#California appellate court affirms summary judgment in favor of @coinbase as to claims for #conversion#breach of contract & negligence; related to #coinbase not supporting #bitcoingold fork for its users; since it's precedent in CA, let's dive in /1
Court ruled that there was no agreement to give Plaintiff #Bitcoingold; there was no "contractual obligation to support or provide services for any particular cryptocurrency." Merger clause barred parol evidence & there was no contractual duty. That's breach of contract /2
Conversion of crypto is a pet issue of mine because it requires the Court to determine that the thing that is allegedly converted (i.e. the civil version of theft) is legally recognized property. Fun Fact- property rights are mostly created by state law. Only 1 state (Wyoming)/3
expressly defines #bitcoin or #crypto as property. The weight of fed & state regulation & law suggests that most #cryptoassets are proeprty, & we all act like its property, but it's an open issue. Even if we assume a #bitcoin is property, there are ~10000 questions about what /4
#bitcoin as property means, and how it should be treated, which implies a variety of things including crim law, the #UCC (paging @Prof_CarlaReyes@Andrea_Tosato) which governs secured lending among other things, and has extremely broad implications for #crypto writ large. /5
So a case that looks at #conversion of #crypto has my attention. Here, the court found no conversion b/c #Coinbase "took no affirmative action" to block Plaintiff's access to the #bitcoingold, & the court rejected the claim that blocking access = asserting control or ownership /6
of that fork. To rule otherwise would "impos[e] a major new duty on all cryptocurrency exchanges...to affirmatively honor every single #bitcoin fork." The court cited BDI, a GA Federal opinion, & declined to impose a "major new absolute tort duty" on exchanges to honor forks /7
According to Archer, the user, not the exchange, has that duty: "There is no requirement that investors keep their coins in exchanges; they can always withdraw the coins to their own private wallets..." There goes the conversion claim... Now, negligence...
Same story- no legal duty, AND "[a] person may not ordinarily recover in tort for the breach of duties that merely restate contractual obligations." Given that plaintiff could not identify a non-contract duty, negligence fails here. /9
What does this mean: A few things. 1. Even tho it's a clickwrap, READ the Terms of Service, & expect to be bound by them. 2. If you think a fork is coming and you want it, don't expect your exchange to support it unless it agreed to do so in those term. /10
So, what about the property issue? While Archer punted , it cites to BDI. BDI is a pretty important opinion (trial level, alas) that says yes we consider #bitcoin to be "specific intangible property" under Georgia law that may be converted. Note the cases cited (Wright!) /11
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On the #ETH declination letter () received by @Consensys. Declination letters are rare & to be savored. Congrats to the team behind this! But what does this mean for staking? For other POS systems and their assets? Time for some educated speculation /1
The letter indicates 2 things. 1. that the investigation captioned "In the Matter of Ethereum 2.0 (C-08950)" is "concluded," and that 2. the SEC "do[es] not intend to recommend an enforcement action [against Consensys] with respect to this investigation" These are both great /2
However (that's the fancy version of "but"), this does not mean that all questions as to staking are resolved, that all questions that may apply to other POS tokens are likewise off the table, that other investigations are not ongoing, /3
#Illinois Senate Bill SB1887 would drive out #blockchain#node operators, #miners, and #validators, waste judicial resources, and confuse existing law in a quixotic attempt to protect Illinois consumers. Let's examine the mess in a #thread:
as a preface, This is a stunning reverse course for a state that was previously pro -innovation. Instead we now get possibly the most unworkable state law related to #crypto and #blockchain I’ve ever seen. A shocking turn of events for the #tech community in #illinois /2
SB1887 focuses on consumer protection (this is GOOD). But, the manner in which it seeks to protect consumers is to require #node operators ##miners & #validators to do impossible things, or things that create for themselves new criminal & civil liability at pain of fines/ fees /3
CFTC brings first regulatory action against an alegal #DAO, charging #OokiDao with operating an unlicensed FCM; seeking disgorgement, restitution, civil moneyary penalties, trading and registration bans and injunctive relief. Lots to talk about here: /1 cftc.gov/PressRoom/Pres…
allegations in claim against Ooki #Dao characertize it as an "unincorporated association comprised of holder of Ooki Tokens" and legacy BZRX Tokens who have voted those tokens to govern (e.g. to modify, operate market and take other actions w/r/t the Oooki Protocol." /2
This a huge distinction. While the #DAO is itself a named party, it is unincorporated which leads to all sorts of material questions about who can be sued for what. In this case the complaint makes clear that the Dao is those who (a) have tokens and (b) have voted to govern. /3
Important questions for those who may have received blocked property in a #grief#spray#spam attack from blocked #tornadocash#ETH addrsses remain unanswered. #OFAC may give clarity in an FAQ; are a few questions that would be helpful for OFAC to address.1st some background/1
By now all of #crypto knows that #OFAC sanctioned #ETH & #USDC addresses related to #Tornadocash and service providers and many #crypto users are struggling to adapt. Why? /2
We’re dealing with a law designed to regulate legal people & entities, &their property, not quasi-autonomous code used by third parties to transact third party assets to others. Arguably the designation exceeds #OFAC’s statutory authority. That’s an argument for another day. /3
#Dao is another word the #crypto industry uses for ...well... anything. Here's a proposed taxonomy to clarify what we mean when we say #Dao: (a quickie sunday am #thread): /1
@VitalikButerin's seminal work discussing the types of human/tech hybrid ventures that may/will be created using censorship resistant technology tools remains the first stop for this discussion: (blog.ethereum.org/2014/05/06/dao…) /2
@vitalik observes that a #DAO "has the murkiest definition of all... it is an entity that lives on the internet and exists autonomously, but also heavily relies on hiring individuals to perform certain tasks that the automaton itself cannot do." /3
#NYDFS issues USD backed #stablecoin guidance; must be fully backed by an asset reserve; issuer must adopt a clear redemption policy, approved by DFS in writing (!!!) redemption at par in fiat; reserve must be held in custody with /1 dfs.ny.gov/reports_and_pu…
US state/federally chartered depository institutions and/or asset custodians. Reserve must be held in govt treasuries "subject to DFS- approved reqs re: overcollaterialiation." Reserve must be subject to independent audit 1x month by independent CPA under AICPA attestation /2
standards. DFS may also impose obligations regarding cybersecurity and IT standards and evaluate issuer BSA/AML & Sanctions compliance, safety and soundness of the issuing entity; and the stability/integrity of the payment system, as applicable on Issuers. /3