Law of the Ledger

Legal Issues with Blockchain and Cryptocurrency

At least three different types of marketplaces facilitate the sale and/or resale of NFTs. These include open marketplaces, curated marketplaces and proprietary marketplaces. Other variations do exist, however, and it is likely that other alternatives will be developed. In the attached article, we examine some of the differences between these types of marketplaces and business models, highlight some of the different license terms of these marketplaces and discuss why IP owners who license their IP for NFTs often are best served by developing their own licenses to be used in connection with sale of their NFTs.…
It is called the Cowboy state for a reason. With varied terrain and a hearty population Wyoming has long been a haven for independent thinkers and doers – pioneers.  The Wyoming legislature recently underscored that truth with the first state law addressing governance issues for decentralized autonomous organizations or “DAO(s).”  We are not talking self-driving vehicles here.  Those will not work on Teton mountain road switch backs.  This is all about future vision of decentralized digital finance.  A new gold rush for the west for those states who embrace it and Wyoming is doing just that.  This March it passed…
The Office of New York State Attorney General Letitia James (“NYAG”) has filed a lawsuit to shut down technology company Coinseed.  The state has accused the firm of selling unregistered securities in the form of digital tokens and operating as an unregistered broker-dealer while making material misrepresentations about the company, its management team, and fees charged to investors in connection with cryptocurrency trades.…
The tokenization of physical and digital art has many advantages. Some of the advantages create potential complexities under US law. Each situation is fact specific, but the following is a summary of some of the areas for which careful consideration is needed with tokenized art. This is not a complete list, but provides some of the most common issues that we typically see. These issues can impact the owners/creators of tokenized art as well as the exchanges and platforms that sell them.…
As with other rapidly-evolving technologies, the blockchain space is experiencing a frenzy of patent activity. The data shows that there are 3-4 times as many published applications as there are issued patents for these concepts. This trend strongly suggests that the number of blockchain-related patents will surge in the next couple of years. However, due to recent changes in patent law, it is more important than ever to ensure that you analyze the patentability of blockchain inventions in light of these changes to target inventions likely to result in patents.  Once likely patentable inventions are identified, it is critical to…
As with other rapidly-evolving technologies, the FinTech space is experiencing a frenzy of patent activity. As its name implies, FinTech is part financial innovation (“fin”) relating to new aspects of finance and finance-related business models, and part technological innovation (“tech”) relating to the application of, and enhancements to, technology that enables the fin-related innovations. Unfortunately, this mixing of innovation often results in difficulties in obtaining patent protection under the USPTO’s ever-evolving tests for patent-eligible subject matter. Many patent applications for fin-related innovations are rejected by the USPTO as being an abstract idea or merely a business method implemented on a…
FinCEN has issued a notice that it intends to amend the regulations implementing the Bank Secrecy Act (BSA) regarding reports of foreign financial accounts (FBAR) to include virtual currency as a type of reportable account under 31 CFR 1010.350. Currently, the Report of Foreign Bank and Financial Accounts (FBAR) regulations do not define a foreign account holding virtual currency as a type of reportable account. (See 31 CFR 1010.350(c)). As a result, the notice indicates that “at this time, a foreign account holding virtual currency is not reportable on the FBAR (unless it is a reportable account under 31 C.F.R.…
The Organisation for Economic Co-operation and Development (OECD) published a report on Regulatory Approaches to the Tokenisation of Assets (Jan. 2021).  The report notes that: “Policy makers in different jurisdictions have approached tokenisation in different ways, either by applying existing financial regulations to tokenised assets; by introducing new tailor-made regulatory frameworks or by adapting existing rules to accommodate the application of DLTs in tokenisation.” Some of the key takeaways from the report are:…
There are a number of uses of blockchain technology which may give rise to competition concerns. As a distributed ledger where transactions are recorded in real time and are accessible to everyone within that network, blockchain makes at least some transaction information accessible to users within the network. The available information can provide insights on highly sensitive commercial business transactions and/or strategies. Blockchains can also be seen as a decentralized model of data storage including payment transactions, purchase history, corporate accounts, pricing history as well as future changes to pricing. These characteristics can expose users of blockchain technology to competition…
The use of blockchain technology by game companies is nascent but growing. As a transaction based-technology, blockchain is well suited to manage in game economies through tokenized game assets and the use of cryptocurrency for payment. This also provides a benefit to players in that they can truly own their assets, as opposed to just having a terminable license as is the case with most traditional online games. Blockchain and NFTs hold great promise. If your business gets involved with these technologies it is critical to get solid legal advice before you get too far down the road.…
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.…