Law Commons^™

Washington’S 'Cutting-Edge' Technology Solution To Combating Sales Tax Fraud: Real-Time Data (Now), Real-Time Remittance In The Future, Richard Thompson Ainsworth, Robert Chicoine, Andrew Leahey, Sunder Gee

Faculty Scholarship

Globally, consumption tax compliance (value added tax and retail sales tax) has gone digital – digital invoices are becoming mandatory, centralized monitoring of transactions and tax payments are increasingly common, and artificial intelligence is assessing fraud risks in real-time. When tax is collected, it is increasingly being remitted in near-real-time. This is the trajectory for the modern retail sales tax (RST) imposed by most states in the US. While this may appear to be revolutionary to the average American, it is a well-worn path among global nations using the value added tax (VAT). The RST will eventually be following suit. …

Cryptocurrencies And Code Before The Courts, Vincent Ooi, Kian Peng Soh

Research Collection Yong Pung How School Of Law

In the rapidly developing cyber sphere dominated by cryptocurrencies and code, it is perhaps not uncommon for firms to focus on cutting-edge technological developments leaving the law behind as an afterthought. B2C2 Ltd v Quoine Pte Ltd (‘B2C2’)1 may serve as a timely reminder of the importance of the legal principles supporting e-commerce and Fintech. In the first case of its kind, B2C2 raised several key questions before the Singapore International Commercial Court (‘SICC’), seeking clarification on how the established legal concepts of breach of trust, mistake and unjust enrichment might apply in the context where an automated contract-forming software …

Money's Past Is Fintech's Future: Wildcat Crypto, The Digital Dollar, And Citizen Central Banking, Robert C. Hockett

Cornell Law Faculty Publications

This Essay argues that crypto-currencies will soon go the way of the ‘wildcat’ banknotes of the mid-19th century. As central banks worldwide upgrade their payments systems, the Fed will begin issuing a ‘digital dollar’ that leaves no licit function for what the Author calls ‘wildcat crypto.’ But the imminent change heralds more than a shakeout in fintech. It will also make possible a new era of what the Author calls ‘Citizen Central Banking.’ The Fed will administer a national system of ‘Citizen Accounts.’ This will not only end the problem of the ‘unbanked,’ it will also simplify monetary policy. Instead …

Intermediated Securities Holding Systems Revisited: A View Through The Prism Of Transparency, Thomas Keijser, Charles W. Mooney Jr.

All Faculty Scholarship

This chapter explains several benefits of adopting transparent information technology systems for intermediated securities holding infrastructures. Such transparent systems could ameliorate various prevailing problems that confront existing tiered, intermediated holding systems, including those related to corporate actions (dividends, voting), claims against issuers and upper-tier intermediaries, loss sharing and set-off in insolvency proceedings, money laundering and terrorist financing, and privacy, data protection, and confidentiality. Moreover, transparent systems could improve the functions of intermediated holding systems even without changes in laws or regulations. They also could provide a catalyst for law reform and a roadmap for substantive content of reforms. Among potential …

Blockchain-Based Token Sales, Initial Coin Offerings, And The Democratization Of Public Capital Markets, Jonathan Rohr, Aaron Wright

Articles

Best known for their role in the creation of cryptocurrencies like bitcoin, blockchains are revolutionizing the way technology entrepreneurs finance their business enterprises. In 2017 alone, tech entrepreneurs raised over $6 billion through the sale of blockchain-based digital tokens, with some sales lasting mere seconds before selling out. In a token sale, also referred to as an “initial coin offering” or “ICO,” organizers of a project sell digital tokens to members of the public to finance the development of new technological platforms and services. After the initial sale, cryptocurrency exchanges scattered across the globe list tokens for trading and facilitate …

The Limits Of Smart Contracts, Jens Frankenreiter

Ira M. Millstein Center for Global Markets and Corporate Ownership

This essay investigates the potential of smart contracts to replace the legal system as an infrastructure for transactions. It argues that (contract) law remains relevant for most transactions even if they are entirely structured by way of smart contract. The reason for this is that the power of smart contracts to create and enforce obligations against attempts by the legal system to thwart their execution is limited. These limitations are most relevant for obligations to perform certain actions outside the blockchain, but also apply to other obligations contingent on facts outside the records stored on the blockchain.

Panel 2: Art Law And Blockchain, Tonya M. Evans, Derek Fincham, Katya Fisher, Jeanne L. Schroeder

Law Faculty Scholarship

Panel presentation on Art Law and Blockchain at 2019 AELJ Spring Symposium: Digital Art & Blockchain.

The Role Of International Rules In Blockchain-Based Cross-Border Commercial Disputes, Tonya M. Evans

Law Faculty Scholarship

[excerpt] The concept of online dispute resolution (ODR) is not new. 1 But, with the advent of Web 3.0, the distributed web that facilitates pseudonymous and cross-border transactions via blockchain's distributed ledger technology, 2 the idea of, and pressing need for, appropriate dispute resolution models for blockchain-based disputes to support this novel system of distributed consensus and trust of which blockchain proponents boast, is a primary concern in rapid development. 3 The common goal of each project is to utilize smart contracts to facilitate "superior, quicker[,] and less expensive proceedings by eliminating so many of the tedious and protracted trappings …

Crypto-Concerns: A Cyberskeptic Looks For Weak Links In The Blockchain, Becky Jacobs

College of Law Faculty Scholarship

In her article, “Beyond Bitcoin: Leveraging Blockchain to Benefit Business and Society,” Professor Weldon explores the potential of blockchain technology to transform corporate governance and risk management and to promote the principles of transparency that animate various mandatorydisclosure regimes.I too am very excited by blockchain’s potential to revolutionize and make more transparent many business practices, but I also have some, pun intended, crypto-concerns. I admit that these concerns are based upon Blockchain technology interacts with the law in a number ofcontexts, corporate governance being one (as well as copyright and other IP, tax, antitrust, securities regulation, banking, criminal, corporate, maritime, …

In Code(Rs) We Trust: Software Developers As Fiduciaries In Public Blockchains, Angela Walch

Faculty Articles

A decade into Bitcoin's existence, governance questions around it and other public blockchains abound. Do these 'decentralized' structures even have governance? If so, what does it look like? Who has power, and how is it channeled or constrained? Are power structures implicit or explicit? How can we improve upon the ad hoc governance structures of early blockchains? ls ‘on-chain governance,’ like that proposed by Tezos and others, the path forward?

In August 2016, in the aftermath of the DAO theft and resulting Ethereum hard fork, I argued in American Banker that the core developers and significant miners of public blockchains …

Property, Agency, And The Blockchain: New Technology, And Longstanding Legal Paradigms, Sarah Jane Hughes

Articles by Maurer Faculty

This article, presented first as the keynote address at the February 2019 Symposium “The Emerging Blockchain and the Law” at Wayne State, explores the need for repetitive considerations of how blockchain technology affects our traditional concepts of property and agency. The article concludes that well-tested norms of property and agency may matter more, not less, when new technologies such as blockchain are used.

Beyond Bitcoin: Leveraging Blockchain To Benefit Business And Society, Rachel Epstein, Marcia Narine Weldon

Articles

No abstract provided.

Law And The Blockchain, Usha Rodrigues

Scholarly Works

All contracts are necessarily incomplete. The inefficiencies of bargaining over every contingency, coupled with humans’ innate bounded rationality, mean that contracts cannot anticipate and address every potential eventuality. One role of law is to fill gaps in incomplete contracts with default rules. The blockchain is a distributed ledger that allows the cryptographic recording of transactions and permits “smart” contracts that self-execute automatically if their conditions are met. Because humans code the contracts of the blockchain, gaps in these contracts will arise. Yet in the world of “smart contracting” on the blockchain, there is no place for the law to step …

Financial Contracting With The Crowd, Usha Rodrigues

Scholarly Works

Equity crowdfunding is broken. The current model imposes too many burdens on entrepreneurs in exchange for too little money. For alternative models, this Article looks to the time-tested venture capital financial contract, and the recent experience of initial coin offerings (ICOs). ICOs made headlines over the past two years, as the means by which blockchain technology companies raised billions of dollars to launch new cryptocurrency ventures. Although their novelty as a monetary and investing device is well known, ICOs also presented significant, unappreciated insights into financial contracting.

ICOs furnished an unprecedented experiment into how bargains would look if entrepreneurs raised …

Crowdfunding Capital In The Age Of Blockchain Based Tokens, Patricia H. Lee

All Faculty Scholarship

Less than three years ago, the Securities and Exchange Commission (“SEC”) adopted investment crowdfunding regulations (“Reg. CF”) to facilitate small companies’ efforts to raise capital and jumpstart employment, providing companies potentially one of the most disruptive transformations in capital markets.

As the lion share of securities are offered under public offerings or Reg. D safe harbor exemptions, outcomes and impacts of Reg. CF offerings are not studied or monitored to the same extent. One line of inquiry is the scope of Reg. CF, including questions about the level of company participation, the types of businesses seeking capital formation, and the …

"Gatekeepers" Are Vital Participants In Anti-Money-Laundering Laws And Enforcement Regimes As Permission-Less Blockchain-Based Transactions Pose Challenges To Current Means To "Follow The Money", Sarah Jane Hughes

Articles by Maurer Faculty

Two phenomena dominate reports about blockchain-based transactions—that they will disrupt and displace legacy banking, securities, and trade intermediaries, and that they present new or greater opportunities for hiding proceeds of crimes or corruption. This essay does not deal with the former topic. Rather, the organizers of the symposium at George Mason University’s Antonin Scalia School of Law asks me to consider the latter question. It proved to be a tough assignment.

This essay looks at the separate questions of (1) the degree to which permission-less blockchain transactions will disrupt current anti-money laundering (AML) regimes and enforcement efforts, and (2) what …

Coin-Operated Capitalism, Shaanan Cohney, David A. Hoffman, Jeremy Sklaroff, David A. Wishnick

All Faculty Scholarship

This Article presents the legal literature’s first detailed analysis of the inner workings of Initial Coin Offerings. We characterize the ICO as an example of financial innovation, placing it in kinship with venture capital contracting, asset securitization, and (obviously) the IPO. We also take the form seriously as an example of technological innovation, where promoters are beginning to effectuate their promises to investors through computer code, rather than traditional contract. To understand the dynamics of this shift, we first collect contracts, “white papers,” and other contract-like documents for the fifty top-grossing ICOs of 2017. We then analyze how such projects’ …

Is Blockchain The Next Step In The Evolution Chain Of [Market] Intermediaries?, Marcela Gomez, Pedro Bustamante, Martin B. H. Weiss, Ilia Murtazashvili, Michael J. Madison, Wilson Law, Tymofiy Mylovanov, Herminio Bodon, Prashabnt Krishnamurthy

Articles

The blockchain is a decentralized solution for handling transactions where we are concerned (among other aspects) with the accuracy and verification of transactions. One of its main promises is to eliminate the need for centralized entities or intermediaries and legal enforcement. Rather than trusting self-interested human intermediaries, the blockchain provides an alternative that relies on transparent computational protocols (Werbach 2018).

In this paper, we delve into this broker-less claim and analyze whether the blockchain needs an intermediary to allow for widespread access to its functionality and whether the blockchain itself is an intermediary. The latter would turn the blockchain into …

Ostrom Amongst The Machines: Blockchain As A Knowledge Commons, Herminio Bodon, Pedro Bustamante, Marcela Gomez, Prashabnt Krishnamurthy, Michael J. Madison, Ilia Murtazashvili, Jennifer Brick Murtazashvili, Tymofiy Mylovanov, Martin B. H. Weiss

Articles

Blockchains are distributed ledger technologies that allow the recording of any data structure, including money, property titles, and contracts. In this paper, we suggest that Hayekian political economy is especially well suited to explain how blockchain emerged, but that Elinor Ostrom’s approach to commons governance is particularly useful to understand why blockchain anarchy is successful. Our central conclusions are that the blockchain can be thought of as a spontaneous order, as Hayek anticipated, as well as a knowledge commons, as Ostrom’s studies of self-governance anticipated.