Cryptocurrencies and blockchain technology are no longer relegated to the most esoteric corners of the Internet. While these important technological and social innovations were once widely unknown, or considered the purview of the dark web, they have now reached the mainstream. Federal and state governments, as well as major corporations, are taking notice. Here are a few recent noteworthy developments:
U.S. District Court for the Eastern District of New York ruled on March 6, 2018 that virtual currencies are commodities regulated under the Commodities Exchange Act (CEA). In this important decision, the court held that the Commodity Futures Trading Commission had standing to sue under the CEA to protect investors against fraud and manipulation in virtual currency markets. This allowed the CFTC to bring claims against Coin Drop Markets alleging that this defendant “offered fraudulent trading and investment services related to virtual currency.” Rulings like this challenge the common assumption that cryptocurrencies are unregulated, and may signal the shrinking of the crypto “wild west” frontier.
Kodak is leveraging the power of blockchain and cryptocurrency to help protect photographers from IP infringement, and get them paid for use of their images. KODAKCoin, and its distributed ledger system, will allow photographers to license their work, police unauthorized uses, and speed up payments through the use of smart contracts (which are digital agreements that allow for automatic execution of their provisions and record transactions on the blockchain).
Shipping giant FedEx is exploring integration of blockchain into its daily operations. Company executives note that blockchain could be utilized to store records and help customers more efficiently track packages and resolve disputes. FedEx is also a founding member of the Blockchain in Transport Alliance (BiTA), and as a part of BiTA’s standards board, will be helping develop a set of industry standards for blockchain technology.
Starbucks executive chairman Howard Schultz recently noted in a Fox Business interview that the company will “probably” integrate blockchain technology into its payment app. While Starbucks’ precise application of blockchain technology remains to be seen, Schultz remarked that he believes blockchain technology will have considerable consumer application in the context of digital currency.
California Bill Would Legally Recognize Blockchain Data and Smart Contract Electronic Signatures
California lawmakers are considering a bill that would confirm that a signature secured through smart contract blockchain technology is an enforceable electronic signature. The bill also proposes that individuals who secure personal information on blockchain technology platforms in the course of carrying out commerce would retain ownership rights to that information. Similar bills have been introduced in other states such as Florida and Arizona.
Deputy U.S. Attorney General Rod Rosenstein announced at the Financial Services Roundtable’s spring conference that the federal government is working on a “comprehensive strategy” surrounding cryptocurrencies. The effort, apparently focused on cybercrime prevention and law enforcement, will be led by a task force made up of representatives from several law enforcement agencies, including the F.B.I., D.E.A., and U.S. Marshals Service.