Law of the Ledger

Legal Issues with Blockchain and Cryptocurrency

The Office of the Comptroller of the Currency (“OCC”) recently signaled its approval for banks to fully wade into the cryptocurrency custodian space.  On in a July 22, 2020 interpretive letter, the OCC concluded that a national bank may provide cryptocurrency custody services on behalf of its customers, including by holding the unique cryptographic keys associated with cryptocurrency, so long as the institution is able to effectively manage the risks and complies with applicable law.…
Under Section 99E: a “Fantasy sports contest” includes any fantasy or simulated game or contest …” and 99E.2 states: “The system of entering an internet fantasy sports contest as provided by this chapter is legal when conducted by a licensed internet fantasy sports contest service provider as provided in this chapter.”…
As part of a multi-faceted deal, Google will become a validator node for Theta’s Mainnet 2.0. As part of the deal, Google Cloud will become Theta’s preferred cloud provider. Theta also plans to further collaborate with Google’s artificial intelligence, machine-learning and big-data initiatives. Another big draw for Theta is that Google owns YouTube. According to Theta, Youtube’s internally-developed technology for video delivery and streaming makes experimentation a lot easier.…
Key Takeaways The United States-Mexico-Canada Agreement (USMCA) provides for financial and digital trade regulations that harmonize the treatment of fintech companies. North American companies leveraging digital assets for payments should consider strategic regional opportunities available under the new USMCA fintech Framework. The USMCA Parties (member countries) continue to license fintech companies using cryptocurrency and create regulatory sandboxes to incentivize experimentation with the new technology under relaxed regulatory conditions.…
On May 13, 2020, Financial Crimes Enforcement Network (“FinCEN”) Director Kenneth Blanco delivered remarks to the Consensus Blockchain Conference regarding the agency’s recent observations in connection with virtual currencies, including the current risks of criminal exploitation of virtual currency, significant issues FinCEN anticipates for virtual currencies in the future, and the industry’s compliance with the Travel Rule.…
A Washington state federal court recently addressed claims relating to rates that cryptocurrency mining companies pay for electricity in Grant County, Washington. The court rejected all of the miner’s legal claims. The dispute focused on the rate classification that this utility applied to crypto miners as explained below.  Due to various risks, the electric utility assigned the miners to a newly created rate class referred to as “Evolving Industries,” resulting in a higher rate class for the miners.  The miners were I-“rate” with this decision.…
A recent report indicates the use of blockchain technology in the energy sector is continuing to grow. According to the report, the global market for this use of blockchain technology is anticipated to grow at a CAGR of 52.9% during the forecast period 2018-2026. One of the big drivers of this growth is that some of the biggest technology companies are investing in making this technology available for the energy sector. The payers include: Accenture, Oracle Corporation, Microsoft Corporation, Deloitte, IBM Corportaion, Grid+, NOdalblock, SAP SE, Power Ledger Pty. Ltd. and Amazon Web Services, Inc., to name a few.…
The number of different open source licenses is growing and the variation in their terms and complexity is increasing. A number of licenses that appear to be, or are commonly referred to as “open source” do not actually meet the Open Source Initiative (OSI) definition of “open source.” Thus, they do not appear on the OSI list of approved open source licenses. We like to say that these licenses are open source-ish! The lack of standard definition of “open source” can lead to potential legal issues and business problems, particularly in connection with investments or acquisitions in companies that use software covered…
A controversial new open source license designed for use with decentralized applications was recently approved by the Open Source Initiative (OSI). The Cryptographic Autonomy License (CAL) claims to be the first open source license specifically designed to protect end users’ rights and ownership of data and control of their cryptographic keys.…
Microsoft has announced a partnership with Enjin to offer a blockchain based recognition program. Azure Heroes aims to reward individuals for verifiable acts of impact such as coaching, creating demos, building sample code, blogging about Azure or completing certain challenges. Community members that have demonstrated their contributions will be recognized with badges across a number of categories. Azure Heroes is branded as a new and fun way to earn digital collectibles for meaningful impact in the technical community.…
For the first time since 2007, the Recording Industry Association of America is reporting that the United States retail music market is on its way to becoming a $10 billion market. Streaming royalties account for a majority of this growth along with new use cases entering the marketplace. New technologies and content offerings have and continue to drive this growth. Innovation in the music production and distribution spaces lowered the barriers to entry, allowing unsigned artists to create professional recordings and distribute their music worldwide. This changing landscape ⸺ including the proliferation of music streaming and new licensing schemes ⸺ has underscored the…
The leaders of the U.S. Commodity Futures Trading Commission, the Financial Crimes Enforcement Network, and the U.S. Securities and Exchange Commission (the “Agencies”) issued a joint statement to remind persons engaged in activities involving digital assets of their anti-money laundering and countering the financing of terrorism (AML/CFT) obligations under the Bank Secrecy Act (BSA). This joint statement provides further clarity on some of the many laws potentially applicable to crypto currency and other digital assets and highlights the need for anyone operating in the space to obtain legal advice to understand their legal compliance obligations. According to the statement, AML/CFT obligations apply to entities…
We previously reported on how popular open source has been under attack from patent assertion entities. The attacks continue. The GNOME Foundation recently acknowledged that it was sued for patent infringement by Rothschild Patent Imaging LLC. The allegedly infringing product is Shotwell, a free and open source personal photo manager. Neil McGovern, Executive Director for the GNOME Foundation says “We have retained legal counsel and intend to vigorously defend against this baseless suit.” The suit alleges infringement of a single patent 9,936,086 titled “Wireless Image Distribution System and Method.”…
According to a recent report, the new chair of the CFTC, Heath Tarbert, has declared that he believes that ether is a commodity. He also anticipates ether futures trading on U.S. markets in the near future. The CFTC has previously taken the position that bitcoin also is a commodity.  He further indicated that he agrees with the SEC that bitcoin and ether are not securities. He also opined that similar assets should be treated similarly. …
Where does my prescription come from? Has it been altered or diluted? Can I trust the label? With millions of prescriptions filled each year, quality control and security across the pharmaceutical supply chain seems like a herculean task. In an attempt to slay this proverbial hydra, the Food and Drug Administration (FDA) developed a new pilot program – the DSCSA Blockchain Interoperability Pilot (the “Blockchain Pilot”) – which aims to use blockchain to create a secure electronic, interoperable system that tracks and traces certain prescription drugs as they are distributed in the United States.…