Embeddedness of Crypto-Crimes: A Novel Theoretical Frame

• In Event: Digital Crime and Decentralized Finance: Artificial Intelligence, Cryptocurrency, and Large Language Models

Abstract

The aim of the paper is to identify and comprehensively describe the characteristics of cryptocurrency markets which facilitate criminality. The theoretical frame is inspired by two distinct paradigms in economic sociology, economic anthropology and criminology. The first is idea of the social and political embeddedness of markets. Conceived to be a critique of the view of markets used in neoclassical economics, the concept of embeddedness assumes that market institutions are fundamentally shaped by non-market social relations, and the logic of economic action, far from being objectively rational, is also socially constructed. The other paradigm is social studies of finance. This approach eschews structural arguments and concentrates on the micro-processes of material production of markets, such as how ideational elements such as mathematical models, as well as market devices such as trading platforms, or the technical foundations of transaction execution engender market processes, and among them, financial crimes. Using these theoretical frames, the paper conceptualizes several forms of embeddedness of cryptocurrency markets, including technical, social, cultural and political embeddedness.

Author

• Csaba Gyoery, ELTE University Faculty of Law, Budapest / Institute of Legal Studies, Centre for Social Sciences, Hungarian Academy of Sciences