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Niche Legal Issues You Should Care About I Avalanche Summit LATAM
23 Plays2 days ago
Geek out on distinct legal issues with tax, anti-money laundering (AML) and litigation panel experts to review and explore key concepts affecting blockchain and crypto businesses. Take a deep dive on the Organization for Economic Cooperation and Development (OECD) tax framework, the Financial Action Task Force's (FATF) latest for Virtual Asset Service Providers (VASPs), asset management and funds, and explore global trends in civil litigation and bankruptcy.
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Transcript
Introduction to Avalanche Summit Series
00:00:06
Speaker
Hi everybody, this is a special Owl Explained series, where we bring key panels from our Avalanche Summit directly to you. Whether you missed the summit or want a fresh look at the discussions shaping blockchain and web3 policy, we've got all the insights right here, straight from the experts, right to your ears.
Panel Setup and Introductions
00:00:30
Speaker
All right. Hello, everybody. We're really happy to be in the beautiful city of Buenos Aires for our Avalanche Summit, LATAM. And this panel is going to be a special sampler of several legal issues that you should care about. But before I get started, I would like our panelists to introduce themselves very briefly because each of them represents a special area among the legal world. So, Sean, would you like to get started?
00:00:53
Speaker
Sure, so great to see all of you. My name is Sean McElroy. I am an attorney at Fenwick, based out of Seattle, Washington. And I work on basically all things related to tax and blockchain. So I've worked with pretty much every kind of, from individuals to companies, to you know big and small, all types of projects within space, and kind of cover the whole range of it and worked on it pretty much my entire career.
00:01:17
Speaker
I'm Justin Ginell. I'm a partner at Suretramonti. I'm a generalist litigator, so handle cases for yeah concerning business torts, IP issues, and everything in between. My name is Olga Andoni. I'm general counsel of Enclave Marcus, which is a subsidiary of Avalapse. And I handle everything, legal, regulatory, compliance-related for a crypto exchange. Hi, everyone.
00:01:47
Speaker
It's not working, but I'll just speak loud. Hi everyone, I'm David Forst. I'm a partner at Fenwick. I've spent my time between Chicago and Wyoming. I, for the last seven to ten years, have focused more and more on crypto, cover the waterfront with it, um particularly relevant today. I do a lot of fun work with respect to crypto.
00:02:08
Speaker
Thank you, everybody, and just a quick intro for those that may not
Overview of Legal Topics in Blockchain
00:02:11
Speaker
know me. My name is Silvia Sanchez, and I manage this amazing initiative called Owl Explains, which is a channel through which we communicate both with policymakers and regulators about what blockchain technology is, we give them solid explainers about what's happening in Web3, and it all began with this amazing idea that Lee had of creating this this channel to explain these topics in a more digestible, accessible way through our podcast, our comment letters, and also these types of ah panels. So before we actually get into the questions, I think that I would like to start with a little structure, like this little illustration of how we have organized this panel. So as you can tell, each one of them has different backgrounds. We have our litigation expert, our tax expert, AML, investment management, and
00:02:58
Speaker
This is not really going to be just oh just litigation or just investment management. Think about it as tapas. You know when you're going out and you have a tapas dinner, you have little plates, you have the olives over here, the cheese. You're not going to eat the whole plate of olives all at once. It's not going to be just one and one. Now we're going to sprinkle in some different topics among each other and even though they are and different, they're all intertwined, there's a lot happening in the industry. So, we're going to get started with litigation.
Litigation Tactics in Blockchain
00:03:24
Speaker
So, Justin, you are our litigation expert and it's definitely an interesting topic to get started. And there have been some unique litigation tactics that are emerging in the niche legal disputes, particularly involving digital assets and intellectual property. So, can you share some of these tactics and how they're shaping the legal landscape?
00:03:45
Speaker
Sure, when I think of tactics, specifically in this space, um I think of two things in particular. one One is it's oftentimes hard to figure out who to sue ah in certain situations. There may be situations where somebody was defrauded and and all you have is a wallet address or maybe you um you know of a DAO or something of that nature, but you don't have an individual to actually proceed against.
00:04:15
Speaker
So courts have been grappling with this over, you know, very recently and within the last few years, you know, what tactics and techniques can be used to find the proper party. um We saw that with the Ookie Dow case out in California. in In that case, the judge actually allowed the plaintiff to go, it was the CFTC, to go after a Dow, you know, a decentralized autonomous organization, which are often so you know part of their organizational structures to keep things anonymous. um and But they also have, part as part of their structure, usually a governance component where holders of tokens take part in that governance. So in some ways it is like
00:04:57
Speaker
a traditional ah entity but it's not organized as such and the court in California applying federal rule 17 you know said it has the capacity to be sued um and it was sued as an unincorporated association so you know the court in that instance was willing to be flexible and allow the plaintiff to go after the party that and in that case was the you know, perceived wrongdoer. um There was another case out in California, the Sarcony case, and they allowed a DAO to be sued. In that case, under a slightly different different theory, everyone who held a token was considered to be a general partner in the DAO. And that thus, every single token holder was jointly and severally liable, and the plaintiff could go after any token holder.
00:05:43
Speaker
um That's great. you know From a plaintiff's side litigation perspective, that's great. From somebody organizing a DAO and holding tokens, that is you know an obvious risk. So you may want to, in that situation, be mindful and sort of wrap the DAO organization in a more traditional structure like an LLC.
00:06:00
Speaker
um where you can enjoy some limited liability, but it is interesting from my respective to see the courts being flexible and allowing parties to go after sort of unconventional organizations. Similarly, you know, there's always been Jane and and John Doe lawsuits, but um that's more common now when you're going after a wallet and just a wallet ah there was a recent case in the district of new jersey where the court allowed four subpoenas and discovery on coinbase before the rule twenty six conference even started to help um get identifying information for the proper parties. um So I think that's certainly a ah one of the tactics that I'm seeing. And then the second one is service and process. um You know, normally ah that has to be done through personal service for obvious reasons. You want to make sure the party that's supposed to get notice of a lawsuit gets that notice. You know, you've been served.
00:06:55
Speaker
um But what we're seeing now, and in my ah home jurisdiction, I practice in New York, and one of my um primary courts that I practice in is the Supreme Court of New York. And the commercial division there, ah just two years ago, Justice Maisley issued an opinion. It was the first in the country.
00:07:12
Speaker
and she allowed service of process through minting a service token and then airdropping the service token into the offending wallet. um First case of its kind, other since then other district courts throughout the country have used federal rule 4 and sort of under similar reasoning allowed that to happen in other situations. The obvious concern is due process. You know, is the person actually getting notice if you conduct a service in that manner? But what the court said, at least in that particular case, was um the wallet still had plenty of money in it, over a million dollars.
00:07:48
Speaker
they could see that the wallet was being actively used so they knew it was being monitored and it was the wallet that was tied into the alleged fraud so for all those reasons the court felt comfortable that due process was met and allowed you know sort of this NFT based service which is you know first of its kind right back in the 90s you know email or 80s emails was it was the first of its kind to allow sort of alternative service through email, now like airdropping and NFTs. It's pretty, you know, the next logical step in that. So so that those are two things that I thought were pretty interesting. And in terms of the minting of the token, you know the token itself linked to a hyperlink that to a website that had all the court documents. So it was still providing all the information just in this very new
00:08:34
Speaker
in an innovative way, which was designed to get at that particular fraudster. And the same thing in the Uki Dao case, they actually allowed service through a message board that set up the topics you know for the Dao to vote on. so So courts are just the overarching point, I think, in all of this is courts are being flexible in both you know who to sue and how to get notice to those people that you're suing. And those are some of the prime trends I'm seeing in litigation over the last you know several months. Awesome. Thanks, Justin. That was a great overview. So let's shift gears a little bit to the tax implication of of crypto.
Global Tax Policy and Crypto Asset Reporting
00:09:07
Speaker
And here we have Sean. So a big so section that is worth mentioning on this sec on this part is the OECD's tax framework. So what can you tell us about the OECD's tax framework, particularly CARF? We have a diverse audience. So I think we can give a bit of a have a background on that. And first of all, what it is, what it's not, take it away. Absolutely. So I'll start. really broadly with what the OECD is, because it's it's an entity you might hear about, but it it really has an important role in global tax policy. So the OECD is a group of, I kind of think of roughly the G20 nations that come together to write laws and write sample laws that various countries will implement in order to carry out global tax policy. It's very important in Europe, South America, all over the world.
00:09:50
Speaker
In the U.S., the U.S. is kind of a love-hate relationship with the OECD. It can really depend on who's in power, what's going on. It's not really along even political lines. Different administrations have tracked closely to the OECD. Others have kind of strayed away from it. But the OECD is ah really its big area in the blockchain has been to create something, the crypto asset reporting framework. So what CARF is, is essentially a reporting tool for governments to each report to each other what activity is occurring and who is covering that activity to make sure that what they deem to be all crypto transactions and crypto activities are ultimately being picked up by governments. So it really is this very you know complex system that they've built out, but it really is the first international reporting regime for crypto. And I think pretty much any exchanges or any types of
00:10:43
Speaker
I use the term broker, but folks brokering assets are going to have to think about how they fit into CARF. The other factor is that it looks like the US is at least saying very publicly, it will participate in an adopt CARF. So how that will happen, whether that requires Congress's act, whether that can be done through regulation, a bit of an open question, but how this kind of information sharing occurs between governments is going to be a major issue going forward.
00:11:10
Speaker
Great, thanks for that context, Sean. And just following that thought, my next question is for for David, now that we're on this on this line of of taxation.
Crypto Tax Reporting Regulations
00:11:18
Speaker
How does this framework interact with existing US reporting requirements? What should businesses be aware of?
00:11:24
Speaker
Yeah, Sylvia, that's a very, very hot topic right now yeah in the United States, because in 2021, the US Congress added one sentence to the Internal Revenue Code, which is tens of thousands of sentences. And basically, it said that tax reporting um for crypto has to more or less mirror tax reporting for conventional securities.
00:11:51
Speaker
Now, that's fine as far as it goes, and I don't think that was terribly controversial. But what we have seen is the IRS has written hundreds of pages of implementing regulations that are partially finalized right now and partially still proposed that will take that reporting mandate from Congress and expand it well beyond the reporting requirements for traditional finance.
00:12:21
Speaker
And that's a major issue in the United States right now because with highly expanded reporting comes a potential chilling of the industry and potential burdens placed on the industry that are not placed on traditional finance. And that's what ah we and and many others are working through right now.
00:12:44
Speaker
And if I could add just one one quick bit on that. are two Two quick things on that. One is is that regulations on this and and additional regulations are coming soon. it's It's an interesting political year in the United States, as many of you might be aware, but this administration does want to put things out quickly and have publicly said that they want to put things out by the end of the year. They'll do this. The second is that this is not the The IRS takes a very broad perspective on its own jurisdiction as to reporting. it that The regulations say it has broad jurisdiction. I think many, many individuals within the blockchain space, many companies within the blockchain space,
00:13:21
Speaker
that U.S. based companies but might have U.S. users, might have potential U.S. users, might have U.S. operations. All of this could be brought within that framework and the IRS could take a very aggressive position on that. We don't know because we haven't seen the final regulations on this, but it's very possible that yeah just it's not just a U.S. issue because of how aggressive this IRS is in the space.
00:13:46
Speaker
Thanks for that. And now let's let's talk DeFi. Let's go over to Ulta.
DeFi Protocols and Regulatory Implications
00:13:50
Speaker
So I'd like for you to talk about the CFTC DeFi enforcement actions, the DeFi sweep and the overlay of CFTC regulation in DeFi. ah Absolutely. At least you're not asking me about tax-related questions. ah Sylvia, yeah, we're seeing a lot of more action from CFTC. Previously we saw some low-profile enforcement actions against the exchanges, but I think, unfortunately, right now, the attention of CFTC is toward DeFi protocols, which also goes, um I would say, truly goes against the ethos of DeFi, which the purpose of DeFi, as we all know, is disintermediation, and it seems like with these actions, recent enforcement actions especially, against the three DeFi protocols, definitely CFTC,
00:14:39
Speaker
ah The compliance structure that they're asking for DeFi protocols is to to, of course, to put DeFi under regulation. we ah The DeFi sweep actions are quite important, I think, for the DeFi space. so we sell cfdc ah enforcing three actions toward Derridex, Open, ah and Zero X as well. And I think for Derridex and Open, they accuse them for offering and register to ops, and I think also for failing to identify their customers.
00:15:15
Speaker
under the Bank Secrecy Act. ah to To be honest, I think that the more I read this complaint, I think that Derrida X, in my opinion, was that this ah truly a theater. Because I think that ah the control, ah I mean decentralization theater to emphasize that because I think the control was way beyond the mere kill switch. And I think, I mean, they were able to to do every controlling, I mean, despite pretending that they were fully decentralized. I think for the zero X, if I'm not mistaken, I think the CFTC accused them for trading third party tokens via their
00:15:57
Speaker
ah via their front-end application match ah ah match ah application that CFTC alleged that should be offered only on centralized and regulated exchanges. So ah definitely I mean this is our action to pay attention to because and then we saw the UNISWAP action where CFTC accused UNISWAP for um I mean, trading of exchange leveraged crypto commodities. I think that Commissioner Mercinger has done a tremendous role and I think she's a big advocate for our industry because with both descents, she has some strong descents both for the actions, again, the 3D5 protocols and
00:16:43
Speaker
against UNICEF. First of all, she she emphasizes how in the previous three actions there there are no allegations of fraud on those actions. So even for these defy protocols to comply, we still do not know the regulations that they fall under.
00:17:00
Speaker
especially also we see I want to jump a little bit ah for Mika because it seems that also DeFi protocols are going to have their obligations to ah to comply with Mika and supposedly Mika was supposed to deliver I think a DeFi regulatory explanation But I don't think we're going to have that regulatory explanation or how MICA is going to be applicable to DeFi protocols until probably by next year, even though it's supposed to be December, I think. So a lot to digest here. I wish I could talk more because, as I said, like there is a lot of more action, unfortunately, from ah CFTC against DeFi, decentralized finance.
00:17:48
Speaker
Indeed. Thank you, Ulta. So that's on the CFTC.
Cybersecurity in Web3 and SEC Actions
00:17:51
Speaker
And now let's go to the other big player, which is the SEC, the Securities and Exchange Commission. So, Justin, the SEC has recently been quite active in cybersecurity enforcement, particularly with cases like SolarWinds. So can you discuss what these actions mean mean for businesses? what have what do you What have you seen with that recently?
00:18:10
Speaker
Yeah, SolarWinds was um a case of first of its kind. It was the SEC going after a company for its representations surrounding its security systems. That's something we hadn't seen from the SEC before. It was the first time they put together an action like this. um They were somewhat aggressive in the claims that they brought. Not only did they bring ah material represent misrepresentation claims, but they also brought a claim under the Exchange Act Section 13 for um not maintaining proper accounting controls and for um inaccuracies and in in the Form 8K. Just this summer
00:18:56
Speaker
um Judge Englemeyer in the SDNY where the case was was filed dismissed most of those claims, um I guess for obvious reasons. The the accounting claim was was held not that cybersecurity issues were not accounting controls, which seems obvious, but I guess not to the SEC.
00:19:17
Speaker
um and um And also dismissed the Form 8K claims as ah finding that the company actually did properly disclose the um cybersecurity risks that were involved in the hack at issue in their Form 8K. However, I think what's still important is the entire case wasn't dismissed.
00:19:37
Speaker
so What's interesting is there was a security statement that SolarWinds put out on its website and it wasn't even investor focused, it was consumer focused, but it made claims like ah we our password protection is really strong, we have really secure networks, you know we take your data very seriously and things of that nature.
00:19:59
Speaker
um And behind the scenes, the SEC was investigating and the Chief Information Security Officer of the company, the CISO, was actually giving presentations to staff at the company saying, we have a lot of vulnerabilities with our security, I'm worried about this, our engineers can't keep up with the problems that are happening.
00:20:20
Speaker
um So there was this disconnect between the public-facing statements and what the company was experiencing internally, and the judge found that that was enough to meet the Sienta requirement, both in terms of the company and the chief information security officer, so there was even individual claims that moved forward. And, you know, what was interesting here is this was sort of a security breach, very, very long in time that created a backdoor to this IT software that was being used. So it affected, you know, 18,000 to 30,000 customers, very, very widespread. um And it wasn't crypto specific, but I think it's important
00:21:00
Speaker
because what the SEC claimed it was doing and why it thought this was important was the materiality analysis was because security was so important to this business that it rose to the level of an actionable misrepresentation. And I think that is true for a lot of crypto-related companies, Web3 companies, where security really is the underpinning um of the entire you know operation or the secret sauce, if you will, right? The the smart contract has to be extra secure the chain that it runs on has to be secure. So there is this heightened security aspect to everything we do in the Web3 space, which makes this, um I think, ah sort of a heightened concern for this industry. And the SEC now has
00:21:46
Speaker
Now added another item to the things that it seems like it's going to scrutinize and potentially bring enforcement actions again. So just something to be mindful of, what can be done if you're operating a company in this space and then you have, you know, potential cybersecurity concerns, and think you want to make sure that your internal investigations and your outward-facing statements are consistent to the extent they can be. If you identify things, you want to take actions um to address those things. You want your disclosures to be accurate if you do have vulnerabilities. A lot of this seems obvious, but it's exactly what got SolarWinds into trouble. So um I think that that's the reason why you know we're going to possibly see more action by the SEC in the cybersecurity space. you know just and Just one thing you said struck me there, because I wasn't aware of that case, was that
00:22:39
Speaker
the The court said cybersecurity is not accounting. And that may seem really obvious. But I have found so many issues that people run into in this space writ large and investors run into in this space writ large is just a misunderstanding of the basic facts of what's going on. You know, if someone tells me I'm going to invest in crypto, that basically tells me nothing because crypto could mean all kinds of different things, right? You could be investing in an NFT ah that is real estate related. And so what are you really doing? You're kind of really investing in real estate, right? You're not really, I mean, it has a crypto wrapper on it, but it's, you know, or you can invest in a fungible token or you can invest in a dollar denominated, you know, token, which is really kind of investing in dollars. so
00:23:27
Speaker
I think it's really important across the disciplines to really understand what the facts are and understand what really at at root is is the issue. yeah It's interesting, and I mean the SEC has a theory as to why it thinks this fits in their more traditional account and control rubric. And in fact, they've actually settled with companies under that very theory. So I think we're going to probably see companies not so willing to settle once the case law kind of catches up um you know with the enforcement actions they're trying to take.
00:24:01
Speaker
Yeah. Great. Thank you both. And we've mentioned already the two big guys in the US. We've talked about the CFTC, the SEC, and I'd like us to zoom out a little bit now. Let's broaden the lens to the international
Taxation Challenges in Staking and Blockchain
00:24:13
Speaker
part. But now on the topic of taxation of staking. So we're back to Tishan. We have to go back to the plate of taxes. We are on our legal tapas, legal topics. So that's inevitable. We're delicious, though. You always come back to the olives. you know you can go everywhere but its really yeah you alwayss come back to the olive Exactly. You have the anchovies, the cheese, whatever, but we still have them. I mean, I love olives, but I know each to their own. So Sean, what are the key challenges or opportunities that you see in the taxation of staking and other crypto activities, not just from the US, but more from the international perspective?
00:24:46
Speaker
Absolutely. Well, I'll start with the US, unavoidably so, as ah as a US tax attorney. But I think staking illustrates something really important about tax questions in crypto, which is the the tax code has developed for a century to deal with all sorts, all types of transactions. All types of economic activity are covered within this intellectual project of the US tax code and worldwide tax code trying to map onto this and ultimately tax the underlying activity.
00:25:16
Speaker
Crypto is just another evolution of technology doing this. It's not something so new and so different that requires us to write new rules. So a lot of the times I'll get a call from a client or whatnot and they'll go, what does the IRS think about this? What does the IRS think about this issue? And that's not really the question. The answer is, what is the tax codes, the answer under the existing tax code when applied to this new technology? So staking is an area where I think the answer is very clear about the taxation of staking, that newly created property is not taxable until it's sold. The answer the answer for that doesn't come from some IRS ruling or what some government official says, but from 100 years of case law, the code and courts having developed it, and applying it to the new technology. So I think the opportunity, and you say, what are the opportunities in this? And then staking is just but one example.
00:26:05
Speaker
When we we see this new technology and how it's being used, the opportunity is really understand the technology and then apply the existing law to that technology and come up with sensible answers that will bring blockchain and crypto into the general mix of other technologies. It should be treated like everything else and that' that's really, I think, the opportunity.
00:26:26
Speaker
Globally, I think that the reporting regulations and how those all interplay with all of this is going to be the major issue over the next couple of years. You're going to have a lot of jurisdictional questions about, and ultimately when we get to substance, it will be who has the right to tax that transaction. There's a big principle that there should be no double taxation, no country or or whatnot should get two bites of the apple.
00:26:48
Speaker
how that's going to interplay when we have really, really complicated international fact patterns. And as governments wise up to this and and taxing agencies wise up to this, that I think is going to be the the big issue but also the big opportunity for thoughtful tax work.
00:27:03
Speaker
Great, thanks, John. And now, going back to Ulta.
AML and KYC Compliance in DeFi
00:27:07
Speaker
So, I'd like to know from what you've seen, because also I'll explain, we don't just explain, we've explained a lot of different topics, different things that are happening, but also breaking down myths, clearing up misconceptions. So, Ulta, what's the biggest misconception that companies have about complying with AML and KYC requirements in the DeFi space, particularly when we're dealing with these decentralized protocols? you You asked me one of those questions that I can't stop talking probably for many, many hours. Look, I mean, it's unfortunate that ah we are dealing with ah with, we are grappling, actually, not we're dealing with, grappling with the concept of compliant defy. But what is compliant defy? But unfortunately, for many defy protocols, they're heading toward, I mean, they're forced to to to abide with ah AML, KYC,
00:27:59
Speaker
And I think the intersection of privacy and compliance is going to be a big issue. Not right now, but for, I mean, many, many years to come. Unfortunately, I don't think we're going to have a clarity, but it seems like the regulators are forcing the five protocols toward KYC and AML compliance. But I would hope that the government and the industry should come together at least to establish those technical standards in order to identify i mean several compliance ah regarding DeFi protocols, compliance paths, and also to I think would be helpful to also identify the red flags or or to establish that red line on where this DeFi protocol should concentrate in order to mitigate that
00:28:49
Speaker
ah the risks, the compliance risks. I am the general counsel of the crypto exchange. ah ah a ah We are a mixed model, a hybrid model, a DAX model and a SEX model. S-E-X. I don't like to use SEX. And I think that it's very confusing and I have to accept this as a GC. It's very confusing for the users when they're on board and they say, oh, this are these are decks. Why do I have to go through the KYC and AML? But as I said, unfortunately, I mean, we try to my role as a GC is not to eliminate the risk, my role as a GC is to mitigate the risk and it seems that so I mean for now we have to deal with this ah compliance standards that unfortunately were pushed from our regulators.
00:29:38
Speaker
I mean, I can talk more and more. We only have six minutes. but Yeah. Thank you, Ulta. Thanks for that. And just um my last question is going to be more like a group question, more like a takeaway
Advice for Digital Asset Companies
00:29:48
Speaker
message. So just a short response from from each one of you, because we've seen that we have a diverse set of tapas, of legal topics. And now that I was looking at the title, it should be a niche legal tapas, topics, issues, whatever you should care about. I think that rings better with the ears.
00:30:04
Speaker
If you had to give one piece of advice to a company operating in the digital asset space today, what would it be? Considering everything we've seen, these evolving regulatory issues and the different rulings, so what would your takeaway message be in around a minute and a half for each one of you? So, would you like to get started and work head down the line? i I'll give a simple one, which is so you know the the firm I work at does a lot of work in in tech startups forever. They've done tech startups. you know They've they're they incorporated Apple. They say all of this. And usually when you're doing a tech startup, tax issues are not something you have to be particularly thoughtful of in the early stages. You're you're getting money from investors. Everything is kind of by the books. You get money in from investors. You issue stock. yeah You have to run up losses and all of that. But it it's very simple.
00:30:50
Speaker
I would say the opposite is true in the Web3 space. Being thoughtful about tax from an early on perspective. Where are you setting up? What's your restriction are you operating in? What are going to be the global tax consequences for that? What's your relationship going to be to the United States? How do you want to do that? Doing it earlier on in the process is absolutely crucial to be successful in this because it's not like in a traditional startup something you can come in five years down the road and then figure out because there's kind of this cookie cutter. It's something that from the beginning being thoughtful about, caring about, will pay a lot of dividends quite and literally over the course of the lifetime of a company. Thanks, Sean. Justin? I think, you know, a key takeaway is from the company side, um unfortunately, the Web3 space um has a yeah reputation amongst regulators, and it's it's a target for regulators in a way that other industries are not. So I think that you just can't be too careful when you're
00:31:47
Speaker
thinking about how to direct your public statements, um you know going back to the solar wind example, everything has to every T has to be crossed, every I has to be dotted, maybe in a way where other companies have to have to not be as careful. um That's on the company side. And then on the individual side, because we were talking a little bit about some tactics and private litigation, um you know there there's an opportunity to be a little bit creative and flexible with court. So if you've been wronged,
00:32:15
Speaker
and you don't think that you're wrong fits in a traditional box, you know go talk to a lawyer and there's probably ah strategies or things that maybe be we you know can be done in this environment to either serve the person or find the proper party or trace assets um and um you know and it's it's worth a shot. it depend you know Obviously the the risk reward and the monetary value has to be there to justify a decision, but if it is, it's worth a shot to to speak to a lawyer in the space.
00:32:44
Speaker
Thanks, Olga. I think for me, being having been on both sides of practice, private practice and now in-house, the only advice that I would give to to developers, to entrepreneurs and to founders here is not because I'm an attorney, but I think you really have to work with an attorney who is not intimidated by crypto. I'm talking here about crypto projects. I mean, usually attorneys are very intimidated by crypto.
00:33:10
Speaker
So you have to find, there is no best or worst attorney, but at least you have those skills to help you navigate those issues. The other thing is, a mentor of mine ah always asks me the question, do you want to be a risk adverse attorney or do you want to be a proactive attorney?
00:33:27
Speaker
In crypto, you really have to have the guts to not always say no. I work with developers, with engineers, with amazing founders, and it is my job as an attorney to not say no, but to try to find solutions. Sometimes I am obligated to say no, of course, but it's good to be that attorney to navigate the legal compliance and regulatory issues that we're facing in this industry, of course, in collaboration with the team. so find good attorneys out there, general counsels or outside counsels, but that's my advice. Thank you, Ulta and David. yeah Yeah, Sylvia, I really like your tapas analogy and um I'll probably steal that, Frank. It's because I'm hungry. Yeah, um because it
00:34:14
Speaker
Blockchain has been the most interdisciplinary area of the law that I've ever worked in. you Every lawyer, if they're going to be a good blockchain lawyer, no matter what their their top line specialty might be, has to be sensitive to the array of issues we've been talking about on this panel because it's such a new area and it's so unformed and it's still evolving. I'd like to analogize working in blockchain to what it must have been like being a securities lawyer in the 1920s.
00:34:43
Speaker
you know, as the law was just in its infancy. And now if you do like some, you know, garden variety traditional finance deal now in the 2020s, you know, a hundred years later, you'll get armies of lawyers charging millions of dollars over a paragraph, right? And, you know, what the precise wording should be. You can't do that in blockchain. It's just too new. It's too evolving. And and there's just so many different things to think about. So I, you know, my advice would be think of it like Topaz. Think of it as, as as very broad and you have to cover a lot of waterfront in an area that is admittedly right now evolving and uncertain and if you like that it's it's very very exciting. All right thank you all so much and thanks for joining us today I'd like to give a round of applause to our panelists thanks for every different issue you brought.
00:35:39
Speaker
And yeah, that concludes our panel. Thanks, everybody. And now it's time for real food. like We've already talked about the tapas analogy. Now we're going to have like some actual tapas and steaks. So thanks, you. Thank you. Thank you.
00:35:54
Speaker
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