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Will STOs replace the ICOs? “Without a doubt” says Todd Wier, President of PrefLogic

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“Audit the token, not the game,” says Todd Wier, President of PrefLogic

Cryptotapas exclusive: Todd Wier is excited about STO space and shares his excitement and insights with Cryptotapas in this exclusive interview.

 

Security Token Offerings (STOs) will be big in the Blockchain and Crypto space.  We at Cryptotapas are big proponents of the potential of STOs and today we bring the wisdom of STOs from Todd Wier, President of PrefLogic, regarding their STO platform, future of STOs, maturing blockchain space and what keeps Todd and his team excited about this space.

Thank you for agreeing to answer our interview questions. We appreciate it.

CT: Thank you for agreeing to interview with us.  We appreciate it.  To get things rolling, tell us something about how you developed a passion for Blockchain and the crypto space that got you into STO space?  Something we cannot find on your website page.

Todd: Haha, you asked.

4 out of our 5 children are all college educated finance and economics majors and during 2017, they couldn’t keep themselves from over investing in the crypto phenomenon. My background is in finance with a specialization in small capital formation. Needless to say, we had many heated discussions as to why they would invest in a utility token that represented access to a nonexistent platform, absent traditional economic drivers. Their reply: ‘to make money’.

Don’t get me wrong, the utility token has its place but, in my opinion, it fails as an investment vehicle. What did capture my attention was how quickly capital was being raised. You remember, ABC raises $10M in 5 minutes, XYZ raises 50M in 3 hours, all via a whitepaper filled with promises and no risk disclosure. Then the SEC comes out and accuses all ICO’s as illegal securities offerings, and I agree with SEC. 

Lightning strikes!

What if all SEC required could be “baked” into “smart contracts” to produce a token that could be offered through an ICO like a distribution platform to provide start-ups and established businesses access to capital through a global pool of investors?

If it worked, it could solve a big problem by providing low-cost capital and plenty of it, in a compliant manner by eliminating the high cost of traditional capital access via Wall St. At this point, the words “Security” and “Token” were not being used together.

That is how we got started on this journey.

CT: How did you come about the name PrefLogic?

Todd: Preferred Architecture + Logic

CT: How big is the team (we saw 8 profiles on the site)? Are all full-time employees of PrefLogic?

Todd: PrefLogic enjoys the full-time effort of 4-5 employees and 4-6 part time at very modest cost.

Preflogic Team

Pref logic team

CT: What problem does your platform solve that Polymath or WeOwn does not?

Todd:  ***Please see attached PowerPoint slide *** 

Polymath called for a reissuance of their client tokens a couple of months back. At the blueprint stage of developing our STO, our engineers maintained that the most important objectives were to put forth a product that would be flexible and nimble, able to withstand change as the Security Token market defined itself across many jurisdictions and scalable. In each instance of change, the issuer and token holder experience would be continuous and uninterrupted. Some of our competitors have had to reissue tokens having hard wired too much of their code left unable to service their issuers without interruption.

CT: Are US citizens allowed to participate in your STO?  If not, why not?

united citizensTodd: No, currently US investors are not allowed to participate. We are not offering an STO but shares of common stock per SEC’s Reg S. Future offerings are on the slate. Sorry, really can’t say more (rules).
***For more information: invest.preflogic.com

CT: What will be your STOs soft cap and hardcap?

Todd: We intend to complete a few rounds of funding. The current round is our first and is only offering 2M shares a $1 at a pre-money valuation of $10M.

CT: Will there be some sort of dividends/income sharing for the PrefLogic Token shareholders?  What other rights will these token shares provide?

Todd: No, Common Share with voting rights.

CT: What US regulations are you relying on for your own STO?

Todd: Again, we are doing a common share offering under Reg S.

CT: Do you have an MVP?  Or do you have a timeframe when your fully functional product will be available?

Todd: Yes, our MVP, the STO Wizard is complete and able to construct Security Tokens though we haven’t commercially released. We have also completed the Investor Purchase Portal and Token Holders, LLC (wholly owned subsidiary) KYC platform that is able to onboard 3rd party verification providers (Accountants, Lawyers, Investment Advisors, etc), Domestically and Internationally, offering an income opportunity for the verification provision. All technologies are demo ready. 

Click to see attached: STO Development Highlights

CT: What is the minimum and maximum wait time between STO and having the tokens available to trade on an STO exchange?

Todd: That depends on the SEC regulation you offer from. When an issuer uses an exemption from registration as in Reg D, CF, S or others, he would have to provide for the registration of the shares/tokens, prior to trading and can do so at any time. In the case of Reg A+ or an S-1 registration of the shares/tokens, the shares are able to trade upon the effective date of registration being granted by the SEC and exchange arrangement.

CT: Do you foresee Governments changing rules of exemption?  If that happens, what would be your backup for PrefLogic?

ToddSpeaking from the US or SEC’s perspective, possible but unlikely. The SEC infrastructure has produced the most credible financial marketplace in the world and the wheels of change grind slowly, but I feel, based on how the Senate hearings have gone and the path SEC seems to be taking, they do see the benefits of automated business process (smart contract) and the transparency/permanency that blockchain offers. That said, the Security Token evolution could produce an environment where SEC AUDIT of the Token or Smart Contract provides the basis of regulation, rather than oversight of the players and the game, producing increased efficiency and market credibility. 

AUDIT THE TOKEN, NOT THE GAME!

As for other Jurisdictions, quite possible and more likely.

Small Jurisdictions want their piece of the Security Token marketplace and to compete, might adopt a framework like the SEC exemptions but offer little or no restriction regarding tradability or token transfer. This would attract issuers and investors alike. Without saying too much, we have had discussions with other Jurisdictions where we would build for them a “side door” or “multi-sig” access into every token authorized for the issue from their Jurisdiction. This would allow Regulators to set forth their requirements, audit compliance through a dashboard and SUSPEND trading in the token (worldwide), with a click of a mouse in case of non-compliance. 

A real-life example might be the Country of Malta revising its Virtual Financial Assets Act to include Security Tokens and their requirements. They could then offer issuers the ability to conduct Security Token Offerings, albeit subject to their Jurisdiction and Regulatory requirements, however, they define them.

Pretty powerful.

As for PrefLogic’s back up plan, not sure I understand. All issuers of securities in token or share form will have to abide by the laws of the land they issue and trade within. 

If you referring to why PrefLogic chose a share offering rather than a Security Token Offering to raise capital as the question?

We chose a traditional structure to offer a more familiar path of participation. We feel, at the moment, that there is more capital available and accessible from the traditional investors, rather than the crypto, which should provide stronger support for our offerings. In addition, we chose the traditional route as it maximizes the opportunity for liquidity by offering multiple paths such as IPO, STO, RTO, merger or sale of. Had we structured as an STO, some paths may not be as readily available. I’ve heard discussions that Kraken and even tZero might opt for the public markets. If so, PrefLogic would be positioned to entertain a reverse takeover by an already publicly traded company, thereby being one of only a few publicly traded security token plays offering access to the sector. Demand may be high?

 CT: Do you think STOs will be the future ICOs, only much reliable, in the crypto space?

Todd: Without a doubt. Consider two companies exactly the same, one in security token form, the other, utility token and they build a successful enterprise: Would you rather own a piece of the company or access to its platform?

CT: How many years will it be before traditional capital will be raised using STOs?

Todd:: Small-cap arena: very quickly.

I think 2019 will be known as the year of the Security Token.

Real Estate sector: almost as quickly, with only a few things to iron out. In my opinion, the ability to offer fractionalized participation in real estate and the asset and cash flow benefits it offers brings reach and potential liquidity to a market that has none of that now. To me, larger markets and increased demand equal liquidity and price appreciation. Can you imagine a Japanese investor purchasing a Security Token that represents a slice of the Trump Towers and having the ability to sell it 5 seconds later.

That’s powerful!

CT: What keeps you excited in this space?

Todd WierTodd: I’m 57 years old and have worked in the financial arena for 30+ years and the biggest marketplace in the world is changing. That’s exciting.

To offer some perspective; UBER changed the taxi marketplace, a big marketplace and the experts say an IPO would value the company at $100-120B. That’s a lot, but when we look at it from the” size of the marketplace” perspective, we’re talking about the absolute largest marketplace in the world: the financial marketplace.

PrefLogic is one of maybe 10-15 legitimate Security Token gateways in the entire world when compared to a US market where more than 3800 financial institutions are registered with FINRA.

Patrick Bryne, the CEO of tZero will undoubtedly be in the history books my grandchildren read and if PrefLogic executes on its mission, and gets a little lucky, it may also get a mention. That’s exciting, YOU are part of this too! PrefLogic sits in the eye of the storm and I’m blessed enough to be able to answer these questions. Thank You!!! 

CT: Thank you! We are excited to be part of this ecosystem as it goes through the ups and downs, growing pains and ultimately changing the face of the current financial system.  Projects like PrefLogic and individuals with as impressive a resume as yourself are needed to take this space forward.  For that, we wish you all the best!

Thank you for reading this article.

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IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

CryptoTapas does not endorse or guarantee the accuracy of the information and claims made in respective publications referenced in this database.

About the author

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.

RK Reddy is an ardent fan of Blockchain and Cryptocurrencies. You can see the excitement about this new technology in every article on Cryptotapas.com. Sometimes this excitement leads to an overly optimistic view. Guilty as charged. RK Reddy says what may seem like an ‘overly optimistic expectation’ today may become an everyday norm in 5-10 years; look at the history of cars or airplanes, Blockchain and Cryptocurrencies belong to a similar frame of reference.”  Of course, that is just his opinion.


Interview

“Coda is world’s lightest Blockchain,” an exclusive interview with Emre Tekisalp of Coda Protocol

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Coda Protocol Interview

What happens when the miners decide to pull out their support of a public network? What
happens when nodes find a project not-profitable and they abandon the project?

It makes the blockchain network weak and vulnerable to attacks. In theory, all public blockchain
networks that rely on network strength to sustain face this existential threat.

Coda Protocol “addresses blockchain’s scalability problem at its source by utilizing recursive zk-
SNARKs to ensure the blockchain never exceeds the size of a few tweets, making it the world’s
lightest blockchain.”

Coda wants to provide a viable scalable solution without sacrificing the decentralized nature of
blockchain.

We asked Emre Tekisalp, Director of Business Development at O(1) Labs, the team behind
Coda Protocol, a lot of questions about Coda Protocol and his answers are below for anyone
wanting to learn about Coda Protocol.

Emre spent two years at Coinbase’s Business Development team where he led a number of strategic programs during a period when the company grew 10x. Before Coinbase, Emre was a Product Manager at Intel’s wearable devices group. Originally from Istanbul, Turkey, Emre has an MBA degree from Columbia University.

Q&A with CryptoTapas

In a world of 1000’s of blockchain projects and protocols, how do you envision Coda
making its mark?

Coda addresses blockchain’s scalability problem at its source by utilizing recursive zk-SNARKs
to ensure the blockchain never exceeds the size of a few tweets, making it the world’s lightest
blockchain.

Legacy blockchains like Bitcoin and Ethereum are incredibly heavy chains from a data
perspective. The heavier the chain, the greater the data processing requirements placed on
nodes, which limits the number of nodes eligible to participate. As the pool of potential nodes
diminishes, decentralization declines, jeopardizing the strength of the network.

Decentralization is not a sacrifice blockchains should be willing to make, yet this is
precisely the danger facing blockchains that focus solely on scalability. Coda confronts this
problem by using recursive zk-SNARKs to encapsulate the entire history of the chain in a single,
lightweight zero-knowledge proof.

To ensure sufficient decentralization upon mainnet launch this summer, we launched Genesis, a
token program to prepare members of our community to be block producers. With more than
500 users joining our testnet, Coda is now one of the largest layer 1 testnets by peer count. It’s
the strength of our technology and commitment to our community that differentiates us from
other protocols.

What would you say to convince the team of a project that is already on another protocol,
say Ethereum or Tron, to move to Coda?

Coda is designed for developers and for projects to use it as an easy tool to enable value
exchange in their existing apps. It is incredibly lightweight and prioritizes decentralization and
security. Already more than half of all web traffic can be attributed to mobile, and so it is
absurd to believe any blockchain system that does not work on mobile will be able to meet
the needs of the increasingly mobile digital economy. Coda’s inclusive and lightweight approach
will allow the protocol to be useful for the existing mobile internet ecosystem.

Who is behind o1Labs.org? How big of a team is working on Coda?

Emre Tekisalp founder of coda protocolCo-founders Izaak Meckler and Evan Shapiro created Coda with the goal of solving the
scalability problems that have plagued blockchain since its inception. We now have 28 full-time employees and hundreds of dedicated community members. The first cohort of validator teams participating in our Genesis program includes Bison Trails, Figment Networks, dsrv labs, and Sparkpool.

Coda Protocol Team

[CryptoTapas Side note: Bison Trails is a Libra Network member]

How does SNARKs make Coda better than other projects, can you explain in a way that a
non-blockchainer can understand?

The basic idea of zk-SNARKs is that they allow one to verify the result of any computation
without having to redo or acquire any detailed information about said computation. For example
you can prove “you are who you say you are” to a website without sharing any sensitive
information like a password. Coda uses zk-SNARKs to enable anyone to easily connect to the
blockchain from any device just by downloading a couple kilobytes of data. In contrast,
traditional blockchains like Bitcoin require expensive desktop machines to download hundreds
of gigabytes over many hours.

In the whitepaper, we read “The resulting consensus protocol is consistent and
responsive as long as at most 1/2 of the mining power is malicious,” can you elaborate
what this means?

In order to function, blockchains require all nodes connected to the network to periodically come
to consensus regarding the latest state of the world. The way this consensus is achieved varies
from blockchain to blockchain.

Coda Consensus

Bitcoin, for example, also requires at least half of the nodes participating in consensus to stay
honest. Unlike Bitcoin, which is a Proof-of-Work network, most Proof-of-Stake networks like
Cosmos or EOS require at least two-thirds of the nodes to stay honest. This higher requirement
makes such networks less resistant to attacks. The specific consensus mechanism we use in
Coda, a variant of Ouroboros, allows Coda to stay secure as long as half of the nodes are
honest, similar to Bitcoin. This is one of the factors that allows Coda to be more decentralized
than other blockchains out there.

Will there be a token sale? What will be the maximum supply of Coda?

We have not disclosed any plans for a token sale before the mainnet release of Coda. Coda will
not have a maximum supply, as it will have ongoing inflation per our Economic Whitepaper. At
mainnet launch, Coda will have an initial supply of 1 billion tokens.

Can non-technical members become Genesis Founding members? How many of your
1000 slots are still available?

Absolutely! We see Coda as a decentralized network and currency built by its participants, and
this includes users with many different sets of skills. The majority of the 1,000 Genesis
Founding Member slots are still open, so hop on over to our website to start getting active on
our testnet.

If you were to meet all of your goals, what would Coda look like in 5 years? What kind of
clients would it have on board and what kind of social impact does Coda have in the
blockchain space?

Coda is built first and foremost for developers.

In 5 years we see Coda enabling internet users to exchange value from any app. This will allow
any developer and business owner to easily accept money and new novel types of tokens from
anyone around the world from any device. We recognize that such a future is not built just by
one company. This is why we emphasize inclusivity above all else and are encouraging people
of all backgrounds to participate at this early stage through our Genesis program. Only by
supporting diverse participation today can we be sure the system will be equipped to serve the
diverse, global population of internet users.

CryptoTapas wishes all the best to Coda Protocol.

Thank you for reading and sharing this article and if you have spare satoshis lying around – consider donating.

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We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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Interview

“The Asensys system delivers 1,000 times the throughput and 2,000 times the capacity of the Bitcoin and Ethereum networks” Says Dr. Brendon Wang, founder of Asensys

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Asensys AMA with CryptoTapas

There are over 5100 crypto projects that are listed on CoinMarketCap. This is not a complete list though, there are 1000s of other blockchain/crypto projects that are out there that are not listed on CMC yet for various reasons (one big one is they may not have their own cryptocurrency to trade). 

With 1000s of Crypto projects already existing – it is difficult to get excited about new projects.  However, when you hear about a project that is conceived and built by a Lead Researcher who lead the team at Microsoft on Distributed Systems, you want to learn more.  

Brendon WangDr. Brendon (JiaPing) Wang, along with Co-Founders Minghao Pan and David (Xiaobing) Zhang, has conceived of an idea that could increase the current transaction speeds by 1000s of times that of Bitcoin or Ethereum. The exciting part about Asensys is its performance increases with the user base. The more users who use the network the faster the network becomes.

This counterintuitive novelty could give Asensys the edge in the blockchain space.  But, is it all hype or is there mettle in this project?

We wanted to find out directly from the founder.  This exclusive Q&A with Dr. Brendon Wang is geared to provide great insight to the reader about Asensys.

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CryptoTapas Q&A

1) How would you describe Asensys to an already confused novice with 2000 odd projects in the market?  What sets it apart?

To understand Asensys, you first need to understand the problem we are solving. Bitcoin revolutionized finance by introducing the first peer-to-peer electronic cash system. Its brilliance lies in the fact that two individuals can exchange value without verification from a third party intermediary, upending the system we’ve relied on for centuries that gave undue power to trusted, centralized entities like banks and governments to validate transactions and provide legitimacy to currency itself. The way Bitcoin circumvents the need for trusted, centralized validators is by outsourcing verification to a decentralized web of computers, called nodes. This means that every transaction and action on the network needs to be broadcast and replicated by all nodes, a process that takes time—too much time to meet the needs of the fast-paced digital economy. This issue of how Bitcoin and all blockchain networks can scale has been one of the biggest roadblocks to adoption of cryptocurrency and blockchain systems to-date.

One obvious way to improve the speed at which blockchain networks can process transactions is to decrease decentralization. The more centralized a system, the fewer nodes need to be communicated with to replicate the action. However, decreasing decentralization compromises the security of the network, making it more vulnerable to a 51% attack—when a majority of nodes collude against the whole to update the chain of transactions in their own interests (AKA: cheating). Incentives are designed to deter nodes from weakening the network, as they stand to benefit from a fully-functioning blockchain, but most members of the crypto community believe weakening security is a bad idea. Furthermore, decreasing decentralization is contrary to the spirit of cryptocurrency that drew so many of us to cryptocurrency in the first place. 

What we’ve done with Asensys is introduce a way to dramatically reduce over-redundant actions across the network (the main culprit contributing to blockchain latency). Our novel solution utilizes Asynchronous Consensus Zones to essentially “divide and conquer” all intra-network tasks into “mini” networks, which are independent and parallel zones.

Dividing workload produces substantial performance lift for the entire network, but it raises two problems: cross-zone transaction handling, which is when a user in one zone transacts with a user in a different zone, and mining power dilution. Asensys addresses the efficiency issue of cross-zone transactions with eventual atomicity and the security threat of mining power dilution with Chu-ko-nu mining.

Eventual atomicity enables transactions to be verified and executed in the zone where the transaction’s first state was initiated. Groups of operations are then conveyed to other zones in relay transactions, but the data pertaining to the transaction remains in the zone in which the initial state resided.

Chu-ko-nu mining protects each zone and the entire network against a 51% attack by incentivizing miners to create multiple blocks for different zones with a single nonce, which enforces even distribution of mining power across zones.

2) Most projects do well in a test environment but fail miserably when it comes to real world application – what factors contribute to this variance and how is Asensys going to circumvent these very issues?

We have conducted an in-house experiment to simulate how Asensys will scale as more users are added to the network and greater capacity and throughput are required. The results demonstrated that performance by the Asensys protocol increases proportionately to the community size. This means that as the user base grows, Asensys becomes even more efficient at processing transactions. In a test including 1,200 virtual machines worldwide to support 48,000 nodes, the Asensys system delivers 1,000 times the throughput and 2,000 times the capacity of the Bitcoin and Ethereum networks. The below graphs are from our whitepaper.”

Linear scaling

cross zone transactions

3) Your claims are in line with companies like Credits, Hedera Hashgraph, etc., all of which have raised substantial capital to fund their projects.  How big is your team to gain traction for Asensys and how are you going to fund it?

I lead a global team working from the United States, China, and Germany. Co-Founders Minghao Pan and David (Xiaobing) Zhang are based in Frankfurt and Shanghai, respectively. Michelle Chuang leads Audience Engagement and Customer Experience for Asensys. She comes to us with over 20 years of experience in marketing and customer engagement and has led key initiatives for companies such as Starbucks, Chevron and Staples Inc. We have funding from angel investors who are also high-profile leaders in technology, news that we will be [releasing] very soon.

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4) Will you have your native currency on Asensys?

Asensys will have its own currency just like Bitcoin and Ethereum to incentivize miners to add blocks of transactions to the chain. Ultimately, however, Asensys intends to be the underlying system powering a decentralized web of applications, each capable of issuing their own tokens.

5) Is your network designed to support micro transactions, and will it be blockchain platform (bitcoin/ethereum/ripple/etc.,) agnostic? 

Asensys is its own infrastructure layer, distinct from Bitcoin, Ehtereum, Ripple, etc.

6) How does Asensys’s unlimited scalability translate to a real world business use case, can you give an example that can be understood by a non-technical business person?

Asensys will be the system powering the decentralized web, which will be comprised of dapps for entertainment, finance, healthcare, e-commerce, education, and more. Just as developers can build on Ethereum, they will be able to build on Asensys without concern for its capacity to scale as the number of users grows. Asensys has a programming language, Parallel Relayed Execution Architecture Language (PREAL), specifically designed for blockchain systems and based on asynchronous consensus zones (just like nVidia has CUDA language to GPU programming). PREAL is based on a functional programming model that allows developers to describe transaction logic without concerning themselves with the underlying parallel blockchain system. 

7) We only saw Academy research reference on your site, is there a white-paper or document that describes Asensys and contrasts it with existing projects?

If you’d like to learn more, please refer to our whitepaper, which describes the details of our system in great detail. This research was also presented at the prestigious NSDI’19 conference. We are continuing to add to our website and build our community. Feel free to follow us on LinkedIN and Twitter channels for updates on news and developments:

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Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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Interview

A Crypto Crimes Database Is Here, and It’s On to Something

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Crypto Crimes regulations

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

Daniel Payne, Murphy & McGonigle

              Daniel Payne

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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About the author

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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