ass'n stuff

Disclaimers

This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services.

Recordings

I have recorded my thoughts on some legal engineering and legal issues in Web3 topics (i.e., cryptolaw).

• Trademark DAO
  • My thoughts on setting up a Trademark DAO, a DAO dedicated to managaing a federally-registered trademark. I had some thoughts on developing a new market for licesning misuse and infringement bounties.
• Business Structure issues with DAOs, Wyoming DAO law, and avoiding securities issues with Cooperatives
  • Super long recording (I apologize for the length). I probably need to break this up into multiple recordings.
    • Anyway, the main business tructure issue to worry about is being classified as a general partnership, lack of limited libaility for when your partners mess up, and dealing with multiple jurisdictions.
    • I reviewed this article on the Wyoming DAO law. I thought the article made some good points. My only concern with any of these laws is that because DAOs are essentially cross-border, and primarily operate online, though these are business structure issues, I think we can analogize this issue to how we deal with international intellectual property. Because IP can cross borders very easily, national governments have worked together to decide how to reconcile their national intellectual property regimes. These are generally formalized into agreements managed by international organizations such as the WIPO Copyright Treaty . Nations adopt these agreements as treaties. This could be one approach we could use to standardize legal interpretation of DAOs across national borders. I can see a big impetus for this one for tracking down wealthy people and businesses that avoid taxes with offshore accounts (See Panama Papers ). DAOs could market themselves as a means to counter these activities and maybe even get preferential laws on this basis.
    • I then reviewed this article on using Cooperatives to avoid some securities issues. This is a very good article explaining one of the inherent benefits of the cooperative structure for Web3 projects when they are thinking of legal wrappers (and additional impetus for why Web3 founders should use Cooperatives).
      • Though, not mentioned in the article, Cooperatives also provide organizational decentralization, which is more aligned with Web3 which seeks technical decentraliation. For more thoughts on how Web3 and Cooperatives connect, please look at my article, Blockchain and the Rise of the Internet Cooperative and Fostering Worker Cooperatives with Blockchain Technology: Lessons from the Colony Project
• Issues with Copyrightable NFTs
  • In this one, I discuss the copyright issues that can arise with NFTs, and how the difference between JPEG-linked NFTs and Generative Art NFTs can lead to more or less legal uncertainty.
  • Copyright infringement can still occur with NFTs despite the popular notion that Web3 is meant to empower creators. There are cases of people stealing other people’s copyrightable works and then auctioning them as NFTs.
  • The copyright issues do not go away with NFTs, but they do make it easier to figure out who our defendant should be for copyright infringement because the infringer’s activities are recorded on the blockchain.

Writings

Here are my short writings (more atomic essays than anything else).

• Blockchain for Compliance
  • Nice article dsicussing blockchain use cases for compliance. The use cases center on Know-Your-Customer (KYC), proof of process, and anti-money laundering (AML). A big point here is that organizations can optimize their regulatory compliance via blockchain because customer data is publcily- or permissioned-accessible, smart contracts can automate KYC/AML tasks such as screening, customers can provide and self-manage their own digital identities, and the blockchain’s tamper-proof feature helps regulators feel confident that organizations are not skimping on their regulatory compliance.
  • Some quotes:

    • Blockchain’s immutability also lends itself to the application of proof-of-process for compliance.  Blockchain could be used to keep track of the steps required by regulation. Recording actions and their outputs immutably in a blockchain would create an audit trail for regulators to verify compliance.  Almost as importantly, regulators could have read-only, near real-time access into the private blockchain of financial organizations.

    • Such a change could reduce dramatically the time and effort (and therefore cost) that financial institutions spend on regulatory reporting, as well as improving the quality, accuracy and confidence of and in the process.

    • Banks and other financial institutions have to complete many tasks and steps as a part of the onboarding process for new clients. In addition to data collection, there are important rules around validation, confirmation and verification to be completed before new clients can be onboarded.  In some markets, the process can take several months.  Many of the steps could be eliminated if the information existed already in a secure, tamper-resistant database – an immutable blockchain.

    • A further possible extension is blockchain as a digital identity management grid, with all information required for screening and compliance being held about individuals and/or firms in a chain.  This would reduce KYC/AML processes to simple automated checks of a blockchain-powered, marketwide utility.  It is likely that sharing sensitive information about customers between financial organizations will start to become the norm once trust is established in a blockchain-enabled ecosystem.  Interestingly, SWIFT has announced that their own KYC registry, which already includes more than 1,000 member banks, will be shared with trusted partners and customers in the future.  This is one of the early steps to fully trusted digital identities in the industry – which must be the target business and legal outcome.

Data

I might also make a short article/review on legal issues with data on how data coops get around them

Probably review # A Relational Theory of Data Governance

Data’s fungibility and representative nature raise practical challenges for management in a trust, not legal ones. While any data could be included in a trust, it may be practically difficult for a trust to manage data if the information the data represents can be obtained via parallel methods, or if the settlor lacks a monopoly over the data source.