Wyoming Blockchain Stampede 2020 | LawCon
September 25, 2020, Wyoming, USA
Wyoming Blockchain Stampede 2020 | LawCon
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Ethics for Blockchain Lawyers
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About speakers

Yev Muchnik
Founding Member at Launch Legal, LLC
Lewis Cohen
Lawyer at DLx Law LLP

Experienced corporate and securities attorney changing the traditional legal services model.

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@NYCryptolawyer on Twitter. Leading a new kind of law firm for a new economy. Corporate attorney experienced in all aspects of blockchain and distributed ledger technology, smart contracts, cryptocurrencies and other new capital raising techniques and structures for businesses, from venture capital all the way through all aspects of capital markets transactions. Let’s get something done!

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About the talk

Wyoming Blockchain Stampede 2020 | LawCon | Yev Muchnik & Lewis Cohen | 9-25-2020 | 4pm-5pm MT

00:05 Intro

02:25 Possible blockchain impact on clients

07:24 Layer’s role

14:16 Crypto in exchange for legal services

20:10 Ethical considerations

25:01 Concerns

31:00 Holding digital currency in trust for clients

36:45 Lawyers as AML/KYC gatekeepers

42:00 Securities law and legal advice

46:56 Decentralized autonomous organizations (DAOs)

50:40 Pending legislation

56:36 Smart contracts

59:40 Enterprise risk management

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Hi everybody. Welcome to ethics for blockchain lawyers. My name is Yasmin Schnack. And I am joined by my esteemed colleagues Louis Vuitton. Everyone is incredibly excited to be here for another year of this amazing hackathon and having skin. Thanks for bearing with us. And then on Friday, we have this really exciting. So I'd like to share with you and educate you on some by way of background. I am a technology attorney based out of Denver Colorado my firm specializing in corporate and Securities Law have been advising clients in the

space in the last four to five years. I started. Tripped into it like a lot of others, but I just need a very randomly. I don't have a particularly compelling story but it became very compelling once I saw the body of Law and environmentalists burgeoning around this area. So it got more and more exciting as the years progressed and I'll so much more mature. I'll be sitting where you're sitting at the hackathon three years ago, which was just amazing, to begin with.

Thank you so much. And how long have you wanted as you have said thank you for bearing with too that to the end of the hackathon. I couldn't be more pleased to be here, co-founder of DLX law we have offices in New York, Wilmington, Delaware and Washington DC where I'm not that sort of kind of and like, yeah, I tumbled into the practice a little bit different because I spend most of my career as a large firm lawyer at the button largest army in the world for many years and that's how I

think I bring a particularly different kind of perspective as that would be Boutique firm. But also I'm having spent many years and in big law and I'm excited to talk about some of the ethical issues that come up in our practice and to share the stage with the average traffic stop. Yeah, so just before we get into an overview of our discussion today. I think it's important to highlight again how pervasive blockchain is across so many different Industries in these are just a

just a few examples. I think a lot of people dismiss an order to complete it quickly. So I sent her an unknown number of discussions today already, but just as the industry has matured so has the technology and the applications and they use spaces. So obviously shouldn't have decentralized finance. Our insecurities are possibly Hot Topics at the moment. There's tons of activity in the space of capital markets Asset Management payment and the remittance has banking and find federal obviously with securities attorneys we talked about this

ad nauseam compliance Securities and then the existence of tokens that don't follow. Definition of energy as well. There are smart contracts and supposed interoperability that is happening to boost up solar electric vehicle smart metering. Several new business models have emerged for energy markets are real-time data management and moving carbon credits using the blockchain the DLT gives us a lot of efficiencies for utility providers and tracking chain-of-custody also in wholesale distribution.

But then also obviously music all of that the beautiful features. Blockchain brings which include removing the middleman and seeing the source of content. For example in the in this industry being able to provide additional revenue streams for artists, but also protecting copyright intellectual property also top of your heart, but just registering clearing IP ride controlling and tracking the distribution of unregistered and registered an electrical property providing

evidence of genuine or first used in trade or commerce, which is incredibly important for protecting your IP General Digital Rights Management enforcing IP agreements transmitting demons in real-time for IP transactions and then authentication and governance and detection and retrieval of Connor. Stolen orange deported beds at Walmart and IBM are doing a lot in the stuff there. There's also a station in fashion and diamonds wine coffee all across the board really real estate was one of the initial doctors of watching. It still makes a lot

of sense for a used tape and for you say, excuse me for and project finance organizing and fractional ownership of the land registry's and property data on the blockchain allowing for Institute of liquidity when you have when you do have fractional ownership in awesome land records, and healthcare is another good one medical and health records providing a lot of transparency being able to track Smurfit drugs clinical trials digital identities etcetera and then government

and going to be able to connect everything everything of that technology. Slow and outdated in this adoption, unfortunately, but there are states like Wyoming there are states like Colorado that are safe like I guess on some level New York that is on our way here voting with national digital currencies with customs tracking sheet road work as well as also tied into government use cases. So we are presenting to be out of the Warriors. And the question is what is the lawyer's role in advising clients

in these situations? This is a bit of an elevated often cited and I think important to reiterate and reflect on Jay Clayton. Notoriously said that it's a big roll of the lawyer is as a gatekeeper, and it's just was in the context of issuing. See I was back in the area of the ICO craze in 2017, but as somebody who provides professional services and who has that knowledge of what is allowed to be placed on the market and instead of being a protector of investors. The role of these securities

regulators is not to respond to market with a lot of unregistered securities and have them. There are several past actions by the SEC before ICO Meguiars would turn out opinion letters to support rating biker chaps and then penny stocks as well have a long history BST does the SEC enforcement goes way back and in terms of pursuing lawyers and cases He thinks that the lawyer knowingly or recklessly has advised the clients to engage in activities that would violate the securities.

So I'll pick up here. We put a little graphic up because you got to have graphics and as someone like you has been practicing this area a long time. I would advise those of you who were listening and watching you were looking at the space and depressed haven't spent as much time. I'm in it one of the most important things from keeping up with your ethical responsibility is to keep your eyes open at all times. I'm working in space. I think anyone who's been a practitioner has encountered, unfortunately, you know, what variety of circumstances

where at the Royal Duties are called into question and it is just the reality that we are innovation occurs a range of different folks and you have you describe the many ways very well thoroughly that I'm that blockchain technology can be used in constructive economic on for commerce, unfortunately. Understand that there are also I'm anyways that it's a chick thing in the world of Krypton token that the technology can be used to a scam people or take advantage or just by folks who are press lazy and did not order

the code or destroy the thing so knowledgeable about the underlying technology, which I believe is turkey part of keeping your eyes open and then watch out for your bad actors of all shapes and sizes. I'm is extremely horny located to a little more detail on that next five. Okay. So I'm just going back to the overview of what we're hoping to accomplish in the next 40 minutes or to your the things that Mr. Nice should be out on a look at 4 on the lookout for and

then topical issues accepting cryptocurrency as payment for in exchange for Legal Services on this is akin to equity instead of compensation type arrangement steak. And he was a hoot holding cryptocurrency in trust for clients whether that is as an advance retainer or whether that is in trust in an escrow the tide situation mail at 8 a.m. Logic considerations any money laundering and consideration set In the Bible, a couple of securities just updates emergence of legal smart contracts and then the continued existence

and the development of eating smart contracts. I'll send you some supplies finance and just a note to the corporate counsel and how they can manage Enterprise risk management with all of these issues that are being covered. So there was an excellent DC bar ethics opinion that just recently came out to the fact that the attorneys cannot hold back the tides of change and in reality, up until this point there was only previously there was only one state that had the shooting

Nebraska as that things right now currency guidance on Alice Birney the four states being North Carolina, Nebraska New York and the District of Columbia. I'll note that the North Carolina sing and stated the book of people with no regard Bitcoin as Shady money and they may well regard lawyers accepting Bitcoin as Shady's lawyer. Will Bitcoin be legitimized one day in the eyes of average Joe's and James maybe but not soon. So it gives you a little bit of color maybe not the not so surprising. But yeah, I did the District of Columbia

more in line where we stand now and sort of meeting the needs of faience in Water Rising, but also have the appropriate guidance to do so. Great. I'm so I'll pick up you from here as I'm sure most attorneys know the first place to turn when you have ethical questions is to the ABA model rules. And of course your own states enactment of the bottle rules, which may or may not have different versions to them. Probably one of the most important places to look is a be a role model role 1.5 out of the prohibition on Andresen is I'm from most lawyers your

first contact with ethics and blockchain as yet you just noted was in connection with hay can I even accept cryptocurrency for 4:14 of my fees? I'm kind of interested. I have my pocket and perhaps an end and I want to do that. Well, I'm one of the things that I can need to be thought about is the position in Nebraska and if you noted you have although they're probably relatively You folks on Gratiot minted in Nebraska. The fact that they issued this advisory opinion is

helpful and at least touchpoint for lawyers who are in the state. I'm what is important to understand is a first what is the nature of the transaction in which cryptocurrency is being received are how are the client being treated as a client being treated fairly etc. the Internal Revenue Service as many of us know at this point. I'm considering on the IRS. I should be considered a virtual currency to be property good and so that puts a certain question to

attach point of view into how the cryptocurrency would be treated. The Practical matter is when you're dealing and we'll talk about some of the other cryptocurrencies but at this point on Even if the cryptocurrency properties I'm as long as the relationship is understood and reasonable and does not necessarily involve a business transaction and what we'll talk about that in a moment. Then a lawyer should be able to channel speaking except for at least a well-understood cryptocurrency as a form of payment. We'll talk in a couple of moments

as two retainers where different considerations need to be made when you are holding the cryptocurrency but not receiving it on your behalf. I'm so those are an important consideration in terms of reasonable desk arrangements immediately calls into question the valuation of the cryptocurrency. So the most liquid cryptocurrency Bitcoin should pretty clearly have an ass or pain of market value such that if you've determined the level of fees your receipt of the Bitcoin. I should have a clear market value such that you can determine that the fees that you're charging are reasonable

in light of the services that you are providing. If you have $10,000 worth of services are you can readily ascertain what $10,000 worth of Bitcoin on the receipt that has the value of the cryptocurrency may not be as clear and it may raise questions as to whether and what the actual nature of your transaction was. The lawyer may even be able to take advantage of the client most likely direction it goes but you could receive a cryptocurrency with a much greater value than the dollar value of your services and that would probably, you know, a very little bit of sperm

under ABA model rule 1.8. There are limitations on the ability of a law firm to enter. Is this transaction with a client and the New York City Bar Association, which of you alluded to before I found that lawyer should meet the requirements of my rule 1 .88 when there is an agreement to accept cryptocurrency. If the only payment methods I think they're concerned of course being that you were in some way entering into a venture where the value of the cryptocurrency question I'm is part of a business transaction with the clients. I'm from both of us

that are we now go easy to do and you know our recommendation probably if you are considering this is to have a payment in cryptocurrency be an option before and I won that they can choose either pay with fiat currency or major cryptocurrencies rather than setting up a business arrangement with ongoing payments in a particular cryptocurrency devalue witch. Wait, and they appear especially if that's has a large amount of the cryptocurrency in question as looking like a business venture and even in the worst-case scenario assistance in some way of facilitating.

next one paleteria I know I'm always amused being in The Cutting Edge of technology and then be reminded to have the most of it. The technology has some other considerations that I should be taken into account and we'll talk more. I'm as I had eluded but the retention of a given cryptocurrency by counsel as retainer does Ray particular concerns and we'll talk about that as a general matter. I would say that's probably something that should be avoided some of the ethical

considerations that have gone on record currency. It had to do with the payment of transaction costs associated with the transfer of the cryptocurrency. The client is going to if there is a transaction cost associated a particular for example, as many of you will know with cerium the gas cost. Contract to be very high. You're probably not using a smart contract to implement the payment of fees, but it's something to take into account in any event. That should be borne by the party folding the Fonz not that the client so you shouldn't for

example, it would be concerning if you set up a process, whereby I was paid and a particular cryptocurrency and then set up some more complex arrangement because you thought you were being clever and cause the client to be responsible for the transaction fees on that smart contract or other more Portmore complex arrangement. For an example of a smart contract-based escrow, that would probably be true starting at this point for an ethical. I'm going to view the other consideration that's always you can out. There are major cryptocurrencies forking, you know,

since the aetherial forge. Can I get 2018 there has not yeah, we have not seen a lot of that. We also saw a course Bitcoin give off a couple of other tokens, but there are concerns if you happen to be holding a cryptocurrency for clients, and there is a Ford there are a lot of questions is that sort of looked at from a more traditional point of view is a dividend should the airdrop tour for alternative cryptocurrency. Go back to the client on you. I would just urge supposed to be a conservative as possible should either something

like that occur. I'm also finality is always something that anyone familiar with cryptocurrency needs to take into account. They're not only waiting at a regional number of transactions final making sure that they're you know in whatever cryptocurrency is being used that there are no finality issues in that the transaction has settled and then Important to take into account the great peace. I think you had alluded to this was recited by writing for the Virginia State Bar ethics journal

back in 2018 that answers ask a question. Is it ethical for lawyers to accept Bitcoin and other cryptocurrencies and it's only recommended to people as we would recommend the New York City Bar advisory opinion that I referred to earlier question out last summer and we have a link for you for that and I think this life is going to be available. I'm sure that I'm after the fact so let's go to the next slide. A great so here we just put up some other useful resources in terms of accepting cryptocurrency. Is that year? We would put down the

last I think everyone should read the last bullet point there, which is an article by Shannon and John restart who has been a consistent a hawk on the topic of blocked a blockchain the general and crypto in particular and he's got a lot of fun for writings and although I would not agree with him on most of his conclusion. I can argue that he is he's not a fossil commentator and I think all lawyers practicing in the space would benefit from reading his thoughts and take into account the concerns that he raises even if I think sometimes they're a little

overheated and he is thoughtful and a serious guy. And again, it's like a lawyer's we have to understand what the other side of arguments are. That's a fine start that this particular site and then also some of us just make sure you understand some of the concerns that can be raised as a blockchain lawyer dealing with cryptocurrencies. Okay, but I think we'll just run through this one quickly against as we don't can't look out into the audience. I have experienced folks. Are

we did the other night for together quickly. Text me of crypto. And basically, I working from you things that people probably most comfortable with down to it to where there are other concerns, you know for Bitcoin and ether I think at this point we know of any legal practices that do accept Bitcoin and ether and that does not I think based on the ballast with limited ethical guidance, but still pretty clear. I think Ray's particular ethical concerns in that in terms of

the other for what I call mainstream kept possible. Those are our ripple. XRP the Clinton cash like playing stellar lumens. Those are highly liquid a token. If the client was very long that particular token anyway, and wanted to give us some of that token to you. I certainly I think it's a little bit more scrutiny into this transaction is important and a particular bearing in mind the New York City opinion raising concerns about business Arrangements under 1.8. I think

generally speaking those are going to be okay. I'm in the comfrey report. What would we see are the free Glee traded utilities the tokens and I put quotes around the word utility because that there's a lot of people come to hopefully there shortly the basic attention token of the Brave browser. That the token the powers polka. Which is the interoperability network link, which is very popular now for chain link and it's at Oracle Arena, which is Cordon has I need a token and he has of course the large smart contract.

All of those are out there in an inferior thing that could be accepted. They're not why I perfectly they're not all that frequent rated and liquidity in the pricing of these tokens are probably concerning so generally speaking I would say probably stay away from those unless there's really compelling need to accept legal payment in one of those the dollar Bay stable coins USD circles a true USD dollar coins instead of Gemini has a coin as well should not be problematic. And so many ways they can be a nice way of

adding a little bit of crypto is your practice. If you don't already heather and die as folk I know we're very special cases. I tether is the subject of an ongoing New York attorney general investigation and we don't know where they going to come out but it's there's a lot of concern there. I would just say stay away. I'm dying of course is a synthetic stable coin made by the maker. It's a very interesting project on 2/3. Tremendous crowded, however, in terms of accepting for a legal fee I would he can stay away their lot of concerns are the privacy coins likewise Monero MXR and

cash both that is where if you're going to store to get a finger pointing at you even though I think his lawyers. Yeah, if we both support privacy on those are probably things to stay away from and then the other top hundred going probably just say no as with me when the smoke token. Okay, let's keep going. I'm I didn't talk to break it up a little bit here and in the middle on and asked us whether you accept crypto in exchange for legal services and how long you been doing it and get some of that juice do truly kind of

follow your prescription and stay away from all these are early on. Did you make some more calls on the on some of these bad and talk to you about it? But yes we have is a great question to fair question. Yes, we do. I understand a retainer letter more or less as I described. I give clients an option to pay in the major cryptocurrencies for with us or purposes. That's Bitcoin and ether and we don't generally have to have resisted accepting of other tokens. I think if someone came to us and wanted to pay and one of the stable coins I mentioned I think we could be fine with that. But we

have that has some somebody come up for us yet. So, you know, we are happy with that. We do fairly extensive KYC on our science in advance if they're not people that I have known to us over along. Of time you one thing I would just add that. We were very concerned if we're accepting Bitcoin for a while. We don't know I'm a client. We don't know where usually pretty cautious about that and prefer money to flow through the traditional banking system, which has a lot of safeguards. Of course on payment Booth also be

very reluctant to accept a large payment on any of the coin or either fur for a ride if it was well, Licras and Echo all of that all the same practices. I can I will have to admit that early on you know, or Circa 2017 the start of iCloud maybe you just don't know but stay with the traditional it will be a very exciting one. Then the banks have more control over that and there will be more scrutiny and I'm on some level. I know that's a very out-there statement.

There will be some more controls in terms of clothing digital currency and digital assets in trust for clients a lot of the topics that all cover your do you overlap with what Louis just spoke about his wild but in general trust money is client money until it's earned by the attorney. So that was in the case in the in the matter of cyber chase and the client should be receiving the benefit of any appreciation answer some of the considerations around weather. Your particular jurisdiction or in a federally

that the digital currencies considered as property or currency and if it's a property then you may not deposit it into your attorney's trust account Ercole software. I open an account and property then you have to safeguard the client's property in a way that doesn't come and go with anything else and with the appropriate safeguards. So any kind of advance to use that is caged to an attorney for their services remains the property of the clients some considerations around there somewhere to chill with Luis have said it if you are accepting digital

currency, what is the valuation, and at which points do you need to change it? And so based on the that Nebraska affix opinion they at their guy dances that you have to change must take place immediately, but it also in such as a pawn objective market rates right at where which find any idea, there are still some gray areas. The underlined guidance is that there needs to be some objectivity there needs to be disclosed. If you are a custodian holding digital currency for others and that should all be very specifically

described in your engagement letter and allocate responsibilities and obligations as much as mentioned as a firm and address any kind of third-party payer obligations or relationships as well. And then again, the other consideration is the security and where do you store? If you do decide to accept the digital currency on behalf of the client and you don't convert it straight away you have to be very mindful about 30 of your wallet wallet or any other kind of consideration any other kind of situation there.

And then just in a situation with for example and an MMA situation right where that there is a need for 4S growing funds before closing a gap in between us again. You would Street. If it was the digital currency in the sheet that is the property and it would be a shame to destroy obligations commingling and and make sure that their record-keeping requirements. So that is the gist of holding digital currency in trust for your clients and just an in summary that you should convert into

the ER if you are putting it in touch rustic rather than holding it as in the form of digital currency backed by Disney Channel to get me just thinking about refunding it for any unused portion. So it just seems very logical if you wanted to add something. I think you have those are all great point my view within this one here is because of the potential confusion on the part of the client if they were price appreciation in wild boys get up with you after I've been received for the retainer, but of course converted into dollars

and then later if it is appreciated quite a while, you know, you might be holding the dollars in the end and that's the kind of say well somehow you're good at the law firm is responsible for the appreciation of the property, which is exactly what some of this coming out. So I personally think at least our practices not even to allow ordered that the client provide retainers in and infect obit or put it the other way at least our practice. Is that all the Teen or payment even if they're going to be converted by us would otherwise be $10. So just to avoid any

any potential, thank you so again, the question is what game we play going back to the issue of Securities. Do we have an additional role Gatekeepers and Sons of AML and KYC compliance and the general understanding is that we outside of facilitating or eating in money laundering we do not have responsibilities and obligations to read our clients with the kind of KYC AML standards and requirements that you so and not primarily for the reasons of attorney-client confidentiality and privileged and safeguarding of those

those well-known principles and tenants of that relationship with children are very important. The financial action task force is called for higher standards for non-financial business lawyers on Law and ABA has also followed in that line has asthma But there is a law firm. Did you move large sums of money on from their trust account for adoptions across state lines across internationally, and so There is an international call and the child did a wonderful presentation on the subject

be on alert on a lot of levels and you know about follow some internal voluntary good practices, which are more in line with a general election special responsibility measures that are provided by the state bars in the ABA for digital assets as an exchange between parties. So there are bad actors in the space and I think it would be easy to Target a firm as a way to wash. Did the Genesis of where those funds go from and unknowingly to the firm of the lawyers for not having

insurance policies in place would be easy to do that kind of position, and then again the subject is just pick up in that quickly after that. It's a real issue for lawyers that are active in the space. It's been a little less more recently, but there was a period you have when we were being contacted sometimes as often as once or twice a month or by people who wanted us to facilitate an escrow arrangement involving, you know, a large particle OTC I transfer Bitcoin very off and you know, what the Asian one or more Asian parties involved with

a minor ostensibly whatever and there were large fees promised and very concerning I was heading for most folks would rain red flags, but you know to be concerned about the client was being asked to function as a type of escrow agent of you have you just described and worst, you know asked us for advice on that and it's generally was you don't just, you know, just run screaming if it's a small amount of fees, you should forego it and it's a large number of fees that you should forget. Anyway, we could go to

I smile when I remember one of my clients. He was working on a project in Singapore and he has contacted about as large a Bitcoin transaction investment into the project that never really got off the ground, but they flew him to think it was Germany or somewhere and had asked somebody else to act as an Asian. There's all this in this industry. I guess they're riddled with these stories that you just never believed him back to his every thought original Spivey just have to keep your eyes wide open. I

have to be aware that like anything. You didn't like the slightest with of impropriety and like an estranged, you advise your client not to proceed and then you terminate set engagement as well as they do in a Halo your advice. Yep, so I guess I was going to pick this up in terms of Securities Law and you did a great job at the outset of kind of sketching this out. This is one of the areas where ethical concerns you after the acceptance of cryptocurrencies for the payment of fees, you know probably takes the greatest Center Stage here. So as most of you will be

aware. Once it became clear that digital tokens could be a creative very easily then dye. It did not take folks long to realize that they could be sold for profit and people could be induced to buy them based on Promises of future appreciation. And once that's a light bulb all went off in 2014. It's 2015 this idea started to percolate and as most of you will know in the summer. 2017 the SEC release what they referred to as the section 2108 our poor section 21 is where the SEC where it chooses not to take affirmative enforcement action, but

nevertheless wants to make the market aware of concerns an issue reports to the market specifically about potential for future enforcement actions and the report cover. How I wish I can most be familiar with and raised concerns unique nature of the doll relatively speaking perfectly until this past summer. We've just figured it out, decentralized. Excuse me, autonomous organization become more popular low many lawyers into a false sense of security that whatever the SEC is confirmed for with leather. How are they didn't apply to whatever particular transactions that

lawyer was working on making a lot of money off of that's so even after the summer of 2017. We continue to see lawyers advising clients about I said that and the fact that these a sales to not trigger, the implication of us Securities laws that were the end of 2017 second enforcement actions of others that preceded the large rainbow frog enforcement action involving a Smartphone app called munchies and I think open folks eyes and I made it clear that I'm yes, you see considered even non-fraudulent distributions of

tokens to potentially are Securities offering and of course, this is really where lawyers came to the fore in earlier. I'm all these transactions general speaker the vast majority had a law firm involved but if they work on plats and I'm I was involved in transaction around this time as to where it where many of you listening for us at that point the gatekeeper liability issue Rose and the SEC recognizes that most of the ocean cannot occur were not for the enablement of law firms were giving either informal advice formal advice.

Potentially that legal opinion that the Securities laws were not implicated and after munchies, I strongly our firm's perspective of was that any token distribution probably needed to be discussed with the SEC. I directly do you address those issues. I'm there were subsequent Foreman actions, which is this not our main purpose of this discussion on ethics involving a first and polite ostensibly decentralized exchange. Not a thief and several others which were very strategic by the SEC to find highlight potential other Miss uses of

digital currencies and bought in technology and two to make clear a kind of perimeter of concern and any lawyer practicing practicing in a space needs to be very familiar with those so that they can advisor-client and then finally going to see reciting this numbered my bad. I hear they were major enforcement actions against two very large and very prominent sales of digital assets. I buy telegram the message and company and check the social media companies a telegram ended in an ultimate and a judgment that enforced a

injunction against the sale of their tokens and ultimately a settlement by telegram with the SEC I take continues to be ongoing with those are Gordon touchdown any lawyer practicing anything that remotely related to Securities getting security device of the space needs to be very familiar with those and certainly, I think in regular contact with the key people at Sinop at the SEC, who am I eat can I help him too direct the commission for the enforcement activity and we're permissions to meet Branson

West Oaks and we're looking probably are familiar with present fascinating legal questions. One of the reasons why you have probably lawyers like you and I and others, you know got involved in the space. They raised questions can be potential can have the status of a legal person right. Now. People are spitting illegal Dalles or trying to use well-known or existing types of entities, like limited liability companies that are otherwise to give legal personhood to a group of developers are others who are using smart

contract technology that they exist only in the blockchain network to create, you know, the valid and binding legal arrangement. This is a fascinating area. There are some great folks out there. I'll call out. I'm one lawyer who I think is just at the peak of a practicing this Ross Campbell also a professor here and right at Cardozo are doing amazing work in this area and several others as well for sure. Former colleague. Abrah Shapiro's doing great work and I give these are all just emerging questions. But as an Ethics matter lawyers, do you need to take a step back and make

sure that whatever advice is being given is being done in a way because many decentralized autonomous organization for down or combining with the first point and issuing tokens and advice is being thought about you know, whether I'm toast does critical care nurse tokens are securities or not. So it's an area where the highest degree of caution needs to be provided. It's not an area where you shouldn't back to where we need to be very cautious if you want to add anything just on that particular discussion.

It isn't as an insult every point to some of the work that's being done in this space in terms of the development of cows and Oakwood open lies doing ice. They checking my conversation with Erin right at the East Denver earlier this year, which is brilliant with them with what he's doing so famous second night, and then she caught some of the committee session yesterday with what's happening with legal contracts and get on to you soon enough, but this area is changing. Like you said that you're tuning in like-new opportunities are opening up for

engineers. New entities are being created. I think earlier today. Maybe you were or even if the select committee they were talking about it was December month with the washing Ziplocs in a limited liability company and there's no drama there Oliver good enough who's done some great work and they are at the forefront of that. Watch the space or participate in the space because there's a lot of interesting stuff happening here. But obviously obviously, again the responsibilities that you

that people turn me, any inspiration, that do often arrives, some technologies you take the floor on this one because this is the most exciting but thank you. Yeah, so, you know your quarterly on for the DC bar ethics observation that you have your pic coin is somehow dirty money anyone involved in it, you know about speed or is likely to be equally dirty and I think seeing the activity and Congress in terms of Legends. Mission or brave legislation most cases that are designed to

help develop the use of blockchain technology and cryptocurrencies are extremely hardening. So for the support, we should the latest episode of all in my report. I could find identify thirty-two separate bills that were pending in Congress that were generally involved a blockchain and cryptocurrency know the number of those that were in the morning. I'm trying to prevent the use of blockchain and cryptocurrency and India number of important ways in many cases. They were designed to help the government use blockchain technology for its work, which

is very important. And of course, yesterday for those who've you been fine to Billy passing bills were introduced into Congress in the house both with Bipartisan support. The first was a bill that was designed to create a unified body of law for digital asset exchanges under the Aegis of the Commodities Futures Trading Commission that would be a huge step forward and regularizing the exchange. Does that better now central to the use of digital assets and then a second Bill introduced by Congressman Tom emmer that I was fortunate to help a little bit with which I'm was

designed to clarify what has been a very difficult issue of law in terms of whether blockchain token from cells should a mini case be considered Securities in their strong feelings and another side of this which I recognized but the bill if adopted would see to clarify and settle those matters. Mandating through an amendment to the Securities Act of 1933 that a new definition which would be that would be added to the law which is better investment and divestment contract outside is the assets old

person to invest with a contract when we look back at the 70-plus years of the helices what we see is, you know, several hundred different cases along the way all of which follow a similar pattern there's in the sensible commercial transaction that does not involve the Senate the sale of Securities where I one person to selling something to someone else. That's something that's all of his varied tremendously orange groves. Most notably in the cases. How is South but also animals are grown for their pelts earthworms in one case whiskey in several cases that are very

popular investment scheme has the assets sold generally speaking with not itself as security the scheme was and if they acid itself independent of any rights and promises of the schemer. Call a badass that would be recognized to stop security. I didn't have money in the water because they are unique and their relationship to the skin. Is it a difference but this legislation is adopted wood would clarify that unless the digital asset independently has the characteristics of security from a sample of paid dividends or had voting rights than the digital asset would not be security what this

would meantime. Is that a large number of other additional assets should be able to be traded on regulated crypto exchanges and really complement the work of the first built by creating a meeting for the marketplace for additional assets that can be used for a wide variety of purposes which are essential because digital assets, you know or something, as some people like to invest in other people, wants to be used and having a liquid market in which they can be traded is essential to their success. So we'll see where that goes. But as he said it was an exciting day yesterday in the

community with the introduction. Let's go to Pieces by the slice very exciting, I may leave on 4:30 federal level for a very long time and he mentioned, you know, there have been several bills that have been introduced them asking 20, which was a bill, introduced in March and followed on the December bill is has also been Bye, predicted to, unfortunately, fail anyway but hasn't been decided on again more clarity in the law dividing cryptocurrencies into three main categories are groups with the suit that synthetic derivatives crypto Commodities in crypto Securities. I won't go into it too much time,

but I would have preferred you to look at it as well. I think that's the one that Louis was Don has a lot more exciting and it has a lot and you know, it just given the parents that we all know-how have the classical screen so we all know has been conscious of time. So I want to make sure that would cover. Since I got the general knowledge on smart contracts and I'm legal smart contracts and the role of attorneys in managing them. If you have anything, in particular, to say just about

controlling a from an ethical perspective from an ethical compliance perspective concerning smart contracts. It's a great question you have on and what we have seen so far at least with your smart contract code in a lot of cases are very serve lightly regulated code operating perfectly in the area of decentralized and potentially large value transactions, but we're no lawyer at work lawyers devices are being sought but as smart contract technology is demonstrated that it works

you are expectation. I think and your side here is great because it is so steps up a wide variety. In which this technology can be used what will become you no more mainstream and I prefer the term automation to Smart contract. I think that the terms of our contract often can confuse people as to what is happening, but it's it it's sort of deterministic Automation and Advising clients who are going to engage in what you might call deterministic. I'm automation. I'm there are you know, interesting ethical questions that arise in particular at the

confidence. So if a client is entering into a traditional written contract, you would expect it to be written in a language for example that the lawyer understand so for example being with us, but many of us speak other languages are going to guess you have you got a couple up your sleeves. I'm yourself. So you might feel comfortable if a client wanted to enter a Colorado-based contract in a second language that you were fooling in. And you would be able to understand it advised him. And for that reason, that language was chosen you would be able

to advise on what the contract said what's new launches were and give advice you would be competent to do that. But let's say the clients talk to enter into an agreement that was reportedly going to create a meeting for economic consequences for them and is written in the language. You did not understand. We're not fluent in whatever that my peach, you know, you would I think immediately identify and say hold on a second. I can't advise you because you're speaking to create a binding legal relationship using a language that I can, not myself understand and therefore I can not

advise you. So why is it that we think is lawyers? If you are using computer code to create a similar sort of economic arrangement if the lawyer is not immediately familiar with the code and understanding how the code works and what it does that you're confident to advise the client and there's some really interesting knowledge questions. On the part of lawyers of the underlined code as most of you will know in the case of your network. That's a celebrity and we're jumping ahead. I am just

I am just okay, just important consideration So it despised. They just highlight everything else that we've spoken about and the lawyer's duty to be vigilant and to be mindful of privacy issue Securities issues a criminal intellectual property contracts all across the board really, it's your in-house Counsel on specialist areas as he would anyway and manage in the end. There's a lot of compliance policies and risk management measures that you can put in place and see your systems as well. So that

started the general overview and if you had to stay one last word about what's beyond the Expanding and that you should as a lawyer be on the washboard. I think I briefly five. That's the part of the biggest thing going on right now. And you raise it a lot of concerns. I just don't quit earlier today. So he published it anonymous article about all the problems and defy on which are Valdez Achill issues. And if so, I think that's an area where you know

lawyers in the space will get a lot of client inquiries, but also have to have the highest degree of Cairn scrutiny before I kind of waiting into I'm born to it for a lot of reasons. But obviously, we do need something a little bit of regulatory guidance as well as everybody for sticking around with us. If you have if not, make sure to watch the recorded version occupied and of course all the ways we're talking Wyoming a super shout out to our good friend Kayla long after all the amazing things. She's done for the state of Wyoming and the crypto Community Caitlin.

You're amazing. Say hi to Tyler.

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