A conference about the law’s future titled Block (Legal)Tech, held at the Chicago-Kent College of Law, attracted an A-list collection of speakers and panelists exploring the evolving digital asset landscape and its impact on legal practice. Some 600 attendees from across the country gathered to hear from a number of industry leaders, top blockchain lawyers, educators, and law enforcement officials, including the Treasury Department’s FinCEN Director Kenneth Blanco.
Advancing innovation while protecting the integrity of the financial system. One of the highlights of the conference were the remarks of FinCEN Director Kenneth Blanco and then a follow up fireside talk. Blanco was appointed to the director position in December 2017. Some of Blanco’s main points included:
- FinCEN is swiftly and continuously building its capabilities and understanding in the emerging technologies space to rapidly identify risks, close gaps, and support responsible innovation through clarity.
- Suspicious Activity Reporting (SAR) reporting is of critical importance to FinCEN’s work in the virtual currency space to help identify emerging threats and typologies for the sake of the victims that are targeted, for financial institutions to better understand and effectively report on these threats, and for public trust and reliance in the good work being done in the financial innovation space.
- FinCEN will continue to update its guidance relating to emerging technology, such as virtual currency, in close dialogue with industry, so that it improves its understanding of both the risks and the clarity that is needed to support responsible innovation.
- FinCEN will aggressively pursue individuals and companies who do not take their obligations under U.S. law seriously, whether by targeting victims or enabling those who do.
The genie is not going back into the bottle. Joshua Klayman, a leading blockchain legal thinker and founder of Klayman LLC, pointed to reports that over $10 billion has been raised in ICOs in the first half of 2018, notwithstanding the complex and sometimes contradictory regulatory framework in the U.S. Klayman noted, “In our blockchain space, the very speed of change appears to be accelerating. What we tinfoil hat wearers hoped for in 2016 is beginning to happen…Bitcoin futures exist in our present. Hedge funds are trading cryptocurrency. Governments around the globe are moving forward with blockchain technology initiatives.” Klayman also noted that blockchain developments have impacted virtually every legal practice area.
To escape the laws of gravity, it helps to understand them. Stephen Palley, a partner with Anderson Kill, who described himself as someone who sues insurance companies for a living, touched upon a number of crypto-law counsel conundrums. On the subject of considering whom to sue in the crypto space, he observed that a DAO (“decentralized autonomous organization," which might include miners, nodes, token-holders or a combination of some or all of these) sounds to him a lot like an unincorporated association, and that’s not a good thing for a DAO.
Beware blockchain’s treacherous vocabulary. Angela Walch, a professor at St. Mary’s University School of Law, implored blockchain lawyers to be the grownup in the room and continuously bring their critical thinking skills to bear in the digital assets arena. Walch bemoaned legislation passed in Arizona where “blockchain technology” was defined unartfully and which she observes will create more problems than it solves. Unfortunately, adding insult to injury, “the Arizona legislation has served as a model for other states,” observed Walch. Walch underscored the importance of lawyers’ gatekeeper role. “Lawyers play a critical role. They must force their clients to be specific and precise,” she concluded.
Hope for a brighter tomorrow. Alexandra Prodromos, a business development manager at Bloq, pointed to the explosion in ICO activity at the end of 2017 and its carry through the first half of 2018. Prodromos also optimistically pointed to the recent comments from the SEC’s Corporation Finance Director William Hinman about the ether token not being deemed a security at this time.
A word about Kent-Law School and legal technology. Chicago-Kent has historically had a strong commitment to preparing students for technological innovation and new frontiers in the legal industry. Conference organizers Professor Daniel Martin Katz and Nelson Rosario were also the instructors for one of the first Blockchain Law classes offered in the world earlier in 2018. The law school also features the Law Lab, an interdisciplinary teaching and research center focused on legal innovation and technology. The Block (Legal)Tech conference was part of the law school’s ongoing efforts to bring high quality legal education to the legal and business communities.
A word about Kent-Law School and legal technology. Chicago-Kent has historically had a strong commitment to preparing students for technological innovation and new frontiers in the legal industry. Conference organizers Professor Daniel Martin Katz and Nelson Rosario were also the instructors for one of the first Blockchain Law classes offered in the world earlier in 2018. The law school also features the Law Lab, an interdisciplinary teaching and research center focused on legal innovation and technology. The Block (Legal)Tech conference was part of the law school’s ongoing efforts to bring high quality legal education to the legal and business communities.