This article examines the structural tension between territorially organised sanctions regimes and decentralised crypto and tokenised assets. It argues that the principal challenge lies not in the formal applicability of sanctions, but in an enforcement gap: traditional coercive models are designed around identifiable persons and legally ownable property, while distributed ledger systems operate beyond territorial seizure and technical shutdown. The study advances lex digitalis rei sitae as a functional connecting factor linking proprietary and sanctions-related effects to the jurisdiction exercising effective regulatory control over access and liquidity. It further demonstrates that sanctions enforcement increasingly relies on address-based designations, compliance obligations imposed on regulated infrastructure, and programmable compliance embedded in smart contracts and oracle systems. The article concludes that effective digital sanctions require modernised conflict-of-laws rules, explicit recognition of digital identifiers as sanctionable control points, and compliance mechanisms consistent with rule-of-law safeguards.
Abstract This chapter explores the application of the validity requirements of a choice of court agreement under the Hague Choice of Court Convention, Lugano Convention, and Brussels I Regulation in disputes involving decentralized autonomous organizations (DAOs), analyzing the legal implications of a choice of court agreement for the DAO, its members, and third parties. When DAOs are involved in a state court dispute, their blockchain-based nature raises numerous legal questions, including issues related to their legal status and their capacity to enter into binding agreements, such as a choice of court agreement. This reiterates the influence of the international context in which DAOs operate on state court dispute resolution, and emphasizes the challenges of locating DAOs in the physical world, highlighting the limitations of state justice for disputes involving DAOs. This analysis underscores how a choice of court agreement introduces a degree of predictability regarding the forum for civil and commercial claims.
The private international law rules governing the ownership of shares have long rested on the modalities of their transfer, which afforded considerable significance to the form they take (registered or bearer). This article seeks to demonstrate that this approach, which is of doctrinal origin, does not in reality determine the applicable law, having regard to the objective pursued by company law when it mandates the registered form. In reality, the legal order of the registered office retains today, as it has always done, its authority over the proprietary status of registered shares, regardless of the location of any agent appointed to maintain the register. The mode of representation of the share-including inscription within a distributed ledger technologyshould have no influence on this question. This solution may nonetheless be displaced, from the standpoint of international jurisdiction, by the insolvency of the holder.
This chapter examines the jurisdiction and applicable law issues that arise in NFT-related contractual disputes under EU private international law rules, namely the Brussels I (recast) Regulation and the Rome I Regulation. It begins by analysing the key characteristics of distributed ledger technologies (DLTs) from a private international law perspective, including decentralisation, pseudonymity, and immutability. The analysis shows that these characteristics, in particular decentralisation and pseudonymity, pose challenges to the current territoriality-based PIL framework. The chapter then discusses how to determine the international nature of digital ledger transactions. It argues that NFT transactions often have objective international elements that do not require courts to presume internationality simply because the transactions utilize DLTs. The chapter then turns to jurisdiction and applicable law issues in NFT-related contractual disputes under the Brussels I (recast) and Rome I regulations. It examines the different types of contracts that may arise in the NFT ecosystem. The analysis demonstrates that NFT-related contractual disputes may not present a significant challenge for the application of EU private international law rules when the parties’ agreement includes jurisdiction and/or choice of law clauses. Where no such choices are made, however, the discrepancy between the decentralised, pseudonymous nature of digital ledgers and the territorial connecting factors in EU private international law rules will create difficulties for the courts. Courts may also face problems of characterisation when applying those PIL rules that cover specific kinds of contracts. As the chapter argues, these potential challenges highlight the need for a broad, flexible interpretation of the rules in light of the specific characteristics of DLTs and of digital assets (including NFTs). The chapter concludes by noting that such difficulties may eventually lead the EU legislature to introduce specific rules for DLTs that would cover digital assets including NFTs, but not before the first cases reach member-state courts or the CJEU.
Lei Fan, Jonathan Katz, Zhenghao Lu, Phuc Thai · 5 authors
The proof-of-stake (PoS) protocols aim to reduce the unnecessary computing power waste seen in Bitcoin. Various practical and provably secure designs have been proposed, like Ouroboros Praos (Eurocrypt 2018) and Snow White (FC 2019). However, the essential security property of unpredictability in these protocols remains insufficiently explored. This paper delves into this property in the cryptographic setting to achieve the "best possible" unpredictability for PoS protocols.We first present an impossibility result for all PoS protocols under the single-extension design framework, where each honest player extends one chain per round. The state-of-the-art permissionless PoS protocols (e.g., Praos, Snow White, and more), are all under this single-extension framework. Our impossibility result states that, if a single-extension PoS protocol achieves the best possible unpredictability, then this protocol cannot be proven secure unless more than 73% of stake is honest.To overcome this impossibility, we introduce a new design framework called multi-extension PoS, allowing each honest player to extend multiple chains using greedy strategy in a round. This strategy allows us to construct a class of PoS protocols that achieve the best possible unpredictability. Additionally, we design a new tiebreak rule for the multi-extension protocol to choose the best chain that can be extended faster, ensuring that the adversary cannot slow-down the chain growth of honest players. It is noteworthy that these protocols can be proven secure, assuming a much smaller fraction (e.g., 57%) of stake to be honest.For a comprehensive security analysis in the cryptographic setting, we develop several new techniques. Analyzing chain growth becomes highly non-trivial as players can extend multiple chains. We introduce a new analysis framework using the Markov chain to assess the chain growth of a multi-extension protocol. To prove the common prefix property, we introduce a concept called "virtual chains" and present a reduction from the regular version of the common prefix to "common prefix w.r.t. virtual chains."
Tokens are a specific category of digital assets and their diversity, value and significance for the economy continuously grows. Considering their legal nature, tokens are digital representations of a certain right or value incorporated in a form of dataset on the distributed ledgers (DLT). The subtype of tokens often called payment tokens are in the scope of the analysis - these tokens have their intrinsic fluctuating value and can be used for bartering (such as bitcoin). Even though they are widely used in commerce, their civil law status is unclear. In the absence of rules regulating their status, it is necessary to analyse them in the context of general civil law rules to determine whether they could be an object of a subjective rights. Specifically, in this context, it is analysed whether the payment tokens belonging to a deceased person can be a part of the estate and, consequently, whether the heirs (as well as other persons) could obtain and exercise any rights over these assets.
The financial sector in the 21st century is experiencing a revolution. The major disruptor is decentralised finance (DeFi) which leverages emerging blockchain technology to eliminate the need for centralised financial institutions and empowers individuals with peer-to-peer digital exchanges. DeFi is underpinned by cryptoassets such as bitcoin, ether, and non-fungible tokens (NFTs). As DeFi offerings have become increasingly sophisticated, important legal issues have arisen. One such issue is whether the law is appropriately positioned to recognise and give effect to the use of cryptoassets as collateral in lending arrangements. The lack of legal certainty at present poses a substantial risk to market participants who are, for the most part, transacting blindly. This article, therefore, addresses the applicability and comparative suitability of New Zealand's Personal Property Securities Act 1999 (PPSA) to cryptoasset collateral, using the recent Singaporean case of Chefpierre as a test case. It argues that the PPSA is generally better positioned than English (Singaporean) secured credit law to respond to the emerging use of cryptoassets as collateral. Nevertheless, the challenges posed by cryptoasset collateral necessitate legislative change; in particular, change to the PPSA's perfection requirements and priority rules. After reviewing and analysing recent legal developments in the United Kingdom and the United States, this article proposes that a number of bespoke rules and concepts designed to respond to cryptoassets be introduced into the PPSA.
The evolution of online dispute resolution (ODR) within the platform economy has fundamentally transformed the landscape of commerce and dispute resolution in the digital era. This chapter delves into the intricate dynamics of ODR mechanisms in China tailored to address transaction-related disputes as well as IP disputes. Highlighting the trajectory of ODR innovation and the convergence of multi-stakeholder interests, this chapter underscores the pivotal role of ODR in enhancing transparency through crowdsourced judgment, expedited resolution efficacy, user trust, platform loyalty, and dispute prevention. By examining the driving forces propelling ODR development – including economic efficiency, the alleviation of judicial burden, the alignment with diversified dispute resolution (DDR), and the advocacy of IP protection – this chapter elucidates the multifaceted implications and nuances of ODR implementation. It also probes into the challenges and outlines prospective advancements, paving the way for continuous ODR refinement amidst the evolving platform economy context throughout the globe. The implications of these findings, such as the emphasis of user participation and the balance of multi-stakeholder interests, extend to the evolving web3 ecosystem, emphasizing the significance of well-designed ODR mechanisms in mitigating disputes and fostering sustainability of the web3 economy. Moreover, this chapter elaborates on how ODR in China sets an influential precedent, reflecting the collaborative and innovative approach in shaping regulations, advancing IP protection, and fostering co-regulation within the digital economy globally.
Digital finance has been with us for more than a decade. It is growing at a rapid rate, and the world is experiencing a significant transition in the access to new and diverse financial products that are being made available online. This chapter discusses the ensuing legal challenges of tokens, smart contracts and international commercial arbitration. It will demonstrate how there are a number of different tokens that have been developed across various sectors such as agriculture, real-estate and intellectual property amongst others. A potential dilemma that has emerged is how when applied to transnational transactions, the law pertaining to tokens is highly fragmented and still being developed. In addition, the emergence of smart contracts that are supported by blockchain technology can facilitate token transactions, which could be subject to arbitration. Problematic though, as a smart contract is subject to arbitration, the dispute resolution clause within the contract itself will require careful consideration. Also, the code supporting the blockchain technology itself will also be challenging because a practitioner will need to understand where and when the code was installed. For instance, was the code inserted in the state where arbitration has been agreed and what the arbitration clause and agreement provides. That said, the chapter has called for more research to better understand the interconnectedness between these new technology, financial products and the existing legal framework for transnational arbitration.
Jan 1, 2025·SOCRATES Rīgas Stradiņa universitātes Juridiskās fakultātes elektroniskais juridisko zinātnisko rakstu žurnāls / SOCRATES Rīga Stradiņš University Faculty of Law Electronic Scientific Journal of Law
Head of Administrative Division of the Constitutional Court of the Republic of Latvia, VSIA “Latvijas Vēstnesis” Journal “Jurista Vārds”, Riga, Latvia, Paula Lipe
This article examines the application of the Rome I Regulation to contracts for the cross-border sale of non-fungible tokens (NFTs), a novel category of digital assets. While NFT transfers are increasingly common in digital commerce, the legal framework for determining applicable law in such transactions remains unsettled. The research adopts a doctrinal legal analytical research method grounded in the systematic interpretation of European Union (EU) legislation, case law, academic commentary and comparative soft law instruments. It focuses on how Articles 3 and 4 of Rome I operate in decentralised, pseudonymous environments where conventional connecting factors such as habitual residence and contract typologies are difficult to apply. The findings demonstrate that although Rome I remains formally applicable, its conceptual foundations—especially the reliance on territorial connecting factors and analogue contract classifications—are tested by emerging realities in NFT sales. The article concludes by identifying areas where interpretative guidance or targeted legislative reform may be necessary to ensure legal certainty and coherence in NFTrelated transactions. Keywords: applicable law; NFT sales; Rome I.
This case analysis examines three sequential English High Court decisions in the litigation between the Crypto Open Patent Alliance (COPA) and Dr Craig Wright. The trilogy comprising the Relief Judgment , the Contempt Judgment, and the General Civil Restraint Order (GCRO) Judgment demonstrates the Court’s methodical progression from injunctive relief to contempt findings and ultimately to a civil restraint order. These judgments illustrate how English civil procedure addresses persistent and meritless litigation, particularly in the areas of digital assets, blockchain technology, and intellectual property. The Court focused on safeguarding judicial resources while protecting the interests of affected parties by balancing the need for access to justice with the necessity of deterring vexatious conduct.
Abstract The Droit de Suite (DDS), designed to offer heightened protection for artists, remains absent from Japan’s legislative framework, potentially creating disparities among creators. The implementation of DDS in Japan encounters hurdles due to its administration’s intricate nature and associated costs. Non-Fungible Tokens (NFTs) have emerged as a promising solution, streamlining DDS processes through token transactions and obviating the need for time-intensive identification procedures. Japanese NFT exchange platforms have already begun providing DDS services, contributing to a more efficient and equitable system. This article delves into the legal complexities of integrating NFTs into the DDS structure, examining their enforceability in Japanese courts and evaluating the efficacy of tokenization within the country. While the discussion is primarily theoretical, the paper explores the concept of DDS, scrutinizes the essence and validity of NFT technology’s cornerstone—smart contracts, and explores the nuances of NFT transfers in Japan, a pivotal element for DDS implementation.
We present a dispute resolution protocol that can be built on the Ethereum blockchain. Unlike existing applications, it is private by design through the use of zero-knowledge proofs. The protocol is resilient to Sybil attacks and provides increased collusion resistance amongst participating parties. A resolution to the dispute is guaranteed, whilst ensuring the users have the final say on the chosen resolution. The proposed protocol rewards stakeholders through a social incentive mechanism leveraging Soulbound tokens, and rewards agents who behave honestly, as opposed to favouring the wealthy. To our knowledge, this is one of the first dispute resolution protocols to implement governance through reputation as opposed to token-based voting. Furthermore, it is fully viable, given that all its necessary components are currently operating on the Ethereum blockchain.
This chapter addresses the question of how jurisdiction and applicable law will be determined by the English courts. It considers the circumstances in which a claimant might be entitled to serve the process of the English court on a foreign defendant, and the method by which such a claimant will seek to bring that defendant before, and under the jurisdiction of the English courts. The chapter reviews existing case law where claimants seeking to vindicate rights in cryptoassets applied for permission to ‘serve out’ on foreign defendants who misappropriated or otherwise acquired those assets. It then considers, using case law, the application of the Rome I Regulation, as retained post-Brexit, and how it might apply in determining the applicable law of a relationship or transaction conducted on a distributed ledger.
Este artículo reseña:
 A. Ortega Giménez. Smart contracts and private international law. Thomson-Reuters Aranzadi, Cizur Menor (Navarra). 2022, pp. 80.
This chapter discusses the nature of the lag between contract law and the real world developments and looks as consumer contract law as an example. It then discusses the longstanding idea of the difference between law in the books (formal or blackletter law) and law in action (law as applied or operative rules). It also discusses the role of contract law in society and examines law as a “shadow” and the escaping from contract law. Examples of escaping are private legal systems and smart contracts. It further examines convergence of contract law across legal systems and the development of international sales law. The final topics explored include the role of contract scholarship, essence of contracts, and relational contracts.
Off-chain disputes regarding transactions executed on-chain are unavoidable. However, a prerequisite to effectively settling such disputes is the identification of the applicable law as well as of the competent jurisdiction. While some transactions merely operationalise off-chain relations between parties knowing each other, many result from interactions between pseudonymous individuals at unknown locations. The present contribution investigates the concrete consequences of pseudonymity on European Private International Law, especially principles to determine the applicable law. In this respect, it clarifies the numerous factors affecting the extent of pseudonymity, ranging from the type of distributed ledger on which the transaction occurred to the possible centralized intermediaries involved therein. The issue ought to be analysed having these factors in mind, as some effectively wither the veil of pseudonymity. Based on the preceding clarification, the contribution analyses the concrete extent to which pseudonymity renders some principles of European Private International Law ill-fit and as a result, difficult to apply in practice.
This chapter examines Japanese Private International Law (PIL) on crypto-assets. After making a general observation on the use of blockchain and PIL, this chapter examines the jurisdiction of Japanese courts in civil cases, the extraterritorial application of Japanese criminal and regulatory laws, and applicable law in contracts, torts, and property.
For international issues, Private International Law (PIL) experts traditionally apply the law of the country with the most significant connection. However, it is often claimed that DLT features, which are immersed in a digital world, cannot be localised or have any connection with a traditional legal order. Is it then possible to determine the law applicable to smart contracts? Before answering this question, this chapter characterises smart contracts in PIL. There are various types of smart contracts: they could be used either to perform a transaction between two parties or to serve as the backbone of a Decentralized Autonomous Organization (DAO). It is then a prerequisite to analyse the different types of smart contracts before characterising them. This chapter seeks the most relevant connecting factors to determine the law applicable to smart contracts.
Bitcoin was launched in 2008 and appears as the first application of the blockchain technology. It remains, to date, the best known and the most used cryptocurrency. Like other cryptocurrencies, Bitcoin aims to become an alternative to State and multistate currencies, such as the Euro. The importance it has gained in practice over the past few years has grasped the attention of legal scholars, who tend to perceive Bitcoin as a challenge to traditional legal rules and therefore reflect upon the ways the latter can be applied to this technological new deal. Although these reflections concern, first and foremost, rules of substantive law, such as contract law, they also extend to Private International Law (PIL). From the latter perspective, Bitcoin raises two types of issues. The first one relates to the ability of PIL to tackle legal relationships involving the use of bitcoins, while the second one concerns the ways in which PIL rules can be implemented to these relationships. This article seeks to demonstrate that all the objections raised against the applicability of PIL to Bitcoin, whether they are based on the existence of an alleged non-State, self-regulated, legal order of the lex cryptographica, on the impossibility to situate legal relationships implying the use of bitcoins in the physical space, or on the pseudonymity of participants in the blockchain, can be overcome without having to introduce sweeping changes to PIL rules. Indeed, the latter rules can rather easily adapt to Bitcoin and grasp its hybrid nature of asset and of currency.
Technological features of cryptocurrencies have been raising a number of challenges for lawyers, in particular those practicing Private International Law (PIL), in that (i), cryptocurrencies are intangible, (ii) they exhibit a wide range of different features that, to add further complexity, evolve in parallel with technological developments, (iii) the identity of cryptocurrency users – i.e., everyone who is involved in the process of creation and transfer of cryptocurrencies – is, at minimum, not easy to trace, since it is protected through pseudonyms or, even, full anonymity, (iv) cryptocurrencies are set for more than one usage, i.e., both as a payment instrument and a form of investment (albeit a very risky one!). Even more relevant, (v) cryptocurrencies have an intrinsically cross-border reach, since they are based on decentralised distributed ledgers, potentially spanned all over the world, with no connections to any particular state, allowing value to be transferred between users across borders at a very high speed, not conditional on the location of the transferor and the transferee. Finally, (vi) it is extremely difficult to impose legal restrictions on their circulation, including territorial restrictions, not only because of the decentralised nature of said ledgers, but also because of their inherent autonomy vis-à-vis the law. The aforementioned characteristics of cryptocurrencies and, in particular, their intrinsic cross-border reach prompt the question of their PIL regime and, namely, (i) the need to identify, among the existing PIL rules, those which are applicable to transactions involving cryptocurrencies, both as payment instruments and as (possible) store of value, and to investigate whether those rules are suitable for framing them, either in terms of legal characterisation (“pure” cryptocurrencies neither represent nor give a claim against an issuer) or of connecting factors and other techniques to establish the applicable law. Following the partly negative answer to the first question, the chapter explores the many legislative options for differentiated PIL rules on cryptocurrencies, in comparison not only to traditional assets, but also to other crypto assets. Finally, the paper calls for a comprehensive conflict-of-laws regime for proprietary effects of transactions over cryptocurrencies, based on the elective situs and some requirements in terms of objective connection of the selected law, coupled with a fall-back rule, which should provide different sub-rules for permissioned and permissionless systems