Fighting Fire with Fire: Combating Criminal Abuse of Cryptocurrency with a P2P Mindset

Abstract

As part of the P2P sharing economy, cryptocurrencies offer both creative and criminal opportunities. To deal with offenders, solutions such as legislation and regulation are proposed. However, these are foreign to the P2P spirit of trusted interactions and transactions. This paper aims to identify solutions that align with P2P technologies and relationships to combat the criminal use of cryptocurrencies. In line with our research question, we adopt the method of grounded theory. Based on 45 interviews on 1,500 h of podcasts, blogs, and TV shows, we observed how experts in finance, technology, and cryptocurrency analyzed the hazards, as well as, the solutions for cryptocurrencies schemes. The results indicate that this new technology has also engendered new types of criminal schemes; thus, we can categorize malicious behaviors into conventional and P2P hazards. In addition, experts also point to conventional and P2P solutions to crypto-crimes at the individual, organizational, communal, and national levels. As such, they underscore the discrepancies between those who push for solutions favoring conventional regulatory forces versus those advocating for normative legitimacy, hence pulling the industry to preserve the P2P identity. Following institutional theory and the need for legitimacy in this new and disruptive industry, we discuss the tension between agendas and suggest unorthodox solutions for an innovative yet troubled technology.