Who Should Practice Crypto Law?

When the stakes are high, there’s little room for error.

Lawyers are a nasty bunch. They fight, fight, fight — and it’s such a drag to hear them throw out obscure legal principles, and, rules, and case names.

There’s so much jargon!

But when crypto legal debates spill out beyond courtrooms and law firm conference tables, you know the fight is a major showdown — with a lot on the line.

Here’s why the crypto law debate is such a big deal:

In many ways, today’s crypto law debates are about the optimal legal structure of the global economy in the 21st century.

Given the high stakes, this is not a fight you can ignore or just leave to your lawyer(s). This debate concerns their core competence on questions of global governance and law vis-a-vis crypto. And it’s a debate that centers on your participatory rights in future techno-social orders. There is no reason to assume that both sets of actors are interest-aligned or that outcomes will necessarily protect your interests.

Therefore, the “crypto law” debate is one you should follow very closely. Given the many overlaps and parallels to ongoing blockchain governance debates, it’s also a debate that pays big dividends for active and good faith participation.

1. The “Crypto Law” Debates

Here are basically two sides in the current “crypto law” debates:

  1. Crypto lawyers who believe they and you should have meaningful power to shape the law of the future (e.g., Zamfir’s desired view of “crypto law”);
  2. Crypto lawyers who believe they should shape the law of the future (e.g., Zamfir’s critic Gabriel Shapiro).

Any self-interested person should already know which side is better.

But it’s not enough to choose winners and losers. We must also unpack why #1 is better relative to #2. Then, we must show that #2 is a very bad idea by itself, irrespective of #1.

Thankfully, Gabriel Shapiro’s review of Zamfir’s crypto law article offers a great illustration of #2. It’s a relatively brief read, and offers context for some of the points below. Here it is:

We’ll dissect Shapiro’s article in detail for several reasons. First and foremost, Shapiro’s response stands as a shining illustration of what not to do in crypto law debates.

But first …

2. Historical Context

  • In the 1990s, Nick Szabo blogs about the future of so-called “smart contracts” that can be made self-enforcing, and which will enable cool technologies like self-repossessing cars and self-evicting apartments. (The argument suffers from several major fallacies, which go largely unnoticed until recently. The fallacies bear directly on this debate, so it’s worthwhile to recall them).
  • Months after the start of the financial crisis of 2008, Satoshi Nakamoto publishes the Bitcoin Whitepaper. Once code is published a few months later, Bitcoin is born, and the blockchain revolution goes live.
  • In 2013–2014, a number of early Bitcoiners decide to launch an entirely new blockchain project, Ethereum — incorporating conceptual blocks from both sources above, among numerous others.
  • In 2018, Vlad Zamfir, a well-known Ethereum researcher, publishes a series of calls for more active participation in blockchain governance by all affected stakeholders.
  • In early 2019, Zamfir publishes a foundational analytical critique of existing crypto legal frameworks.
  • Gabriel Shapiro is one of several lawyers who responds publicly to Zamfir’s crypto law article. The essence of Shapiro’s critique is: “Stay in your lane.”

Though it may seem unnecessary, this context helps us appreciate the far-ranging implications of crypto law — and the importance of big picture frameworks.

3. Primacy in CryptoLaw

Shapiro’s “stay in your lane” politics is part of a broader quest for primacy in crypto law networks, as well as other power/professional networks.

In a response that reads like a cover letter, Shapiro’s ambition is on full display. Here’s what Shapiro wants, in his own words:

“[…] of course as a lawyer I would kill to be able to help advise what the contractually agreed ‘crypto law’ should like. As a lawyer it’d be like advising on one of the coolest deals of all time — a deal to set up a platform for deal-making!”

And here’s how Shapiro intends to get there: by bootlicking Szabo.

If you think this is overkill, please revisit Shapiro’s response to appreciate the depth of conceptual and associational commingling.

Shapiro has apparently concluded that Szabo’s network represents the easiest path to success. So Zamfir’s intervention gives Shapiro an opportunity to ingratiate himself to the broader crypto legal community by taking a bold step in defense of … the status quo. In Shapiro’s own words —

In Defense of […] highly ingrained, time-honored and widely touted “Szabo’s law”

The tone says it all: “I would kill to be able to help advise[.]” (emphasis added).

So yes, crypto law is a war being fought on several different fronts, which we must examine in turn: (A) lawyer v. non-lawyer; (B) lawyer v. lawyer; (C ) lawyer v. self.

3.A. Lawyer v. Non-Lawyer

Shapiro tries to frame Zamfir as an amateur. According to Shapiro, if you’re a non-lawyer, good luck venturing across legal and governance terrain:

I analogously believe (truly without knee-jerk condescension) that Vlad is missing quite a few nuances about law and governance as he has ventured into legal terrain while being a non-lawyer.

The only way to catch the nuance is to be a “lawyer,” whatever that means. In his rush to shove his legal credentials in everyone’s face, Shapiro forgets that lawyering is itself a spectrum:

Nick Szabo and I have one thing in common: we’re both lawyers (although in Nick’s case he may not be practicing, he has a J.D. and is a very keen and longstanding student of the history of law, and that makes him a lawyer in my book).

On this spectrum, Shapiro’s “book” is absolutely irrelevant for determining whether or not Szabo is a lawyer or not. For that, there are bar associations and licensure rules. We’ll return to this nugget shortly, when we look at how Shapiro throws Szabo under the bus. For now, let’s remember: lawyer = good; non-lawyer = stay in your lane!

However, like Eleanor Roosevelt or Elon Musk, Zamfir does not need a law degree to state obvious points regarding the place of law in modern society. He does not need anyone’s permission to draw inferences and build analysis regarding today and tomorrow’s techno-legal landscapes. In fact, outsiders often bring valuable novel approaches and interdisciplinary ideas.

The point here is that irrespective of whether he’s called a non-lawyer, a crypto lawyer, a law person, a troll, or a crypto citizen, Zamfir has extremely valuable insights regarding how the world is run & blockchain’s place in that new order — in a refreshingly open-ended, generative, and broadly-inclusive posture.

In reality, Zamfir’s article is a serious theoretical tome — full of layered lawyered nuance. Zamfir’s ideas deserve to be analyzed, extended, and critiqued, but these critiques must come from a place of good faith.

Zamfir’s crypto law article makes a number of important, original, and principled observations regarding how law already structures and constrains the blockchain. Separately from his analysis of existing legal frameworks, Zamfir also shows the theoretical and practical dead-end of Szaboian legal thought as a normative/political vision.

(If you want to delve deeper into maximalism dead-ends, a rough mapping of the substantive arguments is available here.)

Despite the novelty and breadth of Zamfir’s critique, Shapiro does not engage with Zamfir’s argument, on the merits — on any meaningful plane.

Instead, here’s the basic structure of Shapiro’s response:

  1. Zamfir is not a lawyer, so doesn’t know what he’s talking about;
  2. Therefore, he should stay in his lane, and let the real “adept” lawyers do their thing.

Shapiro admits this can come across as condescending, and it is. It amounts to the same lawyers who created the present system (and benefit from the present system) telling leading techno-social-activists that they should simmer down. It is a classic manifestation of the status quo — the Man — trying to shut down a genuine agent of change.

Nobody should be surprised that lawyers guard their turf so jealously. But this type of grandstanding is so strident that it defies rationalization.

Shapiro’s posture affirms the heart of Zamfir’s critique: the ideology, creed, ethos of “Szabo law”-as-immutability allows blockchain governance capture by immutability/maximalism zealots. As Vitalik Buterin adds in his response, it is the status quo favoring the status quo.

3.B. Lawyer v. Lawyer

Next, everyone who read the piece fully can see that Shapiro’s “response” to Zamfir is actually not responsive to Zamfir. Instead, Shapiro is addressing an audience of lawyers — the incumbent global governance class.

Shapiro literally opens his “response” with a salute to his audience of … “Lawyers!”

The people he wants to reach and influence are a group of … lawyers. Stylistically, organizationally, Shapiro’s piece is an imaginary internal conversation between today’s ostensibly-dominant group of crypto lawyers.

In this internal conversation with his law buddies, Shapiro tries to be authoritative and reassuring — and fails at both. The key message to his law peeps is that, because of unsophisticated “loveable” coders like Zamfir, “crypto law” will continue to generate plenty of legal work. Shapiro’s sardonic promise to these imaginary lawyers, in his own words:

“Your job security is assured! Your social standing, restored!”

If you’re naive, that is. In reality, the only way one gets “job security” and “social standing” — in Law, as in Life — is through hard work, blind luck, and war.

The war is here, and the war is now. It is a crypto war over the scope and structure of tomorrow’s global public blockchains. In this war, lawyering is a martial art that channels competing visions of the future towards somewhat peaceful disputation and resolution.

Given the enormity at stake, the crypto legal battles will only grow bigger. In these battles, many lawyers fight clean; some fight dirty.

When attacking his supposed opposition, Shapiro fights dirty. Here’s what Shapiro‘s response suggests about other prominent law people in the crypto space:

  • Nick Szabo may not be practicing law (now? ever?) —
  • “I [Shapiro] am more legally adept than Nick [Szabo] and spent eight years doing high-stakes deals for real high-stakes clients at real AMLAW10 law firms” —
  • Angela Walch is a no-coiner (thereby implying lack of understanding of blockchain fundamentals);
  • [Crypto Law Review, presumably] is a “very controversial, scatter-shot and uneven blockchain-focused legal blog”

Shapiro wants to be an alpha in the crypto law bar, but by his own admission, he is not. He is yet another outsider vying for primacy in a field that many want to control, but nobody fully comprehends.

3.C. Lawyer v. Self

The above could be seen as needlessly blunt were it not for the fact that Shapiro himself was conscious that his posture could come across as condescending and dictatorial. He tries to preempt this exact attack.

But in so doing, he highlights and heightens the asymmetry inherent in insider/outsider, expert/novice, lawyer/non-lawyer relationships. He is clearly self-conscious about the need to stay hip to the cultural mores of the crypto space (inclusivity), while simultaneously paying obeisance to the other stakeholder groups whose hands feed him.

So Shapiro is forced into the contorted position of trying to pay homage to two competing factions. In the process, he impresses neither.

Shapiro knows that he cannot and should not refer to major figures in the crypto space in a dismissive and infantalizing manner. He knows that he should not preach from above, and should not come across as an authoritarian — that this goes against the whole ethos of cypherpunk/CA and progeny.

Shapiro’s piece shows a mind that knows it shouldn’t be doing something like this.

But it’s a mind that cannot help itself, so Shapiro strikes the most offensive and aggressive posture one can take as a wannabe crypto lawyer:

Unless, like me, you think that “crypto-law” in Vlad’s sense is something only a non-lawyer could dream-up, and while it may represent the kernel of a very interesting, creative and intelligent approach to blockchain, is in dire need of — well, for lack of a better word, some lawyering.

That is so un-crypto, it needs no further comment.

4. Legal Monopoly

Shapiro’s response shows one way that lawyers try to discredit non-lawyers as well as legal opponents. But in the grand scheme of things, this is an insignificant border skirmish. It is useful only insofar as it heightens our vigilance for similar — and far costlier — attacks down the road.

However, the implications of Shapiro’s posture are worth exploring in more detail because they give a clear outline of what’s ahead. Here is the biggest observed trend: Instead of moving towards a robust crypto legal marketplace (of ideas and services), some lawyers seem intent on positioning crypto as a legal battlespace — internally and externally.

Take a look at these themes and inferences from Shapiro’s review:

  • Territoriality. As between Shapiro & Szabo, Shapiro’s need to assert his superior legal adeptness vis-a-vis Nick Szabo is peacocking, but it is simultaneously a highly aggressive and territorial move. “Stay off my turf!” Shapiro adopts different versions of this territorial posture vis-a-vis the other peers he acknowledges. It is reasonable to expect a rapid increase in these types of postures in the crypto law bar over the near term.
  • Specialization. One way of maintaining, or even expanding, one’s territory is to create one’s own market. Therefore, it is reasonable to expect more crypto legal specialization, with lawyers claiming deeper levels of expertise in supposed sub-fields of “crypto law.”
  • Exclusivity. Shapiro’s invocation of professional expertise is also a clever (though transparent) attempt at rhetorical domination by unilateral fiat. Here is the message it communicates: there is an intellectual and professional elite that does “lawyering” & it is the currently optimal regime for steering blockchain through supposed growing pains. Never mind that many growing pains are attributable directly to the lawyers who claim to hold exclusive expert knowledge.
  • Monopoly. We, lawyers, hold a monopoly power over legal narratives. So we get to tell blockchain developers what the law is, what it is capable of, and what it should do. Non-lawyers’ analysis on “crypto law” is cute and “loveable” (Shapiro’s own word choice), but just let the lawyers do the law stuff.

The logical end point for this crypto legal posture is a jealously-guarded monopoly over the practice of law, built on credentials and connections, and maintained through force. To wit: today’s status quo.

5. Shapiro’s Argument Crumbles

Having seen how crypto lawyers like Shapiro argue, let us turn to the merits of the status quo-favoring argument, and its big holes.

First, in ascribing “crypto law” to Zamfir or to a “very controversial … legal blog (Crypto Law Review, presumably), Shapiro shows that he is not familiar with foundational tenets of crypto legal thought — for it was not Crypto Law Review, not Vlad Zamfir, but Gav Would (Gavin Wood) who first formalized the field of “crypto law” back in the Ethereum Yellowpaper and beyond.

Failure to provide this context in a review piece suggests a lawyer who is less interested in understanding what crypto developers think about “law” and far more interested in telling them what the law “is.” These postures stifle innovation and raise transaction costs, among other things.

Second, in an image caption, and elsewhere in text, Shapiro muses: “Crypto law … Is it a thing?” A baseline competent lawyer would have researched to find an article published in the Crypto Law Review that directly traced the intellectual provenance of “crypto law.” Even in disagreement, a lawyer acting in good faith would have noted that “crypto law” is a thing, with a rather rich and principled intellectual mooring long before the Crypto Law Review came into existence.

In this context, failure to acknowledge this fact is like misrepresentation by omission; at minimum, it is a gross dereliction of journalistic duty of direct attribution. In crypto slang, that makes Shapiro guilty af of censorship — especially since the censored content in this conversation chain was none other than the … Ethereum Yellowpaper (and progeny)! This suggests partisan motives and/or dishonesty and/or lack of awareness of the aforementioned context — each of which is, independently, a flaw.

Third, Shapiro’s attempt to strip leading blockchain governance theorists of participatory agency in legal and governance debates because of a lack of a professional legal credentials shows tone-deafness to crypto’s founding mantras of openness, fairness, and objective meritocracy.

Fourth, Shapiro’s attempt to pull rank with AMLAW10 credentials is not just excessively authoritarian, but it also shows lack of appreciation for the broader global context of crypto law. Many big law firms are global firms, yet as this episode shows, even global firms sometimes hire parochial talent.


Big picture, the crypto legal status quo is autopoietic, designed to replicate existing hierarchies. Against this backdrop, the only way crypto can realize its globally-scaled potential is to acknowledge the status quo, and then to improve on it — away from crypto-parochialism towards even more meritocracy, analytical rigor, and pluralism.

6. Cryptopolitanism v. Crypto-Parochialism

As we’ve seen, crypto-parochialism means being a crypto villager, intentionally blind to the broader socio-legal contexts in which crypto operates. Cryptopolitanism (crypto + cosmopolitanism) means a globally-minded outlook on crypto that respects intellectual and normative pluralism.

Here’s the brief argument for why the crypto law debate is a global debate and why a plurality of global approaches is a good thing, not a bad thing.

Because crypto is global, crypto law is also global. Greater intellectual pluralism in crypto raises overall likelihood of better crypto legal thought and smoother implementation. Better outcomes for greatest number of people = more security (across different planes).

This means we need to do everything possible to catalyze and incubate crypto legal analysis from across the broadest possible legal spectrum. Law folks like Shapiro and Szabo are afraid of legal critiques, yet these critiques are the only way crypto can realize its global scaling potential.

Failure to heed critiques leads to bloopers like these by Shapiro:

Shapiro’s parochialism manifests elsewhere, aplenty. “WE” have a “GREAT” legal system; elsewhere, it’s just voodoo and Indians. Here’s Shapiro, setting up a legal hypothetical that explains how crypto law works today and why maximalism is supposedly desirable:

India has a notoriously inefficient, byzantine legal system that is hard for even Indians (no less Americans like me) to navigate successfully. […] I don’t trust India’s legal system.

Shapiro probably didn’t think about parochialism when he wrote his response. And that’s the whole point.

Boasting that “WE” have a “GREAT” legal system (“at least in the United States and other highly developed parts of the world”) is the legal equivalent of crypto-colonialism (crypto as delivery vehicle for radical and highly-coercive law reform projects, globally, outside of the “highly developed parts of the world”).

The position is authoritarian, hegemonic, and totally uncritical. It’s also disconnected from reality, where CryptoLaw > AmLaw.

7. Who is a “Crypto Lawyer”— ?

Zamfir is neither inventing crypto law, nor redefining what it means to be a crypto lawyer, etc.

Quite the opposite, Zamfir is pointing out that crypto legal rights are already closely linked to blockchain governance rights, and these linkages are likely to only deepen. Zamfir wants you to take a more active role in blockchain governance and in the evolution of crypto law.

Zamfir’s critics pay lip service to the critique, but are clearly not getting it. Shapiro praises “Vlad” as “quite a brilliant and interesting fellow.” Shapiro is “glad [Vlad’s] working on and publishing his ideas.” If only Vlad was a lawyer who could see nuance, but alas.

That’s why it is so important to get crypto law right instead of leaving it to self-professed experts who are interest-aligned to replicate existing hierarchies and norms.

If you’re in crypto in any capacity, and if you care about legality and security for crypto, if you think about how law structures crypto, then you are a crypto lawyer — irrespective of formal credentials.

The broader the governance base, the more secure the legal frameworks. And vice versa. It’s really that simple.

By contrast, when self-proclaimed legal experts want to exclude others, the question everyone should be asking is — “Why?”

8. $500K Security or Priceless Security?

As we come to the end of the analysis, we need to take stock of what’s motivating people in these crypto law debates. Here’s one view. The main reason lawyers want to keep outsiders out is to continue rent-seeking and enjoying the spoils of operating in relatively insulated monopoly markets.

Analysis like Berarducci’s show the real-world information, opportunity, and monetary costs of buying legal security in today’s crypto environment.

Crypto law, “crypto legality,” crypto “legal personality,” etc. — these are foundational pillars of the existing crypto legal system, and will remain foundational pillars of any new crypto legal system.

Zamfir’s point is that these issues are too important to outsource. They are vital security threat vectors, as mission-critical as any hardware/software security audit. Before we operationalize global blockchains capable of running general-purpose autonomous code, we need to analyze and debate these issues in rigorous historical, comparative, and broadly-inclusive ways.

Everyone should be thinking about these issues, not merely crypto lawyers on the prowl for $1/2M fees. The broader the governance base, the more secure the legal frameworks. And vice versa.

9. Crypto Intellectual Theft

When self-proclaimed experts claim supremacy over non-experts, there’s usually another thing happening under the surface: outright intellectual theft. This lies at the heart of Shapiro’s review as well.

[Vlad is out of his league] BUT, to Vlad’s credit, there is nevertheless quite an interesting idea he has implicitly cottoned onto — namely, that of combining blockchain technology with the power of private ordering via legal contracts.

No, “Gabe,” that’s not an “interesting idea” that Vlad just “cottoned” upon — like a non-lawyer getting lucky and stumbling on nuance.

This is not an “implicit” point in Vlad’s article. Private legal ordering — through contract and otherwise — has been an explicit part of Zamfir’s crypto law frameworks since at least BG101, and well through today:

To suggest otherwise is to commit the ultimate crypto sin of intellectual misappropriation. As we wrote in the substantive review of the Zamfir v. Szabo Governance & Law debate,

Adherents of “Szabo’s law” will continue their attempts to: (1) deny the validity of Zamfir’s critique; yet, simultaneously, (2) to appropriate the core critique, and re-market it as their own legal innovation.

But they cannot do both.

Conclusion

The fight over the scope of crypto law is fierce, and growing by the day. This includes many discrete battles over the scope of constituent legal forms like “money,” “currency,” “property,” “contract,” “security,” “arbitration,” “decentralization,” “enforcement,” and so on. These fights will only get hotter and bigger in the years ahead.

Big picture, crypto’s legal frameworks are key battlefronts in the war for political inclusion, due process, and overall social utility.

  • Crypto free-thinkers like Vlad Zamfir, CleanApp, COALA, and many others are doing everything possible to widen the field for participation and contestation — so that your rights are protected to the maximum extent possible under today’s legal regimes, and the legal regimes of not-yet-conceived tomorrows.
  • The crypto orthodoxy — exemplified by Nick Szabo and Gabriel Shapiro — prefer a world where they can rest on their laurels and dictate the scope and form of crypto law. The crypto orthodoxy actively silences critique. Under the mantra of immutability maximization, the crypto orthodoxy wants to shelter you from the consequences of an uncertain tomorrow by severely restricting your future freedom of action.

Your choice.