 For those of you who don't know, my name is Catherine Wu. I work for Masari, or a New York-based company, that our mission is to sort of provide more transparency into the crypto asset industry. And I am a US lawyer by training. I don't practice law, but I do spend a lot of time thinking about the intersection between law and technology, and also politics. So this is an issue that's pretty near and dear to my heart, so yeah, so without further ado, I'm here today to discuss a topic really that I think would be a little hard to cover in the next 20 minutes, but is nonetheless relevant to a lot of the discussions that's been happening both at DevCon and also in the broader crypto ecosystem thus far. So let's start with a question. As we think about the future of the crypto space, about Web 3, about crypto's impact on society, I think sometimes it helps to bring the discussion back to basics and think about two questions, which is, what is it about the current state of the world and its governance structure? Do we want to change? And secondly, does it need to be changed? So my goal, of course, is not to present an answer to the above questions, but to develop a framework and hopefully provide a little bit more nuance into this context that I think can be quite polarizing at times, especially online, on Twitter and other forums. So with that, here's where I want to kick off the discussion, which is to look at the history, the formation, and the evolution of public international law. So international law consists of the framework and infrastructure in which the foreign affairs of states are conducted. So that includes the institution's forms and procedures for daily activity, the assumptions on which our society is founded, concepts which permeate through those societies, and the various relations between the society's individual members. And the infrastructure for all of those agreed upon assumptions and practices, commitments, expectations, and reliance is all under the umbrella of international law. And this is important, I think, to crypto because the crypto community is also a global community. And I think there are some parallels you can draw between nation-states and also various actors in the space. So I'm glad I actually went after Santiago because I loved the discussion that he provided, specifically some of the context that I want to start with, which when we think about the 30-year war and what ended it, the Treaty of Westphalia, two important things resulted from that treaty, which he went to a little bit earlier. But first, it's the birth of the modern state from an international relations perspective. So it became clear that the primary origin of international discourse was the nation-state. And the nation-state was also defined in a critical way, which is that the state is sovereign. So what happens in the border of the state is subject to the control of that state and that state only. And secondly, it gave rise to the notion of the sovereign equality of the states. So this means that in theory, no matter the realities of economic disparity, that in the eyes of the law, all states are considered or understood to be equal. So no state has greater power to sit in judgment over another. So this treaty created sovereign states in theory. And from there on out, customary law, which is the practice that's reinforced both through actual practice and common understanding of the international community, developed very fast. So customary law is sort of one way in which international law derives its authority from. But of course, the question, of course, is how exactly does international law, on a global scale, even gets enforced? So there are two ways, generally speaking, when it comes to enforcement mechanisms. So the first, enforcement mechanisms are pretty clear cut when it's considered to be vertical. So if you take the US, for example, so US Congress can impose a rule or a law or regulation that says insider trading is illegal. So once they impose that, the law is then reinforced by the relevant government regulators like the SEC and DOJ, which we've heard plenty about. So they have harsh penalties for non-compliance. And as a result, the individual traders have an incentive to comply with the law and avoid the sort of risks associated with trading based on material and non-public information. Of course, the challenge arises when governance is horizontal. So for example, though we have the framework for international human rights law, human rights violations persists around the world. We continue to see gross violations and disregard for basic human rights that are being perpetrated by individuals, by governments, and by international organizations. So here, we're faced with the biggest challenge in international law, which is that it's not real. Or rather, how does it get reinforced? International law does not have a central lawmaker because we don't have a world police force or a world government. And so there's no mandatory vertical governance in this instance. So there are some scholars out there who are very, very skeptical about international law. And they think that the reason why international law doesn't work is because there's an absence of a comprehensive judicial system with compulsory jurisdiction to settle these disputes and the absence of a central executive to enforce compliance with judicial system decisions. And I actually disagree with that. I think that the emphasis on global courts or a global police force is quite misleading. In fact, when you look at the reality of it, international law derives as binding force from sources other than courts, other than police forces. States comply with international law out of a number of reasons, but a strong one is out of this expectation of reciprocity or retaliation if they don't comply. Or generally out of a belief that a law is morally legitimate and therefore ought to be obeyed. And so for example, effective sanctions exist without the need for centralized adjudication or enforcement agencies. But mostly I want to point to the formation of customary international law, which is, like I said earlier, the practice of, this is a practice that's reinforced both through a consistent practice and B, common understanding of the international community, which remains a highly effective one. So for the record, I'm not addressing like other sources of international like treaties, which are kind of more like contracts or written agreements. But rather, customary international law are formed from a general and consistent practice of states that is followed by states out of a sense of obligation, so thinking like what the right thing to do is. And that sense of obligation is called opinion of jurors in legal terms. So examples of that include diplomatic immunity. It's agreement and it's consensus among members and states first. And then the establishment of governing laws second. So I think a lot of people typically assume that the only binding force or rules are made by legislative and courts. And we tend to forget that honestly, law can also be made by a consent that comes from a community of people without any formal enactment by government entities. And in fact, such customs or practices are not even written down sometimes. So as an example, we can think of industry practices, like let's take this out of the nation state for a minute and listening about sports and general sportsmanship. There was a couple of years ago, so when we were talking about US football, I'm not going to name the team, but there was one US team that was kind of going around and recording other teams and their practices, which is not a rule. There's no rule by the NFL that says you can't do that. But it's generally understood that you shouldn't do that because it's not the right thing to do. Of course, after they started doing that, I think eventually the NFL kind of made that like, OK, you can't do this to another team. But to bring that back to the sort of accepted that you don't do this, and teams traditionally have not done this, and because of this behavior and that's consistent, it then gets codified later on. And so going back to international law, like ultimately, customary international law is a signal source of both strength and flexibility for international law, and it allows international actors to develop rules for behavior that are sort of informally without the need to resort to a formal lawmaking with a central, a lawmaker with a central body. So what's an example of a consistent practice and common understanding from the community that we can bring in the crypto space? Well, I think first we need standards. So there's something that I read one time which emphasizes the importance of values. So it's possible, or it might be possible, for two equally effective governance systems to compete by internalizing different values. So one could perhaps embrace diversity and openness at the cost of some efficiency, and the other could be optimized for efficiency, but for a more sort of like homogeneous set of users and interests. So whether it's the crypto industry working out a global taxonomy that makes sense, or standardizing the very sort of minimal amount of disclosures that should be demanded from token projects, whether it's before or after the token sale, it's about figuring out the values that the community agrees on, and pushing those forward. So bringing this back to the earlier criticisms of international law, personally I think the critics are asking the wrong questions at the end. What matters is not whether international law has the exact same legislative, judicial, and executive branches that domestic states do internally. What matters is whether international law is reflected in the behavior of the states. So it's not whether or not there's a formal judiciary. Instead, it's whether disputes are resolved in orderly, peaceful fashion in accordance with international law, which they mostly are. And more importantly, it's not whether about if the law is enforceable or not. The question is whether or not it's de facto being observed and whether it influences the behavior of the states. So nations have generally accepted important limitations on their sovereignty, and the result is substantial order that we live in today. It's not perfect, it's not optimal, but it's substantial. And it works well enough for you and I to be here today and just have the day-to-day workout fine. And so in reality I think the actual international system is a hybrid of two theories. One, norms that are formed by treaty and two by consent. And so therefore the actual international system is a compromise point between those two theories. Now over the kind of just being online over the past year and half being crypto, I overhear conversations that often go something like this. We don't give a damn about governments and their laws because we're building web three. So to me, I think that's sort of a misunderstanding of what we're really striving to work towards. What we're trying to work towards in this space specifically, it's we're trying to empower sovereign equality in individuals. It's about creative incentives for human cooperation and it's about creating good citizenship among the global community. Ultimately, governance is a bottom up approach. Goals and value go hand in hand, but are created from ongoing community consensus more than predefined rules. And technology may ultimately move the discussion forward and give us a framework to build upon, but governance is not a ground zero issue. And at the end of the day, it's about human behavior. And that's it, thanks guys. You can find me, that's my Twitter and from Asari. Alrighty, we have time for one or two questions. Does anybody have a question? Looking, looking, looking again, I have, oh. Hey Catherine, thanks for the awesome talk. It just struck me a moment ago as you were describing international law that there are some parallels with, sorry, this is way out there, but like the way the different blockchains are governed, and like systems like Polkadot that are being built that are saying, hey, each chain can go off and do its own thing and can have its own rules, its own governance on chain, but then there's some sort of central system where they coordinate and there's so higher level they can communicate and some level of invariance. I'm just wondering if you've ever thought about that and if that's anything we can learn from international law in building these systems. Yeah, I mean, I think ultimately what I'm trying to say here is just sort of like when we're looking to rebuild any sort of governance systems, let's not totally disregard history, right? And so, and I wanted to mention this earlier today, didn't have quite the time to get to it, but if you look at the UN, for example, I think the UN is a good example of a body of, or 200 plus countries has come together voluntarily signed an agreement, and that's fantastic in theory. But when you really look at like, for example, the UN Security Council, that's ultimately five members that decide everything, right? So the UN is a member, it's supposed to be like 200 equal members together, but then you have five who centralize all the power. And so that's an example of a centralized decision-making body that maybe isn't for the best interests of people because we all know how gridlocked it can get. I don't know if that answers your question, but. So like going back to what you were describing on I guess like horizontal versus vertical, would you say that currently like customary international law is like very, or somewhat similar to how like a self-regulating like like SROs work in that there's like a body of institutions or businesses or what have you that basically just kind of like make sure that for the sake of like not having to like bring in like some vertical like watchdog, they kind of just kind of like police one another and make sure that there aren't like bad actors? Yeah, no, that's a great question. I think ultimately like the point I bring up with customary international law is that it's very like dialogue focused and it's very sort of like you put out the standards among yourselves first and then that gets codified, right? So when you're thinking about like, how do you regulate the crypto industry? Like how does I even start with, let's start with like I said earlier standards, right? Like what, so for example, Masari is part of this initiative called the Global Digital Finance and we had a huge debate recently over what does it even mean to be an investor, right? Are you talking about investor people who are using or buying tokens for speculative use? Are you talking about people who are using this? Are you talking about, I mean, could miners technically be a user? I mean, it's just they're so, it's like very convoluted and like as an industry, we can't even agree on like what these different standards are, like what best practices are. That gets hard for ultimately everyone to like want to follow the same set of rules because definitions are all different. So, you know, tying it back to like dialogue and conversations and community consensus, I think that's important. Like dialogue is important and we're still very early and I think that like that's really important to be having right now.