# kaal:claim:3411110-021

**Claim.** 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.

**Type.** failure  **Support.** argued

**Holds when.**

- regulators lacking technical understanding of blockchain

**Source quote.**

> 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.

**From.** Wulf A. Kaal, Samuel Evans, *Blockchain-Based Securities Offerings* (2019), IV.2 Technology Risk, page 20

**Cite as.** Wulf A. Kaal, Samuel Evans, Blockchain-Based Securities Offerings (2019). SSRN: https://ssrn.com/abstract=3411110

**Verify.** sha256 of source PDF `c7626eeb7642045b79f8745df1f7232a8fe8bc44a1f7e87b592850e35b392b50` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Evans%20-%202019%20-%20Blockchain-Based%20Securities%20Offerings.pdf

**Failure mode.** regulator over-reaction from unsophistication  (family: supervisory-capacity-gap)

**Topics.** risk-and-incentives, innovation

**Keywords.** regulator-competence, over-regulation, technology-risk, innovation-policy

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