Is Ethereum legal in China?

Where to find Chinese crypto law.

#LawFUD (Fear, Uncertainty, Doubt about law) is a big recurring theme in debates regarding law vis-a-vis crypto.

#LawFUD is real.

When you clicked on the link that brought you here, you probably already had a position on the propriety of the question above. It might have been something like: (1) yes, no, maybe; (2) who cares? (3) Ethereum is alegal & supra-jurisdictional — operating above & beyond the Great Firewall; (4) dammit, one more thing that my crypto lawyer will be charging me for; (5) etc.

Whatever your presupposition might have been (& whatever your background — legal or not) chances are it has elements of #LawFUD. That’s only natural, because law is an extremely complex decentralized consensus mechanism. We all have different degrees of #LawFUD and that’s ok.

But like all FUD, we can & should work to overcome it.

Extreme #LawFUD → Lexscapism

The most extreme version of crypto’s #LawFUD is captured in Erik Cason’s openly-Messianic Bitcoin manifesto:

The Theological Conquest of Money

Cason’s basic premise there is that law is infinitely violent and corrupt, and that crypto (specifically, Bitcoin) can save faithful Bitlievers from Leviathan.

Here’s Cason:

Bitcoin has the power to destroy the old, corrupt legal apparatus of state and fiat money that has enslaved every human on the planet; and to free every human for the great destiny that awaits us all.

According to Cason, Bitcoin will transcend and subsume law — in a non-violent way — because Bitcoin “is the oath to the commonality of the law itself.”

In this view, technologies like Bitcoin and Ethereum are inherently ungovernable, no matter how great a state’s firewall or firepower.

Pragmatic #LawFUD → Lexit

There’s a more pragmatic stream of #LawFUD in crypto, which manifests as pronounced anxiety about particular legal traditions — & not necessarily law or legal institutions as a whole. Here’s a great recent example:

Because it’s so difficult to discern whose law governs particular crypto processes, some suggest that we should just “go dark” and elide engagement with law altogether.

We can pierce the Great Firewall by burrowing beneath it under the cover of darkness. Maybe.

This view (that crypto should just extricate itself from law in a form of collective ‘lexit’) is exemplified by Amir Taaki’s call to go “dark” — everywhere.

All of It Dark, All of It P2P: After the Binance Hack, Bitcoin Doesn't Cut It - CoinDesk

The ‘lexit’ position isn’t a fringe theory. It’s a widely-held view, hardwired deep into crypto’s founding texts & today’s operational lawgics.

Against #LawFUD → Legal Order

In sharp contrast to those who are afraid of law — and, especially, ‘Chinese law’ or ‘Indian law’ or ‘[insert here] law’ — stand crypto anarchists who understand that it’s simply irrational to fear that which you don’t understand.

This may explain why hardcore cryptocats like Vlad Zamfir have taken a sharp legal turn recently.

And Zamfir is definitely not alone in recognizing the centrality of legal frameworks for Ethereum’s continued march to global scale and massive adoption.

Zamfir’s point is that crypto folks need to educate themselves on law because that gives much more operational security than anti-legal postures (extreme #LawFUD, above) or lexit postures (going ‘dark,’ above).

Is Law-Study Cowardice?

Unfortunately, many people mistake Zamfir’s position as suggesting that we need to educate ourselves on, say, Chinese law — so that Ethereans can comply with Chinese law better (and/or avoid disputes with Chinese authorities better).

Even though Zamfir has explicitly and consistently rejected the position that he is trying to make Ethereum ‘legal’ in, say, ‘China’ — many people still falsely project a compliance trajectory to the broader “understand law as thine enemy & not enemy” argument.

The reason may have less to do with Vlad’s argument, however, and more to do with perceptions about a broader arc of compliance-speak in the Ethereum ecosystem.

Just Say No! to Law

‘Lawyer Vlad’ seems to genuinely want himself and everyone else to have a better understanding of how law actually works, so that blockchain governance stakeholders and processes can manage disputes better.

But Vlad’s critics think he’s a gadfly, spoiling all the crypto-anarchic fun with his ‘abstract musings’ on jurisprudence:

We came to crypto to make money and get away from law; not sink deeper in it! Boring!!!

Substantively, Vlad’s critics tap into these general tropes (with rebuttals in parens):

1. we should leave law to the lawyers (but they are the ones who got us into this mess to begin with, so that’s a nonstarter); and/or
2. crypto can do its thing alegally — outside of the province of law (even though no social process is above or beyond law); and/or
3. we should export “our” values to the world, not the other way around (advice of professional values-exporter, Snowden, to the Ethereum community at #EthBerlinZwei); and/or
4. ...

But like the abstractness critiques against Vlad, these arguments don’t really engage with Vlad’s argument on the merits. That’s a shame, because understanding law is an existential need for blockchain global scaling.

As boring as law may seem now, it’s a lot less boring than studying law from the inside of a jail cell.

Ok, Law; But Not *That* Law!

There’s a bit of an Orientalist/hegemonic anxiety at play in these debates as well.

Perhaps skeptics think learning cryptic governance tongues is a gateway drug to ‘selling out’—speaking Chinese Legalese, with Russian accents and American sensibilities:

This goes back to Andreas Antonopolous’ purportedly “simple question” of: “whose law?”

Shiv Malik’s response to this question is: “our” law (essentially defending Szabo’s flawed conception of #WriteYourOwnLaw). Because the alternative is their law, and we don’t want their law. Because, presumably, foreign law & foreign values are so … different, and so … inherently untrustworthy!

Shiv Malik: “As Snowden implored, ‘Let’s use Ethereum to export our values to the rest of the world, not the other way around.’”

But “we” — with “our” values of radical transparency and algorithmic purity and whatever else passes for “our values” any given day— we can do so much better.

Maybe.

But if it was that clear-cut, we wouldn’t be having this debate.

Punch Drunk Law

Thankfully, the global Ethereum community is full of really smart people who are not afraid of anyone, or anything, including enigmas like 中华法系 (‘Chinese law’) or شريعة‎ (‘Sharia compliant crypto’).

These good faith governance participants can be suspicious and highly critical of particular religious and/or legal orders, but they understand that if other smart good faith governance participants are dipping into law, there might be good tactical or strategic reasons for doing so — as opposed to cowering before existing state-based legal orders.

Twitter’s @CypherDrunk — whoever they are — is a great example of a principled mind not afraid to open itself to radical blockchain possibilities.

Here’s CypherDrunk narrowing Vlad’s “what is [Chinese] law?” question to a “who decides [Chinese law]?” question:

This opens up a deep, constructive, and pretty emancipatory rabbit hole.

You don’t want to miss what came next.

So … Legal?

If you’re an Etherean who still wants to know if Ethereum is “legal” in China, you should help build humanity’s first dynamic database of all the world’s law, starting with robust and secure jurisdiction maps.

This effort can only succeed with the direct participation of Chinese Ethereans, Russian Ethereans, and every other globally-minded Etherean.

Please help put all the world’s law on the proverbial blockchain (#EthLaw/#EthMaps).

That way, you can search for legal answers on an EthLaw.eth that you would have helped build — instead of turning to $500/hr ‘pencil-pushers’ (to quote @CypherDrunk) whose work product you might not trust anyway.

Big picture, that’s the only way crypto will overcome its #LawFUD and realize its full globally-scaled potential.