Crypto Law School

Crypto claims it can write law. Now comes the hard part: learning what that means.

(This is a part of a bigger analytical project, CryptoLaw, which is available on Crypto Law Review.)

1. Who Are CryptoLawyers? Answer: YOU!

By “CryptoLaw Bar” and “CryptoLawyers,” we don’t just mean “lawyers” in the traditional sense of the word.

Instead, the growing CryptoLaw Bar includes CryptoCats like Gavin Wood, Vitalik Buterin & everyone who has ever used Legalese (such as the term “smart contract”) — including YOU — irrespective of educational or professional background.

If you’re a crypto dev, you might never have seen yourself as a CryptoLawyer. You might mistrust or even despise lawyers.

You might have thought that Law and Lawyers were part of “the problem” for which Crypto was “the solution.”

If you thought that, you were wrong. Not trying to be mean; just stating the truth.

2. We’re Not Calling You Names, Read Yellowpaper.io

Please understand that it’s not little ol’ CleanApp that’s calling you out, saying you’re wrong to fight quixotic legal windmills, and tagging you into the CryptoLaw Bar.

It’s the law firm of Nakamoto, Wood, Szabo, Buterin, Hoskinson & Associates, PLLC (founders of Bitcoin, Ethereum, Ethereum Classic & CryptoLaw) who opened the CryptoLaw Bar, threw you in it, and then locked the door on their way out.

Here’s Gavin Wood at the end of 2015, telling us we were all crypto-lawyers who were now finally free to play with our magical crypto-legal “building blocks” to construct whatever shady legal things we wanted to construct:

While contracts that provide pure services concerning each one of these pillars [(1) Identity; (2) Assets; (3) Data] will be extremely useful, these should be considered merely building blocks from which a crypto-lawyer (or crypto-lawmaker?) may construct appropriate shades.

It was all fun and metaphor when we were imagining what it’d be like to be “crypto-lawyers” and “crypto-lawmakers.”

But now that we’ve started being called to account, now that the “shitcoins” are ricocheting off the SEC’s long-arm fanblades, people should realize that not everyone’s a “crypto-lawmaker” in Cryptopia.

There are winners and losers, including in the CryptoLaw Bar. We are all free to “write our own law.” Except, of course, some folks are little bit more free than others.

3. “Smart Contract” Battlefield

To see how legal struggles for primacy play out in the Crypto Legal Matrix, we can look at the ongoing war over “smart contract.”

Importantly, this is just an example, one battlefield of many. Similar battles are raging over classification of crypto instruments as “securities,” “currencies,” and so on.

A. Setting The CryptoLaw Bar

To help us understand what’s going on in these fights, we introduce some lawyers into the mix, including some smart ones, and some misguided ones. Again, please note that in talking about lawyers in the “smart contract” context, we’re not talking narrowly about only those people licensed to practice law in a particular jurisdiction.

Given the centrality of Legalese (and legal forms like ‘contract,’ ‘property,’ ‘legal personality,’ ‘jurisdiction,’ and other legal forms) to projects like Ethereum, EOS, etc., by this point it’s fair game to go ahead and classify people like Vitalik Buterin as full-fledged CryptoLawyers — even though they might not have studied law in any formal institutional sense.

You may still think we’re writing this metaphorically, but we’re not. Many existing bar licensure rules around the world permit supervised independent study of law to satisfy the educational prerequisite for licensure.

And given Vitalik Buterin’s collaboration with leading lawyers, and his publication record, we think it’s appropriate to finally say:

Congratulations, Vitalik Buterin, Esq. (and the broader Crypto Law School Class of 2018) on your admission to the CryptoLaw Bar!
Now, as you may know, the first step (#1) following admission to any Bar association is paying your dues. The second step (#2) is acknowledging the full weight of shared legal responsibilities that you owe to the Bar, and to the public it serves.
Welcome!

In the high-stakes world of CryptoLaw, steps one and two above are one and the same. They basically require acknowledgement of the real-world costs of CryptoLaw malpractice.

Senator Smith; Judge Smith; General Smith; Esquire Smith — simultaneously.

We must remember one of the most profound nuances of The Matrix: what happens in the Legal Matrix doesn’t just stay in the matrix.

Even that “self-contained legal system” couldn’t get rid of all the semi-permeable cracks.

B. Lawyers Are Brawlers

Now that we’ve expanded the CryptoLaw Bar, let’s see how lawyers fight.

By this point, we know that lawyers, judges, arbitrators (in short, “law folks”) employ every tool to advance their particular legal positions. Whatever the battle space calls for, law folks go back to their law libraries (see above) and pluck out the tools that will get the job done.

For instance, returning to “law on the books” & “law in action,” they can turn to legislative history to understand what a legislature or a legislative committee had in mind when they drafted a given law.

C. SmartLawyer > SmartContract

These battles are already playing out in the “smart contract” space, and they will only increase once new “smart contract” legislation goes to court.

Trial

Legal crews (aka law firms) will be able to point to the history of “smart contract” legislation, arguing that this legislation was passed to “legalize” or “formalize” the status of new technologies like “smart contracts.”

For instance, lawyers can glean the overarching object & purpose of “smart contract laws” like Tennessee’s 47–10–202(c) (Tennessee’s Senate Bill 1662, signed into law by Tennessee’s governor on March 22, 2018) from the plain letter of the statute:

Smart contracts may exist in commerce. No contract relating to a transaction shall be denied legal effect, validity, or enforceability solely because that contract is executed through a smart contract.

But as any lawyer anywhere in the world will confirm, if they need to, lawyers can almost always argue that their particular “smart contract” creature also operates outside of the scope a particular statute or regulation.

This is so irrespective of the fact that the “smart contract” under review called itself a “smart contract” or even expressly invoked a particular “smart contract” statutory or regulatory or “private law” legal regime as governing law.

D. SmartLawyers > SmartestLawyer

As with most things in life, whether you win or lose these argument will often depend on the strength of your legal crew.

“Be careful Neo, Esquire! You didn’t win. You just had a hell of a support network.” — CleanApp

Skilled CryptoLawyers (plural) will be able to argue that legislative interventions and definitions (like the Tennessee effort) were, and remain, superfluous. It doesn’t matter how strong or how smart an opposing LawSmith (singular) may seem.

Nine times out of ten, a crew of smart lawyers will demolish even the smartest lawyer working alone.

You can’t “smart contract” your way to a good reputation as a legal brawler; that reputation is earned over years of hard fights. You can’t just assert you have skilz unilaterally; smart lawyers know that they can be called on the carpet at any time, by any one.

That’s why smart lawyers are constantly training and building networks.

E. SmartLawyers: Ready to Fight, Anywhere

Furthermore, for the most part, it doesn’t even matter where these battles will be waged. Functionally speaking, even the seemingly big ‘choice of law’/‘choice of forum’ decisions like whether to fight in a civil law jurisdiction or common law jurisdiction are secondary considerations.

“Choice of law” and “choice of forum” questions are of vital importance. But even they are secondary to the “lawyer selection” question — whether you trust the advice of the lawyer who is steering you towards this forum, or that body of substantive law.

With a strong enough crew and a clear legal objective, anything is possible (as long as you’re vigilant about every possible external and internal attack vector):

Morpheus, Trinity, Neo & Cypherpunk, LLP

Statutes may seem super-duper formal and ultra-Matrix-y, until you remember the nuances you uploaded in law school. Even statutes and “settled case law” and “majority rules” are just samplings of legal authorities.

Nobody can ever have 100% knowledge or control over the Legal Matrix. It’s the ultimate decentralized crypto platform.

When the stakes are high enough, a good lawyer can effectively “re-interpret” statutory meaning in light of new technologies, new circumstances — in light of the common law of contract and/or another statutory scheme and/or X and/or Y and/or Z, and/or et al.

When push comes to shove, the lawyer can even fight to invalidate the statute under a dizzying number of legal grounds. No lawyer, no matter how skilled, can ever predict the outcome of a fight like this. But every lawyer will confirm that it’s really easy to get into a fight like this.

4. CryptoLawyering is Fun. Want More?

The “smart contract” domain is a great illustration of how easy it is to muck up the Crypto Legal Matrix from within, as well as from external angles of attack.

Ready for more?

Then let’s Enter the Crypto Legal Matrix.