Journal of the Korea Institute of Information Security & Cryptology (정보보호학회논문지)

Korea Institute of Information Security and Cryptology (한국정보보호학회)
권호 표지
DOI QR코드

DOI QR Code

Trends in Cryptocurrency Custody Services and Evaluation Guidelines for DeFi Protocols' Custody Poten

가상자산 커스터디 서비스의 최신 동향 및 DeFi 프로토콜 커스터디 가능성 평가 가이드라인 제시

  • Hyunggeun Lee (Korea University) ;
  • Moonho Joo (Personal Information Protection Commission) ;
  • Jihun Lim (Korea University) ;
  • Beomjoong Kim (Korea University) ;
  • Kiseok Jeon (Korea University) ;
  • Junsik Sim (Korea University) ;
  • Junghee Lee (Korea University)
  • 이형근 (고려대학교) ;
  • 주문호 (개인정보보호위원회) ;
  • 임지훈 (고려대학교) ;
  • 김범중 (고려대학교) ;
  • 전기석 (고려대학교) ;
  • 심준식 (고려대학교) ;
  • 이중희 (고려대학교)
  • Received : 2024.05.20
  • Accepted : 2024.07.25
  • Published : 2024.08.31
Download PDF
⟨ Previous Next ⟩

Abstract

This paper has two main objectives. The primary objective is to conduct a comprehensive review of existing survey papers on the advantages, disadvantages, taxonomy, and technical vulnerabilities of cryptocurrency custody services. Additionally, we examined recent regulatory developments, the application of existing frameworks, conditions for performing custody services, and service providers' obligations. The secondary objective is to identify DeFi protocols in the regulatory 'grey area' and analyze their technical aspects and governance mechanisms. By synthesizing these findings, we propose guidelines for assessing DeFi decentralization and their potential for integration within the regulatory framework, providing insights for industry experts, regulators, and policymakers to balance industry needs with societal benefits.

본 논문은 1차 목적과 2차 목적을 가지고 작성됐다. 1차 목적은 가상자산 커스터디 서비스에 대한 종합적인 서베이와 글로벌 규제 동향 및 기술적 시사점을 탐구하는 것이다. 이를 위해 가상자산 커스터디 솔루션의 장단점, 분류 체계, 기술적 취약점 등을 다룬 기존 서베이 논문을 종합적으로 검토했다. 또한, 법률적 측면에서 최신 규제 흐름과 기존 규제 프레임워크의 적용 사례, 커스터디 업무 수행에 필요한 조건, 서비스 제공자의 의무사항을 분석했다. 2차 목적은 규제권 밖에서 운영되는 DeFi 프로토콜을 'Gray Area'로 식별하고, 이들의 기술적/거버넌스적 메커니즘을 분석하는 것이다. 최종적으로, 위 서베이 내용을 종합하여 DeFi 프로토콜의 탈중앙화 평가 기준 가이드라인을 제시하고, 이를 통해 제도권 내 통합 가능성을 제기함으로써, 업계 전문가, 규제 기관, 정책 입안자 등 이해관계자들에게 업계의 요구와 사회적 이익의 균형을 찾는 데 중요한 인사이트를 제공하고자 한다.

Keywords

References

  1. EUR-Lex, MiCa Regulation 2023/1114, https://eur-lex.europa.eu/eli/reg/2023/1114/oj, Sep. 2023.
  2. Dirk A. Zetzsche et al. The Markets in Crypto-Assets regulation (MiCA) and the EU digital finance strategy, European Banking Institute Working Paper Series, no. 2020/77, Nov. 2020.
  3. Coinbase, User Agreement(Coinbase), https://www.coinbase.com/legal/user_agreement/united_states, July 2024.
  4. Vincenzo Di Nicola et al. Resilient Custody of Crypto-Assets, and Threshold Multisignatures, Mathematics 8, no. 10, Oct. 2020.
  5. Zakwan Jaroucheh and Baraq Ghaleb, Crypto Assets Custody: Taxonomy, Components, and Open Challenges, 2023 IEEE International Conference on Blockchain and Cryptocurrency (ICBC), pp. 1-6, May 2023.
  6. Vasudha Rani Vaddadi et al. Exploiting Cyber Threats And Protecting Cryptocurrencies Toward Bitcoin Exchanges. 2023 5th Bienn. Int. Conf. Nascent Technol. Eng. Oct, pp. 1-6, Jan. 2023.
  7. Apolline Blandin et al. Global cryptoasset regulatory landscape study, University of Cambridge Faculty of Law Research, no. 23/2019, Sep. 2019.
  8. Lekkas, Nikolaos, Legal Aspects of the Custody of Digital Assets, International Hellenic University, Jun. 2020.
  9. Jason Scharfman, Operational Due Diligence on Cryptocurrency and Digital Asset Funds, The Journal of Alternative Investments, vol. 24, no.3, pp. 44-50, 2022.
  10. Dennis Chu, Broker-dealers for virtual currency: Regulating cryptocurrency wallets and exchanges, Columbia Law Review, vol. 118, no. 8, pp.2323-2359, Dec. 2018.
  11. Mohammad Belayet Hossain, Acquiring an awareness of the latest regulatory developments concerning digital assets and anti-money laundering, Journal of Money Laundering Control, vol. 26, pp.1261-1268, Jan. 2023.
  12. Hossein Nabilou, The Law and Macroeconomics of Custody and Asset Segregation Rules: Defining the Perimeters of Crypto-Banking, Amsterdam Law School Research Paper, no. 2022-09, Apr. 2022.
  13. Eva Micheler, Custody chains and asset values: why crypto-securities are worth contemplating, The Cambridge Law Journal, vol. 74, pp. 505-533, Aug. 2015.
  14. Ugo Malvagna and Filippo Sartori, Cryptocurrencies as' Fungible Digital Assets' within the Italian Legal System: Regulatory and Private Law Issues, Italian LJ, vol. 8, no. 1, pp. 481-502, Sep. 2022
  15. Geoffrey Cone, et al. Digital assets and property rights in insolvency. Trusts & Trustees, vol. 27, no. 5, pp. 406-413, Oct. 2021.
  16. Matthias Lehmann and Matthias Haentjens. The Law Governing Secured Transactions in Digital Assets. Blockchain and Private International Law. Brill, Feb. 2023.
  17. Holly Smith, SEC guidance on broker-dealer custody of digital asset securities, Journal of Investment Compliance, vol. 22, no. 2, pp. 189-194, Jun. 2021.
  18. Dirk A Zetzsche, el al. The Markets in Crypto-Assets regulation (MiCA) and the EU digital finance strategy, Oxford University Press, vol. 16, pp. 203-225, Nov. 2020.
  19. Susan Alkadri, Defining and Regulating Cryptocurrency: Fake Internet Money or Legitimate Medium of Exchange? Duke L. & Tech. Rev., vol. 71, no. 1, pp. 71-98, Dec. 2018.
  20. Adam Zuckerman, Insuring crypto: The birth of digital asset insurance, U. Illinois. JL Tech. & Policy, Dec. 2020.
  21. Ethereum, Ethereum Whitepaper, https://ethereum.org/en/whitepaper/, Mar. 2024.
  22. Fabian Schar, Decentralized Finance: On Blockchain- and Smart Contract-Based Financial Markets, Federal Reserve Bank of St. LouisReview, pp.153-174, Apr. 2021.
  23. Lennart Ante, et al. A Systematic Literature Review of Empirical Research on Stablecoins. FinTech, vol. 2, no. 1, pp. 34-47, Jan. 2023.
  24. Sam Werner, et al. SokDecentralized finance (defi), In Proceedings of the4th ACM Conference on Advances in Financial Technologies (AFT'22), pp. 30-46, Sep. 2022.
  25. Giulio Caldarelli, Wrapping trust for interoperability: A preliminary study of wrapped tokens, Information, vol.13, no. 1, Dec. 2021.
  26. Richard K. Lyons and Ganesh Viswanath-Natraj, What keeps stablecoins stable? Journal of International Money and Finance, vol. 131, Mar. 2023.
  27. Babu Pillai et al. Cross-Blockchain Technology: Integration Framework and Security Assumptions, IEEE Access, vol. 10, pp. 41239-41259, Apr. 2022.
  28. Ilham A. Qasse, et al. Inter Blockchain Communication: A Survey, ArabWIC 2019: Proceedings of the ArabWIC 6th Annual International Conference Research Track, no. 2, pp.1-6, Mar. 2019.
  29. Matthias Lehmann, et al. Staking Your Crypto: What are the Stakes?, J. Bus. & Tech. L., vol. 19. no. 3, pp. 53-103, Jan. 2023.
  30. Kose John, et al. Equilibrium Staking Levels in a Proof-of-Stake Blockchain, SSRN, Nov. 2021.
  31. Siddharth Bhambhwani, Governing Decentralized Finance (DeFi), SSRN, Jul. 2023.
  32. Hyoungsung Kim, et al. Perpetual Contract NFT as Collateral for DeFi Compos-ability, IEEE Access, vol.10, pp. 126802-126814, Dec. 2022.
  33. Makridis, Christos A. et al. The rise of decentralized cryptocurrency exchanges: Evaluating the role of airdrops and governance tokens, Journal of Corporate Finance, vol. 79, Apr. 2023
  34. Rocha, M. D. A., and Trevisan, N. M., Marketing nas midias sociais sociais, Saraiva Educacao, Feb 2020.
  35. Gontijo, L. H. O., and D'Leon de Almeida, I., Decentralized Finance (DeFi) A study of how decentralized finance positions itself in marketing in the eyes of users, International Journal of Business Marketing, vol. 8, no. 2, pp. 4-14. Feb. 2024.
  36. Anker-Sorensen, Linn and Zetzsche, Dirk Andreas, From Centralized to Decentralized Finance: The Issue of 'Fake-DeFi', SSRN, Dec. 2021.
  37. Fabian Schar, Decentralized Finance: On Blockchain- and Smart Contract-Based Financial Markets, Federal Reserve Bank of St. Louis Review 2021, pp. 153-174, Feb. 2021.
  38. Barbereau, Tom et al. Decentralised Finance's timocratic governance: The distribution and exercise of tokenized voting rights, Technology in Society, vol. 73, May 2023.
  39. Chao, Chian-Hsueng, et al. The Study of Decentralized Autonomous Organization (DAO)in Social Network, MISNC '22: Proceedings of the 9th Multidisciplinary International Social Networks Conference, pp. 59-65, Nov.2022.
  40. Our Network, Governance Extractible Value, https://ournetwork.substack.com/p/our-network-deep-dive-2, Apr.2021.
  41. Taherdoost, Hamed, Non-Fungible Tokens (NFT): A Systematic Review, Information, vol. 14, no. 1, Dec. 2022.