New SEC Guidance clarifies that POW mining & some pooled mining are not securities. This is great....but its maybe not the big story. This guidance ALSO elaborates on a potential new taxonomy to be applied to digital assets & maybe some radical changes to the securities laws /1

https://twitter.com/MikeSeligEsq/status/1902783703807668695

including the creation of legal securities without law. Huh? Yep. Sound the alarm. Batten the hatches. It’s time for a thread /2

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

https://twitter.com/laurabrooksie1/status/1803238438772076809

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

#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

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

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

#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

#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

Take aways from the #blockfi settlement with the #SEC (sec.gov/litigation/adm……) 1. BIA were notes under the Reves test; one factor is that there is "no alternative
regulatory scheme or other risk reducing factors exist with respect to BIAs" Congress can of course, set out a /1 an alternative framework that would potentially push these sorts of ventures into a different regulatory classification. 2. the offer and sale of notes is an investment contract. Yes, you can be debt and an investment contract; the pooling of assets is the key factor here. /2

@gonbegood @lex_node @awrigh01 one of the big problems is that #DAOs as they currently are either legal entities w/ bespoke governance (legal Daos /Laos /daos w/legal wrappers) or groups acting together without legal protection who want to be protected as if they were entities. They either are entities /1 @gonbegood @lex_node @awrigh01 or they *want* the same powers & rights given to entities (individual liability limitation, power to contract as an entity, etc...) w/o the obligations and burdens associated with entities (responsibility to comply with regulation, legal addressability, paying taxes etc...) /2

There has been lots of talk about #uniswap front end interfaces blacklisting #tokens that might be #securities. This is not an attack on #DeFi or regulation of #DeFi specifically, but instead a logical example of how existing regulation applies to legally addressable entities /1 including those that facilitate the use of #decentralized systems- in this case, legally addressable interface providers. And this isn’t new. Quietly, many front end providers are also engaged in #sanctions compliance. While laws obviously apply to legally addressable actors, /2

Today I published "The Limits of Code Deference" papers.ssrn.com/sol3/papers.cf… Inspired by #theDao, #Dapps & #DAOs, this article explores whether #decentralizedventures can absolutely bind their users to their code’s execution. Not surprisingly, the answer is no. Why? A quick🧵: These ventures use code to enable groups of people to act collectively to affect rights to #digital assets. We call these “decentralized ventures.” These decentralized ventures enable transactions among their participants in accordance w/rules created and enforced by their code;

@CaitlinLong_ @uniformlaws @Prof_CarlaReyes I'm very proud of the work done by the brilliant members of the @uniformlaws Digital Asset Working Group incl. @Prof_CarlaReyes @Andrea_Tosato to create this draft. For the twitterati who don't practice law, you may wonder, what's this? & Is it important? YES. A quick #thread @CaitlinLong_ @uniformlaws @Prof_CarlaReyes @Andrea_Tosato The proposed new article 12 of the UCC would include rules for commercial transactions of what we’ve termed "controllable electronic records" or CERs. This would include a wide variety of #digitalassets including what we generally call #cryptocurrency along with /2

We've got a new proposed #SEC #token #safeharbor that would let issuers offer tokens in the US. It's big. But, what's new? How is it different from the prior proposal? What's new? You guessed it. It's unavoidable, It's inevitable. It's a #THREAD. Let's dive in/1 Right off the top, we have the elimination of the "good faith" provision that was previously implied upon the issuers in a(1) & of a(4) which required the issuer to act in good faith to "create liquidity for users." /2

Commissioner @HesterPeirce announces her #token #safeharbor 2.0 sec.gov/news/public-st… #crypto #securities released on #github. here's the link: github.com/CommissionerPe…

Is #FINCEN coming for #NFT #Art markets? A thread about the #NDAA, Anti-Money Laundering Act of 2020 (AMLA), its expansion of BSA coverage to include “dealers in antiquities,” & what it might mean for the #crypto art world: (link to notice here: fincen.gov/sites/default/… ) /1 Why regulate transactions of antiquities (&maybe art)? The concern is that art & antiquities can be used for money laundering, to violate sanctions, & “have been linked to ...criminal networks, ...terrorism, & the persecution of individuals or groups on cultural grounds.” /2

Yesterday, at the conclusion of my #NYU class discussing #Governance of #Bitcoin and #Cryptocurrencies, I posted this slide, summarizing my thoughts about what the #US can do to improve its #law and #policy related to #Crypto. A #thread on what we can and should fix: First, establish an government wide-policy. What do we want? Are we pro -innovation? Do want to protecting consumers? Do we want to strike a balance in the middle?Do we want to facilitate experimentation? How much control will the govt take over these experiments? /2

OFAC settlement w/@BitGo for apparently failing to prevent users accessing their online hot-wallet service via Crimea, Cuba, Iran, Sudan, & Syria IP addresses; service appears to be a non -custodial online wallet. Violaton of OFAC regs, NOT BSA . Let's look at the regs: /1 31 CFR 515.201, (i.e. Cuban Assets Control Regulations) prohibits transactions by foreign countries and their nationals including "...transfers, withdrawals, or exportations of, any property," /2

🚨🚨🚨BREAKING: clarity on how broker dealers should handle non-custodial digital asset securities transactions on ATS. 🚨🚨🚨 THREAD coming atcha /1 /1 since the Joint Staff Statement (July 8, 2019) which addressed BD custody & handling of trades of digital asset securities (sec.gov/news/public-st…) which emphasized consumer protection, it has not been clear how transactions on ATS should be conducted:

Should #smartcontract code execution always be dispostive? Can code execution actually bind participants if litigation is always available? Does extrinsic goverance of #blockchains that may alter #consensus governance weaken, or strengthen a protocol? Who should care? /1

https://twitter.com/masonic_tweets/status/1309166410573197312

Short answer- everyone. #Developers #investors & #lawyers all need to understand #blockchain & #smartcontract governance to understand what it means to build on top of others' tech. Can you patent new art built on a blockchain? Will your software work if the underlying chain /2

Another place where #bitcoin tends to show up in litigation is in divorce, when married couples divvy up assets. In DeSouza v. DeSouza, a spouse was held to violate his fiduciary duty to his spouse by concealing #bitcoin. /1 Here, the divorcing spouse had some #bitcoin tied up in #MtGox and some held on private wallets. One spouse did not disclose the holdings until after the divorce, and the other spouse immediately sought an award of 1/2 and attorney's fees. Court agreed, noting that divorcing /2

#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