Law Commons^™

Emerging Technology's Unfamiliarity With Commercial Law, Carla L. Reyes

Faculty Journal Articles and Book Chapters

Over the course of a three-year, collaborative process that was open to the public, the Uniform Law Commission (ULC) and the American Law Institute (ALI) undertook a project to revise the Uniform Commercial Code (UCC) to account for the impact of emerging technologies on commercial transactions. The amendments, approved jointly by the ULC and ALI in July 2022, touch on aspects of the entire UCC, but one change has inspired ire and attracted national media attention: a proposed revision to the definition of “money.” The 2022 UCC Amendments alter the definition of “money” to account for the introduction of central …

If Rockefeller Were A Coder, Carla L. Reyes

Faculty Journal Articles and Book Chapters

he Ethereum Decentralized Autonomous Organization (“The DAO”), a decentralized, smart contract-based, investment fund with assets of $168 million, spectacularly crashed when one of its members exploited a flaw in the computer code and stole $55 million. In the wake of the exploit, many argued that participants in the DAO could be jointly and severally liable for the loss as partners in a general partnership. Others claimed that the DAO evidenced an entirely new form of business entity, one that current laws do not contemplate. Ultimately, the technologists cleaned up the exploit via technological means, and without engaging in any further …

Distributed Governance, Carla L. Reyes, Nizan Geslevich Packin, Bejamin Edwards

Faculty Journal Articles and Book Chapters

Distributed ledger technology enables disruption of traditional business organizations by introducing new business entities without the directors and officers of traditional corporate entities. Although these emerging entities offer intriguing possibilities, distributed entities may suffer significant collective action problems and expose investors to catastrophic regulatory and governance risks. Our essay examines key considerations for stakeholders and argues that distributed entities must be carefully structured to function effectively.

This essay breaks new ground by critically examining distributed entities. We argue that a distributed model is most appropriate when DLT solves a unique corporate governance problem. We caution against ignoring the lessons painstakingly …

Conceptualizing Cryptolaw, Carla L. Reyes

Faculty Journal Articles and Book Chapters

Sweden transfers its real property recording system to the blockchain, a software protocol that enables public, cryptographically secure transaction verification without reliance upon a trusted third party. Dubai plans to issue blockchain-based government documents. The United States Department of Health and Human Services investigates blockchain-based systems for managing health data. Illinois explores blockchain-based applications for use in the Illinois government. News of governments and public-private partnerships developing blockchain-based legal applications increasingly splash across the headlines; however the law-makers using blockchain and other Distributed Ledger Technology (DLT) systems to implement legal processes do not systematically consider the broader implications of their …

Moving Beyond Bitcoin To An Endogenous Theory Of Decentralized Ledger Technology Regulation: An Initial Proposal, Carla L. Reyes

Faculty Journal Articles and Book Chapters

Current regulation of decentralized ledger technology leaves industry actors in confusion, facing high risk, and confronting significant disincentives to innovate. This Article argues that an endogenous regulatory approach offers an avenue for alleviating these obstacles while still providing sufficient tools for government oversight. In particular, this Article proposes regulation that is endogenous at two levels: first, in that it is created through an iterative, cooperative process involving both regulators and industry actors, and second, that it is implemented as regulation-through-code, that is, regulation written into the code itself. In so doing, this Article also investigates whether successful implementation of such …