Keynote address presented virtually at the Washington and Lee Law Review’s 54th Annual Lara D. Gass Symposium: The Future of E-Commerce: Is It on a Blockchain? on Friday, March 17, 2023 in Lexington, Virginia.

The present downturn in non-fungible token (“NFT”) markets is no cause for immediate alarm. There have been multiple cycles in both the legal and media focus on digital intangible property, and these cycles will recur. The cycles are easily explainable: demand for intangible property is constant, even increasing. The legal regimes governing ownership of these assets are unstable and poorly suited to satisfying the preferences of buyers and sellers. The combination of demand and poor legal regulation gives rise to the climate of fraud that has come to characterize NFTs, but it has nothing to do with the value of the technology, the legitimacy of the demand to own intangible property, or even the value of the assets themselves. Rather, fraud and exploitation are entirely avoidable and predictable outcomes of a situation in which buyers and sellers value assets highly but enjoy little to no protection of their interest in their investment. The solution is not more public service announcements indicating that all NFTs are fraudulent; this is neither true nor to the point. Rather, the only solution is to vindicate investor and purchaser rights in intangible property, so that the legitimate demand for intangible property is channeled into the regular economy instead of gray markets.

The shift from a market built around the sale of tangible goods to one premised on the licensing of digital content and services has done significant and lasting damage to the notion of individual ownership. The emergence of blockchain technology, while certainly not necessary to reverse these trends, promised an opportunity to attract investment and demonstrate consumer demand for marketplaces that recognize meaningful digital ownership. Simultaneously, it offered an avenue for alleviating worries about hypothetical widespread reproduction and unchecked distribution of copyrighted works. Instead, many of the most visible blockchain projects in recent years—the proliferation of new cryptocurrencies and the NFT craze, chief among them—have ranged from frivolous opportunities for speculation to outright fraud. Rather than sewing technological seeds that might have yielded a workable proof-of-concept for digital property interests in consumer goods, exploitative blockchain schemes have salted the earth, threatening to discredit the broader, and fundamentally more important, project of constructing a legal framework for digital ownership.

Tantamount with the increasing application of blockchain technologies around the world, the use of blockchain-based smart contracts has rapidly risen. In a “smart contract,” computer protocols automatically facilitate, verify, and enforce arrangements made between parties on a blockchain. Such smart contracts offer a variety of commercial benefits, notably immutability and increased efficiency facilitated by removing the need for a trusted intermediary. However, as discussed in recent legal scholarship, it is difficult for smart contracts to uphold certain fundamental principles of contract law. Translating concepts of individual intention and responsibility into the decentralized space of blockchain is problematic. Aggregating such individual intention into the combined will and intention of the blockchain entity is at best challenging, and at worst unfeasible. Further, while traditional contracts accommodate change and allow for the amendment of terms in response to evolving circumstances, blockchain smart contracts do not. As the difficulties of blockchain smart contracts become apparent, attention is turning to hybrid smart contracts.

“Hybrid” smart contracts are commonly described in legal discourse as arrangements that consist of both a traditional contract (natural language) and a blockchain-based smart contract (formal computer code) component. In comparison, computer science scholarship provides a more complex and nuanced articulation, framing hybrid smart contracts as arrangements that combine code running inside the blockchain (on-chain) with data and computations from outside the blockchain (off-chain). The link between these on-chain and off-chain operations is created through a decentralized oracle network. Such hybrid contracts maintain the immutability of blockchain, and the trustless contracting this facilitates, with the flexibility that comes from connecting to real-world, real-time data sources.

In such a context, the objective of this Essay is to examine the nature and operation of hybrid smart contracts, integrating both legal and computer science discourse, and to critically analyze whether such arrangements have the potential to mitigate some of the legal challenges that have been identified with respect to fully on-chain smart contracts.

FTX’s recent collapse highlights the overall instability that blockchain assets and digital financial markets face. While the use of blockchain technology and crypto assets is widely prevalent, the associated market is still largely unregulated, and the future of digital asset regulation is also unclear. The lack of clarity and regulation has led to public distrust and has called for more dedicated regulation of digital assets. Among those regulatory efforts, tax policy plays an important role. This Essay introduces comprehensive regulatory frameworks for blockchain-based assets that have been introduced globally and domestically, and it shows that tax reporting is the key element of those regulatory frameworks.

Furthermore, this Essay argues that tax reporting and transparency requirements can significantly stabilize the digital financial market and provide additional funding for much-needed regulatory programs through increased tax compliance. Tax reporting requirements have been effective tools in traditional financial markets. By replicating such policies in the digital financial market, the market would significantly improve. These requirements would help combat money laundering and tax evasion. Also, reporting requirements that target both financial institutions and taxpayers would increase tax compliance and lower administrative burdens. The requirements also have the potential to generate revenue, which can fund additional regulatory developments. For these reasons, tax reporting requirements could be an important tool whose utilization would bring much needed stability to digital assets and the market.

Global connectivity is at an all-time high, and sovereign state law has not fully caught up with the technological innovations enabling that connectivity. TCP/IP—the communications protocol allowing computers on different networks to speak with each other—wasn’t adopted by ARPANET and the Defense Data Network until January 1983. That’s only forty years ago. And the World Wide Web wasn’t released to the general public until August 1991, less than thirty-five years ago. The first Bitcoin block was mined on January 3, 2009, less than fifteen years ago.

Legal doctrine doesn’t develop that fast, especially in legal systems heavily based around judicial precedent like the United States. The disconnect between the global, instant connectivity that internet-based technology makes possible and traditional legal and State regulatory actors has never been more apparent. In the past year, the United States, through its administrative agencies controlled by the Executive branch, has brought numerous enforcement actions against Web3 and crypto projects. Some of these projects and their members have been based in the United States, and others have, at best, limited connections to the United States’s territorial borders.

This Essay calls attention to the way the Internet, and Web3 in particular, has raised constitutional concerns about how United States agencies approach personal jurisdiction. Understanding these constitutional limits is critical for anyone considering forming or participating in a Decentralized Autonomous Organization (“DAO”). Intentional, thoughtful consideration of the issues presented here will ensure that DAOs and their members take on legal obligations in the United States knowingly and responsibly. A corollary is also true: DAOs and their members should fully consider their possible defenses and rights when confronted with the next overreaching enforcement action.

When adjusted to reflect inflation, the federal minimum wage is almost 40 percent lower than it was in 1970. The Biden Administration tried and failed to legislatively raise the minimum wage, and political deadlock will continue to kill legislative change. The shareholder proposal, a nonbinding recommendation to management that shareholders can submit for a vote at a public corporation’s annual meeting, presents a path for improving the wages of many workers in the absence of federal legislation. This Note analyzes the best approach to crafting a shareholder proposal on minimum wage that will prompt an effective increase in the minimum wages paid to workers. It evaluates the barriers to success and concludes that the right team of actors can overcome the barriers to raise the minimum wages paid to workers at large corporations through shareholder proposals.

This Note could be read as another Note addressing Congress’s power to strip jurisdiction from Article III courts. Yet, when this power is exercised in the immigration context, its impact extends far beyond the realm of checks and balances. Instead, this Note is about the insulation of the Board of Immigration Appeals (“BIA”) and its unfettered ability to create, interpret, and adjudicate its own laws. Not allowing courts to review BIA decisions leaves mixed-status families vulnerable to the harsh consequences of inherently arbitrary decisions made by executive officers.

These practices go against the established common law principles of family unity. For nearly a century, our judiciary has emphasized the importance of maintaining the family nucleus and parental autonomy. The courts have explained that it is central to our nation’s history and culture that parents have the right to be present in their child’s upbringing, enacting safeguards such as procedural protections for parents against the intrusion of the State. However, when it comes to mixed-status families, these judicial protections do not extend to immigration proceedings. When a child is born in the United States to undocumented parents, they are forced to decide between complete family separation and the forced removal of a citizen child from the country.

Stripping jurisdiction from courts to hear immigration proceedings of mixed-status families prevents the courts from addressing the violations of the fundamental right to family unity. While Congress does have the power to limit the jurisdiction of Article III courts, Congress cannot withhold judicial relief from people seeking to protect their rights to life, liberty, or property. Judicial recognition of the fundamental right to family unity, in the context of mixed-status families, would be a first step in enabling federal courts to preserve the constitutionality of our immigration system.