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Blockchain & The Law Roundup: 13 April 2018

We haven’t published a roundup for a while so rather than our usual pithy introduction here’s a simple Table of Contents to let you know whether you actually want to scroll down or not. Our takeaway from the latest set of stories collected from around our wonderful planet, would be a simple one. The law, lawyers, firms and regulators are now firmly ensconced in the world of cryptocurrency and we’d suggest that their influence on the market and its products will rise exponentially over the next 12 months.

  • New European Privacy Laws Could Spell Doom for Blockchain Businesses
  • In The Future Blockchain Will Solve Most Real-World Problems — Even Arbitration
  • Lawyer’s Guide to Understanding The Legal Risks of ICOs
  • China Holds Lion’s Share of Blockchain Patents
  • FisherBroyles Bags Blockchain, Fintech Pro From Sheppard Mullin
  • Cryptocurrency Litigation Tracker Launched By Law Firm Morrison Cohen
  • Blockchain Bundesverband Publishes Recommendations for Regulating Initial Coin Offerings
  • Kyrgyzstan Has Blockchain-Friendly Legal System, Report Says
  • Law firm Nixon Peabody joins Wall Street Blockchain Alliance
  • A 200-YEAR-OLD IDEA OFFERS A NEW WAY TO TRACE STOLEN BITCOINS

 

 

Title: New European Privacy Laws Could Spell Doom for Blockchain Businesses

Author: BTC Manager.com

Date: 26 March 2018

URL: https://btcmanager.com/new-european-privacy-laws-could-spell-doom-for-blockchain-businesses/

Extract: 

Regulations concerning data protection could have a negative impact on blockchain applications in the European Union (EU). One of the fundamental operational premises of most blockchain-based applications is in danger of being against a new European law on privacy.

The record of transactions on most blockchains can be viewed by the network participants. These records are once authenticated, become immutable, meaning that they cannot be altered or removed. This immutability is one of the strong points of the technology and a reason while cryptocurrencies like bitcoin and ether have become popular.

 

Title:  In The Future Blockchain Will Solve Most Real-World Problems — Even Arbitration

Author: Forbes

Date: 5 April 2018

URL: https://www.forbes.com/sites/kimjay/2018/04/04/in-the-future-blockchain-will-solve-most-real-world-problems-even-arbitration/

Extract: Ast went all the way back to ancient Greece, where he saw a citizen-driven justice system built on principles that could be applied to today’s buzziest technology: blockchain. “In the 5th century BCE, the Greeks had a different concept of justice than we have now,” Ast explained. “They didn’t have lawyers …

 

Title: Lawyer’s Guide to Understanding The Legal Risks of ICOs

Author: National Law Review

Date: 3 April 2018

URL: https://www.natlawreview.com/article/lawyer-s-guide-to-understanding-legal-risks-icos

Extract: 

Where there are profits to be won, lost or stolen, then governments and their rules, regulations, and laws surely follow. So it is with cryptocurrency and ICOs.

The first bitcoin appeared on the cyber-scene in 2009 when the anonymous person or group called Satoshi Nakamoto created the first Bitcoin block. Since then, the exchange of Bitcoin, Ethers and other cryptocurrencies have reached a fever pitch, with millions of currency being won and lost sometimes in a matter of minutes.

The foundation of cryptocurrency is based on blockchain. Simply put, blockchain is an immutable, anonymous, unhackable, decentralized ledger technology system held on millions of computers, simultaneously, throughout the world.

ICOs, or initial coin offerings, are deliberately based on IPOs, but without the laws and regulations attached to IPOs. Hence, we have the financial version of the Wild West Show. That show is about to be closed down.

As an Attorney, if your client is involved in ICO’s, be prepared for the genesis of government systems designed to reel in some of the wild out of the cryptocurrency frontier. Several governments worldwide are carefully hashing out the complicated, uncertain web of laws and regulations that may apply.

 

Title: China Holds Lion’s Share of Blockchain Patents

Author: PYMTS.com

Date: 26 March 2018

URL: https://www.pymnts.com/blockchain/2018/half-blockchain-patent-applications-china/

Extract: 

New data shows that China filed the most blockchain patent applications in 2017.

According to the Financial Times, data from the World Intellectual Property Organization database showed that more than half of the 406 blockchain patent applications filed last year were from China. And of the top nine companies that filed such patents between 2012 and 2017, six were Chinese, with Beijing Technology Development leading the pack.

“Companies are moving fast in order to protect their ideas in new areas of technological development — long before the technology actually goes to market,” said Alex Batteson, editor at Thomson Reuters’ Practical Law.

China filed 225 of the blockchain patents last year and 59 in 2016, followed by the U.S. (91 in 2017 and 21 in 2016) and Australia (13 last year and 19 in 2016).

Among the companies who have filed blockchain patents, Bank of America applied to patent a technology that facilitates “person-to-person alias-based payments.” In addition, BT Group is trying to patent a technology that can detect attacks on blockchain, and MasterCard has filed a patent for a blockchain-based method for tracking payments and uploading data on to the blockchain at the point of sale.

 

Title: FisherBroyles Bags Blockchain, Fintech Pro From Sheppard Mullin

Author: The Recorder

Date: 29 March 2018

URL: https://www.law.com/therecorder/2018/03/29/fisherbroyles-bags-blockchain-fintech-pro-from-sheppard-mullin/

Extract:

Expert Adam Ettinger has left Sheppard, Mullin, Richter & Hampton to join cloud-based firm FisherBroyles as a partner and co-chair of its financial technology and blockchain practice group.

At FisherBroyles, a so-called virtual law firm that has grown rapidly in recent years, Ettinger will work out of Los Angeles and Palo Alto. His new firm’s “cloud-commuting” model offers a greater measure of flexibility, both in terms of hourly rates and work-life balance.

 

Title: Cryptocurrency Litigation Tracker Launched By Law Firm Morrison Cohen

Author: Block Tribune

Date: 2 April 2018

URL: http://blocktribune.com/cryptocurrency-litigation-tracker-launched-by-law-firm-morrison-cohen/

Extract: 

New York-based law firm Morrison Cohen LLP has introduced a special tracker that aims to provide updates and information on all active legal proceedings in the United States involving cryptocurrency companies.

Called Moco Cryptocurrency Litigation Tracker, the tracker offers heightened transparency with regards to the legal affairs of crypto companies. It will maintain a running list of regulatory actions, private litigation, and regulatory pronouncements regarding cryptocurrency, initial coin offerings (ICO), and blockchain-related litigation.

The tracker seeks to serve as a clearinghouse for the industry to keep track of trends in order to know what the regulators and plaintiffs’ lawyers are thinking, both to prevent against future litigation and to develop defenses to current actions. The tracker will allow prospective investors to immediately determine whether or not a company is presently embroiled in any legal action. The service also provides links to all documents related to the listed cases, including final orders.

 

Title:  Blockchain Bundesverband Publishes Recommendations for Regulating Initial Coin Offerings

Author: Crowdfund Insider

Date: 9 April 2018

URL: https://www.crowdfundinsider.com/2018/04/131685-blockchain-bundesverband-publishes-recommendations-for-regulating-initial-coin-offerings/

Extract:

Blockchain Bundesverband has published an extended version position paper on regulating initial coin offerings (ICOs). This is a follow on publication from a shorter document published this past February. The group seeks to advocate for a regulated market for ICOs in Europe.

The aim of this most recent paper is to analyze the status quo of the open legal issues of token sales in Europe (under EU law).

The document also provides an overview of national rules and / or  issues related to EU-based or German law.

The paper is broken up into six different sections, as follows:

  • Objectives and recommendations for action
  • An analysis and assessment of the current regulatory framework.
  • Examine if and when tokens can be considered securities
  • The fourth part is devoted to the issuance of tokens, focusing on the issuer’s obligation to provide information and commitments related to money laundering prevention.
  • Part five addresses the existing rules of securities trading and their applicability to token sales.
  • The sixth part examines the authorization requirements for token-related services

 

Title:  Kyrgyzstan Has Blockchain-Friendly Legal System, Report Says

Author: Cryptovest

Date: 11 April 2018

URL: https://cryptovest.com/news/kyrgyzstan-has-blockchain-friendly-legal-system-report-says/

Extract: 

The legal ecosystem in the Kyrgyz Republic offers favorable conditions for blockchain development, according to a recent report titled “The Legal Status of Blockchain Technology in Kyrgyzstan.” The report was commissioned by the Kyrgyz Stock Exchange and the International Finance Centre Development Agency and prepared by Geneva-based law firm John Tiner & Partners. The paper focuses on legal aspects related to blockchain technology, cryptocurrency trading, crypto mining, crypto assets, and initial coin offerings (ICOs).

Read more: https://cryptovest.com/news/kyrgyzstan-has-blockchain-friendly-legal-system-report-says/

 

Title:  Law firm Nixon Peabody joins Wall Street Blockchain Alliance

Author: Finextra

Date: 12 April 2018

URL: https://www.finextra.com/pressarticle/73428/law-firm-nixon-peabody-joins-wall-street-blockchain-alliance

Extract:

The Wall Street Blockchain Alliance (WSBA), an industry leading non-profit trade association with a mission to guide and promote comprehensive adoption of blockchain technology around the world, is proud to announce that the global law firm of Nixon Peabody LLP has joined the organization as a corporate member.

“Blockchain is revolutionizing the way the marketplace conducts business,” said Eric Paley, a member of Nixon Peabody’s Blockchain Technology and Digital Assets team. “Our team leverages its global strengths in practice areas such as securities, private fund formation, cross-border transactions, energy, real estate, health care and privacy, and intellectual property to help companies create, integrate and understand these technologies to advance their business goals and remain relevant competitors in the future.”

“We are very pleased to have Nixon Peabody join the family of WSBA corporate members,” added Ron Quaranta, Chairman of the WSBA. “As a leading global law practice, Nixon Peabody is at the forefront of blockchain and cryptoasset adoption across worldwide markets. We look forward to collaborating with the firm and working with them as part of our Legal Working Group, as we explore and define the legal implications of blockchain, ICO’s, cryptoassets and more.”

 

Title: A 200-YEAR-OLD IDEA OFFERS A NEW WAY TO TRACE STOLEN BITCOINS

Author: Wired

Date: 5 April 2018

URL: https://www.wired.com/story/bitcoin-blockchain-fifo-dirty-coins/

Extract: 

But a group of Cambridge cybersecurity researchers now argues that one can still distinguish those contraband coins from the legitimate ones that surround them, not with any new technical or forensic technique, but simply by looking at the blockchain differently—specifically, looking at it more like an early 19th century English judge.

In a paper published last week, the Cambridge team argues for a new way of tracing “tainted” coins in the blockchain, particularly ones that have been stolen or extorted from victims and then sent through a series of transactions to hide their ill-gotten origin. Rather than try to offer any new detective tricks to identify the source of a Bitcoin transaction hiding behind a pseudonymous address, their idea instead redefines what constitutes a dirty bitcoin. Based on a legal precedent from an 1816 British court decision, they posit that the first coin that leaves a Bitcoin address should be considered the same coin as the first one that went into it, carrying with it all of that coin’s criminal history. And if that coin was once stolen from someone, he or she may be allowed to claim it back even after it has passed through multiple addresses.

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