As discussed in Part I of this series, state DAO LLC laws have been enacted in the last several years and have become one option for decentralized autonomous organizations (or DAOs) to create a so-called “legal wrapper” or real-world corporate entity to shield individual members from liability. In Part II we will look at some … Continue Reading
Little-known legal trivia: In 1977 Wyoming was the first state to pioneer the LLC, which is now a commonly applied legal innovation. Fast forward more than forty years…in July 2021, Wyoming again tried to be at the vanguard of new corporate formations and passed legislation that recognized decentralized autonomous organizations, or DAOs, as legally distinct … Continue Reading
Minters of collectible non-fungible tokens (NFTs) have taken a wide range of approaches. In addition to variations in the means of distribution, token standards, governing smart contracts and platforms on which initial sales or transfers are made, the terms, conditions and content licenses (or lack thereof) under which users take possession of an NFT often … Continue Reading
The concept of the “metaverse” has garnered much press coverage of late, addressing such topics as the new appetite for metaverse investment opportunities, a recent virtual land boom, or just the promise of it all, where “crypto, gaming and capitalism collide.” The term “metaverse,” which comes from Neal Stephenson’s 1992 science fiction novel “Snow Crash,” is generally used … Continue Reading
On August 6, 2021, the Securities and Exchange Commission (SEC) announced that it had charged two men, Gregory Keough and Derek Acree, and their company, Blockchain Credit Partners, doing business as DeFi Money Market (collectively, the “Respondents”), for unregistered sales of more than $30 million of securities using smart contracts and so-called “decentralized finance” (DeFi) … Continue Reading
The combination of smart contracts with blockchain technology has created new opportunities to conduct business, realize efficiencies and establish legally enforceable digital contracts. In this two-part video series, Proskauer’s Jeffrey Neuburger and Wai Choy share: Part 1 (Smart Contracts: Benefits & Legal Enforceability): An overview of smart contracts and their use cases, and the law … Continue Reading
On March 19, 2020, the U.S. Department of Homeland Security, Cybersecurity and Infrastructure Security Agency (CISA), issued Guidance on the essential critical infrastructure workforce needed to ensure national resilience during the COVID-19 response. CISA developed its initial list of critical infrastructure workers to help state and local officials determine which operations are essential to critical … Continue Reading
Once purely theoretical, “majority” or “51%” attacks on public blockchains have dealt participants a reality check: The fundamental assumption of Satoshi Nakamoto’s 2008 Bitcoin whitepaper (that computing power will remain sufficiently decentralized in blockchain networks that rely on a “proof-of-work” consensus mechanism) can in practice actually be exploited to enable double spending. “The system is … Continue Reading
As we highlighted in our recent Practical Law Practice Note, Smart Contracts: Best Practices, various state lawmakers are paving the way for widespread use of blockchains and smart contracts in commerce. For example, on January 1, 2020, the Illinois Blockchain Technology Act (BTA) went into effect, resolving some legal uncertainties around the legal status of … Continue Reading
Proskauer authored an in-depth Practice Note published by Practical Law, which details best practices for the use of smart contracts on blockchains. It discusses functional and legal considerations for both standalone smart contracts and smart contracts used in conjunction with traditional written contracts (hybrid smart contracts) and explores the extent to which smart contracts can independently be legally binding. The full text … Continue Reading
We are happy to report that our recent in-depth Practice Note on Blockchain as applied to Supply Chain Management was selected to appear as the cover story for the June/July issue of Practical Law – The Journal. Read the full text here.… Continue Reading
Proskauer partners Daniel Ganitsky and Jeff Neuburger address five factors for private equity firms to consider when evaluating the critical business decision of implementing blockchain-based technology solutions for their portfolio companies: Daniel Ganitsky: Technology is causing private equity firms to deal with a whole new set of questions for their portfolio companies. The use of blockchain technology is one … Continue Reading
Proskauer authored a Practice Note published by Practical Law, which provides an overview of the use of blockchain and smart contracts in the supply chain context, including the legal issues, concerns, benefits and risks associated with its use. It includes, among other topics, information on key distinctions between public and private blockchains and important considerations regarding the use of … Continue Reading
Recently at a conference in Dubai, Brian Quintenz, who is a Commodity Futures Trading Commission (CFTC) Commissioner, expressed his personal opinion (rather than the views of the CFTC) on the conceptual challenges in applying the CFTC’s regulatory oversight to, and fostering accountability for, smart contracts that reside on decentralized blockchains. In particular, Quintenz conveyed his … Continue Reading
When a smart contract coding vulnerability resulted in the Parity wallet “freeze” that compromised over $150 million worth of user funds, we discussed the pitfalls of unsecure code in the context of cryptoassets and the extent to which software developers might be held liable to their users for losses arising from mistakes in, or the … Continue Reading
Virtual worlds similar to the OASIS in Steven Spielberg’s upcoming film Ready Player One may be closer than we think – and provably scarce, blockchain-based digital assets could provide the leap forward that gets us there. Already, developers are testing early implementations. Since CryptoKitties launched at the end of 2017, promptly causing a traffic jam … Continue Reading
On a daily basis, companies are announcing new developments on the adoption of blockchain in core business operations. However, many of these use cases present unique legal issues. In order to provide some clarity on some of these issues, and perhaps to offer a blockchain-friendly environment for the operation of blockchain companies, state legislatures around … Continue Reading
While there has been a great deal of attention being paid lately to the use of blockchain for the issuance and investment (or speculation) in cryptocurrencies, other enterprise-based applications of blockchain continue to be deployed with increasing frequency but less fanfare. One of the more recent deployments of blockchain – viewed as a milestone in … Continue Reading
The recent Parity wallet “freeze” provides yet another example of a coding vulnerability in a smart contract (rather than a flaw in the underlying blockchain or cryptography) resulting in an exploit that compromises cryptocurrency worth millions. It again highlights some of the pitfalls of insecure code in the context of digital assets and raises questions … Continue Reading
New York Assemblyman Clyde Vanel has introduced proposals in the state legislature for four laws which, if passed, could transform how the State of New York interacts with and views blockchain technology. The first proposal, NY A08780, would amend the state’s technology law to allow for signatures obtained via blockchain technology to be recognized as valid … Continue Reading
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