Degen Lawyer's Newsletter

25th July, 2023

GM. Welcome to Degen Lawyer's Newsletter, that's right we’ve tweaked our name. We bring you your weekly shot of legal insights and regulatory updates in crypto and emerging tech space. Our expert lawyers serve up curated analysis, breaking news, and expert commentary.

In this week’s edition:

1. Updates from around the world

2. Regulatory Watch - AI Law coming to India?

3. Weekly Breakdown - This week - ‘Blockchain Size and why it matters’

4. Podcast in the spotlight - Laws applicable to Web 3 Business.

Updates From Around The World

• Kuwait's absolute ban on Crypto

  Kuwait’s financial regulator issued a circular banning all cryptocurrencies. Now this one really sucks, our heart goes out to all our Kuwaiti friends. But as seen with China, a ban just ends up driving the black market, regulators really need to ask themselves ‘is a ban really the best solution at hand’?

• Sam Altman launches World Coin

  The Open AI boss is taking his talents to the promised land with the launch of his own crypto project - World coin, with some pretty ambitious aims like oh - a global-parity based financial system and universal basic income, no biggie.

  The company aims to provide every individual with a unique digital identity, World ID. But here’s where it gets really interesting, they intend to do this through an iris scan by a biometric device known as the 'The Orb’. Creepy right!

  Here you can find a great explainer of the blockchain tech behind it.

  

  Breakdown of the components of ‘The Orb’

• Microsoft Activision Deal further stalled by UK Competition Commission

  Microsoft’s $69 Billion deal of Gaming Giant Activision was set to be completed in mid July, however, the UK Competition Commission is one of several countries not overtly pleased with the potential ramifications. The tech behemoth has requested for an extension till October 23 to finalise the deal. Otherwise the break up fee of $3.5 Billion will kick in - Ouch! Talk about a nasty break up.

• Russia launches Digital Rubble

  Latest in a slew of state run and state controlled CBDC - Not going to poke fun at this one, I value my life.

  

Regulatory Watch

AI Law Coming to India?

Never a dull day in the land of AI, and this time its India’s Telecom Regulatory Authority (TRAI) which has released a recommendation framework on “Leveraging Artificial Intelligence (AI) and Big Data in Telecommunication Sector”.

Here’s the breakdown:

• TRAI's proposed framework recommends the categorisation of AI use cases based on their risks and regulating them according to principles of responsible AI.

• The Ministry of Electronics and Information Technology is proposed to be the administrative ministry for AI.

• Creation of an independent statutory body called the Artificial Intelligence and Data Authority of India (AIDAI), which will act as both a regulator and advisor for AI-related matters.

• AIDAI's role will include facilitating the adoption of future AI technologies, coordinating with technical standard-setting bodies, and overseeing data digitization, sharing, and monetization policies in India.

• AIDAI will be the body in charge of framing regulations on responsible AI use, define principles for its application based on risk assessment, global best practices, and public consultation.

• AIDAI should ensure that responsible AI principles are followed in all phases of the AI framework life cycle and develop a model AI governance framework and ethical codes for organizations in various sectors.

• The recommendation also proposed setting up of a multi-stakeholder body with members from different ministries, departments, industry, legal and cyber experts, academia, and research institutes.

Weekly Explainer

Blockchain Size

Bitcoin vs. Ethereum Blockchain Size

To access the blockchain , what is the minimum amount of data you need access to over the internet?

The blockchain is a distributed ledger that records all transactions on a network. As the blockchain grows, so does the amount of data that needs to be stored.

Bitcoin only stores the most recent blocks, while Ethereum stores all historical blocks. This means that the Ethereum blockchain is much larger than the Bitcoin blockchain, even though the number of transactions on the two networks is similar.

The factors that contribute to the size of the blockchain include the number of transactions, the size of the blocks, and the frequency of block creation. Bitcoin blocks are created every 10 minutes, while Ethereum blocks are created every 15 seconds. This means that Ethereum blocks are smaller than Bitcoin blocks, but there are many more of them.

There are a number of ways to store blockchains, including full nodes, partial nodes, and cloud storage.

It is possible that new technologies will emerge that will make it possible to store large blockchains more efficiently. For example, sharding is a technique that could be used to divide the blockchain into smaller pieces, which would make it easier to store and manage.

To learn more about such concepts, visit our resource page linked below:

Degen Law Academy Resource Page

To help you in this journey of understanding web3, blockchain and its effects on law, we curated just the right resources to get you started.

Podcast in Spotlight

We’re doing something different this week, instead of our weekly articles we’re bringing you a Podcast by our Founder.

Topics Covered with timestamps:

1. Journey in Web 3 - 1:00 to 4:20

2. How do you differentiate a Web 2 from Web 3 businesses? - 4:20 to 6:45

3. What laws apply to Web 3 businesses? - 6:45 to 9:00

4. How do Web 3 companies deal with cross-jurisdictional legal concerns? - 9:00 to 14:43

5. India as a country to set up a Web 3 business - 14:43 - 18:52

6. What are DAOs? - 18:53 - 20:00

7. How do we regulate DAO’s - 20:00 - 21:40

8. Company v. DAO - 21:40 - 24:30

9. What functionalities of DAO’s exist on-chain and off-chain - 24:31 - 25:00

10. What are legal wrappers for DAO’s? - 25:00 - 28:30

11. Financial regulations and CBDC in India- 28:30 - 34:30

12. What needs to be built in Web 3 - 34:30 - 37:45.

Crypto Chronicles- Stories from the wild world of Crypto

In this weeks edition of Crypto Chronicles, FTX - the gift that keeps on giving - this week - Buying an island and creating a super species.

Wow just when we thought everything FTX was finally behind us. They drop this doozy!

The lobbyist, Gabe Bankman-Fried, who is Sam Bankman-Fried’s younger brother, is no stranger to controversy. In 2021, he reportedly tried to buy Nauru (an island in the Pacific) to create a fortified apocalypse bunker state.

Nope, i’m not making this up, especially considering my source - a lawsuit filed in Delaware bankruptcy court.

Here are some additional bizarre details that have come to light:

• GBF reportedly offered to pay Nauruan officials in "cryptocurrency and other digital assets."

• FTX lawyers allege the Bankman-Fried team sought to establish an emergency base for itself and a select group of effective altruists.

• They apparently were looking into plans to develop “sensible regulation around human genetic enhancement, and build a lab there”

A representative for Nauru confirmed the island nation was not and has never been for sale.

The lawsuit comes as Bankman-Fried’s successor, John Ray, seeks to recoup damages caused by alleged transgressions by Bankman-Fried and other former executives. The lawsuit is still pending, and it is unclear how it will be resolved. However, it is a significant development in the ongoing controversy surrounding FTX and its executives.

In the meantime, we can all just sit back and enjoy the show while the FTX saga continues to entertain us all

Thats all for this week folks, we’ll catch you in the next one.

Thank you for reading!

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