From Decentralization to “Quasi-Centralization”: Institutional Challenges and Regulatory Reconfiguration in the Governance Shift of Cryptocurrencies
DOI:
https://doi.org/10.54536/ajfti.v4i1.5506Keywords:
Cryptocurrency, FTX, Decentralization, BlockchainAbstract
Since the advent of blockchain technology, cryptocurrencies have emphasized core values such as decentralization, ontological autonomy, and resistance to censorship. However, in practice, the mechanisms of transaction and platform governance have increasingly exhibited characteristics of “quasi-centralization.” This article takes the collapse of FTX as a point of departure to examine how cryptocurrencies, amid governance failures of centralized exchanges and a breakdown of market trust, have been reintegrated into emerging regulatory frameworks raising complex issues regarding institutional asset classification, governance structures, and risk management. Employing literature review and comparative legal analysis, this study investigates key dimensions including the misuse of exchange funds, regulatory discrepancies, the blurred boundary between investment and speculation, the centralization of governance, and the erosion of anonymity in crypto assets. The findings reveal that cryptocurrency governance lies at the intersection of technological ideals and institutional realities, and that neither a single-state legal system nor traditional financial norms is sufficient to address the cross-border and technically self-referential nature of crypto systems. Future governance frameworks should shift toward function-oriented, tiered regulatory architectures, integrating verifiable technical standards, investor suitability classification mechanisms, and cross-agency collaborative platforms. The objective is to establish a regulatory paradigm for crypto assets that ensures transparency, flexibility, and foresight without undermining the innovative momentum of blockchain. Such a framework would reinforce market order, asset security, and user trust, while offering theoretical insights and policy guidance for the sustainable development of blockchain technology in both financial and institutional contexts.
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