Legal Management of Cross-Jurisdictional Blockchain Operations

Legal Management of Cross-Jurisdictional Blockchain Operations

Date(s) - 01/05/2019
9:00 am - 1:00 pm



Various bodies are in the process of formulating blockchain regulatory frameworks. However, there is no international framework in place for blockchain activities yet. Blockchain activities are presently governed by a patchwork of varying—and possibly conflicting—national and regional regulatory regimes. Any blockchain venture seeking early market share should be aware of the major legal issues invoked by blockchains across jurisdictions. This seminar discusses some of the primary blockchain law issues that will need to be handled across jurisdictions, sampling primarily from Canada and the U.S with regional touchpoints in the UK and Europe. The information shared will comprise a general base, to be further developed and refined by lawyers across jurisdictions in respect of any given blockchain venture or operation.

This seminar will provide a practical overview of blockchain law from its three primary sub-groups:

1. Corporate Funding by ICO/ITO/STO (Initial Coin/Token Offerings, or Security Token Offerings);
2. Ongoing Blockchain Operations; and
3. Enforcement/Litigation.

Course details:

I. Introduction

  • a love-hate story: blockchain and the law;
  • disclaimer.

II. Corporate Funding by ICO/ITO/STO

  • digital tokens in the context of securities issues, distributions, and registration;
  • persuasive “soft law” released by the U.S. Securities Exchange Commission, and the Commodity Futures Trading Commission;
  • the latest statements by the Ontario Securities Commission;
  • local compliance is not the same as global compliance;
  • secondary market trading issues;
  • sandbox regimes;
  • the Global Financial Innovation Network, including regulatory bodies from the UAE, Canada, and the U.S.;
  • practical strategies to work within the rules;
  • UAE’s reported intention to permit ICOs as a corporate funding option.

III. Ongoing Blockchain Operations

  • ongoing issues in securities law, and over-the-counter trades;
  • anti-money laundering and anti-terrorist financing regimes, including the importance of knowing your customer;
  • problems posed by virtual private networks;
  • income tax and tax classification of digital assets;
  • tax on digital tokens as goods or services;
  • contracting in cryptocurrency and the definitions of “money” and “funds”;
  • financial institution issues;
  • fiduciary issues;
  • payments system issues;
  • monetary/financial instruments;
  • IT contracts including: (a) the importance of legal contracts for smart contracts, (b) third party vendor agreements, (c) node agreements, and (d) mining coalition agreements;
  • data privacy and use of a distributed ledger to point to centrally managed cloud storage;
  • AI & algorithmic governance in smart contracts;
  • insurance considerations;
  • corporate veil issues (e.g. regarding operations of a foreign wholly owned subsidiary);
  • public and private international law;
  • division of legislative powers and in the context of government blockchain operations;
  • export controls;
  • optimistic outlook for blockchain and cryptocurrency regulations in the UK / EU.

IV. Enforcement/Litigation

  • local and cross-border market manipulation offences;
  • local and cross-border regulatory litigation;
  • domestic rights when a foreign exchange goes bankrupt;
  • private disputes over tokens in the context of public and private international law;

V. Final Thoughts

  • Market opportunity and cross-jurisdictional regulatory risk;
  • “Sharding” as a potential response to conflicting rules across jurisdictions
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