An analysis of crypto-asset trade, enforcement, and estate planning

Abstract

This study examines crypto-asset trading, focusing on regulatory violations that lead to enforcement actions and the impact of estate planning after a digital asset holder’s death. We review the literature on crypto-asset estate planning and explore lessons from Islamic finance regarding crypto assets. We then use quantitative analysis to compare price-volume relationships in Islamicoin and Bitcoin. To strengthen our analysis, we employ the Kaplan-Meier survival estimate, parametric survival analysis, and the Probit model. Our findings show that Islamicoin’s trade volume predicts market price changes more often than Bitcoin’s, which seems to be influenced by factors other than trade volume. Further investigation reveals that securities regulators are increasingly enforcing rules against crypto-trading violations. These violations typically occur when trading activity decreases while prices increase. We also find that widespread price changes tend to motivate people to violate the regulations over time. Recently, positive price changes, rather than trade volume, have been the main factor influencing regulatory violations. However, trade effects were observed later in some of our models. Given these findings, we conclude that regulators need to improve digital assets Act to address estate planning issues, in addition to protecting investors. The paper ends with policy recommendations and suggestions for future research.