Canadian Lawyer InHouse

September/October 2018

Legal news and trends for Canadian in-house counsel and c-suite executives

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9 CANADIANLAWYERMAG.COM/INHOUSE SEPTEMBER/OCTOBER 2018 equivalent of $3.7 million — to the court- appointed administrator by the following day or be found in contempt of court. On July 6, Lacroix said he hadn't com - plied with the judge's order because the computer with his encrypted password into his PlexCoin account had been seized by the administrator. Pronovost then ordered the computer to be brought into the courtroom, which was closed to the public, and told Lacroix to make the transfer or be sent to jail on the spot. Lacroix made the transfer, which was successfully completed a week later thanks to the lifting of a court-ordered freeze order on the Bitcoin financial services company that handled PlexCoin. For Montreal lawyer Adam Atlas, the courtroom showdown was one of the more colourful incidents resulting from the many ponzi-like schemes that continue to proliferate in the murky world of cyber- currencies and ICOs. "The advent of blockchain technology has made it easy to raise funds in the form of virtual currency," says Atlas, a payment law lawyer licensed in Quebec and New York who mostly advises clients on issues such as electronic payments, currency exchang - es, e-wallets and blockchain and merchant transaction acquiring law. A former lawyer with Stikeman Elliott who struck out on his own in 2003 to spe- cialize in the niche fintech field, Atlas says the problem with ICOs — which he equates to IPOs "without all the legal problems and vetting by securities commissions" — is that they are unregulated. "Each ICO involves the issuance of vir - tual tokens or coins that are transferrable," says Atlas, who maintains a website that lists hundreds of ICO blunders from around the world. "They have features of shares and money [but] are neither of those things." According to Atlas, ICOs are akin to unvetted prospecti that can be written and issued by fraudsters. "There are no adults in the room so who's to know," says Atlas, who has documented two dozen fraudulent ICOs around the world this year alone. He says Lacroix's case is not unique to Quebec or Canada. "These types of business projects are occurring every- where," says Atlas. "I can open a website to sell bitcoins around the world and across multi-jurisdictional banking systems that make a lot of people believe they can get rich quick." As the notion and popularity of distributed ledgers such as Bitcoin continue to grow as an alternative way for people to store assets, Atlas says, the challenge for regulators will be to create "a sphere of regulated activity that is less regulated" than traditional securities and currency exchanges. "The idea of value being centralized and secret is eroding," says Atlas. "We are migrat - ing toward a more transparent and secure and reliable financial system. But along the way there will opportunists who take advan- tage of the interregnum we are currently in." — Mark Cardwell News Roundup A roundup of legal department news and trends No two businesses are alike. We get that. You want a law firm that is flexible and can adapt to your particular business needs without compromising service or quality. At Pallett Valo LLP we provide forward-thinking legal counsel designed to respond to each client's unique legal challenges. That's what we call Right-sized Thinking®. Want a legal solution that's the right fit for you? Call us today to find out more. Legal Service That Fits Any Occasion Right-sized Thinking® • 1-800-323-3781 • pallettvalo.com Your Authority For: Business Law • Commercial Litigation • Commercial Real Estate Construction • Insolvency & Corporate Restructuring Employment & Labour • Wills, Estates & Trusts ntitled-2 1 2018-02-09 12:28 PM

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