schemes, the frequency of which far exceeds comparable activities on the equity market.[20] Thus, there is no basis for ascribing intrinsic value.

3. The importance of a cryptocurrency for a crypto network

The blockchain-based crypto networks Bitcoin and Ethereum thrived and are maintained by financial incentives.[21] Zohar describes the incentive structure in the Bitcoin network for the Simons Institute for the Theory of Computing at the University of California, Berkeley, as follows:

“Behind the scenes, the system which offers payments to nodes that support the currency, is ruled by the resulting incentives.”[22]

The (crypto-)currency underpinning a crypto network forms the core of a blockchain ecosystem according to Huang et al.:

“It turns out that the incentive economy model of digital currency is the core of the blockchain industry ecology. Two goals of the incentive mechanism are based on the token of blockchain system, which is achieved by the following two strategies: One focus[es] on the issue mechanism of the token. It assesses what behaviors of the network node deserve newly issued coins (…). The other focuses on the allocation mechanism of the token. It restricts the distribution of existing tokens in the system through evaluating the nodes contributing to the network, (…)”[23]

Thus, the cryptocurrency ensures that crypto network participants act in such a way that they support the network and its cryptocurrency and do not endanger the continued existence of the network.[24]

Metcalfe’s law states that the value of a network, and thus the value of a crypto network’s cryptocurrency,[25] increases with the square of the number of its participants (people or computers).[26] This means cryptocurrency and crypto network are closely related. Cembalest sums up their interdependence with the following statement:

“Bitcoin cannot be destroyed and will survive as long as the network does.”^[27]

It is important to emphasize at this point that the financial incentives in crypto networks such as Bitcoin and Ethereum serve solely the interest of the network and not the interest of the individual or a selection of network participants.

a) Basic incentive structures in crypto networks

The financial incentives and incentive effects in crypto networks can be roughly summarized as follows:

In the Bitcoin and Ethereum networks, there is a competition among the so-called miners to decide whether to add a new block including transactions to the blockchain: Whichever of them prevails and gets to decide receives a reward, the so-called block reward. In the Bitcoin network, this consists of newly created bitcoins and the transaction fees of other network participants for processing their transactions.[28] In the Ethereum network, the fees are also part of the block reward.[29]

Since the number of transactions per block is limited, there is also competition among the network participants in both crypto networks for the inclusion of their transactions in a new block. The higher the total number of transactions, the higher the fees that network participants must pay.[30] The miners (who prevail in their competition) then process first those transactions whose rapid processing is worth high fees to the network participants.

A miner network, in which the miner itself must contribute to the required transaction volume and the reward gets reduced by fees, seems absurd. In addition, the reward must cover the costs of successful participation in the miner competition, especially the miner’s electricity costs. Otherwise, there is no effective financial incentive to participate in the crypto network as a miner. Also, to use the block reward to pay the bills in the real world, someone needs to pay the miner “real money” for it. Especially in the early days of a crypto network, this means that new network participants must be recruited, otherwise the miner will pay on top. Later, the need to recruit new network participants is to keep the number of transactions high or to increase it, so that the fees can develop their financial incentive effect and the continued existence[31] of the crypto network is secured.

Paid fees reduce the cryptocurrency holdings of the (other) network participants. Consequently, the network participants are incentivized to acquire more of the cryptocurrency to be able to have their future transactions processed in the network. However, additional purchases cost “real money”. Recruiting new network participants also increases demand. And according to the general understanding, increased demand means that the network participants’ own holdings become “more valuable”. That means, a subsequent purchase is not always necessary. The financial incentive has the effect of network participants supporting the network by either acquiring more cryptocurrency or recruiting new network participants. It may serve their individual interests, but it primarily serves the value and continuity of the crypto network.

In the case of the Ethereum network and its cryptocurrency ether, the incentive structure described above is supplemented by an additional programming layer[32] and thus the possibility of creating further incentive structures that can be determined by the network participants themselves. Incentive structures implemented using so-called smart contracts are characteristic of DAO (“Decentralized Autonomous Organization”) or DeFi (“Decentralized Finance”) systems.

b) “Support” of cryptocurrency and crypto network through pump-and-dump manipulation

The “value” of crypto-assets like cryptocurrencies can be influenced by so-called pump-and-dump manipulation, which in turn attracts network participants and can thus support the continued existence of the crypto network.

Pump-and-dump manipulation per se is an old phenomenon in financial markets. Usually, a distinction is made between information-based and trade-based manipulation:[33]

In information-based manipulation, false information about the value of an investment product is disseminated in the hope that potential investors will believe this false information.[34] This requires uncertainty about the value of the investment product and information asymmetry between the provider and the potential investor.[35] If these conditions are not met, investors will not react as desired, i.e. they will not invest in the investment product.[36]

Trade-based manipulation, on the other hand, is about buying and then selling at a profit or vice versa, which is possible if there is an asymmetry in liquidity-motivated trading or price momentum.[37]

According to Dhawan/Putnins, another, much more far-reaching form of manipulation takes place in crypto networks:

“Combining hand-collected data with audited data from a pump-and-dump aggregator, we identify as many as 355 cases of pump-and-dump manipulation within a period of six months on two cryptocurrency exchanges. Up to 23 million individuals are involved in these manipulations. We estimate that the 355 pumps in our sample are associated with approximately $350 million of trading on the manipulation days, and that manipulators extract profits of approximately $6 million from other participants. In all, 197 distinct cryptocurrencies or „coins“ are manipulated, which implies that approximately 15% of all coins in our sample of exchanges are targeted by manipulators at least once in the six-month period. There are, on average, two pumps per day. This rate of manipulation is considerably higher than pump-and-dump manipulation in stock markets in recent decades.”[38]

In this case, crypto network participants called manipulators declare publicly, e.g., in social networks, that they want to “pump” a certain crypto-asset and ask others to join the “pump”.[39] Many prompted respond by purchasing the crypto-asset, presumably in the hope of profiting from the increase in value when the pumped crypto-asset is later sold before the price collapses.[40] Here, however, the above-mentioned classical mechanisms of information asymmetry and uncertainty about the value of an asset are not exploited to “fool” others to purchase an investment product.[41] Also, manipulators do not exploit the asymmetry of price effects that underpin trade-based market manipulation.[42] As a rule, there is no collusion either. Dhawan/Putnins assume that hubris and the quest for gambling are a reason why these manipulations – despite the high risk of loss – can take place repeatedly in crypto networks.[43]

Dhawan/Putnins find that rational investors who do not have a speed or skill advantage would not participate in pump-and-dump manipulations because pumping implies loss for participants other than the manipulators:[44] pumping is per se a zero-sum game that involves the redistribution of wealth among participants.[45] However, while the manipulators use their advantage to make profits, and trading costs such as transaction fees are incurred, pumping becomes a negative-sum game for participants other than the manipulators.[46] This means that, while the fastest or most skilled participants can profit at the expense of the slower or less skilled participants, the non-manipulators all lose money.[47]

Pump-and-dump manipulations will take place as long as they are in the interest of the network, i.e. as long as they ensure a high total transaction volume and thus the continuity of the network. As long as new network participants, driven mainly by hubris and the quest for gambling, join the network, the harm to existing network participants does not jeopardize the network’s continued existence, but promotes it. The interests of individuals or certain groups remain irrelevant, as already emphasized above.

c) Other pump manipulation examples like “tether”

The “support” of a crypto-asset and network can also be indirectly provided by other crypto-assets, as the Tether-case shows:

Tether[48] is the issuer of a so-called stablecoin[49] called USDT (also called tether), which has probably had a considerable influence on the “value” development of bitcoin. Put simply, Tether pumped more and more USDT into the crypto market at ever shorter intervals to acquire bitcoins.[50] This created the impression that the bitcoin price and thus its “value” would increase. Many new network participants were attracted by this impression. But where do the tens of billions of U.S. dollars[51] that are supposed to make this stablecoin valuable and stable in value come from and where are they?[52] The promise inherent in the stablecoin concept that each tether always corresponds to one U.S. dollar in the issuer’s vault therefore aroused doubts.[53] Currently, the New York State Attorney General’s Office, together with the online magazine CoinDesk, is trying to gain insight into the composition of the Tether reserve.[54] It is expected that nothing of value will be found.

On January 27, 2022, the U.S. Securities and Exchange Commission (SEC) prohibited a bitcoin ETF expressly naming

“manipulative activity involving the purported ’stablecoin‘ Tether (‘USDT’)”.[55]

In addition, the SEC focused on the risks ignored by the applicant, which besides others result from so-called wash trading, insider trading as well as fraud and manipulation at bitcoin trading platforms.[56]

III. Crypto networks like Bitcoin and Ethereum have the character of a pyramid scheme

The number of transactions on the Bitcoin network per day is decreasing.^[57] The number of transactions on the Ethereum network has also decreased since May 2021.^[58] Declining transaction numbers do not meet the goal of supporting the cryptocurrency and the crypto network. However, these crypto networks are still popular. The dynamics underlying the influx of new network participants described above point to the presence of a pyramid scheme. They suggest why Bitcoin and Ethereum are still popular.[59]

1. A pyramid scheme according to point 14 of Annex I to Directive 2005/29/EC

In its “4finance” judgement of April 3, 2014[60], the European Court of Justice (ECJ) ruled on the interpretation of point 14 of Annex I to Directive 2005/29/EC[61], which governs the example of the misleading commercial practice called “pyramid promotional scheme” being regarded as unfair under all circumstances pursuant to Art. 5 (5) of Directive 2005/29/EC:

Establishing, operating or promoting a pyramid promotional scheme where a consumer gives consideration for the opportunity to receive compensation that is derived primarily from the introduction of other consumers into the scheme rather than from the sale or consumption of products.

In its ruling, the ECJ specified the characteristics of a pyramid promotional scheme within the meaning of the Directive as follows:

“20      In that regard, it should be noted that the prohibition of pyramid promotional schemes is based, in all language versions of Annex I, point 14 of Regulation 2005/29, on three common conditions. First, such a promotion is based on the promise that the consumer will have the opportunity of making a commercial profit. Next, the realization of that promise depends on the introduction of other consumers into the scheme. Finally, the greater part of the revenue to fund the compensation promised to consumers does not result from a real economic activity.

21      It is common ground that, when there is no effective economic activity to generate enough revenue to fund the compensation promised to consumers, such a promotion scheme is necessarily based on the economic contribution of its participants, since the opportunity for a member of that scheme to receive compensation depends essentially on the fees paid by additional members.

22      Such a scheme can only be a ‘pyramid’ in the sense that its sustainability requires the subscription of an ever increasing number of new participants to fund the compensation paid to existing members. It also means that the most recent members are less likely to receive compensation for their participation. That scheme ceases to be viable when the growth in membership, which should theoretically tend to infinity in order for the scheme to continue, is no longer sufficient to fund the compensation promised to all participants.”[62]

The amount of a consumer’s economic contribution for the opportunity to receive compensation is irrelevant:

„34       Having regard to all the foregoing considerations, the answer to the questions referred is that Annex I, point 14 of Directive 2005/29 must be interpreted as meaning that a pyramid promotional scheme constitutes an unfair commercial practice only where such a scheme requires the consumer to give financial consideration, regardless of its amount, for the opportunity to receive compensation that is derived primarily from the introduction of other consumers into the scheme rather than from the sale or consumption of products.”^[63]

Chances of winning, which can be increased by joint participation, are sufficient “opportunity to receive compensation” according to the ECJ’s decision of December 15, 2016.^[64] Moreover, a direct link between the consumer’s contribution and the compensation that existing participants receive is not necessary for the classification as a pyramid promotional scheme.^[65]

2. Bitcoin and Ethereum as variants of the pyramid promotional scheme

In the case of the Bitcoin and Ethereum crypto networks and their respective cryptocurrencies, the aforementioned three conditions of a pyramid promotional scheme within the meaning of the ECJ are met, with most network participants being considered consumers:[66]

a) Promise that the consumer will have the opportunity of making a commercial profit

According to the ECJ, promotion in the context of a prohibited pyramid promotional scheme is based on the promise that the consumer will have the opportunity of making a commercial profit. On the one hand, this promise is reflected in the chance of a block reward determined by the network’s protocol.[67] On the other hand, there is a communicated possibility and thus promise of direct influenceability of the profit opportunities in line with the networks’ incentive structures. As pointed out above, pump-and-dump manipulations are conducive to maintaining the crypto network.

b) Realization of that promise depends on the introduction of other consumers into the scheme

The fulfillment of these profit opportunity promises depends on the introduction of more consumers into this system. Newly introduced consumers compensate for the loss of network participants and maintain or increase the total transaction volume, i.e. the fee volume. Miners must be able to profit and exchange the (block reward and) fees for “real money” to pay their real-world bills. Also, the other network participants must find new customers to realize their profits by exchanging them for “real money”, especially at a higher price than the one they paid themselves. Finally, their profit opportunities can be influenced effectively and are thus higher if they are joined by other network participants. As pointed out above, collective pump-and-dump manipulations are conducive to maintaining the crypto network.

c) The greater part of the revenue to fund the compensation promised to consumers does not result from a real economic activity

After all, most of the revenue to fund the compensation promised to consumers must not come from a real economic activity. Bitcoins in the block reward are computer-generated. The fees in the block reward are economic contributions of other network participants. Also, profits of manipulators are lost when pump-and-dump schemes fail due to a lack of manipulable network participants. Thus, even notwithstanding profit from direct sales, the greater part of the revenue to fund the compensation does not result from a real economic activity.

d) Problem: Law enforcement hampered by pseudonymity of crypto networks

The ban on pyramid promotional systems under European competition law, which had to be transposed into national law, is not directed against consumers, but is intended to protect them. However, malicious actors are often difficult or impossible to identify, especially due to the anonymity-like pseudonymity of crypto network participants. As a consequence, consumer protection laws can hardly or not be enforced and consumer protection cannot be realized. The same applies to potential criminal offenses subject to national laws.

3. Malicious actors under the radar of the Market Abuse Regulation (MAR)

Manipulative crypto network participants often do not fall under relevant market abuse regimes. As demonstrated above, crypto-asset manipulations are often not information- or trade-based, but emotion-based. The Market Abuse Regulation^[68] (MAR), for example, (only) regulates conduct with information that can be used for market manipulation and thus market abuse:

Pursuant to Art. 3 (1) point 34 of MAR, ‘information recommending or suggesting an investment strategy’ means information

(i)         produced by an independent analyst, an investment firm, a credit institution, any other person whose main business is to produce investment recommendations or a natural person working for them under a contract of employment or otherwise, which, directly or indirectly, expresses a particular investment proposal in respect of a financial instrument or an issuer;

or

(ii)        produced by persons other than those referred to in point (i), which directly proposes a particular investment decision in respect of a financial instrument.

Pursuant to Art. 3 (1) point 35 of MAR, „investment recommendations“ means

information recommending or suggesting an investment strategy, explicitly or implicitly, concerning one or several financial instruments or the issuers, including any opinion as to the present or future value or price of such instruments, intended for distribution channels or for the public.

The Statement by the European Securities and Markets Authority (ESMA) on Investment Recommendations in social media of October 28, 2021[69], points out that the information qualifying an investment recommendation must also enable investors to identify whether it is objective and whether conflicts of interest exist. However, typical posts by pseudonymous crypto network participants on social media often include the following

• the exclamation “Buy the dip!”;
• the (false) message that one has just bought more crypto-assets;
• the exclamation “To the moon!”;
• Graphs showing a future rising price;
• the exclamation “Hodl!“;
• the hashtag “#cryptoasset”, maybe in combination with imagery (GIF).

None of these contain information[70] apart from the obviously subjective statement, highlighted by subjective interest. Nevertheless, they have a manipulative effect, as Dhawan/Putnins[71] have shown: The more social and crypto network participants claim subjective interest in a crypto-asset, the more observers feel that the value of the crypto-asset will increase due to high demand. The more subjective interest is displayed, the more effective the – emotional[72], not information-based – manipulation becomes. Collusion is not necessary: a hashtag like “#bitcoin” is sufficient to create the (illusion of a) mass.

Last but not least, pursuant to its 14th recital the MAR assumes an “informed investor”:

Reasonable investors base their investment decisions on information already available to them, that is to say, on ex ante available information. Therefore, the question whether, in making an investment decision, a reasonable investor would be likely to take into account a particular piece of information should be appraised on the basis of the ex ante available information. Such an assessment has to take into consideration the anticipated impact of the information in light of the totality of the related issuer’s activity, the reliability of the source of information and any other market variables likely to affect the financial instruments, the related spot commodity contracts, or the auctioned products based on the emission allowances in the given circumstances.

As Dhawan/Putnins[73] have pointed out, most crypto networks lack informed investors who base their investment decisions on information. Where information is largely irrelevant, the answer to the question of whether bitcoin and alike are financial instruments within the meaning of MAR is also no longer relevant. And thus, once again, there are no effective means against manipulation, especially at the expense of new network participants.

IV. Proposal of a limited prohibition of use

The current state of regulation on crypto-assets is insufficient. Politicians and the public are not aware of the risks of crypto networks. Although pyramid promotional schemes have been banned for years, the anonymity-like pseudonymity of crypto networks makes these bans difficult or impossible to enforce. Market abuse regulations often do not apply. Therefore, a swiftly implemented, limited ban on the use of cryptocurrencies, i.e., crypto-assets underpinning crypto networks should be on the European agenda.

1. Suggested wording

The limited ban on the use of cryptocurrencies such like bitcoin and ether, i.e. crypto-assets underpinning crypto networks, can be worded along the lines of point 14 of Annex I to Directive 2005/29/EC. Which means that the use of such crypto-assets could be banned, which help

establishing, operating or promoting a pyramid promotional scheme where a consumer gives consideration for the opportunity to receive compensation that is derived primarily from the introduction of other consumers into the scheme rather than from the sale or consumption of products.

The details, especially the determination of the legal consequences and the distribution of the burden of proof, are left to the decision of the European and national legislators.

2. Purpose of the limited ban: enable law enforcement and (real) innovation

The proposed limited ban is intended to enable legal enforcement where existing laws fail mainly due to the anonymity-like pseudonymity of the crypto network participants. Consumers[74] would be directly affected but not sanctioned. Potential consequences for consumers could include void contracts, contractual implications, and no or limited access to crypto exchanges. Enforcement of the ban of pyramid promotional schemes is then no longer dependent on a business act attributable to a person. Also, damage could be prevented in advance.

The proposed limited ban on the use of crypto-assets underpinning crypto networks does not mean a ban on crypto-assets per se, but only on those promoting a pyramid promotional scheme. There is thus room for innovation. Huang et al., for example, see no fundamental need for (financial) incentives in blockchain networks if the network participants act dutifully for other reasons:

“However, in the private chain, incentives are not that necessarily, because the nodes participating in the accounting often complete the game outside the chain, and participate in accounting through coercion or voluntarily.”[75]

Compliance, encouraged for example by the identifiability of network participants, should make harmful financial incentive structures irrelevant. Finally, it would be up to the respective crypto network developers and participants to introduce a legally compliant network and incentive design. The Tepper School of Business at Carnegie Mellon University could provide guidance in this regard:

“Our research shows that the economic incentives that drive human behavior play a critical role in how blockchain technology is and will be used. Its success as a useful tool will depend as much on how humans interact with it as on the technology itself.” [76] [77]

V. Consequences that are worthwhile because consumer protection is an EU objective

In line with the incentive design of Bitcoin and Ethereum, the proposed limited ban starts with their cryptocurrencies bitcoin and ether. Due to their technical design, this ban is expected to impact the respective crypto network as a whole. It is expected that these crypto networks will collapse, mainly due to a reduced influx of new network participants. The collapse would also solve the problem attributed to crypto networks of high energy demand, which burdens power grids and the climate. Network developers as well as participants would have to adapt to the – not new – legal situation and avoid collapse by lawful means. An interest worthy of protection in the preservation of prohibited pyramid promotional schemes is not apparent.

The European Supervisory Authorities (EBA, ESMA and EIOPA – the ESAs) warned consumers on March 17, 2022, that many crypto-assets are highly risky and speculative.[78] They warned against “aggressive promotion of those assets and related products”.[79] In contrast, it remains unclear what actual benefits the EU Parliament had in mind on March 14, 2022, when discussing and voting on the proposal for a regulation on markets for crypto-assets (MiCA).[80] The last days have only shown that members of the EU parliament are insufficiently informed and probably easily influenced on the part of crypto advocates:[81] On March 12, 2022, the crypto press published email addresses of EU parliamentarians and asked readers to influence them in their decision regarding the quasi-ban of certain crypto-assets.[82] Crypto network participants spread the demand on social media.[83] EU parliamentarians reacted to the promotion of crypto-assets with concerns of an assault on Europe’s innovative strength(!), that the EU would fall behind and not benefit from early adoption.[84] Having read this paper, the parallels between pump-and-dump manipulation and parliamentary influence peddling for personal gain are not inconspicuous.

European institutions should put on the glasses and look at the dynamics arising from the financial incentives in crypto networks like Bitcoin and Ethereum. The inconsistencies of the last few days do not speak in favor of European consumer protection. A first step could be to examine the proposed ban based on existing EU competition law in favor of consumers.

V

V

[1] Amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing, https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32018L0843&from=DE (last accessed March 18, 2022).

[2] See, e.g., EBA reports on crypto-assets, January 9, 2019, https://www.eba.europa.eu/eba-reports-on-crypto-assets (last accessed March 18, 2022) and the Proposal for a Regulation of The European Parliament and of The Council on Markets in Crypto-assets, and amending Directive (EU) 2019/1937, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020PC0593 (last accessed March 18, 2022).

[3] Cf. Olson, Line Goes Up – The Problem With NFTs, January 21, 2022, https://www.youtube.com/watch?v=YQ_xWvX1n9g (last accessed March 18, 2022).

[4] Olson, Line Goes Up – The Problem With NFTs, January 21, 2022, https://www.youtube.com/watch?v=YQ_xWvX1n9g (last accessed March 18, 2022). See also, e.g., Pointbrite, Is Bitcoin a Ponzi scheme? Parts 1 and 2, https://www.youtube.com/watch?v=IdA6vmKJxyk (last accessed March 18, 2022).

[5] Olson, Line Goes Up – The Problem With NFTs, January 21, 2022, https://www.youtube.com/watch?v=YQ_xWvX1n9g (last accessed March 18, 2022). See also, e.g., Pointbrite, Is Bitcoin a Ponzi scheme? Parts 1 and 2, https://www.youtube.com/watch?v=IdA6vmKJxyk (last accessed March 18, 2022).

[6] Judgment of the Court of Justice of April 3, 2014, in Case C-515/12 („4finance“), ECLI:EU:C:2014:211, https://curia.europa.eu/juris/document/document.jsf?text=&docid=150284&pageIndex=0&doclang=DE&mode=lst&dir=&occ=first&part=1&cid=495854 (last accessed March 18, 2022).

[7] Judgment of the Court of December 15, 2016, in Case C-667/15, ECLI:EU:C:2016:958, https://curia.europa.eu/juris/document/document.jsf?text=&docid=186265&pageIndex=0&doclang=DE&mode=lst&dir=&occ=first&part=1&cid=1022083 (last accessed March 18, 2022).

[8] Judgment of the Court of December 15, 2016, in Case C-667/15, ECLI:EU:C:2016:958, para. 26, https://curia.europa.eu/juris/document/document.jsf?text=&docid=186265&pageIndex=0&doclang=DE&mode=lst&dir=&occ=first&part=1&cid=1022083 (last accessed March 18, 2022).

[9] Judgment of the Court of December 15, 2016, in Case C-667/15, ECLI:EU:C:2016:958, para 26, https://curia.europa.eu/juris/document/document.jsf?text=&docid=186265&pageIndex=0&doclang=DE&mode=lst&dir=&occ=first&part=1&cid=1022083 (last accessed March 18, 2022).

[10] Judgment of the Court of December 15, 2016, in Case C-667/15, ECLI:EU:C:2016:958, para 26, https://curia.europa.eu/juris/document/document.jsf?text=&docid=186265&pageIndex=0&doclang=DE&mode=lst&dir=&occ=first&part=1&cid=1022083 (last accessed March 18, 2022).

[11] According to current estimates, only about 5% of the total amount of bitcoin is held by institutional investors through custodians, see Bridgewater, The Evolution of Institutional Investors‘ Exposure to Cryptocurrencies and Blockchain Technologies, January 14, 2022, https://www.bridgewater.com/research-and-insights/the-evolution-of-institutional-investors-exposure-to-cryptocurrencies-and-blockchain-technologies (last accessed March 18, 2022).

[12] After Matt Damon might have driven many people to loss with his advertisement for Crypto-dot-com, basketball player LeBron James has now been signed up to introduce kids to blockchain and crypto: Sherter, „LeBron James teams with Crypto-dot-com to teach kids about blockchain,“ CBS News, January 28, 2022; Blasi, „LeBron James partners with Crypto-dot-com to teach kids blockchain technology,“ MarketWatch, January 28, 2022, https://www.marketwatch.com/story/lebron-james-partners-with-crypto-com-to-teach-kids-blockchain-technology-11643401669 (both last accessed March 18, 2022). See also USA Today, Computer science researcher creates game to teach blockchain to children, June 24, 2021, „Murtuza Jadliwala, assistant professor in the Department of Computer Science at UTSA, has cultivated an innovative table-top game called CryptoMiner to educate younger students on how blockchains function and how they enable cryptocurrency applications.“, https://www.utsa.edu/today/2021/06/story/jadliwala-murtuza-develops-cryptominer-blockchain-game.html (last accessed March 18, 2022).

[13] E.g., Proof-of-Work (PoW), which is known to consume a lot of energy.

[14] E.g., miners in PoW-networks like Bitcoin and Ethereum.

[15] For example, the maximum number of bitcoins was limited from the outset to around 21 million Bitcoins, see Bangert, Fake Limit – Why There Are More Than 21 Million Bitcoins, November 19, 2021, https://de.beincrypto.com/fake-limit-warum-es-mehr-als-21-millionen-bitcoin-gibt/ (last accessed March 18, 2022).

[16] See Cembalest, Eye on the market: The Maltese Falcoin, February 3, 2022, p. 5, https://privatebank.jpmorgan.com/content/dam/jpm-wm-aem/global/pb/en/insights/eye-on-the-market/the-maltese-falcoin.pdf (last accessed March 18, 2022).

[17] See Bangert, Fake Limit – Why There Are More Than 21 Million Bitcoin, November 19, 2021, https://de.beincrypto.com/fake-limit-warum-es-mehr-als-21-millionen-bitcoin-gibt/ (last accessed March 18, 2022).

[18] Cembalest suspects that the bitcoin concentration in the network, i.e., 2% of the network participants hold 72% of the total Bitcoin amount, might (partly) cause the volatility, see Cembalest, Eye on the market: The Maltese Falcoin, February 3, 2022, p. 6, https://privatebank.jpmorgan.com/content/dam/jpm-wm-aem/global/pb/en/insights/eye-on-the-market/the-maltese-falcoin.pdf (last accessed March 18, 2022).

[19] Largely due to so-called pump-and-dump schemes, see Cembalest, Eye on the market: The Maltese Falcoin, February 3, 2022, p. 7, https://privatebank.jpmorgan.com/content/dam/jpm-wm-aem/global/pb/en/insights/eye-on-the-market/the-maltese-falcoin.pdf (last accessed March 18, 2022).

[20] Cembalest, Eye on the market: The Maltese Falcoin, Feb. 3, 2022, p. 7, other fluctuation factors considered are named on p. 8, https://privatebank.jpmorgan.com/content/dam/jpm-wm-aem/global/pb/en/insights/eye-on-the-market/the-maltese-falcoin.pdf (last accessed March 18, 2022); Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, Nov. 12, 2021, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[21] See, e.g., Barrera, Blockchain Incentive Structures: What They Are and Why They Matter, August 22, 2018, Medium, https://medium.com/prysmeconomics/blockchain-incentives-101-what-they-are-and-why-they-matter-5127afb56aeb (last accessed March 18, 2022); Wright, Bitcoin is All About Incentives, Medium, November 6, 2018, https://medium.com/@craig_10243/bitcoin-is-all-about-incentives-72894518f6b5 (last accessed March 18, 2022); Choy, The Use of Incentives in Crypto, November 13, 2021, https://www.aier.org/article/the-use-of-incentives-in-crypto/ (last accessed March 18, 2022).

[22] https://simons.berkeley.edu/talks/aviv-zohar-2015-11-20 (last accessed March 18, 2022).

[23] Huang et al., A Survey on Blockchain Incentive Mechanism, September 2019, https://www.researchgate.net/publication/335782855_Survey_on_Blockchain_Incentive_Mechanism, p. 4 (last accessed March 18, 2022).

[24] Huang et al., A Survey on Blockchain Incentive Mechanism, September 2019, https://www.researchgate.net/publication/335782855_Survey_on_Blockchain_Incentive_Mechanism, p. 4 (last accessed March 18, 2022); see also Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System, p. 4, https://bitcoin.org/bitcoin.pdf (last accessed March 18, 2022).

[25] See Nagarajan, Cryptocurrencies can be valued based on network size just like social media companies employ metrics like monthly active users, Goldman Sachs says, Business Insider, July 21, 2021, https://www.businessinsider.com/cryptocurrency-valuations-bitcoin-fundamentals-network-size-goldman-sachs-social-media-2021-7?amp (last accessed March 18, 2022).

[26] See Cembalest, Eye on the market: The Maltese Falcoin, February 3, 2022, p. 6, https://privatebank.jpmorgan.com/content/dam/jpm-wm-aem/global/pb/en/insights/eye-on-the-market/the-maltese-falcoin.pdf (last accessed March 18, 2022).

[27] Cembalest, Eye on the market: The Maltese Falcoin, February 3, 2022, p. 8, https://privatebank.jpmorgan.com/content/dam/jpm-wm-aem/global/pb/en/insights/eye-on-the-market/the-maltese-falcoin.pdf (last accessed March 18, 2022).

[28] Zohar, video beginning at approximately minute 21:30, https://simons.berkeley.edu/talks/aviv-zohar-2015-11-20 (last accessed March 18, 2022).

[29] https://ethereum.stackexchange.com/questions/97345/how-exactly-are-ethereum-transaction-fees-and-block-rewards-sent-to-the-miner (last accessed March 18, 2022).

[30] Evolution of transaction fees in bitcoin (BTC) between 2012 and 2021, Statista, https://www.statista.com/statistics/1224286/transaction-fees-bitcoin/ (last accessed Feb. 6, 2022); Evolution of transaction fees in Ethereum between 2015 and 2022, Statista, https://www.statista.com/statistics/1221821/gas-price-ethereum/ (last accessed March 18, 2022).

[31] This includes the security of the crypto network, determined by a high volume of transactions.

[32] Ethereum as Ethereum Virtual Machine with programmable smart contracts, i.e. computer programs, is therefore often referred to as a „global supercomputer“.

[33] Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, November 12, 2021, p. 2, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[34] Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, November 12, 2021, p. 2, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[35] Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, November 12, 2021, p. 2, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[36] Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, November 12, 2021, p. 2, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[37] Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, November 12, 2021, p. 2, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[38] Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, November 12, 2021, p. 3, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[39] Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, November 12, 2021, p. 3, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[40] Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, November 12, 2021, p. 3, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[41] Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, November 12, 2021, p. 3, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[42] Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, November 12, 2021, p. 3, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[43] See Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, Nov. 12, 2021, p. 4, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[44] Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, November 12, 2021, p. 3, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[45] Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, November 12, 2021, p. 3, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[46] Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, November 12, 2021, p. 3, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[47] Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, November 12, 2021, p. 3, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[48] „Tether“ includes: Tether Holdings Limited, Tether Limited, Tether Operations Limited, and Tether International Limited, see CFTC Press Release, October 15, 2021 https://www.cftc.gov/PressRoom/PressReleases/8450-21 (last accessed March 18, 2022) and CoinDesk Memorandum, January 4, 2022, https://de.scribd.com/document/551025260/Memorandum-of-Law-by-CoinDesk-in-Tether-Petition (last accessed March 18, 2022).

[49] A stablecoin is deemed to not fluctuate in value, but always correspond to a certain amount of money (here 1 USDT = 1 U.S. dollar), which is held in reserve by the provider.

[50] Cf. Faux, Anyone Seen Tether’s Billions? Bloomberg Businessweek, October 7, 2021, https://www.bloomberg.com/news/features/2021-10-07/crypto-mystery-where-s-the-69-billion-backing-the-stablecoin-tether (last accessed March 18, 2022); Mattheis, Crypto Conundrum: Is Tether Behind a Giant Scam? Capital+, September 2, 2021, https://www.capital.de/p/plus/politik-wirtschaft/krypto-raetsel–steckt-hinter-tether-ein-riesenbetrug–30702964.html (last accessed March 18, 2022).

[51] Cf. Tether website: https://wallet.tether.to/transparency (last accessed March 18, 2022). Questioning the accuracy of the data, Tomlin, Why Does Tether Deserve the Benefit of the Doubt?, Bennett’s Blog, May 14, 2020, https://bennettftomlin.com/2020/05/14/why-does-tether-deserve-the-benefit-of-the-doubt/ and referenced by the same on Twitter on February 4, 2022, thread: https://twitter.com/BennettTomlin/status/1489686820292120579?s=20&t=gMvQqgmhaQlNXKB5BU5J3Q (last accessed March 18, 2022).

[52] Cf. Faux, Anyone Seen Tether’s Billions? Bloomberg Businessweek, October 7, 2021, https://www.bloomberg.com/news/features/2021-10-07/crypto-mystery-where-s-the-69-billion-backing-the-stablecoin-tether (last accessed March 18, 2022).

[53] Cf. Faux, Anyone Seen Tether’s Billions? Bloomberg Businessweek, Oct. 7, 2021, https://www.bloomberg.com/news/features/2021-10-07/crypto-mystery-where-s-the-69-billion-backing-the-stablecoin-tether (last accessed March 18, 2022); Mattheis, Crypto Conundrum: Is Tether Behind a Giant Scam? Capital+, Sept. 2, 2021, https://www.capital.de/p/plus/politik-wirtschaft/krypto-raetsel–steckt-hinter-tether-ein-riesenbetrug–30702964.html (last accessed March 18, 2022).

[54] Cf. De/Lewitinn, CoinDesk Joins Court Case Seeking Access To NYAG Tether Documents, CoinDesk, Jan. 4, 2022, https://www.coindesk.com/policy/2022/01/04/coindesk-joins-court-case-seeking-access-to-nyag-tether-documents/ (last accessed March 18, 2022).

[55] https://www.sec.gov/rules/sro/cboebzx/2022/34-94080.pdf (p. 17, last accessed March 18, 2022).

[56] https://www.sec.gov/rules/sro/cboebzx/2022/34-94080.pdf (p. 17 ff., last accessed March 18, 2022).

[57] Cembalest, Eye on the market: The Maltese Falcoin, February 3, 2022, p. 9, https://privatebank.jpmorgan.com/content/dam/jpm-wm-aem/global/pb/en/insights/eye-on-the-market/the-maltese-falcoin.pdf (last accessed March 18, 2022).

[58] Statista, Number of Ethereum transactions per day on the blockchain from August 2015 to January 9, 2022, https://www.statista.com/statistics/730818/average-number-of-ethereum-transactions/ (last accessed March 18, 2022).

[59] The use of crypto assets by the Ukrainian government to finance its defense should be disregarded here.

[60] Judgment of the Court of Justice of April 3, 2014 in Case C-515/12, ECLI:EU:C:2014:211, https://curia.europa.eu/juris/document/document.jsf?text=&docid=150284&pageIndex=0&doclang=DE&mode=lst&dir=&occ=first&part=1&cid=495854 (last accessed March 18, 2022).

[61] Directive 2005/29/EC of The European Parliament and of The Council of May 11, 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (Unfair Commercial Practices Directive), https://eur-lex.europa.eu/legal-content/DE/TXT/PDF/?uri=CELEX:32005L0029&from=DE (last accessed March 18, 2022).

[62] Judgment of the Court of Justice of April 3, 2014 in Case C-515/12, ECLI:EU:C:2014:211, https://curia.europa.eu/juris/document/document.jsf?text=&docid=150284&pageIndex=0&doclang=DE&mode=lst&dir=&occ=first&part=1&cid=495854 (last accessed 2 February 2022).

[63] Judgment of the Court of Justice of April 3, 2014 in Case C-515/12, ECLI:EU:C:2014:211, https://curia.europa.eu/juris/document/document.jsf?text=&docid=150284&pageIndex=0&doclang=DE&mode=lst&dir=&occ=first&part=1&cid=495854 (last accessed March 18, 2022).

[64] Judgment of the Court of December 15, 2016 in Case C-667/15, ECLI:EU:C:2016:958, para 21 et seq, https://curia.europa.eu/juris/document/document.jsf?text=&docid=186265&pageIndex=0&doclang=DE&mode=lst&dir=&occ=first&part=1&cid=1022083 (last accessed March 18, 2022).

[65] Judgment of the Court of December 15, 2016 in Case C-667/15, ECLI:EU:C:2016:958, para 34, https://curia.europa.eu/juris/document/document.jsf?text=&docid=186265&pageIndex=0&doclang=DE&mode=lst&dir=&occ=first&part=1&cid=1022083 (last accessed March 18, 2022).

[66] According to current estimates, only about 5% of the total amount of bitcoin is held by institutional investors through custodians, see Bridgewater, The Evolution of Institutional Investors‘ Exposure to Cryptocurrencies and Blockchain Technologies, January 14, 2022, https://www.bridgewater.com/research-and-insights/the-evolution-of-institutional-investors-exposure-to-cryptocurrencies-and-blockchain-technologies (last accessed March 18, 2022).

[67] The fact that consumers may not have the technical (and financial) means to mine is irrelevant here because network protocols do not consider individual or group interests and thus do not distinguish between consumers and businesses.

[68] Regulation (EU) No. 596/2014 of the European Parliament and of the Council of April 16, 2014, available at https://eur-lex.europa.eu/legal-content/DE/TXT/HTML/?uri=CELEX:32014R0596&from=HU (last accessed March 18, 2022).

[69] ESMA70-154-2780, https://www.esma.europa.eu/sites/default/files/library/esma70-154-2780_esmas_statement_on_investment_recommendations_on_social_media.pdf (last accessed March 18, 2022).

[70] Above all, horoscope-like predictions of the future are not information.

[71] Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, November 12, 2021, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[72] Here, for example, greed or fear of missing out on great wealth (called Fear Of Missing Out, FOMO) is triggered.

[73] Dhawan/Putnins, A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets, November 12, 2021, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670714 (last accessed March 18, 2022).

[74] According to current estimates, only about 5% of the total amount of bitcoin is held by institutional investors through custodians, see Bridgewater, The Evolution of Institutional Investors‘ Exposure to Cryptocurrencies and Blockchain Technologies, January 14, 2022, https://www.bridgewater.com/research-and-insights/the-evolution-of-institutional-investors-exposure-to-cryptocurrencies-and-blockchain-technologies ((last accessed March 18, 2022).

[75] Huang et al , A Survey on Blockchain Incentive Mechanism, September 2019, https://www.researchgate.net/publication/335782855_Survey_on_Blockchain_Incentive_Mechanism (last accessed March 18, 2022).

[76] Zetlin-Jones, Exploring Economic Incentive in Blockchain Use, Tepper School of Business, https://www.cmu.edu/tepper/news/stories/2020/september/blockchain-economic-incentive1.html (last accessed March 18, 2022).

[77] The author of this article does not consider blockchain technology per se to be fit for the future.

[78] https://www.eba.europa.eu/eu-financial-regulators-warn-consumers-risks-crypto-assets (last accessed March 18, 2022).

[79] https://www.eba.europa.eu/eu-financial-regulators-warn-consumers-risks-crypto-assets (last accessed March 18, 2022).

[80] https://www.europarl.europa.eu/news/en/press-room/20220309IPR25162/cryptocurrencies-in-the-eu-new-rules-to-boost-benefits-and-curb-threats (last accessed March 18, 2022).

[81] https://twitter.com/paddi_hansen/status/1503385941087502338?s=20&t=WaFTynA2v37Dtdm6mKqIbg (last accessed March 18, 2022).

[82] https://www.btc-echo.de/news/bitcoin-verbot-kurzfristige-aenderungsantraege-bedrohen-btc-zukunft-136928/ (last accessed March 18, 2022).

[83] https://twitter.com/blocktrainer/status/1502582708005912576?s=20&t=WaFTynA2v37Dtdm6mKqIbg (last accessed March 18, 2022).

[84] See https://twitter.com/DrStefanBerger/status/1504041527479316480?s=20&t=WaFTynA2v37Dtdm6mKqIbg; https://twitter.com/DrStefanBerger/status/1503427170558873600?s=20&t=WaFTynA2v37Dtdm6mKqIbg and https://twitter.com/DrStefanBerger/status/1504068797577285633?s=20&t=SpaRLh8_lRKRzqouNuN6Nw (last accessed March 18, 2022).