Addison Cameron-Huff, Blockchain Lawyer

What would it take for DAOs to overtake traditional corporations as the main way that Internet-based businesses are organized?

It's easy to take shots at DAOs but this blog post looks at what it would take for this transformation to actually happen. We're certainly not even close to a world where most tech is built and delivered by DAOs, but there are hints that DAOs can be used for quite a bit of what's currently done by traditional companies. They're starting to be used for funding scientific research or creating digital dollar equivalents. In another sense of the term, some major blockchain networks (e.g. Bitcoin, the first and still largest) might themselves be considered DAOs, and if they're not quite within the definition, they show a bit of the path forward. This article sidesteps definitions, and instead looks forward to what's required to make DAOs mainstream.

Blockchain developers and Shakespeare have in common the same dream: “let's kill all the lawyers”. This blog post explains why the dreams of both aren't possible, by exploring the need for lawyers in complex technological systems.

The Dream: A World Without Lawyers

It's commonly considered among professionals in the anti-money laundering (AML) field that AML is the ally of police. The reason for this is that AML systems feed data into the police and spy service, which then use this data to inform their investigations. But this concept ignores the reality of AML, which is that it costs money for private businesses to have staff that do AML. AML rules are free to the government but very expensive to the companies they apply to, and those costs are directly passed on to customers. So whether you pay taxes for police or higher prices due to AML, you, the public, are always paying.

A Better Use Of Everyone's Money: Expanding Police

Everyone's seen a teenager use a cousin's driver's license or a fake foreign ID card. These have long existed, and the history of all identification documents is a constant battle with counterfeits. But the AI era is not a continuation of that, it's a clear break with the past. Perfect-looking identification documents can be generated, and can be inserted into videos in real-time (or the entire video of the person can be faked). Anyone in doubt about how good these videos are should check out the latest OpenAI demo for generating videos from text prompts (released yesterday): https://openai.com/sora. High resolution video replicas of people are here, and they're available to anyone with a computer.

AI Impersonation

The vast majority of scams go unreported. No one knows how many people are affected, but I've spoken to many, many people by phone who call me out of the blue looking for advice about dealing with scams. Much of the time they don't realize it's a scam. Lawyers don't normally like these kinds of calls because they're not going to result in work (and might even result in liability for them).

Calls about scams are essentially the same as people calling up plumbers asking for free advice about how to do their own plumbing, or calling up auto garages to ask for advice about fixing an engine. But I'm happy to help out if I can, and feel good about the millions in losses I've helped prevent. I'm positive I've prevented more losses to people calling out of the blue than I've made in legal fees in my decade as a lawyer in private practice.

I regularly get calls from people who are the victims of Internet-based fraudsters. I have some fairly standard tips for them (see below!) but there's little that can be done once they're already a victim. Everyone's aware of the amount of online crime but few people know how these crimes happen. How do criminals manage to meet so many people? How do they reach the victims? In many of the cases they do this by placing ads on YouTube, Facebook, and other platforms. The ads lure people into the crimes by pretending to be the official sites of legitimate businesses and then they're robbed by lookalike exchanges, dealers, wallets, or other types of frauds. Below is an example from a YouTube ad I saw recently.

In the early days of cryptocurrency, there was some discussion of replacing “money”. Today, there's discussion of Central Bank Digital Currencies, modelled on crypto, replacing cash and banknotes. But all of these debates might be missing the larger story: the elimination of money.

As technology improves, the cost of switching between money and assets gets ever closer to zero. The interchange between CAD and USD is now close to zero (Wise). Cryptocurrency to cash can be under 0.25% (most dealers). Cash to stocks can be zero (Robinhood). Some assets have high transactional costs, like real estate, but the securitized version, REITs, are stocks that transact at near zero. All around us, the transactional costs are rapidly falling.

Canadians have played a key role in the development of the global cryptocurrency industry. At every stage, Canadian lawmakers and regulators have been closely following developments and issuing guidance or amending laws. To my knowledge, no one has written a concise history of the developments of the last decade. This blog post is my attempt to do so, with links to the underlying guidance, staff notices, interpretation bulletins, statutory amendments, and regulations.

The First Rules: Taxes

As we come to the end of 2023, the holiday season is always a time to reflect on what's gone well and think about the people who've helped make our lives better.

Here's a bio that I submitted to a talk for January, 2024:

Mr. Cameron-Huff is an experienced lawyer, blockchain industry participant, software architect, programmer, and consultant. He has provided consulting advice to two major Canadian regulators in the field of cryptocurrency, and provided continuing professional development to the regulator of lawyers in the same area. He has been an advocate for the industry for many years, and has been published in major publications in Canada and the United States. His work crosses legal, technical, and business domains. His blog on cryptocurrency topics features 300 articles going back to 2013.

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.

The Temptation

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).

Having Opinions And Posting Them Online

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.