The Metaverse Mining Movement: the Legal Ramifications Surrounding this Modern Digital Phenomenon

The Metaverse Mining Movement: the Legal Ramifications Surrounding this Modern Digital Phenomenon

By Hannah Hendry, JF Law

In modern times, the concept of cryptocurrencies has become increasingly popular. It is paving the way for a new digital era in our society. At the touch of a button, people have become millionaires overnight. It could be perceived as the modern equivalent of discovering oil in the Middle East or gold in Alaska. In the contemporary world, mining for oil has been challenged by mining for coins. Bitcoin mining emits 37 megatons of carbon dioxide into the atmosphere annually.

Cryptocurrency

Cryptocurrencies will have significant impacts on our economy and future financial situation. Cryptocurrency is a digital currency in which the transactions are verified. These transactions are recorded onto a system called a blockchain. Bitcoin is the most popular coin, the chain that put cryptocurrency front and centre. It is a powerhouse that commanded the world’s attention, unveiling it as a serious rival to fiat currency. Fiat currency is a government-issued currency that is not substantiated by a commodity such as gold.

The introduction of blockchain to the internet created a single identity online. It encompasses all of our data together. This increases accountability, accessibility and security. This altered how we manage our space on the internet.

In 2008, the global financial crisis collapsed our economies. The tooth fairy struggled to finance our tooth collections, leaving us sleeping on pillows of lead instead of secure financial gains. With no gold for our tooth fillings, no coal for our fires, a dire situation arose. However, through the ashes, Bitcoin emerged as a modern day Wall Street proposition built on a blockchain. Cryptocurrencies do not suffer the same repercussions that fiat currencies and stocks endure through periods of great economic stress.

Nevertheless, cryptocurrency also encounters hardships. Are there any laws to protect people buying and financing crypto? This new area in our society has the potential to revolutionise how we operate our banking and transfer money, how we will pay for produce and how the internet is reconstructed.

PC: The Pros and The Cons

Issues surrounding cryptocurrencies and the legal hemisphere are the frequent occurrences of fraud. In January of this year, hackers stole non-fungible tokens (NFTs), valued at $2.2 million from New York art collector Todd Kramer. The following month at OpenSea, the world’s biggest NFT market, approximately $1.7 million worth of NFTs were stolen. These incidents have created a slump in the number of people buying and selling NFTs. These fraudulent occurrences have impacted the virtual trading world, with trading on OpenSea decreasing by 80 per cent in March. Cryptocurrency is undetectable. If someone steals your currency, you will not be able to find it. There are no laws in place to protect a person against this type of fraud or theft. These scams create uncertainties for people to adapt to this modern currency.

Additionally, mainstream media influencers can have an impact on the crypto market. Economist Nouriel Roubini accused Elon Musk of market manipulation. In February 2021, Musk’s company, Tesla, purchased $1.5 billion in Bitcoin. Roubini stated that Musk used his Twitter platform to inflate prices in Tesla’s favour,

and called on the US Securities and Exchange Commission to investigate the matter.

Cryptocurrency also houses many benefits. It ensures easier transactions. Using a simple application, hardware wallet or exchange wallet, anyone can transfer and receive cryptocurrency. Furthermore, this industry has one of the fastest growing markets in the world. In 2013, the total market cap of cryptocurrency was around $1.6 billion. As of 2021, this figure increased to $1.4 trillion.

NFT: Novelty for Technology

Non-fungible tokens (NFTs) were relatively unknown outside of small internet strongholds until 2021. They are a strange concept that bewilders the wider public, not least the legal hemisphere. Unlike cash, which is interchangeable, each NFT is one of a kind. Each one possesses a unique asset built on a blockchain that comes with the right to use it.

NFTs come in various forms: photographs, animation, videos, memes, and tweets. In October 2021, Twitter user Lauren Walker mockingly tweeted her dismissal of NFTs. Ironically, this tweet was minted and listed for auction on OpenSea at a value of $5,000. Their value is encrypted in their uniqueness. NFTs can also represent real life assets. They can be distributed as certificates of authenticity.

The European Commission’s draft of the Markets in Crypto-Assets Regulation (MiCA) was first proposed in 2018. It aimed to provide support to anti-money laundering rules, as well as enhance financial stability and investor protection in EU member states. This proposal could be construed to manage and regulate particular NFT market activities. Currently, it is arbitrary as to how member states would regulate the scope of cryptocurrencies.

Law in Ireland

Virtual asset service providers (VASPs) that are operating within Irish shores must adhere to the guidelines of the Anti-Money Laundering and Countering the Financing of Terrorism framework, as provided for by the Central Bank. These guidelines aim to assist credit and financial institutions in observing their obligations.

In 2019, the Irish Government issued a paper titled “International Financial Services Strategy 2025.” This document outlines its commitment to develop Ireland as a global leader in the financial sphere, as well as announcing measures to illustrate Ireland’s qualifications as an EU centre of excellence for distributed ledger technology (DLT).

For a number of years, the Industrial Development Authority (IDA) has worked with the Irish Blockchain Expert Group on the “Blockchain Ireland” initiative. They aim to enhance the blockchain trade within Ireland. The Irish Government is perceived to be welcoming of further developments in this virtual world of cryptocurrency.

Yet, can these virtual institutions obey these same rules and existing legislation, or does further legislation need to be implemented in Ireland? These cryptocurrencies are non-traceable. The formulation of legislation would provide substantial challenges for the Oireachtas.

How is a fraudster or thief held accountable for their actions if their digital fingerprint is untraceable?

There is currently no prohibition on cryptocurrencies in Ireland. However, there has been no regulatory regime implemented either. Ireland implements certain EU Single Market Directives, such as the Electronic Money Directive 2009/110/EU or the Market Abuse Regulation 506/2014/EU. These legal frameworks were designed to maintain an adequate level of supervision over the financial market. These regulations provide examples for

MiCA to aspire to, regarding the regulation of cryptocurrency. Until the EU’s MiCA regulation is implemented, cryptocurrency will be unregulated.

It is undeniable that cryptocurrencies will become increasingly common in our society. Therefore, legislation would have to be constructed carefully to fulfil their unique character and obligations.

An Teanga agus Trasdul

An féidir lenár rialtas criptea-airgeadra a úsáid mar bhealach chun an Ghaeilge a spreagadh agus níos mó daoine a mhealladh chun an teanga a labhairt? Níl aon amhras go bhfuil tuairim na coitiantachta i measc na hóige ag tacú leis an teanga a labhairt , chomh maith le húsáid an airgeadra samhalta. Rinne Ireland Thinks/ The Good Information Project suirbhé ar an teanga. Foghlaimíodh go gceapann 65 faoin gcéad de dhaoine gur cheart dúinn níos mó Gaeilge a úsáid go laethúil. De réir an suirbhé seo, b’iad an aoisghrúpa 18-24 an scata leis an chaighdeán is airde líofachta. Mar sin de, dá mbeadh criptea-airgeadra cruthaithe go hiomlán trí mheán na Gaeilge, an mbeadh aistriú níos míne den airgeadra inár spás airgeadais agus spás dlíthiúil?

Can our government utilise cryptocurrency as a method of promoting the Irish language? The Irish language is becoming increasingly popular with young people, as is the use of virtual financial currency. Ireland Thinks/ The Good Information Project undertook a survey on the language. They found out that 65 per cent of people think we should use more of the language in our everyday lives. This survey also established that the 18-24 age group have the highest percentage of fluency. As a result, could a cryptocurrency entirely through the medium of Irish, result in a smoother transition of this currency into our financial and legal space?

Bhí ar TG4 an chéad NFT as Gaeilge a bhaint den suíomh OpenSea. Níor thug an ealaíontóir cead na híomhánna a bhualadh. Dá bharr sin, má chruthófaí NFT nó criptea-airgeadra trí mheán na Gaeilge, beidh sé riachtanach reachtaíocht a chur i bhfeidhm chun cosaint a sholáthar do dhearbhúinéirí, ceannaitheoirí, agus díoltóirí. Tá an réimse mór seo de nadúr neamhrialaithe, agus beidh sé deacair airgeadra samhalta a bhunú.

TG4 had to remove the first Irish language NFT from the OpenSea platform. The artist had never given permission for the images to be minted. Therefore, if an NFT or cryptocurrency is to be created through Irish, legislation will need to be implemented for the protection of artists, buyers and sellers. This vast space is of an unregulated nature, and it will be difficult to establish a virtual currency.

The Yellow Bit Road

The legal ramifications of cryptocurrency are yet to unfold, but it holds promising endeavours and potential. This unwinding road is a novel phenomenon that legislators should address promptly. It is only a matter of time before this virtual world will be engaged with and tackled, bit by bit, by our legislators and court systems.