Addison Cameron-Huff

The most common question I've heard from clients over the last five years of working with the crypto industry in Canada is: “How does my company get a bank account?”

One of the reasons why it's so hard to get a bank account for a cryptocurrency-related company is the prevalence in Canada of stolen payment credentials (debit/credit card information). Most people who I ask about this crime says it's happened to them. In a study by Canada's Chartered Professional Accountants, approximately 1/3 of Canadians said they'd been a victim of this crime. The rest of this blog post will explain how this commonplace crime is connected to the difficulties that companies have had in opening business bank accounts in the virtual currency (cryptocurrency) space.

Many concepts sound great in theory but become thorny in practice. One of those concepts is the idea of the "public interest". The term has existed as a principle for good government, in various forms, for thousands of years and it's widely used in law. In a recent blog post, a well-known Ethereum developer implicitly put forward the idea that public blockchains ought to be run in the "public interest". But what does the term mean and is that a standard that ought to be at the heart of Ethereum, or any other public blockchain? It's a concept that's widely used in law. Why not for Ethereum?

The term "public interest" appears in ethical guides, statutes, and administrative law textbooks all over the world. But this simple term hides a complicated reality. Few people agree on what the "public interest" is, how to identfiy it, or how to know when something isn't in the public interest. This is a standard that opens the door to debate, rather than providing a standard in the sense of Ethereum's ERC-20, technical standards, or really anything that programmers would say is a "standard". What lawyers and regulators call a "standard" might surprise people who are not familiar with the thousands of pages of scholarship on various sorts of "standards" in law (e.g. Canadian administrative law).

Toronto has an impressive and growing group of legal professionals who work in the blockchain space. This blog post is an attempt to list the people and their areas of focus (see the end of the table for the inclusion criteria and disclaimers).

Canadian company Dapper Labs Inc. has a new license to share with the world: version 2 of the "NFT License". This license relates to a special kind of Ethereum "token" pioneered by the company using their popular game/marketplace: CryptoKitties (further information here).

The UK's financial industry regulatory body, the Financial Conduct Authority, is consulting on "cryptoasset" regulation until April. They've issued a document that contains their views on various aspects of the industry and how they might be regulated.

Who runs Ethereum? Who's accountable for what happens on the Ethereum network? This is the first in a series of blog posts exploring this topic.

I've started a new law practice that's 100% dedicated to serving the blockchain/crypto market. The launch was been covered on Friday by Bitcoin Magazine: https://bitcoinmagazine.com/articles/canadas-first-all-crypto-legal-firm-opens-its-doors-to-global-clientele/. The firm was officially opened on the 10th anniversary of the Bitcoin genesis block, January 3rd, 2019. I'm excited to be able to work full-time in this industry as cryptocurrency enters its second decade.

From 2013-2017 I ran a technology law practice that slowly transformed into a cryptocurrency-focused law practice. The law practice was very successful, serving around 150 clients, primarily located in Ontario. But it was a bit too busy. In the fall of 2018 I was faced with the choice of either expanding my practice (i.e. hiring associates or adding partners), joining a larger firm, or doing something more radical. Around this time one of my key clients, Ethereum co-founder Anthony Di Iorio, expressed an interest in having me change my role from outside counsel to inside counsel. In 2017 Anthony made me an offer to join Decentral Inc., his main corporation, as its Chief Legal Officer. Within two months I was promoted to President and took on a general management role.

My last blog post was in August, 2017. The reason why there hasn't been other posts since then is that I became the President of Decentral Inc.

At Decentral I led the development of a next generation cryptocurrency wallet (jaxx.io) and many other exciting projects. I built up the company to 35 employees, increased revenue by millions of dollars a year, released a major new platform, and helped nearly a million people around the world to interact with their cryptocurrency. I didn't have time for personal blogging.

Last week the CSA published a staff notice on ICOs (token crowd sales) and cryptocurrency funds. This week my thoughts on that staff notice were published in Bitcoin Magazine: https://bitcoinmagazine.com/articles/op-ed-planning-ico-canada-here-are-10-regulatory-points-ponder/.

The actual staff notice, titled “CSA Staff Notice 46-307 Cryptocurrency Offerings” can be read here.

In an hour I'll be speaking on a panel at the Bitcoin & Ethereum Summit. The topic for the panel is ICO vs. VC. As a prelude to the talk, here's a table that compares venture capital (VC) investment with initial token offerings (ITO)/initial coin offerings (ICO) sales:

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.

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.

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