If you have ever seen crime shows from the 90s or early 2000s, you inevitably saw a frustrated detective wring his hands and say, “there is no record of the crimes from the other state.”
Even to this day, a national crime database is not a thing in many countries.
In the United States, there is no simple search system to scoop records from national, state, county, and federal databases. These databases operate on a different search parameter.
However, blockchain and crypto space may be able to circumvent the painful lessons from this lack of a single-source reference.
Murphy & McGonigle, a financial services law firm with a focus on blockchain and crypto litigation, has built a database to act as a single-source reference for specific case laws, verdicts, and fact patterns.
Blockchain Litigations Expected to Rise
As more and more companies are now venturing into the blockchain space, Daniel Payne, a shareholder in Murphy & McGonigle’s FinTech & Blockchain Practice expects an uptick in the number of cases in the space and for the relevance of the database to be more prominent. “As the economy drives toward a blockchain future, we think the litigations in the space will follow,” Daniel said.
The database tracks the trend line of litigations in the space. For instance, the 2017 and 2018 trend line shows a massive increase in blockchain litigations, which has subdued in 2019 as illegal and unauthorized ICO’s died down.
According to a report by Murphy & McGonigle, securities-related fraud lead the litigation list, while Texas leads the charts for the most number of blockchain-related litigations in the US. The report also notes that “the SEC issued a warning that it has put market participants on notice and is now focusing on non-fraud violations.”
Comprehensive Search Functionality
CryptoTapas had the opportunity to preview the Blockchain Litigation Database with Daniel Payne. The search criteria are quite comprehensive, with options to search for a specific case by plaintiff, lawyer, code, verdict, or any number of parameters. All the charts and statistics on the database are hyperlinked, helping to take the users straight to the details of whatever information interests them, depending on their search.
The database lets users narrow down their searches to the minutiae of a specific type of complaint. For example, if you want to see only criminal cases within a broad category, you can do that. You can further narrow down the search to a particular jurisdiction. You can even find cases by law firm or attorney. “One interesting aspect of the database is it helps you find the law firms that dealt with specific case types,” said Daniel. “One of the interesting aspects is that a particular attorney in Florida has been very active in finding plaintiffs to file a specific type of litigations.”
“Our database helps tie the incidents together that lead to a case,” Daniel said. “A case is otherwise just a case; however, learning about the incidents helps us advise our clients so that they don’t fall into the same pitfalls.”
Bitcoin and the Blockchain Litigation Database Have Common Roots
The idea behind the database came from the mortgage litigations the firm dealt with during the 2008 financial crisis. To help the clients they represented, Murphy & McGonigle started tracking all the mortgage litigation cases, whether their clients were involved or not. This database gave them the edge in terms of finding case laws and rulings to leverage in their cases.
The utility that the firm drew from tracking mortgage litigations sowed the seeds for the Blockchain Litigation Database. Bitcoin was also born during the recession, which was primarily caused by the subprime mortgage crisis.
Smart Contracts Are Legally Binding
“Smart contracts can absolutely be legally binding, and because of that, parties entering into smart contracts need to be careful,” Daniel said. “They should consider getting the legal advice they need before entering the contract.”
All the aspects of a legally binding contract are present in a smart contract. For instance, an offer, conditions, an acceptance, and an execution are all part of the smart contract’s protocol, and as such, they can be just as binding as any other contract.
“Parties should be aware of the ramifications of entering into a smart contract before they enter into them,” warned Daniel.
Education Is Needed in the Space
“I do not think that the attorneys or the courts have the full understanding of this new technology necessary to get questions right that are being presented to them in every case,” Daniel said. “However, we have seen that many of the verdicts on the cases we are tracking are absolutely correct.”
Daniel said that there is a need to educate the individuals working in the blockchain space, especially in terms of the law. “We have seen instances where failure to really understand the technology has led to the decisions that we question,” Daniel clarified.
There is no one to blame here because this technology is so new that many people do not have the required understanding. This lack of understanding is part of the growing pains that any new industry goes through. It is part of the evolution.
“Many of the undertakings of the companies within this space fall within the purview of the existing laws, while few specific aspects need some updates,” Daniel said.
Talking about the efforts made in the space by the blockchain community, Daniel said, “I am happy with the efforts by the blockchain communities in educating the Congress so that they have the background necessary for dealing with the issues that come before them.”
The database is not available for public viewing, but they do offer subscriptions for those who want access.
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RK Reddy holds two Masters degrees, one in Accounting and another in Business Administration with over 15 years of experience in the financial services industry.
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