K6 Blog

History has a way of repeating itself. Twenty years ago, when Amazon was just an experiment in online book sales and Google was just a Yahoo! copycat, nobody seemed to understand what the “Internet” actually was or how it would eventually affect our lives. That went double for lawyers, who in the mid-1990s pushed the panic button when the concept of online contracting became a reality. State lawmakers rushed to introduce statutes that would define and constrain this monster before it wrought havoc on the unsuspecting analog world of contract law. They came up with technology-specific, proscriptive rules for electronic signatures that, had they been successful, would have left the U.S. a patchwork of unworkable state laws that would have prevented electronic delivery and signatures for all kinds of transactions that we take for granted today. Fortunately, a model law called the Uniform Electronic Transactions Act (UETA) emerged that, in contrast to the initial view that online...

The Securities and Exchange Commission today announced it obtained an emergency asset freeze to halt a fast-moving Initial Coin Offering (ICO) fraud that raised up to $15 million from thousands of investors since August by falsely promising a 13-fold profit in less than a month. The SEC filed charges against a recidivist Quebec securities law violator, Dominic Lacroix, and his company, PlexCorps. The Commission's complaint, filed in federal court in Brooklyn, New York, alleges that Lacroix and PlexCorps marketed and sold securities called PlexCoin on the internet to investors in the U.S. and elsewhere, claiming that investments in PlexCoin would yield a 1,354 percent profit in less than 29 days. The SEC also charged Lacroix's partner, Sabrina Paradis-Royer, in connection with the scheme. Today's charges are the first filed by the SEC's new Cyber Unit. The unit was created in September to focus the Enforcement Division's cyber-related expertise on misconduct in...

Initial coin offerings (ICOs)   have been hailed as a disruptive new business paradigm that allows startups -- most of which are focused on blockchain or distributed ledger technology (DLT)-- to raise operating funds without the regulatory constraints and requirements that are applied to a traditional underwritten IPO. Being positioned safely outside the regulatory framework, ICOs have become a very attractive and flexible fundraising tool.  The SEC has made it clear , however, that some ICOs are subject to the full reach of the securities laws. ICO market participants must now distinguish those ICOs that may continue without regulatory constraints and those that must now conform to the U.S. securities laws. This treatment is not elective or optional - if the ICO involves the offering of a security, the ICO must be done in accordance with established securities law requirements or proceed under an exemption if available. In its July 25, 2017  Report , the SEC concl...

In December 2016, K6 Blog published this post instructing lawyers to "start thinking like developers" to remain relevant in the age of smart contracts. The following post appeared April 18, 2017 in the New Jersey Law Journal. By  Charles Toutant , New Jersey Law Journal Lawyers who advise clients on "smart contracts" drawing on blockchain technology say some potential adopters liken them to a "magic pill" that will provide a cure to all their contract-related headaches. But as " smart contracts"  become more common in more sectors of the economy, lawyers will need to increase their technical know-how and renew their focus on counseling clients instead of ministerial work, according to specialists in this fast-evolving field. While expectations should be tempered, experts said adoption of the new technology will bring changes to the practice of law. Some boosters of the technology have expressed unbridled enthusiasm for blockchain tec...

By Ken Moyle Here are five basic principles underlying blockchain technology. 1. Distributed Database  Each party on a blockchain has access to the entire database and its complete history. No single party controls the data or the information. Every party can verify the records of its transaction partners directly, without an intermediary. 2. Peer-to-Peer Transmission  Communication occurs directly between peers instead of through a central node. Each node stores and forwards information to all other nodes. 3. Transparency with Pseudonymity  Every transaction and its associated value are visible to anyone with access to the system. Each node, or user, on a blockchain has a unique 30-plus-character alphanumeric address that identifies it. Users can choose to remain anonymous or provide proof of their identity to others. Transactions occur between blockchain addresses. 4. Irreversibility of Records  Once a transaction is entered in the database an...

By Ken Moyle Attention all business attorneys who... ...took the LSAT because there was no math in it ...still pack a Blackberry ...think a " smart contract lawyer" is a  smart lawyer who writes contracts. I bring you some disturbing news. Your life is about to change. ​ ​ Technology is transforming your clients' business, and you cannot ignore it. Your clients may not be in the technology business, but they have recognized the need for tech to keep them competitive. As a trusted adviser, you will need to recognize how technology is influencing the relationships inside the client's company, and the resulting effect on your ability to continue adding value. The best example is the resurgence of the smart contract. A “ smart contract ” is a computerized transaction protocol that executes the terms of a contract. Although the concept has been making the rounds for 20+ years , it has recently become a dominant buzzword. That’s mostly because t...