Blockchain and Law - the Perspective - SANG YONG LEE CHUNGNAM NATIONAL UNIVERSITY LAW SCHOOL

Transcription

1 Blockchain and Law - the Perspective - SANG YONG LEE CHUNGNAM NATIONAL UNIVERSITY LAW SCHOOL

2 Technology Distributed Ledger Technology (DLT) Peer to Peer Network Consensus Algorithm Cryptographic Technology : Electronic Signature / Hash Function Smart Contract

3 Features and Benefits Features Immutability Transparency Authentication Decentralization Benefits Trust without TTP Disintermediation Thus, the Efficiency

4 Illusion and Fear Illusion Lex Cryptographia Code as Law Fear Frenzy of Speculation / Ponzi Scheme Money Laundering / Funding Terrorism Tax Evasion Outright Ban?

5 Structuring Legal Problems Infrastructure Personal Information Liability Services Cryptocurrency DAO and ICO Smart Contract

6 Blockchain Infrastructure and Law - Privacy (Finck, 2018) - Pros and Cons Decentralized Enhancing Data Sovereignty Transparency and Immutability Friction with Data Protection Law (ex. GDPR) Personal Data on DLT : Pseudonymous not Anonymous Transactional Data Public Keys Hardship in Compliance Nodes as Controllers Data Minimization / Right to Amendment / Right to Access / Right to be Forgotten Solution? New Technologies Purposive Interpretation of Law : Data Protection vs. Innovation Legistlative Action

7 Blockchain Infrastructure and Law - Liabilities (Arner et. al, 2017) - Code as Law? legal liabilities will simply not disappear with DLT Risks Inaccurate Data Input Insufficient Coding Cyber Attack cf. nodes with weaker security Key Person Risk Legal Consequences Paths : Contract / Torts / Partnership or Joint Venture Shared Control Joint Liability Concentrated Ownership?

8 Blockchain based Services and Law - Cryptocurrency - Legal Characteristic Payment Instrument vs. Commodities Investment Goods cf. token Legal Consequence Tax Forcible Execution Regulation No Issuer Regulating Exchanges Consumer Protection : Registration / Soundness and Reliability of Transaction AML/CTF/KYC

9 Blockchain based Services and Law - DAO / ICO - Decentralized Autonomous Organization Features Soft Corporation : Share (Token) / Payment for the Share (Cryptocurrency) / Shareholder Decisions (Smart Contract) Transparency Preventing Disputes & Audit Efficiency Regulation : Corporate Law? Cf. The DAO Case ICO Features Efficiency / Low Investor Control / High Risk Legal Structure Various : Donation / Sale / Partnership & Joint Venture Regulation Coin vs. Token Securities? Existence of Issuer : Centralized / Liabilities / Investor Protection / Unfair Transaction

10 Blockchain based Services and Law - Smart Contract - Concept pacta sunt servanda Automated Execution of Contracts vs. Automated Formation of Contracts Code as Relation vs. Code as Contract Cryptocurrency Token / Smart Property (Digital Asset) Benefits Increased Certainty and Efficiency Finance / IP / Commerce / Accounting / Legal / Etc.

11 Blockchain based Services and Law - Legal Analysis of Smart Contract - Shift of Disputes : Performance => Formation Formation Void, Avoided or Revoked Contract Hard Fork / Reverse Trading (Insolvency) Interpretation Wet Code vs. Dry Code Purposefully Vague Performance Imperfect Performance Justified or Rational Breach ( the DAO Case ) Regulation by Public Law Illegal Activity by Smart Contract Consumer Protection : Formal Equality vs. Substantive Equality

12 Beyond Illusion and Fear Beyond Illusion Blockchain gives us benefits But, blockchain doesn t solve every problem and doesn t lie outside law Beyond Fear Blockchain causes some problems and is at odds with some law But, that doesn t justify abandoning the opportunities What should we do? Let technology solve its problem Adapt existing legal system to new technology to preserve its purpose Cooperation of engineers, lawyers and policy makers