Regulators' relative unsophistication about the technology is itself a risk driver, because a poorly informed regulator is likely to over-react and precipitate new or expanded regulation.
Source quote, verbatim
The relative unsophistication of the regulators and the lack of regulators' understanding of the technology could result in an over-reaction which in turn can precipitate creating new / expanding existing regulations.
Wulf A. Kaal, Samuel Evans, Blockchain-Based Securities Offerings (2019). SSRN: https://ssrn.com/abstract=3411110
Holds when
regulators lacking technical understanding of blockchain
Classification
failuresupport: arguedfailure: regulator over-reaction from unsophisticationfamily: supervisory-capacity-gaprisk-and-incentivesinnovation
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