7 Legal Questions That Will Define Blockchain in 2019

Will the SEC define 'sufficient decentralization?'.

With each pronouncement, the SEC representative stated their views did not necessarily reflect the views of the SEC. Looking back at the greatest hits, from "Every ICO I've seen is a security" to "If the network on which the token or coin is to function is sufficiently decentralized the assets may not represent an investment contract" and "Current offers and sales of ether are not securities transactions," the SEC has not officially confirmed any of these statements and has instead clarified that staff views are non-binding and create no enforceable legal rights.

Although the SEC does not make law, it may release official guidance on these areas that will effectively set up goalposts for blockchain networks to achieve "Sufficient decentralization."

The correct interpretation of Securities Exchange Act of 1934 Section 6(b)(5), which requires that the rules of "The exchange" are designed to prevent fraudulent and manipulative acts and practices.

Does "The exchange" refer to the national securities exchange where the ETF would trade, or the bitcoin spot market? See SEC Commissioner Hester Pierce's dissent.

The French Data Protection Authority, members of the EU Parliament and the EU Blockchain Observatory and Forum, are among the few governmental actors that have publicly acknowledged the tensions between blockchain and the GDPR, in particular the rules around the right to erasure, right to rectification and the principle of data minimization.

Will the EU Data Protection Board issue guidelines and recommendations to "Ensure that blockchain technology is compliant with EU law" as suggested by the Committee on Civil Liberties, Justice and Home Affairs?

As blockchain projects become more geographically decentralized, anonymous and/or censorship resistant, domestic regulators must tackle breaches of their laws by facilitating global coordination or, perhaps, harmonization of their securities, commodities, money transmitter, and tax laws.

Are crypto investors and blockchain companies really 'flocking to Blockchain Island Malta in droves' and if so, how will these new crypto friendly frameworks stack up against more established, but restrictive regimes, such as the U.S. securities law framework and years of established case law?

In 2018, the SEC published guidance on online platforms for trading digital assets, ShapeShift reluctantly introduced KYC in the form of compulsory membership, and the SEC fined EtherDelta's creator for causing software to violate the law requiring registration of securities exchanges.