Addison Cameron-Huff, Blockchain Lawyer

Silicon Valley Bank (SVB) failed on Friday. With around $200 billion in assets, this is one of the largest bank failures in US history. It has particularly affected the cryptocurrency space because SVB was especially concentrated in the technology sector. At least one major stablecoin used SVB to hold a portion of their cash: USDC. Circle Internet Financial, the corporate group behind USDC, announced that $3.3 billion USD is stuck in SVB, which is currently under the control of the FDIC (US federal government).

Canada needs to get serious about fighting financial crimes. Frauds and scams cost Canadians billions of dollars a year and undermine their faith in legitimate businesses. Fraud reports keep increasing, while police clearance rates are falling (in absolute terms, and relative terms). I get many calls from people who are the victims of sophisticated criminals and I've heard their stories. Lawyers can't usually do much to help people. The police themselves are under-resourced and don't have the necessary technical resources to combat sophisticated criminals, who target Canadians from abroad.

A specialty police unit is the best means of targetting frauds. It's better in most cases than using securities regulators, consumer protection regulators, or other agencies that don't have the necessary experience and skills to take on modern criminals. The days of pickpockets are over. Canadians don't lose the $200 in their wallet. They lose their $500,000 retirement nest egg. The costs are staggering.

Bahamas-based FTX closed (spectacularly) last year, taking with it $95 million USD of investment from the Ontario Teachers' Pension Plan (OTPP), and billions of dollars of customer assets. FTX was not registered in Canada, but it was in the process of acquiring Canadian crypto dealer Bitvo, which news reports indicate was held up by pending regulatory approval. It also seems that there are reports that FTX was serving at least some Canadians but that part of their operation was murky. At some point, Ontarians were onboarded and trading on FTX, then later refused (perhaps due to action by the OSC behind the scenes - this is not explained publicly).

The Canadian Regulatory Regime

It's a new year and a new run up in cryptocurrrency prices. These moments always trigger media speculation and end the "is crypto dead?" questions that immediately crop up when prices go down. The end of 2022 saw the failure of several large non-Canadian businesses in the cryptocurrency space, fueling concerns like "is crypto dead?" and whether "crypto will ever recover". I've been seeing these waves of questions and concerns, and then the euphoria when prices go in the other direction, for nearly a decade. The truth is that cryptocurrency prices are volatile, and that cryptocurrency has never died. Even sustained downward prices aren't a sign of failure or "the end of crypto". Because cryptocurrencies were not invented to go up in price and they function just fine without large speculative bubbles.

Speculation/Gambling/Investing

Cryptocurrency started off as a simple, if technologically complex, payment system. The basic idea is that public/private key cryptography is used to ensure that one number decrements and the other increments. These numbers are now worth billions and have spawned many new applications. The progress is amazing but the downside of a system in which numbers are sent from one place to another is that they can be traced. But more than just being traced, they can be seen and traced by anyone, at any time, for the rest of time. This is an uncommon pattern for money-related tools and not always a good thing.

OpenAI's DALL-E model for generating images was made available a few months ago. One of its uses is to generate art, and it's already being used by magazines and blogs to supply images for articles. I tried it out for supplying images for articles on my own blog. The results are funny, but not useful.

The Ontario Securities Commission (OSC) put out a report on their survey of cryptocurrency use a few days ago. The survey shows that 13% of Cannadians own cryptocurrency (or cryptocurrency-based securities such as ETFs), Canadians have made huge gains on crypto (pg. 20 of the survey), and a quarter of trading platform users make use of VPNs.

The OSC concluded that their survey shows Canadians aren't knowledgeable about crypto, but if anything the survey shows that they need to carefully think about terms and definitions. Cryptocurrency is hard to understand but the questions posed to test the public's knowledge say more about the OSC than about Canadians.

Canada has a variety of active sanctions programs that aim to cut off the flow of money to foreign officials and companies. Most of these are executed as regulations under the Special Economic Measures Act. Less commonly, they're regulationed under the United Nations Act (implementing general UN sanctions) or, even less commonly, the Justice for Victims of Corrupt Foreign Officials Act. There can also be sanctions in other legal instruments. An overview of these programs is published by Global Affairs Canada.

I started my law practice directly after articling at a large Bay St. firm. I learned a lot about the profession at the highest levels, but not much about the business of law. Nearly a decade later I've picked up a few lessons that I wish I had known when I first started off. Below is my attempt at distilling some of this hard-earned experience into a program for how to grow and build a law practice. Click here to jump right to the content, or read on to learn more about this program.

About The Making Of This Program

Canadian law firms have been heavily involved in the cryptocurrency space over the last few years. They've written tons of great articles, but they're difficult to find. So I've put them together, in the form of a unique list of 950 articles that mention "bitcoin", "ethereum", or "cryptoasset". The assembled pages are an interesting view on what's happening in Canadian law, and who's doing it (since many of the pages are lawyer profiles that mention their transactions).

This blog post is an update on cryptocurrency litigation in Canada over the last 90 days. Although there's been a number of proceedings that mention "bitcoin" or "ether" on CanLII, there are really only four where the main subject matter was cryptocurrency.

The cases below concern a dispute over BTM management software, a self-represented person who ran a type of crypto investing club, a technical decision with respect to cryptocurrency ETFs, and exemptive relief granted to a well-known cryptocurrency dealer.

This blog is a custom progam that I wrote back in 2013, updated a little bit over the years. My most recent upgrade is adding pagination, as the over 250 blog posts with high resolution images was far too large to load quickly on mobile. Page load performance is now much better.

The first three quarters of the 2022 cryptocurrency industry have seen immense changes. In my own practice, the following developments have been top of mind: more useful NFTs, cryptocurrency litigation, large investments into platforms, politicians taking notice, proof of stake, and more.

The Rise Of Interesting NFTs

I've been a lawyer for eight years. Before that, I held many jobs, including website developer. This work has taught me a few things about how to connect with clients and grow a business. Today I'm launching a standalone website to share what I've learned in the form of concise 7-10 minute sessions as part of an audio guide on growing your law practice.

UPDATE: This is now free - I've posted all of the audio in a new blog post: https://www.cameronhuff.com/blog/grow-your-law-practice-audio-guide/.

A couple days ago, a lawyer in the San Francisco area that I know wrote a blog post on why they stopped taking blockchain clients in 2017. Kyle Mitchell's blog post is noteworthy because it's written by a smart lawyer (who is also a programmer) who raises client management issues that are relevant to any lawyer who works in tech. These issues are even relevant to people who don't work as lawyers, because Kyle's thoughts are really about how to deal with aggressive businesspeople, some of whom may be breaching contracts or even breaking laws.

How, as a professional, can bad people - bad clients - be avoided? Kyle's answer is to cut off a field that he considers too risky. The rest of this blog post explains why I haven't followed in his footsteps. The end of this blog post contains some practical tips for lawyers to help avoid bad clients.

Cryptocurrency enthusiasts often describe its value proposition as being at least partly based on it being "decentralized". Cryptocurrencies are decentralized, it's true, but in a way that's more subtle than it might first seem. It's not the lack of a central bank or some other legal angle that makes cryptocurrency decentralized. It's also not in the activities that it's used for. It's decentralized because of its technical functioning. This is a bit challenging to understand from a cryptocurrency point of view, but recent developments in NFTs help make it more clear. More specifically, Damien Hirst's recent NFT collection called "The Currency" helps make the type of decentralization in cryptocurrency more clear.

There's a concept that's very popular in the programmer community: "technical debt". Over time, new code that's not properly documented, or not properly architected, can slowly weigh down the project. Ultimately, technical debt can weigh down the entire business, stalling features and preventing bugs from being fixed. As the term implies, the idea of technical debt is that it's a debt that must one day be paid for. Companies have a similar problem with legal debt.

What's Legal Debt?

The Wall Street Journal recently ran an article: “Crypto Might Have an Insider Trading Problem”. This article is just the latest in a long series that confuses insider trading, an offence under securities laws, and acting on secret knowledge outside of a securities context.

One of the most important subjects in law, because of its profound impact on us all, is “remedies”. My Remedies professor in law school repeated a mantra that's stuck with me through nearly a decade of law practice, and it's one of the most important lessons to learn about law: without a remedy, there is no law. The rest of this blog post explores the reality of this maxim in Canada today, and what global technologists in the blockchain field may do to help with the situation.

Ancient Law, Modern Application

A draft law was published for comment by the Ministry of Finance in Ontario late last year, igniting a firestorm of criticism from the investment industry. Canada's crypto industry seems to have not noticed that the draft law would be an enormous change to how cryptocurrency and tokens are regulated in Ontario (and consequentially, Canada as a whole). This blog post explains the proposed law, why the investment industry doesn't like it, and what it might do to the nascent Canadian blockchain industry. The diagram above shows the areas of the Ontario Securities Act that have significant changes under the new Capital Markets Act.