 The door is still open, it's still open. The front door is still open. Yeah, I know, um, you brought a game with you. You're gonna use games in the room. No, I don't. You're ready? Yeah. Okay, it would be nice if any. It's gonna be really nice. And agree with every nice thing you said. I'd be interested to make it out. Okay. Are you just going in your car once? Yeah, actually, that's funny. Yeah. Because that's actually another one. I don't know, they're going like, I don't know what you think. Yeah. Disclose our conflicts. Alright, um, hi everyone. Uh, this panel is called Blockchain and Law. There's some subtitle on it, I don't remember. Um, we all spend a lot of time together, actually. So this is like, we just do this all the time anyway. So it's like now there's just a bunch of people in the room with us. Um, and we have like formal questions and stuff. Um, so yeah, so we're going to talk about Blockchain and Law. And, um, we have a lot of time to sort of go through our agenda. And then maybe if people have questions for us at the end, uh, they can go ahead and ask those at the end. Um, um, yeah, so I'm just going to pass the mic around and people can give their short little backups about themselves. Hi everybody, my name is Maria Gomez. Um, I used to be a corporate lawyer, but today I'm working in a project that's called Aragon. And so what we do is we build governance tools and applications for Blockchain-related organizations. For the creation of governance, as opposed to those new type of organizations. Hi, I'm Constance. Um, I started out my legal career working at BFF. Um, litigating, um, yeah. Yes, fighting the good fight, uh, litigating issues of personal oppression and internet loss. So dealing with, um, issues that courts have never seen before become technologies new. Um, and then I worked for, uh, big law firms, um, litigating cases for big tech companies before I discovered Blockchain. And this was Bitcoin back then in 2011. And then I was, um, general counsel and chief finance officer at Aragon for four years. And then now we run this, uh, we run this wonderful community called Koala, which all of these panelists are our members and some of you guys in the audience. Um, we are a community of like-minded legal experts, academics, researchers, economists, psychologists, the whole chavain. And we get together at workshops and conferences and cross-working groups, trying to solve, um, deeply troubling issues that are common to us all. So, um, what are some of the key works, any kinds of tools and how to develop policy and culture in this case? Hi, my name is Rick Dudley. Um, primarily what I do is, um, I'm a mechanism designer in the Blockchain space. So I have clients and I help them to build projects that are on a set of lines so that they actually really do fulfill the promise of Blockchain technology and provide the safety guarantees that the users expect. Um, in that capacity, I oftentimes also have to make sure that it's in some fakes since, at least remotely, people are compliant. Um, so I spent a lot of time discussing with, you know, various lawyers in various places. Um, how do we structure these things and not want to follow the law? Um, and so, uh, actually, really prior to that, I was in Kuala. Um, um, yeah, and I still am in Kuala. Uh, as a president. Um, um, but yeah, so, so I mostly, in Kuala, I'm not, I'm the non-lawyer in the room most of the time, so I'm sort of helping people to, um, understand the technology side, the Ethereum side in particular, and, uh, I'll be moderating the content. My name is Zilka Lufay. Um, I'm the General Counsel, Chief Executive Officer of NOSES. Um, we build decentralized infrastructure and the Ethereum function. Um, we might build a multi-quallet, our unit and our NOSA safe. Um, we have protection market protocols and, um, also working on our decentralized exchanges. My role is mainly to make our products, um, dispute-resistant. Um, prior to joining NOSES, I worked in the Caves in financial regulatory, um, insurance like finance, uh, compliance, um, also international arbitration. Hi, I'm Annie. I'm the Associate General Counsel at MAKER, so we are an initial decentralized student group. I've been down again in a lot of options space for the last few years, working at various student projects from community currencies and financial inclusion, um, to now work with the MAKER DAV team. Um, before then, I was a proper lawyer. I've worked in SEC in investigations and capital markets transactions. Um, and my first life, I was, I worked on Wall Street as a research analyst. Thanks. Hey, I'm Kate Riddler. I work at NOSES, and you will find out that I'm also not a lawyer. Um, so I've been in the blockchain space for some time. I think at NOSES, I work in comp strategy, but I originally came to know that we're all a community from working on a small cooperative, which I set up, like, Articles Association for and tried to do a distributed cooperative form in 2014. Um, and that community came to be an advisor and a community member of the Inter-Internetary Database Foundation, which is kind of a throwback now, but I think that's how I came to know you guys. So looking at a kind of model of decentralized stewardship on a human level of decentralized protocols and thinking through that. So my background is more in kind of running and research practice rather than loss of security and organizing. Okay, so, um, you know, we have an outline. Um, I don't know, I probably won't keep it entirely a mystery, but I will be somewhat curious. Um, but the basic idea is to sort of provide an introduction to what we think are salient legal questions in the blockchain space, um, which may not be what you think are salient questions, and then we can sort of suss that out at the end. Um, but yeah, let's, uh, let's start. I don't think anyone can sort of respond to the question of what is apegality, and, um, so in, in the sort of the blockchain space, you sort of talk about extra-legal or unstoppable applications, and oftentimes there's a, there's a legal undertone or a legal subtext to those statements that is actually predicated in this concept of apegality. Um, and it would be entirely unclear to a layperson or even, in some cases, it would be one of the legal background of what that means or how that applies. So, um, So, what we mean by apegality is, and, you know, I'd like to hear what you guys think about this, is, you know, we're not talking about things that are legal per se, i.e. already defined, you know, by specific law or regulation. We're not talking about things that are illegal. Um, apegality is what we refer to as things that exist currently outside of the view of the law today. So when we think about, um, unstoppable code, um, uh, we often think, oh, what we're really talking about is the, is the blockchain reality. And there is a blockchain reality, but we forget that there's also a physical legal reality. So people participating in that code, the development of the code, people participating in the project, all of whom have a legal and physical presence in the real world. Um, and so what we, when we talk about apegality, we're really trying to figure out how do we make this blockchain reality correspond and deal with this physical real reality, legal reality, maybe not real, legal reality that exists for many of us who work in this space. Um, apegality is very easy to grasp, if you just refer to the ordered, the disordered and the unordered, and we're basically in an unordered space. And I think, um, in the long, I mean, right now there's a lot of regulation happening, so the unordered space is becoming less unordered, so it's becoming more ordered or disordered, depending on where we stand. Do you want to expand a bit on which one's ordered, which one's unordered, which one's disordered? I think, from a regulatory perspective, find a regulator. Um, anything that doesn't comply with the new overarching or overreaching regulation in several countries would be disordered. Um, and the unordered, our apego space becomes smaller and smaller. But that is up to debate, so you might have a different opinion on this. No, I just, that's what it is for the audience. I'm not sure if there's complete illegality, because as long as there's human interaction, there's a set of even when we don't have codified rules or regulations, what's the ground by which we operate together as part of our human interaction? So, if I take a very common law approach and I think about, um, there's laws, but there's also principles, there's a constitution, right, that grounds the legality of all the subsequent laws that are enacted by Congress or by, um, regulatory agencies. So, there's a pecking order, right, we start in the US legal culture, we start with the Constitution, which is a piece of written literature, um, as opposed to the English Constitution, which is unwritten, but it's a set of those founding principles. Um, and on top of that, we have laws passed by Congress, and on top of that, um, we have regulations that are put out by enforcement agencies that interpret the law, right? So, increasingly, lots of law kind of falls in that top space, and we talk about things in a very concrete way, as we all know, we're all scared of the FCC, we're all scared of enforcement actions, right, so they're operating in that level, um, and we kind of want to look at, well, where are these grounding principles and are these subsequent recognitions of laws? Um, so I think, you know, delves into the opportunities you can think of the relational aspects of, um, human interaction, and I hope it's just a way of executing those human interactions and what the values are between various parties. It's, I notice always when we are talking with lawyers, um, and, um, I used to be a lawyer doing the thing about legality is that we are always referring to this legal system coming from the governments, um, and so, well, that's why, like sometimes we say legality is something that is not ordered, but sometimes we find order, uh, uh, coming from legal systems coming from the private parties. Um, so it doesn't mean that we are not ordered if it is outside the legal system or that there are no rules at all. Um, there are now new, uh, projects or these blockchain organizations, these new systems, they are, um, self-organizing in a way and trying to impose these or to create this new system, um, that is parallel and it's outside of the, of the legal traditional one. Just what if we follow up, you know, in terms of this kind of unordered space, eventually that unordered space becomes ordered. There are forces that shape the way laws form. It's slow, but it moves, it moves in a particular arc. And without, you know, new kinds of projects and new kinds of thinking and innovation, and what happens is that the kinds of forces that shape the political economy, which lead to the laws that we then see later on are going to be in play. So these are stakeholders, incumbents, um, entire systems, you know, people with poor resources. So it's, when, when we say people often think, oh, if there isn't a particular law for, for, you know, blockchain, that means the law doesn't apply. There are many areas of law that already apply that have yet to be imposed as an ordering on the space. And yet, it will be ordered and, and what we are really interested in as a community is how do we shape that ordering and that can be done through building new projects, um, changing the market forces, changing our collective uh, culture and what everyone believes will work or won't work. So all of these things are equally important as we, as we look at whether laws exist or do not exist that apply to us today. I wanted to reply to Maria on like, you know, the privately ordered space. So, um, we are trying to order ourselves, um, at that order, or like on unordered by regulation, but ordered by ourselves, that is sanctioned by the state. So as long as they, they have it with what they're doing, and as long as it's good in self-regulation, they don't interfere, but it, it will not. What we do, I mean, does affect, I mean, does come into play with the, we might get into conflict with the public space basically. So I think what we want to discuss here today also is what can you actually order privately and what can you not order privately? Um, so I just want to also bring it back. I feel like there's a common conception in the space that a legality almost translates to a kind of autonomous legality, and that there was early on a misconception based on the term smart contract, that there is some type of contract law, somehow embedded in how these technical consensus protocols run when it actually is not once one match up. So I think a lot of what you said about shaping the relational space, where if you have these principles and law is not always necessarily an external appeal, so you would think not necessarily on-chain, off-chain, but if you kind of externally appeal to outside the community or like an extra diridicial force, like what are the points of those contact? So if you order yourselves correctly privately, you can also strategically choose like what are the points of contact when you do seek a court of law, when you do see liability, and other questions in large part concerned about responsibility and liability. So I think that's a very good point and a good sort of transition, I'm just going to quickly say, I think the process that the blockchain community is experiencing now is you exist in this illegal framework with like unawareness, right? I mean it's like your ignorance of the law, people don't know what the laws are, they don't understand how the law works, and they also coincidentally land, and this is actually interesting about the blockchain community as a whole. Some of us have landed very much squarely in the illegal space, whereas some of us have landed very squarely in the illegal space for the same reason, right? You weren't aware of the law, you weren't paying attention, whatever, and you just were doing your thing, and some people thought their thing was going to be cool and they were really wrong. And so we are, as a community going through this process of ordering space and formalizing as a community what we're doing and the real risk is as a community if we start to again, out of ignorance create an ordering that is in conflict with the law, right? Because what's going to happen is we're going to have a set of community norms that we all believe are true and valid and legal again because people make laws outside of the government but we will have formed a set of laws that are in conflict with the laws that we all operate under. To put it in a very concrete term it's great that we can have this conference here and we're not like a biker game, right? Like, a biker games have their own law, they operate outside the law, they literally call themselves outlaws and have outlaw badges and go to outlaw parties and like, you know, these parties are funner. There's a lot of benefits to not being an outlaw party pros and cons, right? And so I think for most of us here in the blockchain space, we're trying to align our order in process with this other legal ordering process and so apropos of that I'm going to ask the next question, the next prompt which I think is something that oftentimes comes up in the space and also is of, you know, touches back to some of these other conversations about contracts and use of terms, you know why can't we just make smart contracts between us and call it a day, right? Like, why is it that we can't just have like these sort of weird computer mediated bilateral agreements that are interesting and unique in their own right but like why aren't these new forms of private agreements sufficient to protect our activity again, as we sort of move through this unordered space into an ordered space why isn't it sufficient for just, you know, three people in this room to get together throw some stuff on a computer and why isn't that like a sufficient protection and I don't know who's starting it's not a constant stuff. Basically what I earlier spoke about is that in relation to persons we're fine to private ordering as long as we don't violate the private law, the criminal law and administrative law so that's what we have to focus on and the moment we do that we have a problem or we might not because no one realizes but we rather not have that problem So going back to case what about smart contracts again this number I think there's there's a train of law in this space that everything can be codified into code but smart contract is really just the enforcement piece of a contractual relationship it doesn't encompass the totality of contractual relationship which includes elements like is there a meaning in the mind so there's this complation that says the execution of some function, the enforcement of some function is also the evidence of the intentions when in fact we have an outcome but the hope to see it between two people is whether or not that is the correct outcome that accords with the expectations of the parties so that's necessarily I think something that falls outside of the scope of the code the code for the evidentiary of the intentions of the party but it's not by itself the totality of that of that relationship What's the difference between a smart contract and a written contract a paper contract also contains many other provisions and there's also other activities that can be evidentiary of a relationship between the parties right So I think that what we're really talking about there the difference between in sort of late terms the difference between a smart contract and a written contract a paper contract is that when you go through the process of signing up a paper contract you've demonstrated some meeting of the minds already and you've demonstrated that in some relationship to the greater of all people don't say oh I signed this well it does happen actually where you have very ignorant people and they're like I signed this contract because I got some ice cream and then you're like okay well obviously that like failed to meet the qualifications of a legal contract and I think that what we have in the blockchain space is people who didn't like the concept of a legal contract didn't like the concept of a legal agreement sort of just wished away the laws relationship How is this different to like an oral contract for example I mean you don't need a written contract and sometimes people as you just said the guy with the ice cream it happens all the time I don't see a difference in that I don't think the difference is in the sort of formal structure the difference is in quite literally the minds of the people in the agreement right when we talk about people in this community making smart contracts smart contracting systems they are not, well some of them are the person who's like oh I got some ice cream so I took this token or whatever but a lot of the people really do are trying to construct their intent is to create something that exists in a legal brain but they're failing to do, they're not doing steps necessary to really achieve that, so I think that's the difference is the intent of the people in the process I think there are many like nuance reasons why they're different, one is just historically and use of force in terms of like to see the century where what is the law is at maybe there is a historical ground that they're like extraterrestrial and that contracts actually are meeting other ones but right now there's like a really big space between terms of service for using software to like a multi-party contract agreement am I going to have liability for a DAO that I signed up with for MetaMask like 10 years ago and because that software did something and I haven't participated for a long time so I'm kind of liable for it, that feels a lot different than I am signing a contract for employment or producing funds and it's also to answer very shortly one more reason why I think that legality and code is not sufficient is simply because from hanging out with you guys I learned that there isn't necessarily the law there are actually like a lot of laws and there isn't necessarily like the kind of blockchain protocol there are a lot of technical disagreements about protocol upgrades so it's that lack of homogeneity that also makes it very difficult to match the two up so to talk about international law and different jurisdictions and so on Back to the usual question of why is it enough to have smart contracts and call it a day there's two concrete examples you know a group of people for blockchain people are participating everyone has the best of intentions all of a sudden you have an assassination contract it's launched on mainnet and you thought you guys were just a group of people or you thought you were just contributing to a code for a particular project and all of a sudden the law sweeps in and apart from this blockchain reality and all the agreements you made that then deem you a general partner in a general partnership and liable for all the acts that everybody can participate in so this is where it's really there is a physical legal reality with states that have the use of force that operate on your projects even if you can't see it right now that's just one clear example I just want to add that as long as we have humans and for example in these blockchain organizations even in some processes that can be encoded in smart contracts these organizations are being formed by humans so there are subjective constraints that are needed and that are impossible to codify so I was talking before about self governance and how we could create this rules system and a way to the problem with that is that whenever there is a dispute for example to decide what is according to those rules or not it's very subjective and so that's why just smart contracts are not enough one of the solutions that we are working on is something like the core which is an oracle and that oracle decide which works with humans will decide what is if certain action within an organization is to those rules or not we cannot decide and the DaoPak is a perfect example of that the attacker actually said thank you for if the code is really law I follow the law and thank you for all the money and actually the community decided that was not the outcome that they wanted they wanted to overrule this blockchain smart contract reality so there's that human layer just as you said that we need to take into account as we build this infrastructure that's ultimately meant for all of us humans to deal with and just briefly I think it's interesting to note in the case of the Dao the reason the code wasn't law was because ultimately the issue that arose was not from the author of the contract that was exploited the underlying issue was a mismatch between two parts of the stack below that developer wrote and you can sort of get into this I think that depending on how much of a software you are there's this really fascinating philosophical discussion around programming languages and why would we ever want to use a language where such a problem can even emerge but here we are in reality where we have those languages and there's no way that you can legitimately argue well okay there's conspiracy theories that are somewhat extreme but outside of those it's very clear that the intent of the original publishers of the Dao was not to have the Dao hack happen so we can all look at that and agree again the vast majority of obviously not everyone but the vast majority of people can look at that and say okay well the code that shouldn't be law is the code that actually the person who wrote the code had an intent and that intent was clear and the fact that there was a bug underline code obfuscated that intent and if you're having that sort of level of complexity in your discussion about code as law like if your code is that sophisticated which is actually like the vast majority of code the Dao wasn't a particularly sophisticated piece of software so if we can't express simple things like the Dao in these unambiguous terms then we're going to be stuck having humans try to mediate to resolve these issues in one form or another whether that's through like an Aragon sort of module or through something else Billy do you want to remember your question later and we can come back to it thank you one thing I wanted to say to that is that the Dao team could actually have made this a bigger contract it could have set up a contract saying code is law and maybe this legal system is the choice of law as England and Wales or something else and then you know you would have had some kind of a backup so if you want code as law you can set up a contract to actually state that or you need that in addition to this you would need to have a legal system that catches all the other things that you have missed out on it yeah so I think for this community the reason people don't do that and again if you're not a lawyer that just seems like especially in America hopefully lawyers are expensive everywhere but hopefully we didn't just get the short end of the stick we only live in the countries where law is expensive hopefully law is expensive everywhere and it's not only the expense that provides people anxiety but it's like you're opening up this whole new world because this is one of the things that it's easy to misunderstand if you're a layperson which is just because you don't know what the law is doesn't mean that you're not subject to the law you can't like lead ignorance to the law you can say oh I wrote I drove over this person because I didn't know it was illegal right and so in the same vein your suggestion is a perfectly reasonable suggestion as a lawyer which is I should provide myself some legal protection by at least like writing something down and notarizing it but for other people they feel that that's like opening Pandora's box and that's inviting the law into their situation to make it worse not make it better I mean that's literally why we're here on this panel is to sort of dissuade people from that line of reasoning and if you want to stay away from any legal jurisdiction if you choose as your distribution arbitration you could also actually not take a territorial jurisdiction as your choice of law you can actually take rules of law so if the ethereal community would want to make you know rules of law like everyone right now is creating something like that you could actually put that in there because most arbitration laws or international arbitration laws they allow you to do that so we could create some legal system ourselves and refer to it in our contracts in our distribution mechanism but we haven't gotten that far I mean we could do that I think it was a great idea and we are actually working on this just on the arbitration I think there's more flexibility in choosing procedural rules for resolution but the substantive rules yeah but the substantive rule but I don't think you can violate it like the mandatory law so you cannot so I've worked for ten years in international arbitration and Fannie also so we have a bit of a dispute on this question my position on this is you cannot you cannot violate mandatory laws and you cannot use codons I mean like torture or you cannot any other human rights that are enshrined in international law but on the substantive level it's not just procedural you can actually come up with your own rules on that but you cannot can you give an example for the non-lawyers about what one of these rules that you can make up would it be like consent I think that's the best way the consent how you give a consent you give consent can be also I say hey it's good yeah so actually Anna has a very good idea it's you could say for example a signature requirement if you could say that the action signature is the signature under your contract and then you wouldn't need to follow jurisdictional signature requirements so that would for example be a rule you can very much adapt it to your own legal system you choose but for example I mean we worked on initializing the DxTow what we realized I mean there isn't yet this system of rules we had that is being developed that doesn't exist yet so we had to look at the jurisdiction we had to take a choice of law of the jurisdiction so you need a jurisdiction that has a barrier that allows you to do this so it doesn't function at all jurisdictions yeah okay it doesn't function all jurisdictions start to cut you off at the last line there so we do have an agenda can I do my questions yeah really you're so close I'm gonna try to hand the mic to you you were talking about CODIS law and it's not often that I have a bunch of lawyers there and I was curious to talk about the interpretation of CODIS law from the non-lockchain perspective of the interpretation of law to be interpreted as it was intended originally this is a big debate in the Supreme Court in America and how CODIS law and traditional law could be about really interpreting the actual English you know what I mean what that stands or how does that juxtapose in today's current law climate yeah so we have long arguments about this because um technically I think I guess there's a in this well in QALA broadly you go from all over the world right so there's all different laws I mean this panel coincidentally is mostly I think US law but maybe not I mean I don't know what the split is I can't count apparently um but yeah I mean there's definitely um yeah so there's definitely I think a question around like in the US context versus the European context common law context yeah so technically in that previous statement the UK is not part of the EU I just said but um yeah I think that there's um actually answered I didn't think I was answering the question I don't know who wants to answer it sorry so um you know I don't know how many of you guys are familiar with John Kerry Barlow's um declaration of independence in cyberspace so this was you know when the internet was new and we thought this was this open free space free from nation states and unfair enforcement mechanisms where we could all learn and live and play together on this wonderful worldwide web and you know um if you read it it's beautiful but it almost seems quaint today because eventually we realized that um you know these networks that we created still were operated by people, businesses who live in this political economy and shaped by the market, shaped by legal forces, shaped by culture shaped by norms and that's how we see the internet today which is very much not an independence sphere of cyberspace so when we say Coda's law we're kind of drawing on this very long tradition of technologists or people who are innovating at the edge of new technologies who think that they have somehow escaped the law and created a space where they can make their own rules and um you know there's a lot of split between different jurisdictions about how you know in operationalized literally what that means in terms of how Coda's interpreted and but in the broadest sense that we've been approaching this question is um is it enough to make private agreements with technology or do we need to take um the law all the laws and the politics and the culture that come with the building of laws into account as we build this stuff anyone else type of comment no we don't we're skipping that so what we're going to do for the sake of everyone's sanity is imagine these two right next to each other arguing at length about common law and civil law and boring all of you so we're skipping that so that's from Billy's question Billy would have in alternate reality I pass them the mic and they just argue about it um no one wants to hear any of it so okay we're not doing that um but this is an apropos the next question which is you know do we need to reform the law um do are legal reforms necessary for the community to achieve its desired goals I think is probably the most simple way of putting that and I think that um question uh yeah um does do we need legal reform to accomplish the community's goals not yet I think um we are just starting um we are just starting to have actually at least in the in the case of organizations native smart contract native organizations we are just starting um to have those people are just starting to use these new tools and I think um right now we I really believe that these new rules are going to come from this private sector first um I always put this example of the London um exchange it was initially called Jonathan's coffee house in the 18th century and that became at least today uh London exchange and so I really believe that um these initial rules are going to come from us this initial system and even ourselves we have to enforce those rules as well um these coffee house were like private clubs in the 18th 18th century and the governments they didn't want to to recognize those rules and force in them so the people they organized and they made sure that they weren't enforcing those rules and that's how this is the new system that we have and so private private governance um is effective and I think this is for us it's going to be necessary now I think I agree and disagree which is um are we going to achieve as a community today writing different SEC rules really not but I think if we broaden the idea of what legal reform means and to how do we shape the way the law is going to work now and in the future I think we have enormous space and that can be done in a lot of areas of private governance which Aragon is working on but you know we talk a lot about regulatory capture and market capture and these and as we move from this unordered space into an ordered space if we don't take a proactive approach to figuring out how do we make our processes sound, how do we meet the kinds of goals that we can all agree on you know um protecting consumers, having freedom to contract um you know promoting innovation and creativity um making sure criminal activities are conducted on our networks if we can't come up with ways and means using the infrastructure that we have to deal with these problems what will happen is as we move into this unordered space the forces that always shape the entropy toward centralization the forces that are powerful today will continue to shape that in the future and we'll see what happens with the internet happening to crypto and you're already seeing it with Libra and others so we really need to figure out you know how do we as a community build the road and the rules today while we still have space and capacity to do that um as the law starts I think that's really correct and also what I see as one of the opportunities is a network and I don't think blockchain is the only example of this but I think normally when we kind of choose terms of service or interact with software we feel like we're contracting with a corporate entity but in the case of more distributed systems you're kind of contracting with a network you don't know it potentially contains much of the other things so in non-legal terms like that relational aspect of reorienting how we interact with software to be more about kind of entering into agreement with a network of several different parties and have common responsibility because what I hear is the tension point in a lot of our conversations is how do you manage liability and responsibility and pseudonymity and that seems to be the kind of core tension um we're finding legal space like preserving the ability to interact pseudonymously while interacting responsibly and that's one of the major points for me and yeah just to sort of add to that the um the um sorry the feedback is really bothering me um you know we're also when you talk about uh you know anonymity and providing you know maintaining sort of privacy that is also um somewhat circularly to avoid exposing yourself to laws that you otherwise wouldn't be exposed to and also even more uh to take a step further um you know not all laws are just we don't all you know we all have our own sense of justice our own sense of morality and our own sense of ethics and maybe I think it's ethical to and maybe everyone I know it's ethical for me to do something legal thing in some other country and in order for me to do that I need to protect my identity right and um to stop those people coming after me or you know harming the current counter parties that I'm interacting with and what have you and so I think there's a benefit I mean we're constantly thinking about like assassination markets and like kidnapping children and child porn and all this stuff but that same protection um can work to actually create like a more just and ethical environment and um especially to talk about stuff like you know the air god like you know the it's allowing people to have uh an agreement that is more just than what they could actually get within a legal framework right and I think that's that's actually sort of the um rhetoric for why people engage in this you know potentially engage in this process pre-reform I definitely think that there are very specific areas of law that to me is there fundamentally an opposite of the four tenants of um how watching so we think about crypto assets crypto assets are their assets mean whoever holds and controls that asset they are the owner right versus registered assets which means they they have to be named um so a lot of what crypto assets are are are assets that behave as as the functions of registered assets meaning that they behave like securities in the sense that they are economic incentive tools but instead of saying only a certain class of folks who are named to our credit can access that that set of instruments we want everyone to be able to access that and that's fundamentally opposed with how securities law functions whereby you cannot be a bearer asset if you're a security right that's just part of the law you have to be registered there's there are these regulated intermediaries that um serve particular functions so I think that's a fundamental aspect of the law that needs to be changed and that also goes into corporate governance and who can participate in the governance of something that doesn't quite look like a traditional corporation um we're trying to build public commons, digital public commons but we need an incentive mechanism that allows anyone to participate so it could be a revenue share model well that traditionally looks like a security then that means there are only tools on our finances that way so we're constantly at heads with expression of an existing legal version that doesn't match um and lawmakers are at least in the states aren't really going to do anything about it anytime soon so you have regulators like the SEC trying to figure out what's the best way to balance a space where for them it is a legal in the sense that um they've got you know 50, 60, 70 years of securities law that says when's a security always a security what is this morphing thing that goes from a security to a non-security so they kind of have to put that up even though they don't really have that kind of law making power this goes back to where is the legitimacy of the law comes from so they're kind of operating in that gray area and they're doing these peer settlements to try to say okay you were early you didn't kind of know what the law was um you're not a pure fraud you're doing something innovative that might bring lots of value so here might be cause more damage by shutting you down and preventing you from having this asset or you know you can kind of tort and pay um and that's a cost of doing business in this space and we'll let you go and experiment like so there's a real compliment which I think there's that friction and government agencies don't actually know they're actually in an illegal space where they don't know how to proceed I just want to add super quickly I naive really loved the idea that what could be produced is different and new types of definitions of financial assets I think that would be fantastic that's obviously up go we also need to post-regulation in the Dao space because in the Dao space there are more and more people are entering that the ecosystem they do not know and most people do not know what legal liabilities are attached to that one example a lot of people do not think about is for example if you get a grant from a Dao and the Dao there's the Dao's anonymous you do not know where the money actually comes from you might be implicating yourself in like terrorist financing activities just by taking the money so organizations that if you have a company and you get a grant from a Dao in strict sense you would have to ask yourself well am I sure that this money coming from some terrorist organization or some organization that is in the eyes of some big government considered to be terrorists or AML related if you do that and if that were the case then you basically might implicate yourself no one ever thinks about that and there are other questions like that and because of that there needs to be protection for the developers for the people who are actually in this space and we are the ones who have to propose it we are the ones who have to propose those laws to the regulator because if we don't do it they are going to do it for us you know we do have an opportunity here because the internet came before us and we have one example of where the architecture of the law did not fit this new kind of architecture and there needed to be a long and slow process of how to develop how to make these things consistent and in here we have the same problem we have laws that are based in geographic real physical jurisdictions that assume that there are centralized organization structures like the board identified participants so you have laws that are all framed around this particular plumbing and then you have this technology that is enabling all sorts of different things people from all over the world to participate on projects at scale who then who still nevertheless live in some of these physical jurisdictions so right now there is a lot of belief that this can be a game changer and that means entities organizations like agencies like the SEC are taking a wait and see approach and taking these careful selective one off steps to try to figure out how to deal with this because they actually don't know how so a lot of people one of the earliest cases I worked on in my career was a youtube icon case and it was an open question whether youtube could exist and it was a negotiation of powers between the content creator between the copyright holders which were these large organizations you know and entities in hollywood you had regulators politicians who largely get their money from a lot of these large organizations you had then also the fact that youtube already existed with billions of users which was also a market force and then we also had the narrative of what we want to protect whose rights are at stake do we want to promote creativity with this particular law you know stifle or promote creativity or protect copyright holders or not so right now we are in the same space where the things that we're building the rules that we're making amongst ourselves the products that we're building the values that we put behind those products are all going to have an impact on how law is reformed and how law is being reformed today these are all things that we can do today and with that I think we're going to wrap up the rest of our time with questions and answers I don't know you should be able to probably try to walk up here because we're on a wire mic to ask their questions or yell I guess or be very loud that also works the first thing to go up was standing gentlemen attention where new stuff gets created kind of retroactively try to find the best way to make it work with laws and almost any new thing that gets created whether it's YouTube whether it's New Year's 20 obviously runs the friction with existing laws so as people who are more on the engineering side and the builder side how should we think about that how should we think about sort of tension between if you do want to have innovation of course you're going to end up not fitting in existing frameworks and on a theorem we've seen specifically there's been this approach of what the people that were hurting kind of got an easier way out of that even though they kind of ran into the laws but yeah I just curious how you think about that the tension between building something new and the interest I'm going to mention that A it's not legal advice I always love saying that and B it obviously depends on where you live this is a very much jurisdictional dependent response and so thank you I would say that I think actually there's what's in there I would recommend to the innovators in the demo to always have the lawyer right and that lawyer will help you navigate these waters of innovating while being compliant at least that you don't end up in jail as long as you are protected that way I think that some lawyers can help you have the law and I'm not saying with any legal but you know it's really difficult the legal world is a world that you don't know you're building something you want to push it out so what do you do? legal advice is very expensive what does one do what would be really great to see is have the community come together because these are issues that are actually common to everybody how do we solve this problem of maintaining responsibility while enabling these features that make this technology so special and something really quite new and one of these things is right now the regulators don't know yet what to do can we come up as a community with sound practices that deal with the things that we that they can we care about how to deal with this technology responsibly how to have transparent processes so that there is an element or due process and informed participation these are rules that we all make together across projects today and that's something that we should work with okay so there's four oh okay wow alright Hansen's main questions bro okay do you have your naps? so my question goes back to some of the comments several of the lawyers made about getting out in front of the debate and influencing it before they come and get us because I'm old enough to remember the Declaration of Independence that was based the first time you know wearing giant's of flesh and steel and all of that the basic idea is leave us alone but we learned they won't leave us alone and we ended up with some bad laws the first time around etc etc so my question is it's one thing to talk about you know come up with our own self-regulation our own processes but what specifically do you guys think could be done how do you use the word lobbying let's say defining the debate governments and regulators as a community it's really interesting the self-regulatory question and I'm always skeptical about what people's interests are so you might have seen in the last I think maybe or so something called the crypto rating household which is a a cum laude of all the big blockchain guys where they're like the big banks and Bracken and Cumberland like they decided that they were just going to break people and be like you're a security, you're not a security but if you're a security you won't know because you don't show up on this thing and there's no disclosure of the conference of interest there's no transparency around the methodology but at the same time these are folks with deep connections to Washington right so Coinbase is GC it's someone who's close with and so there's all these intrigue of folks and we've seen also two recent settlements from the SEC that actually look very favorable EO's got a slap on the wrist $24 million for a $4 million raise not bad, it's just a cost-earning business cheaper than doing an IPO side coins side funds, they also got a pretty I think light settlement but basically they're security to it but it doesn't have to be registered so that's great it's really it's actually I think it works well so there's something happening where I don't know what it is that's going on behind the scenes we're just little people but there's something happening there are powers that beat that are trying to negotiate some things but is it also for their interest so what do we do I think the only way to is to keep your head down and don't fuck up just make sure that works for people that there's actual adoption in this case outside of crypto traders and being a toy make things that actually matter for people this is why we're building this use of tools and that's the only way right that's the only way to make the case so yeah we're not going to be able to get to all these questions what how do you propose dealing with the clash between the public policy objective of national security and anti-crime and on the other hand the civil liberties case for privacy and confidentiality that seems to be one of the biggest problems in the world in the upcoming years I think so how do you propose doing that from the ground up as it seems to be well I mean for me I have a different story about the stuff that I'm not going to tell but let's sort of work through that quickly like I don't think that the blockchain technology we have today is in any way inhibiting law enforcement is certainly not more so than the cryptography in isolation right like if you just said okay cryptography exists as math in the universe criminals have access to math and they can figure out how to encrypt things and that capability is going to be there I don't think that developing blockchain technology broadly speaking facilitates crime in this it's a bit pedantic but the law is a bit pedantic and that's the nature of playing the legal game I don't when the Mexican drug cartel was kidnapping telco workers to force them to build a radio network so that they could directly communicate each other to ship drugs no one pulled Motorola into a court and said what are you doing making these radio ships right they said yeah HSBC is a great example that there's a legitimate understandable anxiety around this question but there's so many examples where if you weren't just being a criminal no one misattributed crime to you and I think in our community that's something that people have to come to terms with it's like we have to separate out the criminal activity from the non-criminal activity and then this conversation becomes much easier to have you know with emerging technology I have not gotten up to speed on where we are at the morphic encryption or the ZKPs exactly but you know there is an opportunity for us to do some really interesting things with this technology that break that old binary that is you're either you know if you have privacy you're going to cut against national security and in order to have robust national security you know you have to you know somehow give some civil liberties and some kind of privacy and this the zero sum maybe can be broken because technology enables different things maybe what we can do is have decentralized identity networks that use the ZKPs that allow people to have a token which doesn't share all your information and yet still allows people some companies or organizations or dows to check the OFAC list against their participants make sure that they're not on this the terrorist phase so that's one example one of the things that we're willing to answer the other gentleman's question as well one of the things that we're working on in Koala is creating a Dow model law so what this involves is looking at what are the goals behind the means the mechanisms that traditional legal frameworks require so usually you know if you want to have legal standing capacity to sue or be sued to actually legally aren't these things usually require a traditional identification and a jurisdiction but behind those means there are some goals and what we're doing as a mapping exercise is figuring out what of these goals can be met through technological guarantees what can we claim is a functional equivalent to this rule because actually they can't even follow those means anymore they don't exist in the blockchain space and then to create from there to still an alternative legal framework that meets these public policy goals and with Koala we have this wonderful benefit of having incredible minds from diverse backgrounds contributing to this project and also a very large academic network that gives heft to the fact that what we're doing is really a neutral fact based analysis from how we think the world should go forward and then you know as we build this legitimacy and the chorus of voices to then socialize back with other stakeholders they are interested in listening this is an opportunity that we have they know this is something new they know we don't know exactly what to do with it we have an opportunity to fill that vacuum with things that we can come up with oh and just we have a workshop on Friday 9 to 10 30 this is the next question yeah actually it was related to the question that this gentleman asked a bit earlier that we just when we talk a bit about being proactive to helping for speculations or being effective participants I was wondering if that was the large committee effort to you know I have this conversation and have something that can be considered by the authorities and stuff partly answering so the question is are there any communities or organizations that call this one to make this happen there's also a new one called NAFTA it's the international association of trusted blockchain applications just formed this summer and they're very close to Brussels they're not only European they're meant to be worldwide so they're trying to get the regulators on what they want but this year however I've seen this and this is a general problem there are a lot of legacy institutions such as very big banks big institutions big corporates who have a very different agenda so just trying to get a point across which comes mainly from this ecosystem is difficult because they they interest very much cash so I think what we have to do is basically gather the people who are interested in this and driving this forward within at least this community and not with big corporates I mean we have to talk to them and we have to find common grounds but we first need to know what we actually want before we talk to them or like because they bulldoze us over right now do we have how much time do we have in the room? I mean you guys can go on for 20 minutes if you want do you folks want to go on? I think there's more questions there's four more questions I guess we'll just go front to back so I'm interested in if you could share some examples of breakthroughs in blockchain and law innovation like specific examples or jurisdictions or states or laws that are starting to come to fruition so it seems that at the moment it's always smaller states there are smaller states that are now that actually come up with new solutions to help the blockchain space this is not necessarily that there are good solutions but there are solutions and what happens is you basically for example you have in the DAO space you have Mata are in the process of giving inter-personality to DAOs I do not necessarily agree with how they do it because what they do is they turn the DAO into what is not just a corporate entity other jurisdictions Switzerland has been very active in facilitating the crypto community especially in relation to securities laws so it comes to basically the smaller states they infect in a way the bigger states and hopefully they infect it with the right disease and not the wrong one other than that do you have any other good examples of jurisdictions that's probably it I need to know also we should mention Gibraltar they were very early in having a crypto regulatory framework because principle is principle based so it's based on principle not you know it's technologically agnostic it's very wide so they can just they can kind of innovate within those very principles but in my opinion also of Gibraltar they are overreaching on AMR because they try even to have decentralized taxes to follow the AMR laws which some people in the community support another stone but for us I think the goal would be to approach a smaller jurisdiction we write, you know we draft something we think is good like something based on technology and other functions and have that implemented in a smaller state and then hope that it catches on because that was the same way that was implemented in Wyoming and Wyoming isn't really known for its corporate laws but then Delaware took it and then it went all around the world and that's how you get laws spread this other, yeah the other one so the question is really the earlier question by like for builders we're trying to basically push the boundaries and some observations which are quite hard to figure out obviously like trying to get legal advice every time is quite costly and also sometimes practically I'll say a lot of lawyers didn't really like what not to do but probably it's like hopefully we can never tell you what to do so I guess I'm asking more for like personal like not from like legal advice but like just out of your personal advice is like what would be like helpful advice to these builders yeah since the example was like used for example it was just done offering and then it just got fined which is okay like I mean like 44 million I don't know if it was serious like that but in some sense or you can also like recommend to like move jurisdiction to some smaller regions that are flexible or like other new things in auto so is there any personal advice you guys have I wouldn't suggest doing things in auto I'm not a lawyer if you have the money you should get an in-house lawyer because in-house lawyer can tell you much more give you much more frank advice because if you work as a law firm as a lawyer they basically hedge their risks so they don't give you they won't give you a legal opinion which has hundreds of assumptions and it's based on this based on this then you can maybe do this but this is you know it depends so if you have the money you should always have an in-house lawyer to assess the risks and also it depends always you know it's a risk spectrum you want to just keep out of jail you know like how much risk you want to take and a lawyer will then advise you what the right approach is and if you cannot afford a lawyer or like not in-house I think as you spoke about jurisdictions I mean forum shopping for your company is a very good idea and there are some group very crypto friendly jurisdictions where it's much better to have your company than others and also offshore jurisdictions are not that expensive but there are some limitations on and I mean maybe maybe don't live in the US I mean I think one point on the jurisdiction is that there's something called long-arm jurisdiction and the US has a very very long arm so it's not it's not enough that you're not in the US or you're somehow in Switzerland because if you are targeting US persons then you are liable right and the only way to find out conclusively that you're not targeting US persons is to do POIC for everybody because geo blocking is not sufficient in and of itself because VPN access is pretty easy so unfortunately there are all these issues around the passwords of regulations I want to say something about that if you can't really do all the KYC blocking the US is really unfortunate but it's a very the reason why US is always blocked is because of legal reasons and geo blocking is still kind of but it's not a full defense but geo blocking is a defense plus terms US citizens saying US persons are not allowed to participate that's not a long-term solution but that's what projects right now adapt and that's one of the less risky approaches in this space okay, yeah, Salih sorry you know it was interesting I started with like CODIS law or I know sort of a joke that CODIS is law but kind of going back to the Dow hack you were saying that maybe the Dow could have specified that CODIS isn't law or CODIS law or we're going to go under the state of Delaware legal jurisdiction but does any of that even really matter because honestly like you had this sort of nebulous we of the Ethereum community that ultimately decided what to do so like in any of these networks isn't like the real legal jurisdiction the decentralized network I spent a lot of time talking to lawyers and something that they charge you a lot of money for and they say very often is it depends so I mean my personal view is that as a developer, as someone who helps teams and works with teams to build technical solutions I think that again I'm not a lawyer not all of us on this panel only a minority of us are not lawyers the lawyers their business my business is to sell people technical advice and so I fall under the same sort of I guess moral hazards that lawyers fall under because their job is to sell you legal advice and so I immediately like see it oh that guy just totally like dragged this conversation on for another 15 minutes for no reason this guy just gave me $300 and so do these protections help I mean they do help in a particular abstract frame but in your particular instance in your particular case you have to have the sort of sophistication the savvy as a person participating in this business or whatever you want to call a community to make that decision for yourself like ultimately your lawyers to be frank almost certainly not going to go to jail and you know it's your own do your own research you have to protect yourself I don't think that it's so I guess I inadvertently completely skipped a part of your question no I do not think it's the blockchain community that ultimately makes the decision I think it's the people with guns who will chase after you and kick down your door that are ultimately making the decision or you may use the like let's see where it goes I would also say that I would love to see an initiative from this community because lawyers are not necessarily incentivized to give people active advice to see some sort of initiative come out of the community to finance and find that ethical space of like positive legal advice and have a coalition to have protections around that it's a long ask but I think that's probably the closest organization to do so but that's what I see about the kind of it doesn't necessarily address your question but all of the questions in general are a real need for this other issue that's kind of been lurking is there's the law which is sort of the minimum standard and there's a sense of what is legitimacy like so you're saying you can have all these legal kind of pipings in place but then a bunch of people decided to do something anyway now is that legitimate and and perhaps some of the framing is a way of creating or disproving legitimacy so someone could have potentially sued so I mean I imagine part of what animated the decision to go and get people's money back is well this is the equitable thing to do to get people's money back because based on the expectations that people wouldn't just will they nearly lose their money due to a bug code that wasn't in their power and control they entrusted that to the developers to do that so that would be the private thing to do in order to facilitate and keep the experiment going it's about that trust between people this is the right thing to do maybe others thought that that wasn't a legitimate act like who are you to come in and do this versus the coast so those are those are the questions that lead to fundamental disputes and you just use the law in different ways to buttress your position so someone could have sued if that's not legitimate based on this set of rules that we had the law and you're importing a whole body of law into what you're choosing right you're choosing Delaware law for this and you can say well under this corporate we're making an analogy now to these cases and so therefore they had legitimacy and the remedy is X and someone else can make a different argument so it's the law can be used as tools that allow people to reframe the argument so there are tools to put hurdles in places to sue basically so what you do is to minimize your risk I mean your question is always how do I minimize the risk I put hurdles in place I put a choice of law in my agreement I put terms of the conditions and it becomes then harder to sue you and to get you basically and I think this is the final question of that yeah thanks for making time so with regards to regulation the thing about the history of regulation my understanding is that regulation is required when you get like a market externality the two people in the industry there's a negative side effect that doesn't oppose the cost of those two actors most of them in the 1930s after Great Depression there's a lot of financial regulation coming to come prevent that and my question is what are the negative externalities that the blockchain space gives rise to and can we actively regulate against those or do we have to wait for the mistakes to happen retroactive regulation that was really interesting you can question unfortunately we were in the back of the room yeah that was really interesting I'm going to let the lawyers respond do you have any thoughts what do you mean by proactively prevent the negative externalities so basically wait for the massive mistake to happen first like a Great Depression and then make rules to regulate against that happening you know the the Great Depression or whatever you could argue that it really happened with the ICO boom and you know the companies that went all bust and you invented you invested all your money so I mean the protection of the consumers in that respect you could maybe not there's not a correct term in economics in economic terms you could call that an externality in which the regulators seek to regulate and we only see it all about consumer protection and money laundering, anti-money laundering concerns mainly and you know if we manage to get rid of those externalities in the space privately by self-regulation the regulators are less keen to regulate but unfortunately what we've seen already there have been you know fallouts of that and that is why we are now in this position having this plan so I think the blockchain community as a whole is far too large to sort of do what you're describing I think that there is absolutely though a subset of people who are interested in doing exactly what you're describing and there are people that are on this panel people that we talk to because of course people that feel this way that we don't talk to but you know the I think the Dow you know the Dow the boom bust cycle that we see on all crypto assets the natural volatility what I was sort of interpreting when you were first speaking was more of you know what happens when you have to go to the Ethereum blockchain to like access some controversial video recording of Trump right I mean that to me is like a really like possible situation that we're in and then how would we as a community respond to that or you know you could be particularly trollish you could say every blockchain you know I put this data on all these blockchains here's how you access this horrible video or whatever and you know and do it in this trollish way where there is this sort of large incentive for Trump to go berserk and try to stop it right and you just sort of push the question to the floor um I feel like that's the kind of event that we're not as a community prepared for like it's that sort of situation I think you know fraud and sort of more conventional crime drug dealing even like gun running international crimes that stuff I think we can sort of handle as a community because you know you have the outlaws and the people who are trying to operate within the law but these sort of you know we live in this new political I mean I think for you know I grew up in the 80s you know maybe it was because I was a kid or whatever but the political climate that we're in now it seems like there's this real political risk that we have with technology that even with clipper chip and these other things like the stakes weren't really the same it seems like the stakes have really changed and I don't think that there's much we can do about those types of problems certain types of preventative or proactive regulations that also causing a lot of its own negative externalities so you've seen with KYC and L rules and just with you know the whole ICO like I mean what it's actually pushing as who gets to access capital markets right so part of it those rules are out of place is to protect investors who are somehow less sophisticated or less able to absorb losses because they just don't have as much money right but then that also prevents people from having opportunities to access work especially in an economic scenario today where wages are stagnant and most wealth creation is now through capital so if you start preventing ordinary people from accessing capital appreciating opportunities then they kind of state more sorry I won't ask because actually it's time thank you