Christie’s made history again last night during its evening sale, An American Place: The Barney A. Ebsworth Collection, at 20 Rockefeller Center in New York. This time, the history was not in the form of a record-setting sale (though the sale brought in $317.8 million), but as the first major art auction to be recorded by distributed ledger technology. Christie’s teamed with Artory, a company that operates an art-focused, blockchain-based registry, to securely register and track the provenance of over 90 artworks that were offered in the sale. Continue Reading
A version of this article originally appeared on Law360 on November 7, 2018.
Blockchain technology and smart contracts have the potential to become major disrupters in the energy industry. For example, these technologies may accelerate the automation of some or all aspects of the electricity delivery transaction chain and allow for more decentralized, efficient electricity markets. Further, these technologies may allow end users (such as homeowners) to play a more active role in the electricity markets beyond simply relying on their local utility company to supply their electricity demand. Thus, blockchain technology could fundamentally change the way electricity is supplied and consumed in wholesale (i.e., the sale of electricity for resale) and retail (i.e., the sale of electricity to an end user) markets in the coming decade.
As these technologies advance and become more widespread (i) users of such technologies must be cognizant of the various regulatory requirements that could apply to them, (ii) state and federal regulators need to update regulatory practices that are obsolete or impede the use of these technologies in the electricity industry, and (iii) traditional incumbent utilities should consider ways in which they can leverage these technologies.
Over the past couple of years, the crypto industry has come under heavy scrutiny from skeptical regulators seeking to root out fraud and protect investors amid the initial coin offering boom that generated over $4 billion in 2017. However, this skepticism is starting to give way to a more business-friendly attitude.
Crypto firms have made notable headway with regulators in recent months, securing authorizations to act as custodians of digital assets and working towards approval of the first bitcoin-based exchange traded fund (“ETF”). These developments may reflect an evolving collaborative environment that bodes well for the future of blockchain-based innovations. Continue Reading
Distributed ledger technology is continuing to be thought of as the technology that can address some of the issues that plague the music and content-creation space. Our Music Festival (“OMF”) is relying on this technology to develop a music festival and fan-interaction network that will be powered by its currency token, known as an “OMF Token.” OMF was founded by Justin Blau (the DJ known as 3LAU), Adam Lynn and Kevin Edelson and they are backed by a team of individuals from the talent management, music and festival sectors. Continue Reading
On their own, blockchain technology, open source software, and patents each present legal issues that are often complex and frequently misunderstood. When combined, the complexity and misunderstandings of these three topics are magnified. This set of issues is important now because blockchain technology is on the verge of mainstream commercialization and much of it relies on open source software. As with any technology where there is rapid innovation, the number of patents being filed and obtained is increasing. The interplay between patents and open source is often confused. The recent changes to the scope of patentable subject matter under U. S. patent laws have created uncertainty over what is patentable. This is particularly true with respect to blockchain-based inventions and how innovations in this space are disrupting business processes. Click here for our paper on some of the common issues and (misunderstandings) with these topics, both individually and in combination. This paper addresses how this trio may work together and the potential legal and business ramifications resulting therefrom.
The Commodity Futures Trading Commission (“CFTC”) obtained an important court win and boost to its regulatory authority over Cryptocurrencies this month. A federal district court in Massachusetts recently issued a decision in CFTC v. My Big Coin Pay Inc. which affirmed the CFTC’s position that all virtual currencies are commodities and subject to CFTC jurisdiction. The opinion follows another recent district court opinion in New York, CFTC v. McDonnell, in which a court also interpreted the Commodity Exchange Act (“CEA”) to find that cryptocurrencies constitute a commodity under the CEA. CFTC Chairman Giancarlo in a speech last week in Minneapolis further emphasized the CFTC is continuing to increase civil enforcement actions with 83 having been filed in the last CFTC fiscal year resulting in over $900 million in civil penalties. The current political efforts to dismantle the Dodd Frank Act apparently have done little to slow down the CFTC Division of Enforcement, in particular when it comes to regulating cryptocurrencies. Continue Reading
Blockchain is a revolutionary technology that has great potential to solve many of the fundamental challenges facing the music industry today. Blockchain technology including distributed, decentralized ledgers, smart contracts, and the ability to tokenize digital assets, is uniquely suited to address issues such as rights management, licensing, copyright ownership, royalty tracking and reporting and the primary and secondary ticketing markets for live events. Various aspects of the technology are currently being used to address some of these problems. Despite these current uses, blockchain adoption likely will be incremental and more evolutionary than revolutionary, at first. Longer term, blockchain technology could provide a more comprehensive solution for the industry.
On September 11, 2018, the U.S. District Court for the Eastern District of New York denied a motion to dismiss an indictment of a Brooklyn real estate entrepreneur in relation to two virtual currency investment schemes and initial coin offerings (“ICOs”). The indictment, which charged securities fraud against Maksim Zaslavskiy, was based, in part, on the theory that the cryptocurrencies at issue were securities. In his motion to dismiss, Zaslavskiy argued that this premise was faulty and the ICOs offered by the two companies he owned, REcoin Group Foundation, LLC (“REcoin”) and DRC World, Inc. (“DRC”), were not, in fact, securities. The court, then, was called upon to consider whether the securities laws apply to cryptocurrencies. The court also considered Zaslavskiy’s argument that the securities laws are void for vagueness as applied to cryptocurrencies and token sales. Continue Reading
Blockchain has long been touted as having transformational potential. Yet, the commercial adoption has been slow. As with any cutting-edge technology, commercial adoption usually requires some tipping point. For adoption of blockchain-based supply chain, the tipping point may just have occurred.
According to a recent article, starting in September 2019, Walmart and its Sam’s Club division will require suppliers of fresh, leafy greens to implement real-time, end-to-end traceability of products back to the farm using a digital ledger. They plan similar mandates for other fresh fruit and vegetable providers within the next year. This will apparently require more than 100 companies to use this blockchain-solution. Continue Reading
In a flurry of activity and confluence of developments, the SEC, FINRA and a Brooklyn federal judge have commenced actions and made rulings that continue to define the regulatory framework and obligations surrounding the sale and trading of digital securities, whether they are labeled as cryptocurrencies or tokens. Continue Reading