Risks and the regulatory issues arising from the use of DLT

This chapter focuses on the risks arising from the use of cryptoassets and DLT-based models of financial services. It reviews the current consensus on the impact of cryptoassets on financial stability and analyses the various facets of potential harm to consumers from trading such assets, in particular in light of the unregulated nature of much of the existing cryptoassets ecosystem. It considers the privacy implications arising from the open nature of blockchain technology and analyses several of the common risks that regulation seeks to minimise in traditional financial markets such as market abuse, anticompetitive behaviour, money laundering and financial crime, identifying the extent to which those risks might arise through the provision of DLT-based financial services and thus the extent to which existing spheres or regulation are sufficient to regulate those risks.