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Home » The lack of a legal seat for bitcoin exchanges makes defending users more difficult

The lack of a legal seat for bitcoin exchanges makes defending users more difficult

Important facts:
  • Attorney Adrián Bengolea spoke of the lack of a legal system to process claims.

  • Ismael Lofeudo said Bitcoin adoption will increase as exchange communication improves.

Since most cryptocurrency exchanges and other companies in the bitcoin space do not explicitly state their legal addresses, it becomes difficult to defend consumers who make claims. In fact, this could represent a barrier to entry into the ecosystem.

This is represented by the Argentine lawyer Adrián Bengolea He participated on June 30 at the event “Legal Breakfast: Consumer Protection in the Crypto Ecosystem“, organized by the NGO Bitcoin Argentina.

According to Bengolea, executive director of the organization United Users and Consumers (UCU), which operates in Argentina, There are security issues on cryptocurrency platforms that require attention. These issues concern the defense of users when making claims. “To make matters worse, how difficult it is to communicate a claim to a stock exchange,” says the lawyer.

Bengolea recalled that in Argentina, for example, there are stock exchanges and other legal entities that offer services to Argentines. But there are also other companies that have their registered office or headquarters abroad and still provide assistance to the residents of the country.

For him, This is a “very big difficulty” in defense to consumers when making a claim.

“We don’t have an international legal system. And international demand for a small-volume consumer is almost tantamount to being defenseless,” he claimed. “It seems to me that it’s a big impediment in the system and it can make people say, ‘Don’t go in there,'” he said.

A company that usually has an international presence, particularly in Latin America, and does not clarify its physical headquarters is Binance. The largest cryptocurrency exchange by trading volume has no established legal address. Still, the company has received licenses to operate in more than a dozen countries.

According to Bengolea, the ability to make claims is “something crucial” in terms of user safety. “And it seems to me that the user is not aware of it”, He suggested.

The chief executive of UCU attended the virtual event organized by NGO Bitcoin Argentina. Source: NGO Bitcoin Argentina.

Bitcoin companies need to be “more aware”.

Argentine lawyer specializing in computer law and digital economy Ismael Lofeudo was also part of the conversation at the NGO event Bitcoin Argentina.

Lofeudo commented that the addresses of the companies offering cryptocurrency services They need to have a “greater awareness” of consumer needs. Especially those managements of companies that are not based in the countries in which they operate.

Lofeudo complained to consumers on several occasions Access to justice is hindered and they remain unclaimed when they have problems with the exchanges.

Because of this Companies are opaque in their address information, which forces lawyers to do more research and investigation, which ultimately costs more money.

Therefore, he urged companies to “comply with the regulations, first provide addresses, create claim channels and appoint a legal team for these tasks”. “And make the decision from management to make claim channels available to consumers,” Lofeudo added.

Bitcoin adoption will increase as communication between businesses and users improves

On the other hand, lawyer Ismael Lofeudo claimed that if communication between cryptocurrency companies and users improves, Ecosystem adoption will increase significantly. In addition, it will allow the products and services offered by these companies to be more widely distributed in each territory.

Attorney Lofeudo argues that Bitcoin adoption will increase as communication with businesses improves. Source: NGO Bitcoin Argentina.

According to the lawyer, one way to improve this communication is to start companies Provide users with more security and claim options. Also, “Clarity in the message, in the advertising. That users really know what they’re buying,” he said.

Lofeudo explained that the phase in which all crypto-active companies were presented with “bombastic terms” as opportunities to invest and make money is “over.”

In his opinion, “now is the time to clearly communicate the offer.” “That will allow for more adoption of this type of technology,” he said.

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