Blockchain Is 2017’s Opportunity for Lawyers

Addison Cameron-Huff is an active legal force in the Toronto tech community focused exclusively on the blockchain and internet startup space. He can often be found speaking at events and previously co-chaired OsgoodePD’s Critical and Emerging issues in Blockchain Law. He recently joined Decentral Inc., the company founded by Ethereum’s co-founder, Anthony Di Iorio.

As the world reacts to the uncertainty of cryptocurrency offerings, such as initial coin offerings, initial token offerings and sales of securities of cryptocurrency investment funds, many startups in the community are having discussions on what the future of Canadian innovation in the cryptocurrency space looks like. Cameron-Huff is co-chairing and will be speaking at OsgoodePD’s Blockchains, Smart Contracts and the Law on November 15, during a 1 day program where 17 top legal, tech and financial industry experts from the US and Canada discuss the biggest legal issues facing the blockchain.

To get a sneak peek at what to expect, Addison Cameron-Huff spoke with Osgoode Professional Development’s Program Lawyer, Amy ter Haar about what it will take for the law to catch up with blockchain technologies.

While blockchain developers have been busy creating cryptocurrencies, smart contracts and enhancing transparency, the law is only beginning to catch up in its consideration of the proper treatment of these issues. What is it that lawyers need to understand right now about blockchain law?

The intersection of blockchain and securities law has been the most important trend for lawyers in this field. I published an article recently that looks at the CSA’s August Staff Notice about token sales. Securities regulators are paying attention and trying to figure out how securities laws apply to some of the innovative structures that people are coming up with.

Tax is a constant question that I get. Lawyers need to know how to identify tax issues (e.g. sales tax) and refer their clients to the appropriate professionals.

Everyone should be keeping an eye on the 2014 amendments to the PCMLTFA that are not yet in force. It’s important to be aware of Money Services Business rules even if they don’t yet affect most businesses involved in cryptocurrencies.

How might blockchain technologies impact the legal services industry both now and in the future? What’s the biggest missing piece in Canadian blockchain law?

The first thing that Canadian lawyers should know is that American law firms are well ahead of them. US firms like Perkins Coie have had blockchain practices for years and they’re competing for the business of Canadian blockchain startups. Our lawyers need to catch up with what’s going on in the rest of the world or the entrepreneurs will go elsewhere for the legal services they need. Commercial work can be done in other countries and a cluster of service providers is needed (lawyers, accountants, PR, etc.). I hear lawyers in Toronto discuss how novel these things are and that their firms aren’t that committed to it because they’re waiting to see how this pans out. There’s been too much waiting.

At Blockchains, Smart Contracts and the Law, you’re co-chairing the program as well as speaking in a session about analyzing the Nature of Blockchain Transactions and the Differences in Business Models. Can you give us a preview of your ideas about these differences?

The biggest questions in “blockchain law” right now are not about what new rules will be created but about how existing rules will be applied. Canada is a common law country, and most new technologies can be dealt with within the existing legal framework. The hard part is in carefully disassembling what someone is doing and figuring out how different legal regimes apply to those pieces. Typically, this means consumer protection laws, sales tax, anti-money laundering, securities and corporate law basics.

There are not “blockchain businesses”. There are companies that are using blockchain-chain related technologies the same way that there are companies making use of database technologies more broadly. The details matter. Some companies involve consulting services, others are building new blockchains or tools for managing tokens on existing blockchains. There’s a very wide variety of business models and they shouldn’t be painted with the same broad brush, even if there are shared legal issues. A cryptocurrency exchange has very different legal needs (and legal issues) than a startup building a new blockchain.

What do lawyers need to do to a) get grounded in blockchain law, b) stay up to date and c) get some help?

Attend community events like Toronto Legal Hackers, Blockchain Canada or Canada Bitcoin Blockchain Meetups to learn about what’s going on in the industry. The legal issues flow from the activities people are engaging in, so if you want to know about the legal issues you need to know what people are doing. This isn’t an industry where you can pick up a book and know it all.

Staying up-to-date means reading about new developments constantly and staying in touch with the entrepreneurs building the blockchain future. There are some good publications like Bitcoin Magazine, Coindesk, various subreddits, and the Twitter accounts of key people.

Lawyers should reach out to colleagues who’ve already dealt with the issues that their clients are asking about. This isn’t a field where you apply a checklist or load up an old precedent. Active engagement is essential.

Addison Cameron-Huff will be co-chairing OsgoodePD’s Blockchains, Smart Contracts and the Law, November 15, 2017. The future of Blockchain is now – this is your chance to be a part of it.

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