The Cyberlaw Podcast

On December 17th, Alan Cohn hosted the 244th episode of The Cyberlaw Podcast. We took a deep dive into all things blockchain and cryptocurrency, discussing recent regulatory developments and projections for 2019.

Our episode begins with Alan welcoming Will Turner to Steptoe’s Corporate and Blockchain Practice. Turner joins the firm’s Chicago office as partner, bringing with him with more than two decades of experience in corporate and securities law, primarily with application to cryptocurrency, fund formation, investment transactions and mergers and acquisitions. Turner also handles matters involving capitalizations, project finance, restructurings and joint ventures. Will Turner explains why the crypto market became bear in 2018, associating this development with the increase in mergers and acquisitions activity in the crypto market. Moving into 2019, Will projects the “hot items” will be anti-money laundering and securities compliance. In addition, Will presents a more general overview of how the blockchain industry is no different from other industries.

Evan Abrams discusses the joint statement issued by the Federal Reserve, the Federal Deposit Insurance Corporation, the Treasury’s Financial Crimes Enforcement Network, the Office of the Comptroller of the Currency and the National Credit Union Administration urging use of technology to bolster anti-money laundering compliance. Abrams states that banks can and should be engaging with the industry and the importance of striking a balance between technology and privacy. Abrams also discusses the U.S. Department of Treasury’s Office of Foreign Assets Control sanctions compliance risks for cryptocurrency companies. In 2019, Abrams projects increased attention on digital counterparts as blockchain-related financial institutions continue to grow. Evan Abrams also highlights the New York Department of Financial Services recent announcement authorizing Signature Bank, a New York State-chartered bank, to offer a digital payment platform called Signet that leverages blockchain technology.

Finally, Josh Oppenheimer covers recent LabCFTC updates from the Commodity Futures Trading Commission (CFTC). On November 27, 2018, the Commodity Futures Trading Commission’s LabCFTC FinTech initiative released A Primer On Smart Contracts. This is the first time since 2017 that the CFTC opined on issues relating to blockchain. The agency released its first primer on virtual currencies on October 17, 2017. Oppenheimer also discusses the pledge the G20 nations made earlier this month regarding their commitment to regulate crypto-assets to further a resilient and open global financial system. In so doing, they agreed to follow standards set forth by the Financial Action Task Force, or FATF. Oppenheimer notes this is significant because FATF, as the global standard setter, has insight into different regulatory approaches and constantly receives input from industry stakeholders. Lastly, Oppenheimer talks about how Ohio is set to become the first state in the country to accept tax payments using cryptocurrency.

For the interview portion of our podcast, Alan welcomes back Gary Goldsholle, who joins the firm as partner, after serving nearly four years as deputy director and senior adviser of the Securities and Exchange Commission’s (SEC) Division of Trading and Markets. Goldsholle brings more than two decades of experience as an executive in the federal government and securities self-regulatory organizations. Goldsholle is working with Steptoe’s Financial Services, Public Policy, and Blockchain and Cryptocurrency practices. Goldsholle discusses the Securities and Exchange Commission’s noteworthy announcement, just days before Thanksgiving, with significant implications for the network marketing industry regarding regulatory oversight and enforcement of cryptocurrency companies. In its Public Statement, the SEC referred to two recent enforcement actions against Paragon Coin, Inc. and CarrierEQ, Inc. (dba Airfox). Both companies sold tokens that the SEC determined to be unregistered securities. Goldsholle also provided insight into EtherDelta, the SEC order concerning trading Ether against other ERC-20 tokens. Moving into 2019, Goldsholle hopes the SEC will define and issue guidance on what the industry calls “utility tokens” and “consumption tokens.” He projects that a custody failure, or similarly significant event, will spur deeper discussion on the issue of taking custody of crypto-assets and promote guidance in the custody space.

 

Download the 244th Episode (mp3).

You can subscribe to The Cyberlaw Podcast using iTunes, Pocket Casts, Google Play, or our RSS feed!

 

As always, The Cyberlaw Podcast is open to feedback. Be sure to engage with Stewart on social media: @stewartbaker on Twitter and on LinkedIn. Send your questions, comments, and suggestions for topics or interviewees to CyberlawPodcast@steptoe.com. Remember: If your suggested interviewee appears on the show, we will send you a highly coveted Cyberlaw Podcast mug!

 

The views expressed in this podcast are those of the speakers and do not reflect the opinions of the firm.

Direct download: TheCyberlawPodcast-244.mp3
Category:general -- posted at: 3:27pm EST

In the News Roundup, Nick Weaver and I offer very different assessments of Australia’s controversial encryption bill. Nick’s side of the argument is bolstered by Denise Howell, the original legal podcaster, with 445 weekly episodes of This Week in Law to her credit.

Later in the program, I interview Rep. Jim Langevin (D-RI), who’s a force for cybersecurity both on the Homeland Security Committee and on the Armed Services subcommittee that oversees Cyber Command and DARPA—a subcommittee that insiders expect him to be chairing in the next Congress.

Turning back to news, the Marriott hack, already one of the biggest in history, has developed a new and more interesting angle, Gus Hurwitz explains. It may have been a Chinese intelligence operation.

The Khashoggi killing has backfired on… Israeli and Italian state hacking companies? Yes, indeed. Hacking Team and NSO are now immersed in legal hot water. And as a sign of how much the Middle East has changed, Nate Jones tells us that a Saudi dissident is now waging lawfare in Tel Aviv.

We touch on what the detention in Canada of Huawei’s CFO means for U.S.-China technology relations as well as on a new DOD report on the risks of EMP. Nick explains why he doesn’t worry about EMP but nonetheless loves the EMP alarmists.

 

Download the 243rd Episode (mp3).

You can subscribe to The Cyberlaw Podcast using iTunes, Pocket Casts, Google Play, or our RSS feed!

As always, The Cyberlaw Podcast is open to feedback. Be sure to engage with Stewart on social media: @stewartbaker on Twitter and on LinkedIn. Send your questions, comments, and suggestions for topics or interviewees to CyberlawPodcast@steptoe.com. Remember: If your suggested interviewee appears on the show, we will send you a highly coveted Cyberlaw Podcast mug!

 

The views expressed in this podcast are those of the speakers and do not reflect the opinions of the firm.

Direct download: TheCyberlawPodcast-243.mp3
Category:general -- posted at: 10:34am EST

This episode features an interview with Michael Tiffany, the co-founder and president of White Ops and a deep student of how to curtail adtech fraud. Michael explains the adtech business, how fraudsters take advantage of its structure, and what a coalition of law enforcement and tech companies did to wreck one of the most successful fraud networks, known as 3ve. You can read more about the take down in the joint White Ops and Google report, “The Hunt for 3ve.”

In the news, David Kris covers the Supreme Court argument in the Apple antitrust standing case. At stake: whether Illinois Brick should apply outside a brick-and-mortar context. Our panel guesses that it won’t.

You knew this was coming: Megan Reiss covers U.S. proposals to screen Chinese students for espionage risk before giving them visas. We think it’s a good idea, but really wish there were a way to score every student in China for how compliant they are with government wishes…oh, wait

Nobody trolls like the Russians troll. David Kris covers a Russian trollsuit claiming that Facebook has unfairly censored Russian speech. Showing that they know their opponents’ weakness, the suit includes broad hints that censoring Russians is … racist. Maury Shenk covers the bookend—Russian government threats to sue Google for not complying with Russian censorship demands. And I suggest that Putin’s Data Protection law will be just that—a law to protect Putin’s data. Speaking of privacy law always protecting the powerful, Michael Tiffany offers several reasons why GDPR has been good for Google and Facebook ad market share and bad for European competitors. It’s the tragedy of EU mercantilism: always aiming at the United States and usually hitting itself in the foot.

Another day, another Iranian hacking/ransomware indictment. What’s different about this one, Megan tells us, is that it includes a Treasury order freezing the bitcoin the Iranians collected. That’s a potentially new and powerful law enforcement tool. With only a little cajoling, David Kris acknowledges that this is one Trump administration initiative that is both novel and a good idea.

Wrapping up, David Kris ponders the surprisingly straightforward Fourth Amendment issues raised when the police have to stop an autonomous-mode Tesla going 70 on the 101 with a passed out “driver.” And Megan and I ponder the difficulty posed for social media by the “yellow-vest” riots in Paris. Which model applies: Arab Spring or Russian interference? You know what the Macron administration will say. Buckle up, Big Tech. To paraphrase Peter Parker’s Uncle Ben, with great power comes utter confusion.

 

Download the 242nd Episode (mp3).

You can subscribe to The Cyberlaw Podcast using iTunes, Pocket Casts, Google Play, or our RSS feed!

 

As always, The Cyberlaw Podcast is open to feedback. Be sure to engage with Stewart on social media: @stewartbaker on Twitter and on LinkedIn. Send your questions, comments, and suggestions for topics or interviewees to CyberlawPodcast@steptoe.com. Remember: If your suggested interviewee appears on the show, we will send you a highly coveted Cyberlaw Podcast mug!

 

The views expressed in this podcast are those of the speakers and do not reflect the opinions of the firm.

Direct download: TheCyberlawPodcast-242.mp3
Category:general -- posted at: 11:18am EST

1