Blockchain Papers

Ben Chester Cheong, Harry Kishen

No abstract is available for this record.

Brian L. Frye

No abstract is available for this record.

Eva Micheler

Abstract This chapter explores the English law as an example of a particular model for the analysis of intermediated securities. It analyzes the rights of investors through the lens of trust law rather than through bailment and highlights the advantages and disadvantages of the no-look-through model. It also reviews cases where individuals hold a relatively small number of securities through a financial service provider, including the Duomatic principle that gives license to the court to override the formal requirements for shareholder decisions contained in the Companies Act. The chapter demonstrates why the intermediated holding structure that has evolved across the world does not sit comfortably with English law. It cites the recent scoping study conducted by the UK Law Commission combined with the UK Government’s ambition to attract a global pool of investors, which suggests that the UK Government is motivated to address the problem with the English law.

Michael Schillig

No abstract is available for this record.

Gary Low, Terence Tan

Purpose To address recent cases and the applicable legal principles relating to cryptocurrency, and to contribute to legal thought in this developing area of law. Design/methodology/approach This article considers recent cryptocurrency related cases in Singapore, Canada and the United Kingdom, and then considers the implications of the developing law in relation to proper causes of action and issues of practical asset recovery relating to the enforcement of judgments. Findings The intangible and highly movable nature of cryptocurrency places a premium on decisive asset recovery. The cases also suggest that injunctions remain a useful and effective debt recovery tool, especially when coupled with quick investigative action to trace cryptocurrency payments. However, the law remains unsettled as to the most appropriate cause of action for a claim in cryptocurrency or how a debt in cryptocurrency can be subject to execution. These issues raise the fundamental question of the nature of cryptocurrency, whether it belongs to an existing category of property, or if it is sui generis. Practical implications Cryptocurrency remains relatively novel and usage is increasing but not widespread. Users of cryptocurrency and lawyers involved in transactions or disputes involving cryptocurrency would benefit from a broader understanding of the legal issues Originality/value This article provides expert analysis from experienced litigation lawyers familiar with the concepts behind cryptocurrency.

Amy J. Schmitz

Amy J. Schmitz describes the development of contracts and the challenges in resolving disputes in this arena. She explains the need for sound dispute system design complete with an arbitration provision built into smart contracts. She is the Elwood L. Thomas Missouri Endowed Professor at the University of Missouri School of Law.

Victoria Sandberg

In the last few years, the world has witnessed a fast expansion of bitcoin and other cryptocurrencies. From being mostly associated with criminal activity in their earliest years, cryptocurrencies have now taken a step into the legal business markets. The increased use of cryptocurrencies in business and commercial transactions entails that their appearance in the insolvency proceedings can be expected in a foreseeable future. However, the fast development of cryptocurrencies means that the current regulatory frameworks around the world have not kept up with the changes, which is especially noticeable in international situations. The continuous growth of cryptocurrencies and their value indicate that they will become very interesting for insolvency practitioners in the future, but the lack of regulation and case law within this field raises the question of how they will and should be treated. 
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\nWhile cryptocurrencies continue to find their place in modern society, whether and to what extent they should be regulated in the international insolvency law is a vastly approaching issue. This thesis discusses the possibility of regulating cryptocurrencies on the international level of the insolvency law by examining firstly, the different risks and issues that the cryptocurrencies will give rise to in the insolvency law and insolvency proceedings with a special focus on jurisdiction, secondly, the current regulatory frameworks and principles on international and European Union level and lastly, the possibilities of regulation through both soft law and hard law in order to create a way to approach these problems. The possibility of regulation will be discussed in a multidisciplinary light, with the principles of international financial law as well as the nature of blockchain-based technology taken into consideration. 
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\nThe aim of the thesis is not to come up with a specific course of action, but rather to enlighten the most prominent pros and cons of different possibilities. The potential ways of regulation brought up in the thesis are the use of blockchain technology itself, amendment of existing legal frameworks, the use of regulatory sandboxes and a new legal framework.

OECD

The digital economy has had a profound impact on society, including the global business landscape and market dynamics. New phenomena such as online platforms, social media, distributed ledger technology (such as blockchain), big data and online service providers affect business models and our understanding of what a “business” is. The links between digitalisation and Responsible Business conduct (RBC) are manifold. New digital tools can help firms accelerate their contribution to sustainable development, and enable businesses to strengthen their efforts to meet standards of RBC. At the same time, digitalisation can also cause business to violate human rights, or contribute to social and environmental harms in new ways. This paper discusses the links between RBC and digitalisation. It aslo summarises the key issues and findings emerging from the stocktaking and analysis of current initiatives.

Bálint Ferencz

Though there are some initiative in order to give legal foundation for smart contracts, its legal status is still not settled. Most of the examination of smart contracts has been presented by common law scholars and practitioners while fewer civil law jurists shared their views on the matter. However, there seems to be a tendency that the representatives of the common law are reluctant to accept smart contracts as legally binding contracts while civil law jurist apparently are more open to that. The aim of the present article is to find out what the core principles and values are which make this difference. While evaluating the approaches in this respect, some additional thoughts will be added why the civil law may be more tolerant towards to smart contracts. The main purpose of the article is to highlight the different aspects as regards the smart contracts.<br/>

Shaanan Cohney, David A. Hoffman

No abstract is available for this record.

Xavier Foccroulle Ménard

This article aims to summarize the present situation with regards to the use of cryptocurrency as collateral in secured transactions in the United States, Canada, the United Kingdom and France, and offer solutions to issues related to the use of cryptocurrency for this purpose. These proposed solutions are arranged as a framework that could be enacted in Canada, and elsewhere. The article first reviews the concept of a cryptocurrency, with special emphasis on bitcoin, and the concept of secured lending. Then, it discusses the categorization of bitcoin in the United States, Canada (with Ontario and Quebec as examples), United Kingdom and France. At this time, only the United States and Ontario have doctrinal and regulatory guidance when using cryptocurrency specifically for secured lending. Finally, this article proposes a legislative framework to take security interests in cryptocurrency in Canada, including drafts of specific statutory amendments for both Ontario and Quebec legislation. The article concludes by noting how this framework can be replicated elsewhere, notably in the United States, the United Kingdom and France.

Ori Oren

In the summer of 2017, a new method of funding startup businesses exploded from a small capital market to one worth billions. “Initial Coin Offerings” (“ICOs”) can appear to be a simple crowdfunding campaign or a public stock offering at the same time and, until recently, have been conducted with no regulatory oversight. Due to the high risk of fraud, the SEC has begun cracking down on ICOs, requiring many issuers to register their “ICO tokens” as securities or halt trading entirely. This Note looks at the regulatory precedents and factors that the SEC has considered to decide whether a token is a security, and proposes an alternative legal system to securities law that may be better suited for regulating certain types of ICO tokens. This Note concludes that, for ICOs that raise money for a decentralized autonomous organization—in which all token purchasers hold equal management rights—uniform partnership law is the ideal mode of regulation.

Janis Sarra, Louise Gullifer

No abstract is available for this record.

Diana Vieira Fernandes

No abstract is available for this record.

Darcy W E Allen, Aaron M. Lane, Marta Poblet

No abstract is available for this record.

Anne Lafarre, Christoph Van der Elst

Blockchain applications have largely been short-lived phenomena in the (classical) corporate governance arena over the past few years. However, at the same time, blockchain has also found its place in addressing agency problems in modern organizations, such as Decentralized Autonomous Organizations (DAOs), offering valuable opportunities to eliminate classical inefficiencies. After a brief introduction to the agency problem and its associated costs in corporations, this chapter explores blockchain technology as a potential solution to this issue. Furthermore, the chapter delves into these DAOs, which, at least in theory, eliminate the agent and its accompanying problem while incorporating artificial intelligence. In the governance of more traditional corporations, blockchain should also be considered a useful tool for overcoming several agency problems and inefficiencies. However, regulatory burdens, uncertainties, as well as concerns related to accountability and other associated costs and interests, slow down the adoption of blockchain in the corporate law and governance environment.

Yang Xia, Zheng Yang, Haiyong Sun, Yan Fang · 6 authors

No abstract is available for this record.

Pascal Favrod-Coune, Kévin Belet

No abstract is available for this record.

George S. Geis

A healthy system of shareholder voting is crucial for any regime of corporate law. The proper allocation of governance power is subject to debate, of course, but the fitness of the underlying mechanism used to stuff the ballot boxes should concern everyone. Proponents of shareholder power, for instance, cannot argue for greater control if the legitimacy of the resulting tallies is suspect. And those who advocate for board deference do so on the bedrock of authority that reliable shareholder elections supposedly confer.\nUnfortunately, our trust in the corporate franchise was forged during an era that predates modern complexities in the way that stock ownership is now tracked and traded. We do not trace shares, and any clear-eyed look at the conferral of voting rights via back-end stock clearing practices is unsettling. Evidence of the various entanglements crops up from time to time—in the form of questionable voting outcomes or disputes about standing for shareholder lawsuits—but the underlying problems are systemic, not episodic. Our stock clearing system is a kludge.\nThis is an important moment for corporate law, however, because new technology is approaching a state where clearing and settlement systems may soon support traceable shares. The rise of distributed ledgers and blockchain technology is poised to allow for specific share identification and precise records of share provenance. This may sound like an uninteresting technical sideshow, but as this Article will argue, the impact of traceable shares on corporate law will be profound. It will change the structure of shareholder lawsuits, alter the allocation of corporate governance rights, and require lawmakers to rethink fundamental principles of shareholder responsibility for corporate misdeeds.

Christoph Van der Elst, Anne Lafarre

Current shareholder engagement systems face large classical inefficiencies. First, due to the large chains of intermediaries in the current securities models, transaction costs are high and shareholder votes and other information are not always correctly transmitted between shareholders and issuers. Recent cases including DNick Holding and T. Rowe Price show the ‘absurdness’ of the current systems. The Shareholder Rights Directive II addresses these problems and the Implementing Regulation already hints at modern technologies to increase the transparency and verifiability of shareholder engagement. Next, the current shareholder engagement system enables different opportunities for different types of shareholders, creating inequalities and hindering shareholder democracy. The solution to these substantial problems lies in a state-of-the-art technology: in this contribution we argue that blockchain technology can solve these current inefficiencies that shareholders and companies face. Using a permissioned blockchain, information can be stored in a verifiable and immutable way, with a consensus mechanism tailored to its purpose. The large amount of initiatives and prototypes of blockchain proxy voting and trading, including the legislative initiatives that were initiated in the past 2 years, show the merits of using this state-of-the-art technology. The Europe Union should incorporate this technology in its legislation, like the CSD regulation, for remaining technology-proof in this globalized market.

Daniel Hellwig, Goran Karlic, Arnd Huchzermeier

This chapter looks beyond the novelty of self-executing ‘smart contracts’ in blockchain networks and explores developments against the background fact that commercial parties have, for centuries, used documentary credit to simulate autonomous performance. Blockchain-based smart contracts and documentary credit share three core functionalities which are essential to any effective autonomous performance, analogue or digital—they both (i) act through internalized media of exchange; (ii) operate as closed systems; and (iii) provide means of securing sufficient resources to guarantee contractual performance. Using these three functionalities as a framework, this chapter conducts a comparative analysis of mechanisms for effecting autonomous contractual performance in a commercial setting. From this comparison, a few hypotheses are drawn regarding the potential areas where smart contract technology is more likely to find fruitful application. In particular, the chapter considers potential limitations to applying smart contracts to scenarios beyond digital asset transfers, how dispute resolution mechanisms should be designed to complement (rather impair) the autonomous nature of contractual performance under smart contracts, and potential capital cost implications which might arise in some cases when parties seek to replace human intermediaries with smart contracts.

Wenming Xu

No abstract is available for this record.

J. Maria Glover

This year marks the fiftieth anniversary of the adoption of Federal Rule of Civil Procedure Rule 23, and with it, the advent of the modern class action. As the fiftieth anniversary approached, many scholars, including myself, said that class actions were dead, dying, or headed for a zombie state. Many of the Supreme Court’s recent class action cases all but confirmed that view. In just the last six years, the Supreme Court ratcheted up the requirements for class certification under Rule 23 in Wal-Mart Stores v. Dukes and Comcast v. Behrend, increasing the cost and difficulty of obtaining certification. And, in a series of cases, the Court permitted the use of class action prohibitions in arbitration contracts, thus eliminating a swath of class actions and, often, the underlying claims themselves. The Court’s language in these cases also tracked stock arguments against the class action, leaving the distinct impression that the Roberts Court was on a mission to diminish or destroy the class action procedure. But a funny thing happened on the way to the funeral: just as the obituaries for the class action were being written, the Supreme Court issued a series of decisions that breathed new life into it. In Halliburton Co. v. Erica P. John Fund, Inc. (Halliburton II) and Amgen Inc. v. Connecticut Retirement Plans & Trust Funds, the Court reaffirmed the fraud-on-the-market theory, a critical tool in securities class actions. In Tyson Foods v. Bouaphakeo, the Court vindicated the use of statistical proof to satisfy Rule 23 requirements, distancing itself from strong suggestions in prior cases that individualized proof requirements would doom class certification. And the language in these cases tracked stock arguments in favor of class actions. To paraphrase Mark Twain, the rumors of the class action’s death now seem greatly exaggerated. But the Court’s class action decisions raise a new and perhaps more vexing question. If the Court is not fully intent on destroying the class action, what drives its seemingly disparate decisions? Do they reflect an anti–class action agenda losing steam, as Professor Coffee has suggested? Was the unbridled anti–class action agenda an illusion to begin with? Or is there a deeper explanation for these decisions? Part I of this Article demonstrates that the Court’s “pro–class action” decisions cannot be easily reconciled with their “anti–class action” counterparts through traditional means—neither through straightforward applications of Rule 23, nor precedent, nor particular case facts. But Part II posits that the Court’s seemingly disparate class action cases can still be rationalized. To do so, however, one must look past the procedural veneer and consider the underlying substantive rules and remedial regimes at stake. Indeed, a key question presented in each case—notwithstanding what appears in the petitions for writs of certiorari—is whether the Court will embrace an interpretation of a substantive rule that has the effect of facilitating the availability of the class action. The Court’s ultimate answer reflects a composite judgment about the substantive rule at issue and its implications for the availability of the class action device. Accordingly, to the extent one insists that procedural rules are, or ought to be, transsubstantive—that, “in form and manner of application, [they do] not vary from one substantive context to the next”—the Court’s class action jurisprudence might actually be deemed “non-transsubstantive.” This Article’s thesis has numerous implications—for separation of powers, judicial lawmaking power, federalism, the role of precedent, notions of transsubstantive procedure, procedural theory, and the nature and legitimacy of the judicial role, among others. The limitations of the Article format permit consideration in Part III of just two: First, the implications for the nature and scope of the federal courts’ procedural and substantive lawmaking powers under the Rules Enabling Act [hereinafter Enabling Act]. And second, related implications for the nature and legitimacy of the judicial role in “procedural” opinions.

Feroz Ahmad Ahmad, Prashant Kumar, Gulshan Shrivastava, Med Salim Bouhlel

ON 12 JANUARY 2009 a pseudonymous entity signed a transaction that instructed a distributed network to transfer a small amount of digital currency to Hal Finney, one ofthe key figures of the cypherpunk movement. After a few minutes, the transaction was recorded on a distributed public ledger, permanently updating the balance ofbothparties. This transaction— the first Bitcoin transaction—marked the beginning of a new era of decentralized payment systems, ushering in a variety of financial Services that do not depend on any centralized clearinghouse or other financial middleman. Bitcoin is regarded by many as a powerful technological innovation that could disrupt many sectors, in the realm of finance and beyond. But the underlying technology on which the network operates, the Bitcoin blockchain can do much more than that. Just as the internet did in the early-1990s, blockchain technology carries with it a whole new range of promises concerning how decentralization can support and promote individual freedoms and autonomy. Blockchain proponents believe that Bitcoin and other cryptocurrency platforms will revolutionize mechanisms of value exchange in the same way that the internet transformed information sharing, by providing a platform for people to exchange digital resources, in a secure and decentralized manner without the need to rely on any intermediary or trusted authority. But this revolutionary potential also carries with it serious implications for censorship, intellectual property, and the regulated flow of information. A blockchain is a decentralized database of transactions maintained by a distributed network of computers, which all contribute to the verification and the validation of transactions. Once accepted, these transactions are recorded inside a “block” of transactions, which incorporates a reference to previous blocks. This creates a long chain of blocks—a “blockchain”—that stores the history of all transactions in a chronological order. Every block contains information about a particular set of transactions, a reference to the preceding block in the blockchain, and the answer to a complex mathematical puzzle that is used to validate the data associated with that block. A copy of the blockchain is stored on every computer in the network, making it virtually impossible for anyone unilaterally to modify the data stored on this decentralized database: if anyone tries to modify any transaction the fraud will be immediately detected by all other network participants.