Call for articles: Special Issue - Risk Management of Digital Assets

Submission deadline: April 4, 2023

Call for Papers – Special Issue of Journal of Risk Management in Financial Institutions – Risk Management of Digital Assets

Guest Editor: Gregory Hopper

The Journal of Risk Management in Financial Institutions invites papers for a special issue devoted to risk management of digital assets.

Following the proliferation of new crypto financial institutions over 2017-2020, market enthusiasm for the possibility that crypto assets might usher in a new financial paradigm began to grow strongly at the end of 2020. Bitcoin, which had been trading at about $16,000 in November of 2020 rocketed to over $60,000 in just one year. Ethereum appreciated even more, moving from about $500 in November 2020 to almost $5,000 a year later. During that one year, many other digital currencies also experienced spectacular increases.

However, digital asset values began to fall precipitously in 2022, exposing some major risk management failures in many of the most prominent crypto financial institutions. The stablecoin TerraUSD lost nearly 99 percent of its value. Three Arrows Capital failed, defaulting on loans that also brought down one of its lenders, Voyager Digital. FTX and its sister hedge fund Alameda collapsed after having lost billions of dollars1,2. Two of the senior staff have already pled guilty to a number of financial crimes and the founder stands accused of a plethora of criminal charges such as securities fraud and money laundering3.

The implosions of major crypto financial institutions in 2022 dampened the enthusiasm for digital assets considerably. Without adequate risk management practices, there will never be widespread adoption of blockchain technology by consumers or mainstream financial institutions nor will there be acceptance by the regulatory community.  Blockchain-based financial services must be able to comply with current laws and regulations, such as KYC and AML, and must also have robust risk management practices that are equivalent to mainstream financial institutions, even if they are implemented in a fundamentally different manner.  

In this special issue, we are seeking original papers from practitioners, academics, policy makers, regulators, and consultants that focus on how crypto markets should be properly risk managed. Suggested topics may include but are not limited to the following questions:

1)    What are the risks of centralized and decentralized digital finance and how are they different?

2)    How can KYC and AML be implemented in DeFi while preserving financial privacy?

3)    How should stablecoins manage the risk of bank runs?

4)    How can stress tests be run on decentralized markets?

5)    How should centralized crypto institutions, such as digital asset exchanges, be risk managed?

6)    What are the legal risks of smart contracts and how can that risk be managed?

7)    How could a financial crisis happen in a decentralized market? How can DeFi institutions protect themselves from a decentralized financial crisis?

8)    How could a crisis in crypto markets spillover to the traditional financial system?

Submission guidelines:

The following types of articles will be considered for publication:

  • Practice articles: Thought pieces, briefings, case studies and other contributions written by practitioners. Articles should be 2,000 to 5,000 words in length.
  • Research papers: Contributions which explore new models, theories and research in risk management. The principal management implications of the submission should be included. Articles should be up to 6,000 words in length.

All submissions will be peer-reviewed to ensure that they are of direct, practical relevance to those working in the field.

Our current copy deadline for this special issue is April 4th 2023.

Manuscript submissions and enquiries should be submitted to the Publisher, Julie Kerry. Further, more specific guidance for authors on format and style can be found here.

Questions about this issue and proposals for papers should be directed to the Guest-Editor: Gregory Hopper, gregory.hopper@er-econ.com as well as the Publisher, Julie Kerry.

 

1. US Securities Exchange Commission (2022) ‘SEC Charges Samuel Bankman-Fried with Defrauding Investors in Crypto Asset Trading Platform FTX’, available at: https://www.sec.gov/news/press-release/2022-219#:~:text=The%20Securities%20and%20Exchange%20Commission,the%20CEO%20and%20co-founder. (accessed 12th January 2023)

2. The United States Attorney’s Office Southern District of New York (2022) ‘United States Attorney Announces Charges Against FTX Founder Samuel Bankman-Fried’, available at: https://www.justice.gov/usao-sdny/pr/united-states-attorney-announces-charges-against-ftx-founder-samuel-bankman-fried. (accessed 12th January 2023)

3. The United States Attorney’s Office Southern District of New York (2022) ‘United States Attorney Announces Extradition Of FTX Founder Samuel Bankman-Fried To The United States And Guilty Pleas Of Former CEO Of Alameda Research And Former Chief Technology Officer Of FTX’, available at: https://www.justice.gov/usao-sdny/pr/united-states-attorney-announces-extradition-ftx-founder-samuel-bankman-fried-united. (accessed 12th January 2023)