Why I am launching Law & Blockchain
And how it could bring value to 4 distinct audiences.
It has become abundantly clear to me: Distributed ledger technology (DLT) will have a big impact on many industries. It has the potential to remove economic inefficiencies in many areas, and will inevitably see an increasing amount of applications over time.
Legally however, it is very much a grey area. Through www.lawandblockchain.eu I want to contribute to navigating this legal uncertainty. On it, I will gather available research, collect news and share my own insights.
Legal challenges in a rising industry
During my LLM in International Business Law at Tilburg University, I started to become aware of both the potential and the legal challenges of DLT. With the exception of the internet before it, there has never been a new technology that challenged our legal frameworks to such an extend.
The very nature of DLT makes application of existing legal frameworks difficult. Distributed systems, cryptocurrencies, decentralized autonomous organisations, smart contracts and initial coin offerings are all challenging how we have structured legal mechanisms across jurisdictions.
Currently, regulators are taking a wait-and-see approach: they don’t have a clue how this wave of innovation will play out yet… You can’t blame them though, because, at the moment, no one really has. Legal challenges will keep emerging whenever new technologies come in contact with old legislation. The problem is that the potential of technology grows exponentially, while legal systems are slow by nature .
Over the last year I started developing a keen passion for the legal challenges that are arising. My enthusiasm for the intersection between law and blockchain has been growing steadily and today, I’m launching www.lawandblockchain.eu.
Through Law & Blockchain, I hope to provide some clarity in a field that is plagued by legal uncertainty. I will be sharing my insights on relevant legal topics for others to freely enjoy.
The website is subdivided in four sections:
- News: A collection of news on law & blockchain from a variety of sources.
- Blog: My personal insights on issues related to law & blockchain.
- Research: A collection of all publically available academic research.
- Blockchain 101: Informative guide about the basics of DLT
Who is Law & Blockchain for?
Of course, the website is interesting for everyone that shares my enthusiasm. Still, there are four groups in particular that we should distinguish:
1. The ‘Crypto Industry’
There are many misconceptions in crypto. Most notably, the ideas that law does not apply in the space or alternatively, that law is simply not needed. While the law may be dull and the technology exciting, the impact of the law cannot be simply wished away. Likewise, the fact that something is distributed or automated, does not mean that risks suddenly vanish.
Unawareness or a lack of interest in the relevant regulations is dangerous for developers and entrepreneurs. It could result in serious legal consequences. Take for example the liability that could arise from launching an initial coin offering with a token that resembles a security. The sale of unregistered securities is a serious offense in virtually any jurisdiction. (note: I am not saying that all tokens are securities).
Another example is that in many jurisdictions, merely running a node could potentially make you liable for losses assumed by third parties as a result from risks created by the ledger. One can also imagine exchanges being liable for the sale and promotion of unregistered securities.
Even worse, the above risks combined could mean that running a node for a network that hosts a decentralized exchange could make you liable for selling unregistered securities as well!
I am not saying that this is desirable in a normative sense, but these are examples of possible risks that should be accounted for. Unawareness of these risks makes this impossible. It is therefore crucial for innovators to be aware of all possible legal consequences, so they can act accordingly.
To properly regulate a highly technical space with the potential to disrupt many industries, regulators need to be well-informed. They need to be aware of the potential in the first place and give innovation room to ‘do its thing’.
At the end of the day, regulators will have to do a balancing act between protecting vested interests (e.g. the protection of investors or preventing money laundering) and crafting regulation that does not stifle innovation. This is an incredibly difficult exercise.
To successfully perform this exercise, they need to be aware of all possible effects of their regulation, both now and in the future. Naturally, this is not always possible, but providing regulators with quality information is nonetheless a prerequisite to good legislation.
Doctrinal research has a great role to play in thinking of the possible applications, risks and future challenges of DLT. Sadly, many tend to dismiss the influence of academics on the space, even though the concept of cryptocurrencies itself was built from forgotten ideas in research literature.
As I’ve mentioned, good information is a prerequisite to good legislation. Through research literature, academics are thus vital in the space of ‘law and blockchain’.
www.Lawandblockchain.eu will therefore also function as a hub to gather all openly available research on the space, for innovators, regulators and academics alike to explore.
Finally, it is clear that cases involving DLT will increasingly come in contact with our traditional legal system. As such, lawyers should be aware of how to apply relevant legislation. Not only will we see private litigation relating to DLT, law firms will increasingly be asked to provide legal advice relating to both permissionless and permissioned ledgers.
To properly do this, they need an understanding of the complexities of these technologies.
Finally, we could see a future where smart contracts will increasingly be used for a number of purposes (financial products, escrows etc.). Lawyers should understand what they are, how they work, how to interpret them and perhaps even how to draft them.
My personal goals
Of course, not all is altruistic. By actively contributing in the community and sharing my insights, I will train myself to think critically about the challenges between the law and blockchain technologies. Eventually, the goal is to profile myself as a knowledgeable source on the subject. In the long run, this is a space that I am passionate about and want to work in.
Every market is a question of supply and demand, and I know that there will be a considerable demand for knowledgeable lawyers in DLT. I also know that the supply will take a while to really develop, as universities will be slow in teaching on the subject. I am positive about the future prospects of both the space and my career in it, regardless of whether that is in academics, the private or the public sector.
“Choose a job you love, and you will never have to work a day in your life” — Confucius