Addison Cameron-Huff, Blockchain Lawyer

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.

A Lack Of Statute & Regulation: Purported Authority Over Cryptocurrency

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).

Last Friday I spoke at the inaugral professional development event of the new Metaverse Bar Association. Below are my remarks adapted from that event, aimed at lawyers trying to become advisors to token projects.

Seinfeld said that he became a good comedian by writing jokes every day. He marked off each day on a calendar and made sure to do it every day, without exceptions. If there's one key to becoming good at something it's to keep doing it every day.

Try to do one useful thing a day. This maxim works as a lawyer or in any other field.

Lawyers often regard their job as being completed once they've finished writing up a contract. On the other hand, lawyers often have to deal with signing mistakes and errors that are made in making use of contracts. Docusign, and similar software, solves some of this problem but there's so much more that could be done.

Many lawyers and businesses have been discussing the idea of ChatGPT and similar LLMs taking over their work. There's a lot of promise about revolutionizing the way people work. But in reality, these tools are a very long away from replacing humans. The reason for this is that they're not good at law, they fail to properly understand questions, they fail to identify gaps in the facts that require follow up questions, and they're susceptible to making up law that doesn't exist. Below are a few examples that illustrate these problems.

Imagining What A Case Is About

This is part three of a three part series. Part one explored the business side of various crypto lenders that have gone bankrupt, and part two looked at the legal side of these companies' pre-bankruptcy operations (which reached many billions of dollars of claims). This third part looks at the CSA Staff Notice that mentions these companies and proposes new restrictions on Canadian cryptocurrency trading platforms: CSA Staff Notice 21-332 (CSAN 21-332).

For the reader who is new to these sorts of staff notices: they are a way for securities regulators to public their internal thinking about an issue. Although theoretically not law, these staff notices are often treated by practitioners as if they are law, and they're an important part of the regulatory landscape in Canada. CSAN 21-332 is complicated. This blog post looks only at the parts of the notice that are related to credit/borrowing.

The first part of this series examined the crypto lenders that took the blockchain world by storm a few years ago, and ended in several high-profile bankruptcies. This post looks at what the laws about lending are, and the arguments for why these crypto lenders weren't violating laws (despite the SEC & state-level settlements that say they were). This post completes the necessary background to understand the next part in this series, which is about the government's response in Canada to the failures of crypto lenders in the US. The first half of this article explains the background on various sorts of credit products, and then the second half gets into the specifics of the legal arguments of the now-bankrupt crypto lenders.

Familiar Lending Models

The image above is from section 48 of Hammurabi's Code and it concerns the delay of payment of debt due to crop failure. The Canadian Securities Administrators (CSA) issued their own document concerning debt, around 3700 years after Hammurabi. A lot has changed in the intervening years, but not the government's interest in regulating debt and credit. This blog post is a part of a series that looks at that interest in the context of the cryptocurrency industry, with particular attention to the companies mentioned in the CSA's most recent guidance document: Voyager Digital, Celsius, BlockFi and Genesis. These companies, up until they went broke, managed billions of dollars of other people's money, and promised a new world of credit for crypto. What went wrong? What were they doing? Why have regulators taken such a strong interest? Read on to learn more about what was once a popular business model.

As economies develop and markets improve, it's natural to see the distinction between money and asset grow thinner. Bitcoin and money is a good example of this. Money market funds and bank deposit accounts is another. As transaction costs decrease, people can switch between assets in a way that's very money-like.

The thinning line between asset and money has legal practice ramifications because the blurring of categories calls for greater care in ensuring that businesses stay on the right side of laws written for a world in which the lines were thicker and more obvious.