Choice-of-law Problems with Blockchain-based Negotiable Instruments

I have written a paper on choice-of-law problems with blockchain-based negotiable instruments, with particular reference to bills of lading and investment securities. In this paper, I have examined the emerging substantive rules as well as choice-of-law rules of some legal systems and made suggestions for choice-of-law rules. The information is current as of August 2021. This paper is to be published as a chapter from Andrea Bonomi and Matthias Lehmann (eds) Blockchain & Private International Law (Brill). The text, subject to formatting and copy-editing, may be obtained from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3937664.

The role of law in smart contracts

My article, "スマートコントラクトと法の役割"(The Role of Law in Smart Contracts), came out from a Japanese journal last June. The text is attached to this post.

At the outset, I tried to dispel the confusion of "smart contracts" with legal contracts. That expression came to be used in the blockchain context after it first appeared in the Ethereum white paper. While the use of this catchy phrase seemed successful as a marketing ploy, the author of the white paper, Vitalik Buterin, later regretted adopting that term, saying that he should have used more boring and technical expression like "persistent scripts."

After clarifying the concept of "smart contract", I began my analysis with the private law issues arising from the hacking of a smart contract. Smart contracts are capable of storing crypto-assets and, since their code is open to be inspected, their bugs are also exposed. Due to these characteristics, smart contracts attract many hacking attempts.

I then proceeded to examine the possible criminal liability of the actors surrounding a smart-contract prediction market. A prediction market, though capable of offering socially useful functions, may be seen as a venue for gambling which would constitute a criminal offence under many legal systems.

I concluded this paper with discussions on the regulatory issues of Defi (decentralized finance) in some details. 

Conflict of laws in blockchain and cryptoassets

I gave a paper on the above theme at a meeting of the Study Group of Private International Law of the Kansai Region (Japan) on 23 January 2021.

Conflict of laws is an abstract subject. So I structured my analysis along typical scenarios which are partially taken from real cases. They include the bankruptcy of an exchange provider, the misappropriation of crypto-assets, the mistaken transfer of crypto-assets, the use of crypto-assets to purchase goods or services, the hacking of a smart contract (or decentralized autonomous organization) and the use of crypto-tokens for securitization. I gave detailed considerations to proprietary issues in particular, as these are a theoretically challenging area.  I also gave comments on the works of others including the project of the Hague Conference on Private International Law.

The handout distributed to the audience (in Japanese) is attached here.

Presentation at the conference “UNCITRAL Asia Pacific Day" (4 December 2020 at the University of Macau)

I gave an online presentation on blockchain-based bills of lading under the UNCITRAL Model Law on Electronic Transferable Records in Session III of the conference.

I attach here the slides and the transcript of my presentation as well as the conference timetable. Preparing for this presentation, I built on my Japanese paper given at a symposium in Tokyo one and a half year earlier and published subsequently. This conference was a fitting occasion to convey my thoughts in English and take stock of the latest developments in actual practice.