I have a collection of notes for a book about derisking token projects. It contains a lot of the advice I hand out to companies in the token space, which is based on years of work in the field and listening carefully to other lawyers. I took the notes for a few of the chapters and asked ChatGPT (3.5 model) to generate the book chapters. The result is surprisingly good!
Here's 40 pages of generated "book": https://www.cameronhuff.com/blog/_assets/book/Derisking_Token_Projects_Chapters.pdf.
In a famous law review article published in 1890, future US Supreme Court Justice Louis Brandeis and Samuel Warren sketched out a new era of privacy law. Drawing on ancient cases, the two lawyers explained the evolution of society and law which necessitates a new right “to be let alone”. The authors call for the common law to evolve to meet the new threats. They didn't ask for a new statute or regulation to be passed because in their view it wasn't necessary, since the common law can adapt to any change. From the second sentence of the paper:
“Political, social, and economic changes entail the recognition of new rights, and the common law, in its eternal youth, grows to meet the demands of society.”
I've been asked whether “crypto is dead” many times over the years. More recently, people have become jaded and skeptical, following the failures of a number of scams and also the failures of some of the more wild-eyed promises of marketers.
The disillusionment isn't from the failure of technology but from the failure of marketing. Too many people fall victim to the lies of marketing people who want to part them with their dollars. Over the years I've seen many scams and one of their most common features is failing to show the code. How does it work? What does it do? What can you prove it does?
Many of the legal engagements I work on don't have clear answers. I do the best I can to make the issues clear, and I help clients to steer away from the more obvious dangers, but ultimately there's a degree of uncertainty when people are forging a new path with technology. That's why it's critically important that everyone have a voice when it comes to cutting-edge tech law.
I've never worked on a team where there wasn't some contribution from one of the people. Even the most junior lawyer, or even summer student, can add something to a team. If the only perspective someone shares is that of how a non-expert might perceive something, that's also valuable, since framing and narrative are often important in legal strategy.
This year marks 15 years of making software-based legal experiments. I started down this path with winning a hackathon put on by Yahoo! in my final year of undergrad at the University of Waterloo. My two successful experiments, which became businesses, were in the search space and another in the regulatory management space.
None of the projects below have ever been a particularly great source of income, but they've been valuable in terms of building my knowledge of programming, law, and business. As a tech lawyer advising clients, it helps if you know at least a bit about what your clients do. On a less practical note, each of these legal experiments is an attempt to see whether how people use and access the law can be improved. There's also just a certain joy to building something that's never existed before.
“Consumer protection” is the oft-cited raison d'être of regulators in Canada (and abroad). Central to this idea is that the government exercises its authority to reduce the risk of loss for a consumer. Consumer protection and risk of loss are intimately tied, and in the case of Canadian regulators position on the cryptocurrency field, risk of loss is central. But the tradeoffs inherent in this idea are rarely explored when risk of loss/consumer protection is discussed.
Risk of loss must be one of two things: i) losing out on risk of gain, or; ii) gaining a loss. But before explaining the previous sentence, I'd like to give an example of what this means in a context that's more understandable than financial products.
This blog post is aimed at lawyers who are working on files that have to do with holding cryptocurrency, either as part of a buinsess service, secure storage, or allegations of misappropriation. This issue includes technical security, processes, and business models - all of which affect what sorts of risks might materialize and how they're addressed upfront.
This blog post is a bit of a milestone: ten years of blogging as a lawyer. I would never have guessed this blog would last so long. And along the way I've learned a few things about having opinions (that I post on the Internet).
It's been around ten years since Bitcoin got going and Ethereum started. It's been long enough that people shouldn't be seeing articles and pundits commenting on how bad the “crypto community” is. This comes up regularly with the ongoing criminal trials of SBF and his associates from FTX (e.g. this article in the Financial Times). These articles always put forward the idea that cryptocurrency somehow has a single community of people who are both behind it, in charge of it, and evangelizing it. Nothing could be further from the truth.
There's no shortage of pundits making claims about AI and ChatGPT. This blog post isn't another one of those kinds of articles. This is an explanation of my own attempt to build an AI tool to answer anti-money laundering legal/compliance questions. You can try out the test system for yourself, with any questions about Canadian AML law: https://carrentis.com/aml/index.php. It's as interesting to see what it can do as what it can't. This post explains what I made, why I made it, and where AI might fit into the future of legal practice. Along the way I give the results of the AI methods for answering various AML questions with correct explanations of how the answer was developed.
At the start of last month I had a conversation with the founder of a well-known cryptocurrency company. They said "you should write an article". After a busy September, I've found the time to do so. Below is an article about the contested authority of securities regulators over cryptocurrency, in the context of shifts happening in US jurisprudence. Although these changes haven't been felt in Canada yet, and have had little impact even in the US, I believe it's quite possible we'll see this line of legal thought become important in the coming years. This article is a bit less concise than it could have been so that it is accessible.
I've put together 50 tips for entrepreneurs, lawyers, and service providers. Some might be obvious and others have some nuance to them. I hope this helps you as you think through your own legal problems in the blockchain space.
1 The person who pushes a boulder down the hill is responsible for what happens under just about every legal system on Earth. It's difficult to escape the reach of "law".
One of the most popular inquiries I get is: “How can I raise money for real estate using tokens?”. What people mean by this question depends on who they are in the value chain of real estate, but typically they're looking to either appeal to international real estate buyers, “fractionalize” real estate into smaller chunks, manage the investment process better, or add innovative new elements to ownership like faster payouts to owners. This blog post discusses some of the issues associated with moving real estate development/ownership into the digital world. At the end of this blog post is a sketch of what an AI-driven future of real estate fraction trading might look like.
As a lawyer who's worked in the crypto space since 2014, I've introduced quite a few people to potential opportunities as an incidental part of the job. I've also seen many people get hired into key roles. A rapidly developing industry means that there's always new companies hiring people with a range of experience. This blog post is about some of the ways I've seen people get jobs in crypto. Below are a few of the ways to get jobs, and at the bottom of this post, some crypto-specific websites to check for job postings.
My latest experiment with search is a search engine for jobs in blockchain: https://jobs.cameronhuff.com. It's a crawler that looks through a list of about 80 blockchain company's career pages and finds all the job listing pages. Then the pages are run through a filtering process and on to ChatGPT. The ChatGPT API is used to extract the structured data about the job and generate new data like tags. The AI-summarized job data is then piped into a Meilisearch instance to make it searchable.
The aftermath of the SEC initiating litigation against Binance and Coinbase is a tightening of standards around what tokens are allowed on exchanges/dealers.
Robinhood, one of the largest free stock trading applications in the world but also a cryptocurrency dealer, has announced that they're removing tokens already: https://www.coindesk.com/markets/2023/06/09/robinhood-ends-support-for-some-tokens-named-in-sec-lawsuit-as-securities/.
There are three assumptions widely held by the public, lawmakers, and even many lawyers. The three assumptions are, together, the FEF assumptions, which is that laws are:
An alternative title for this blog post could be: “Assumptions About Law That Surprise Engineers (And Some Lawyers)”.
People who work in the cryptocurrency space have a good understanding of how it works, but outside of the industry, it's a bit of a muddled mystery. Above I've attempted to illustrate how it works, with progressively larger circles of less decentralization. Some parts of the industry are closely linked to the core protocols, and others, such as merchants, exchanges, and custody services, are quite a bit further away from the decentralized core of how cryptocurrency works.
Securities laws have an almost unique structure: forbid everything and then allow action through certain exceptions. The default prohibition is found in Ontario securities laws, and the other provinces, and in America (which is the origin of Canadian securities laws, see footnote #1). Some of the exceptions are quite broad, others much more narrow. There are many, many exceptions from the general rule of prohibition. The exceptions are designed to permit the existing markets and players in the securities industry. But this is a fairly unique legal structure. Most laws have a list of what can't be done, rather than prohibiting everything and then listing what can be done. This subverts the general legal maxim that what is not prohibited is permitted.
Many people have a hard time with understanding securities laws because they turn the general rule on its head. People are much more used to a system in which certain activities are prohibited. In a sense, securities laws are like that, but the legal structure of how that's achieved is the inverse. Securities laws are not a list of what can be done but rather exceptions from the rule that all cannot be done. This gives enormous flexibility to the regulator tasked with enforcing the law but also creates uncertainty for market participants who may not be sure what they are permitted to do. Savvy market players often operate at the edge of what's permitted or not, and sometimes their activities are legalized and become a part of the standard practice (e.g. RTOs).