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![https://www.sec.gov/Archives/edgar/data/70858/000007085818000009/bac-1231201710xk.htm
Bank of America, Form 10-K, US Securities and Exchange Commission
“[C]lients may choose to conduct business with
other market participants who engage in business or
offer products in areas we deem speculative or risky,
such as cryptocurrencies. Increased competition may
negatively affect our earnings by creating pressure to
lower prices or credit standards on our products and
services requiring additional investment to improve the
quality and delivery of our technology and/or reducing
our market share, or affecting the willingness of our
clients to do business with us.”](https://image.slidesharecdn.com/deatheragepresentationblockchaincryptocurrencysmartcontracts03-180307004554/85/Deatherage-presentation-blockchain-cryptocurrency-smart-contracts-and-the-law-03-06-2018-7-320.jpg)
![z
Smart
Contracts –
Revenue
Sharing—
Money Sent
Shared with
People on List
§contract Token {
§ mapping(address => uint256) public balanceOf; string public name;
§ string public symbol; uint8 public decimal;
§ event Transfer(address indexed from, address indexed to, unt256 value);
§ function Token(uint256 intialSupply, string tokenName, string tokenSymbol,
uint8 decimalUnites){
§ balanceOf(msg.sender) = initialSupply; totalSupply = initialSupply
§ decimal +tokenSymbol; name = tokenName;
§ }
§ function transfer(address _to, uint256 _value){ If(balanceOf [msg.sender] <
_vlaue) throw;
§ //253, 8 bit, 10 253+10 =8 ; 8
§
§](https://image.slidesharecdn.com/deatheragepresentationblockchaincryptocurrencysmartcontracts03-180307004554/85/Deatherage-presentation-blockchain-cryptocurrency-smart-contracts-and-the-law-03-06-2018-28-320.jpg)
Uploaded byScott Deatherage
Deatherage presentation blockchain, cryptocurrency, smart contracts and the law 03.06.2018
The document discusses the implications of blockchain technology and cryptocurrency, focusing on the legal framework surrounding smart contracts and initial coin offerings (ICOs). It elaborates on the importance of compliance with SEC regulations and the evolving landscape of digital assets in financial markets. Additionally, it highlights the potential operational benefits and legal challenges associated with smart contracts in various industries.
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Deatherage presentation blockchain, cryptocurrency, smart contracts and the law 03.06.2018
- 1. z blockchain cryptocurrency smart contracts LAW Scott D.Deatherage Environment. Energy. Blockchain. scott@sdeatheragelaw.com 214.983.1218
- 2.
- 3.
- 4. z Client Server vs.Peer to Peer Network
- 5. z z §“But to me,the blockchain, the underlying technology, is the biggest innovation in computer science—the idea of a distributed database where trust is established through mass collaboration and clever code rather than through a powerful institution that does the authentication and the settlement.” §“How blockchains could change the world” (May 2016).Tapscott, CEO of the Tapscott Group, is coauthor, with his son, Alex, of Blockchain Revolution. Rik Kirkland is the senior managing editor of McKinsey Publishing and is based in McKinsey’s New York office.
- 6. zThe New Economicsof Institutions of Capitalism https://medium.com/@cryptoeconomics/the-blockchain-economy-a-beginners-guide-to-institutional-cryptoeconomics-64bf2f2beec4
- 7. https://www.sec.gov/Archives/edgar/data/70858/000007085818000009/bac-1231201710xk.htm Bank of America,Form 10-K, US Securities and Exchange Commission “[C]lients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies. Increased competition may negatively affect our earnings by creating pressure to lower prices or credit standards on our products and services requiring additional investment to improve the quality and delivery of our technology and/or reducing our market share, or affecting the willingness of our clients to do business with us.”
- 8. zz 100 Banks AndOther Related Entities Developing Distributed Ledger for Financial Industry
- 9. z z Blockchain Companies inthe DFW Area
- 10. z z Delaware July 2017 Law Blockchain andSecurities Planning to Apply Blockchain to Land titles Professional licenses Birth certificates Death certificates
- 11. z z Senate Hearing onCryptocurrency and Blockchain
- 12. z z What Is a Blockchain? DistributedLedger A database that runs on millions of computer connected by the Internet Uses state of the Art Cryptography Cryptography protects against hacking and other abuses Distributed and De- Centralized “Miners” using computing devices spread around the world confirm transactions in return for cryptocurrency Mass collaboration allows the system to confirm and protects transactions and related data
- 13.
- 14.
- 15.
- 16. z Bitcoin Bitcoin: A Peer-to-Peer ElectronicCash System Satoshi Nakamoto satoshin@gmx.com www.bitcoin.org
- 17. z z What Are theDifferent Types of Cryptocurrency? Currency or Coins Utility Tokens Asset-Based Tokens Security Tokens
- 18. z z Initial Coin Offering or ICO Coins orTokens are Issued to Buyers Pre-Sale Simple Agreement for Future Tokens Then they are Traded on a Cryptocurrency Exchange
- 19.
- 20. z z ICOs May Become a NewWay of Raising Initial Capital May Replace Venture Capital Or Venture Capital Get in on Pre-ICO Sale
- 21. z z And This Is Where the Legal Concerns Arise Concern of Sellersand SEC that the Coin or Token is a Security Reg D Private Placement or Registration as Public Company Security Crypto Types Wanted to Be Unregulated—but there are no special exemptions SEC Chairman Stated in Senate Hearing that ICOs and Tokens Would Generally Be Securities Warned Lawyers and Accountants against Advising Otherwise Private Litigation under securities laws and common law, e.g., fraud or misrepresentation
- 22. z z Legal Questions Arisewith ICOs Howey Test 1. An investment of money 2. in a common enterprise 3. with an expectation of profits predominantly from the efforts of others. ICO Suggests IPO SEC Chairman suggests Most Coins/Tokens Will Be Considered Securities Better to Comply with SEC Rules, Than Risking Being Shut down, Investigated, or Sued
- 23. z z Complying with SEC Reg D Sellingto Accredited Investors Process for Verifying- –”Know Your Customer” or KYC ”Anti-Money Laundering” or AML
- 24. z z Are New Rules with New Exemptions Needed? CouldReg A Work Here? Two caps $50 million for a Tier 2 offering and $20 million for a Tier 1 Would Cover Most Token Sales Includes Disclosure Requirements May Require Transfer Agent; Blockchain Makes This Unnecessary and Inefficient $75 Million Float Limitation May Need to Be Raised or Eliminated Jonathan Rohr, Tennessee College of Law, & Aaron Wright, Cardozo School of Law
- 25.
- 26. z z Smart Contracts Smart contracts arebased on the idea of “if-this-then-that”
- 27. z zz A Vending Machine IsNot a Contract
- 28. z Smart Contracts – Revenue Sharing— Money Sent Sharedwith People on List §contract Token { § mapping(address => uint256) public balanceOf; string public name; § string public symbol; uint8 public decimal; § event Transfer(address indexed from, address indexed to, unt256 value); § function Token(uint256 intialSupply, string tokenName, string tokenSymbol, uint8 decimalUnites){ § balanceOf(msg.sender) = initialSupply; totalSupply = initialSupply § decimal +tokenSymbol; name = tokenName; § } § function transfer(address _to, uint256 _value){ If(balanceOf [msg.sender] < _vlaue) throw; § //253, 8 bit, 10 253+10 =8 ; 8 § §
- 30.
- 31. z z Digitization of Contracts CanSmart Contracts Be Legal? Can Legal Contracts Be Smart ?
- 32. z z Smart Contracts The term“smart contract” refers to computer transaction protocols that execute the terms of a contract automatically based on a set of conditions. With the advent of Ethereum, means code that runs on Ethereum Blockchain.
- 33. z z Applications Securities Reduce time fortrading securities, reduce counterparty risk Insurance Automate claim process, automatic payment to policyholder, bypassing the claims process Manufacturing Smart contracts replace current supply-chain processes--bills of lading, proof of origin, or quality control
- 34. z z Commercial Reality: Smart Contracts Must Retain Legal Enforceabili ty to Remain Commercial lyViable Exchange Involves Value Parties Retain Right to Seek Judicial Assistance Commercially Viable • Not Only Technically Viable • But Legally Enforceable
- 35. z z Contract on the Blockchain Not Outside theLegal System Must Be Compatible with Jurisdiction’s Legal Framework Not Insulated It from Laws of Relevant Jurisdiction Constitutions, Statutes, Regulations, and Case Law Still Apply
- 36. z “In effect, smartcontracts must simply be seen as programs operating in distributed computing environments and not as a semi- mythical technology liberating the contracting parties from the shackles of traditional legal and financial institutions.” Eliza MIK, Singapore Management University, “Smart contracts:Terminology, Technical Limitations And Real World Complexity.”
- 37. z z Future? Code of Law/Lawof Code Companies are developing computer languages that allow coding of contracts Allow switching back and forth between code and contract language
- 38. z z Could Identification ofBugs Occur in Code and Contracts? Codex/Stanford Law School https://www.youtube.com/watch?v=1Fa_2FXBAjA In drafting smart contract in Solidity, software shows errors when code not drafted properly. What if code could tell lawyers they have errors, ambiguities, contradictions or inconsistencies, or legal issues in provisions that are being drafted?
- 39. z z Questions of Coding and Law CanMachine Learning and Natural Language Processing Convert Contracts into Code? Are Contracts More Than Conditional Statements, of If, Then Provisions? Does Direct Coding Require Coders to Be Lawyers? Can Ambiguity Be an Advantage, Not a Bug, to Allow Leeway for Parties to Contract?
- 40. z z What Do Machines Have a HardTime Dealing with? “use best efforts” “good faith” “commercially reasonable”
- 41. z z Don’t Kill Allthe Lawyers Just Yet
- 42.
- 43. z blockchain cryptocurrency smart contracts LAW Scott D.Deatherage Environment. Energy. Blockchain. scott@sdeatheragelaw.com 214.983.1218