The Security Token Academy hosted the first Security Token LA meetup in Santa Monica on August 16th, 2018.

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The Security Token Academy hosted the first Security Token LA meetup in Santa Monica on August 16th, 2018. Our host and legal expert Amy Wan sat down with blockchain lawyer Morvareed Salehpour to discuss some of the hurdles that face companies utilizing the blockchain and why the world will follow the U.S. when it comes to the security token industry. 


Amy Wan, Security Token Academy

Morvareed Salehpour, Managing Partner, Salehpour Legal Consulting


hi I’m Amy Wong with security token

Academy and I’m here with Marbury salla

for all right so you’re a blockchain

attorney so in terms of what you’ve seen

or legal hurdles you know what does the

landscape look like I think there’s a

couple issues that are now starting to

develop one of the most interesting

issues in my opinion is issues with when

things go wrong on a blockchain so

there’s issues with regard to


what court are you gonna sue in what

country because it could be the

situation where when something goes

wrong every single place there is a node

is a point of liability so all of a

sudden you could be subject to

conflicting laws across different

nations so you kind of have to set

yourself in a position where have a good

argument in terms of where you’re liable

similarly there’s issues with

enforcement because where are you going

to enforce an order even if you’re able

to get that from a court where you don’t

the court doesn’t have jurisdiction over

people who are members of this public

blockchain and are decentralized across

the world and there’s similar issues

with anything even hold liable because a

lot of transactions will involve people

you may not be able to pinpoint because

of the decentralized nature of the

blockchain so these are all a lot of

really neat novel legal issues what’s

the solution gonna be how are you gonna

grapple with these things or are we

going to see maybe the emergence of new

legal infrastructure I think one of the

big issues is going to be that it’s

going to start evolving

in courts and you will see new decisions

coming down like there’s already a

decision or a case that’s pending in New

York where someone has asked for a

court-ordered rescue fork and that’s

something some of these issues will be

resolved when a decision is made in that

case but the way to kind of protect

yourself right now is to get an attorney

who has knowledge about the space

involved in coding the smart contracts

for kind of giving you advice and making

sure your smart contracts are

appropriately set up to anticipate some

of these issues so that you have set

yourself up for a strong argument when

you do you know come up with issues

regarding liability enforcement in

jurisdictions so that brings up a very

interesting point you know there are a

lot of purported blockchain attorneys

now what should they be doing or

thinking about to make sure that they

are adequately protecting their client I

think they need to actually understand

the space and the issues that are coming

up I think a lot of focus right now is

on securities law which is a very

limited focus and the innovation that’s

going on in blockchain has more

widespread effects and will actually

cause just changes in how our legal

structure works and how our cases are

decided because we all have to come up

with ways to resolve the issues that are

common to a decentralized system and

that’s something we’re not really

prepared to address right now because

we’re used to centralized system so we

do need to get creative and use past

precedent in a creative way to get our

clients where they need to be really

interesting well let’s talk for a second

about securities laws and regulations

and tokenization do you think we have

enough regulation not a

or what what needs to change in order

for this industry to to move forward in

a responsible fashion I think one of the

things that needs to happen is that we

need new regulations that are block

change companies specific so one of the

things that I’m really interested in and

I think it’s a good idea is there’s a

virtual currency digital currency act

and that is a proposal by the you know

the common laws that society and it has

basically the same organization that

proposed the UCC and the states adopted

has now basically proposed this law and

the ABA is on board now and it will

sterilize money transmission licensing

rules across the state so that you

companies that are in the blockchain

space don’t have to comply with 50

different laws but will only have one

law that they need to comply with and

it’s specific to them so that there are

exemptions for blockchain companies so

that they are not unnecessarily covered

little purposes of Licensing because as

it is right now they may be subject to

licensing even if they’re just

researchers that are transmitting points

yeah that’s really interesting you know

the security token industry right now it

seems to be primarily based in the US

the rest of the world is still on this

thing about you tony tokens and things

like that

what gives is do you think you know the

security token industry is going to be

it and the rest of the world will move

that way or are we gonna have two

different paradigms well I believe it’s

all going to kind of follow the u.s. I

think we’ve always been the leader in a

lot of laws and regulations

I feel other countries are starting to

follow us there’s already a couple

countries I believe it was Switzerland

was starting to say basically there it’s

a security I think the UK is also come

out recently supporting that kind of

classification so I think it’s all going

to start falling in line and there will

only be loopholes left for so long right

now i ciose and

Tio’s and and all these token sale

offerings they are still going around

and you know incorporating in crazy

jurisdictions jurisdiction shopping in

the Caymans and Malta and you know you

name it

do you have any thoughts about that is

that trend going to continue I think it

may in the short term and I also think

that they should realize that the fact

that you are purposely going out and

trying to form shop does not mean that

the SEC won’t come after you if you’re

still engaging in business in the US and

you saw effects in the u.s. that’s all

changing and they se can come out at any

point say well you’re really operating

business in the u.s. your funds are

coming in here so we’re going to come

after you how do you think the practice

of law might change due to blockchain

with distributed ledger technology I

think it’s we you know lawyers are just

going to have to understand coding more

I think smart contracts are gonna be

something where it’s gonna have to

involve the lawyers and the developers

working together so I think that’s gonna

be a lot more technological innovation

that lawyers need to understand and they

really have to understand how that works

on but how a blockchain really works on

the technical mode very interesting

thank you so much for joining us

I’m Amy one from security token Academy

thank you for having me