A model American state law for virtual currency businesses was approved last week by the National Conference of Commissioners of Uniform State Laws: “UNIFORM REGULATION OF VIRTUAL CURRENCY BUSINESSES ACT”.
I hope that this model law is not used as inspiration for regulatory efforts in Canada. This blog post explains why.
The US Securities and Exchange Commission has published a long report on the “The DAO” that contains an an analysis of the application of US securities laws to token sales/ICOs.
Surprisingly, they decided not to proceed with an enforcement action against anyone involved in The DAO. The full report can be read here: https://www.sec.gov/litigation/investreport/34-81207.pdf.
On March 20th Donald Johnston (Aird & Berlis) and I ran an event with OsgoodePD titled “Critical and Emerging Issues in Blockchain Law”. This is my recap of what was covered.
I created flatlaw.ca in 2013 shortly after starting up my law practice. It's now one of the highest ranked sites for many fixed fee-related search terms on Google. As of June 3rd, there are 100 lawyers advertising 551 fixed rate legal services products.
This blog post contains some of the statistics for the site over the last couple years.
I ran a webinar this afternoon with the BC Courthouse Libraries titled “Digital Security for the 2017 Lawyer”. You can download the slides here.
The event was conceived and hosted by Katrina Leung, a BC corporate-commercial lawyer who works for the BC Courthouse Libraries. We had about 125 people tune in and they've kindly permitted me to distribute the slides. A webcast will also be made available next week on their Vimeo page.
My article on “tokenization” of real world assets was published by Bitcoin Magazine on Friday.
From the introduction:
“Tokenization is the process of converting rights to an asset into a digital token on a blockchain. There is great interest by financial intermediaries and technologists around the world in figuring out how to move real-world assets onto blockchains to gain the advantages of Bitcoin while keeping the characteristics of the asset.”
Yesterday I spoke at the OsgoodePD mini-conference on “Critical and Emerging Issues in Blockchain Law”. One of the items I covered was a brief highlight of laws that are often relevant to blockchain companies. Here are the statutes:
1. Federal anti-money laundering law: Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Note that there's also a Quebec law that might be relevant.
Bitcoin hit new record highs recently ($1600 CAD), in part based on speculation about Bitcoin ETFs. Although some people look at Bitcoin as in investment, other people use it as a payment method. What sorts of things can you buy with Bitcoin?
In recent months I've heard of people using Bitcoin for:
The Bank of Canada released a working paper this month that contains a bold claim: “Lesson 1: Digital currencies will be counterfeited.” The paper is on the lessons that private bank notes from many decades ago hold for digital currencies today. Much of the paper consists of an excellent history of bank notes. But the paper also contains claims about digital currencies, specifically, private, non-Central Bank affiliated digital currencies like Bitcoin. This blog post explains why the working paper's Lesson 1 claim about digital currency counterfeiting is not correct.
The working paper states that bank notes have always been counterfeited. They then go on to explain several problems with digital currencies that have nothing to do with counterfeiting (such as "fraud" and "cyber attacks") and conclude with:
The Delaware Court of Chancery (leading corporate law court in the US) ruled on Wednesday in a case that involved miscounting of shares as part of a buyout of Dole. In a footnote the court notes that blockchain technology would be a good solution to one of the key issues in the case:
“[D]espite laudable and largely successful efforts by the incumbent intermediaries to keep the system working, the problems have grown. ... Distributed ledger technology offers a potential technological solution by maintaining multiple, current copies of a single and comprehensive stock ownership ledger.” - Footnote #1, pgs. 8-9
Delaware is the corporate capital of the United States. It has more corporations than residents. Many jurisdictions would like to follow in Delaware's footsteps and become a hub for incorporations (one benefit: ongoing registration fees). And in 2017 there's an opportunity to use technology to leapfrog Delaware and create a global corporate hub. This blog post lays out how Rwanda could create a Delaware-beating infrastructure based on blockchain technology (also called "Distributed Ledger Technology"). Added bonus: Rwanda create a new class of online corporation with publicly traded securities.
Last week I spoke about blockchain-based corporate voting (and other topics) at the “Blockchain Symposium” held by Gowlings WLG in Toronto. This blog post expands on that discussion and explains why I think corporate voting via blockchain will be reality within the next few years.
Corporate voting is just one aspect of the large constellation of service companies that handles ownership, registration, transfer, settlement, clearing, and other functions of the public securities markets. What's going on in the world of securities management/investor communications?
TD is looking for a manager for their "Enterprise Shared Platform of Blockchain Center of Excellence". The position "reports to the VP, Blockchain CoE to support the business priorities of the Blockchain CoE." The ad was posted a month ago: https://www.linkedin.com/jobs/view/236085965.
The US Federal Reserve published a paper this week on the application of blockchain technology to the payments, clearing and settlement sectors of the US financial system.
The paper is an excellent overview of the current system and how blockchain might change things. Section 2.1 provides explanations of payment processing, securities post-trade processes and the roles of financial intermediaries. From the section on settlement:
Starting a blockchain software business? Below is a checklist of some of the legal & business issues common to this emerging industry.
Note: This post was written by Victoria Barclay and Dennis Bardetsky of the CFA Society Toronto. I've republished it here (with their permission) because the publication this appeared in, The Analyst (September edition), is not available online. I've slightly reformatted the article to better fit this blog. I was one of the panelists who spoke at the conference. The original title was "FinTech Conference - Three market developments poised to disrupt your business".
Just over a year ago I met Nachshon Goltz. Fast forward today and together we've built the world's most comprehensive global law search engine and implemented a new model for legal search. We run Global-Regulation.com, a law search engine that makes use of machine translation to make laws written in 25 languages searchable in English.
EY recently released a report for the UK government about how its Fintech sector stacks up against other global financial hubs. Toronto was not on the list of comparable jurisdictions. But if it was, it would probably be in fourth place by region.
I'm a technology lawyer and a legal technology entrepreneur. I was recently asked to contribute to a book about how people are leveraging law degrees outside of law. The author has allowed me to publish my thoughts here and hopefully they'll appear in print at a later date. Below are the three technology products I've developed that wouldn't have happened without a combination of J.D. and programming.
Last summer I wrote about why Ontario's bus system is so uncompetitive. That blog post has received a lot of traffic and I've even received a few emails from entrepreneurs wondering how to start a bus company. This summer the Ministry of Transportation (MTO) is discussing reform and has put out a discussion paper. The paper contemplates removing legal barriers to entry/reforming the Ontario Highway Transport Board and poses seven questions. My answers are at the end of this blog post.