Introducing LawDEX: Open-Source Legal Resources for Blockchain Developers and Entrepreneurs

“Can you recommend a lawyer for my {ICO or blockchain project}”?

As lawyers and entrepreneurs, we’ve been asked this question countless times. While there are indeed multiple talented lawyers in this space, we believe the overall state of blockchain-related legal advisory is disappointing. Why?

1. Legal advice is costly: Most lawyers are researching and learning about blockchain technology on-demand. They’re developing resources, strategy, and practices from scratch, mainly on the client’s dime. For example, lawyers and advisory firms have been charging up to $1,000,000+ to advise organizations looking to ICO. But what about open-source blockchain projects who don’t intend to ICO, can’t recoup large legal costs, and need a cheaper solution?
2. Legal opinions are fragmented: Three different lawyers could have three different opinions on which approach you should use. Some law firms even claim that you could go to jail if you act on the advice of the other law firm. How is that for peace of mind?
3. Legal advice could be inaccurate: No one has complete certainty on how the SEC, CFTC, FinCEN, and private plaintiffs are going to respond to various blockchain projects. Everyone has a different piece of the puzzle given the experience that they hold. Collaboration will help provide a more holistic, and hopefully accurate, picture.

To help solve these issues, we introduce the LawDEX Project to provide open-source legal resources to blockchain developers and entrepreneurs. Why?

• Open-source legal resources for blockchain developers will help drive legal costs down because it’ll lessen the need to reinvent the wheel.
• Open-source legal resources will create a transparent “decentralized” ecosystem of legal opinions that lawyers and users can learn from and build upon.
• Open-source legal resources will incentivize more entrepreneurs and developers to enter the space by making the legal and regulatory aspect a tad less confusing.

Nothing in LawDEX is legal advice. You should not blindly rely on this information. You should still seek out a lawyer to discuss the unique business, operational, and technological characteristics of your project. However, LawDEX DOES provide general legal education resources that can help both clients and lawyers become more informed. Moreover, high-quality resources helps to prevent everyone from having to reinvent the wheel.

While the blockchain community is gungho about the open-source ethos, many advisors who serve the community are financially incentivized to maintain a walled garden on their knowledge. We believe this behavior needs to change.

How do you contribute?

1. If you’re a blockchain entrepreneur and have retained legal counsel in the past to do research, please consider contributing informational resources and documents (with all confidential information removed) that are general enough to apply to many.
2. If you are a lawyer, please consider contributing templates and articles that could help developers and entrepreneurs better understand the landscape. Potential subjects could include: securities frameworks, global and domestic money transmitter analyses, disclosure templates, AML/KYC approaches, and more.
3. Anyone who believes that some information is wrong or not updated should submit a pull request with updated information.

We believe there’s already amazing groundwork. Coinbase’s Securities Law Framework is a valuable data point for companies seeking to ICO, as is Protocol Labs and Cooley’s SAFT Project. Coin Center’s 50 State Regulatory Analysis and other informational documents are also helpful for entrepreneurs to understand the legal landscape.

However, more could be done. Therefore, we are launching LawDEX and Mobius is seeding the project by sharing two resources it used to conduct its recent $39M Token Sale:

Resource A: A 50-State Survey of the Regulation of Token Sales under State Money Transmission Acts, researched and drafted by Thomas Brown and Molly Swartz of Paul Hastings. This survey guided Mobius in forming its token sale policies such as unfortunately prohibiting New York state buyers due to New York state laws.

Resource B: A version of the Founder Institute’s Founder / Advisor Standard Template (FAST) modified to use tokens as compensation.

We hope this ecosystem can grow organically. Let us know if you have the expertise and wish to be a curator of these resources by emailing lawdexproject@gmail.com.

Lindsay Lin, Counsel at Lightyear.io

David Gobaud, Co-Founder & CEO @ Mobius