The Revolution Will Be Memorialized: Selected Blockchain-Based Smart Contract Use Cases
What happens when computer code autonomously performs contractual terms? This article addresses the legal ramifications of several novel-use cases for smart contracts, a specialized form of computer code that primarily operate on blockchain ledger systems. Blockchain-based smart contract systems offer potential cost savings for businesses, consumers, and public entities entering into certain digitally autonomous agreements by replacing traditional performance, enforcement, and dispute resolution mechanisms with automated computer algorithms.
There is no generally accepted legal definition of “blockchain,” and we caution against a fruitless lexicological endeavor. We emphasize the importance of regulating behavior as it relates to the use of emergent technologies like blockchain, and not overregulating the underlying technology. A blockchain ledger is a type of distributed ledger with certain definable technological components. Abstractly, a distributed ledger is a self-verifying record of transactions kept chronologically, similar to traditional accounting systems. Blockchain’s revolutionary impact comes not from it replacing existing accounting systems, but from selected technologic features enabling the replacement of institutional and intermediary-backed trust systems. In application, a blockchain memorializes transactions similar to a common real estate chain of title. Title records are stored on a centralized ledger that is uniformly ordered, chronologically timestamped, and substantially immutable. The chain of title is consistent and cannot be repudiated absent judicial orders validated by certification of the county recorder.
Smart contracts are digital agreements encoded onto a blockchain. Upon occurrence of one or more deterministic conditions called “oracles,” the smart contract generates an output based upon acquired input data. This output can engage in predefined performance, issue executable commands to a third party to perform an act, cancel prescheduled actions, query information from an outside data source, or nullify party obligations. The drafted contract is converted into a programming language (e.g., Solidity). The counter-party must either reverse engineer the coded contract (thereby accepting its accuracy) or trust the blockchain programmer (e.g., IBM’s Hyperledger or other trusted service providers). Smart contracts allow institutional (and statutory) trust inherent in the county recorder’s office to be replaced with technological trust in the smart contract’s code. However, as smart contracts automate contractual performance, they impinge upon social normative values reflected in implied terms imputed under principals of legal realism. Replacement of traditional contracts with smart contracts requires a careful balancing of existing legal frameworks and the formalism of digital algorithms, as we explore the following use cases.
Supply Chain Management
Letters of credit guarantee payment based on the occurrence of certain terms. A blockchain-based letter of credit can be programmed for tracking the purchase, transport, import, and delivery of goods. A blockchain-based letter of credit assures payment and confirmation of transit as the goods move from the seller, to a bonded warehouse, to a freight hauler via air, ship, or land transport, to a second warehouse and ultimately to the buyer’s possession. A blockchain-based letter of credit can be programmed to pay and confirm the transit of goods upon confirmation of predefined events. IBM and freight carrier Maersk’s recent partnership integrates logistics between ports and ships, thereby creating significant operational cost savings. However, these cost savings may create unforeseen externalities. Early blockchain ledger systems, like Bitcoin, have been criticized for large energy consumption requirements to perform the proof of work calculations that run the ledger. Blockchain ledger energy consumption demands from a large, international firm like Maersk could create carbon outputs exceeding traditional administrative systems. However, as these technologies mature, newer developed blockchain systems become increasingly more energy efficient, leading to reductions in these power demands.
Article 9 of the Uniform Commercial Code (UCC) governs assets subject to security agreements, typically employed in commercial transactions. A smart contract programmed to implement art. 9 security agreements could accept digital payment data from the creditor’s bank documenting a debtor’s timely payments. If a scheduled payment is not made, the contract automatically sends out a late payment notice without the creditor’s interaction. If the late payment is not made, the contract automatically sends out a default notice. If the default is not cured within the cure period, the contract sends a pre-signed assignment of title to either the government records office or a trusted party to transfer title. The pre-signed assignment is embedded and cryptographically stored on a blockchain ledger. Unless the defaulting party cures, or the term is modified, the pre-signed assignment is filed, and the process cannot be otherwise altered, thereby automating execution upon the securitized interest.
Discretionary or indeterminate conditions raise feasibility concerns. Deterministic computer protocols are ill-suited to automate discretionary or indeterminate clauses such as force majeure events, “reasonableness,” “best efforts,” or other vague or undefined terms. One solution requires party interactions with the smart contract after the occurrence of one of these indeterminate events. These could require additional information or consensus from the parties analogous to traditional contractual modification to resolve the dispute over the term. The contract could generate an inquiry to the creditor and require confirmation or denials of the event in question. The contract’s oracles could also access trusted government sources or reputable news outlets to confirm the existence of the event during a determinate time to delay operation of automated execution against a securitized interest.
Consider a hypothetical hurricane making landfall in the debtor’s location. After making a late payment after the storm, the debtor could explain via email or web portal to an automated smart contract that the payment delay was due to power outages caused by the hurricane. A sufficiently sophisticated smart contract could monitor news media for this information autonomously. After verifying the weather event at the agreed upon place of performance, the smart contract queries the creditor to agree to modify performance based upon a justifiable excuse or refuse and trigger a preprogrammed automated dispute resolution (ADR) system programmed into the smart contract. If the parties agree to excuse the delay, nothing further occurs, and the smart contract continues to monitor the performance of the now modified agreement.
If modification is denied, however, utilizing algorithmic ADR, the smart contract would statistically analyze caselaw and generate for both parties cases supporting and rejecting the reasonableness of the case and a prediction of success on the merits. Data about what constitutes “a reasonable time” for delayed performance in the event of a hurricane could be aggregated from reported judicial decisions to develop a statistically significant framework regarding performance, payment, and the effect of the then-unforeseen circumstances. Failing the parties’ reformation of the smart contract based on this new statistical data, the parties could then choose a number of binding ADR resolutions.
It is important to note, however, that blindly pursuing Pareto-efficient resource allocation using autonomous systems may result in moral, social, or legal outcomes that do not maximize or may even diminish the general public good from a utilitarian perspective. Strict adherence to deterministic smart contract terms also raises serious questions concerning artificial intelligence (AI) replacing human normative decisionmaking. The public trust in the judiciary provides a safety valve against the strict adherence and literal reading of contractual terms to the public’s detriment. As an example, this is demonstrated when the common law precedent refuses to enforce contractual bargains or implies terms on the basis of public policy. The public trust in a jury of community peers as fact finder was developed as a check against overreaching government influence in social normative processes.
In contemporary AI systems, the underlying neural network is often changed and recalibrated based on evolving heuristics created in response to data acquisition during normal operations and sometimes in response to expected but unacceptable outcomes. These new data points in turn change the AI and its autogenerated outputs, which may ignore social or legal concepts of morality, equity, or fairness. The AI is programmed to have adaptable outputs without any human interaction. For example, the AI program for TESLA’s automatic driver function has been altered with aggregated multi-car data to reduce the required driver response time (a driver’s tactile response period) to maintain the auto-drive, driverless mode. In blockchain-based contracts, interactive party inputs to AI-generated inquiries may be important conditional clauses to relieve the party of certain contractually defined consequences. These interactions could result in a narrowing of concepts like “reasonableness” or “morality” that are more a reflection of current social value systems, as opposed to statistical modeling based on past precedent that blockchain AI would invariably rely on.
A traditional example in which Pareto efficiency is socially unacceptable is found in Florida’s real property laws. A smart contract to automatically “return” title to a bank on a mortgagee’s default would be unenforceable under Florida law, which follows the lien theory of title, where title to property remains with the homeowner. Judicial process is mandated for a lien holder to retake title and possession to real property, and automating those processes through smart contracts would violate public policy.
Domestic Relations and Probate
Traditional domestic relations statutes have a number of reporting and obligation requirements that could utilize smart contracts to reduce administrative and other transactional costs. Likewise, similar systems could be utilized to automatically transfer digital assets or digital title to physical assets in probate cases. The process under Florida’s Fiduciary Access to Digital Assets Act could be automated to transfer control of digital assets and social media accounts.
A smart contract for support payments could provide for the automatic withdrawal of support payments from one party’s bank account to the other party. By automatically tracking the payor’s income, the smart contract can adjust support payments by automatically adjusting and reporting modifications based on existing statutory guidance. Court pleadings and default notices can be automatically drafted and served with supporting caselaw and filed in court after review by counsel describing the changed circumstances.
Likewise, a smart contract can automate the sale of adverse interests in marital or estate property. The adverse parties would agree to sell real estate within a specific range over an agreed upon time. If no offer meets these parameters, then the minimum acceptable bid for the sale is automatically reduced to a new price and time range, and so on. Once an offer exceeds the minimum, the smart contract automatically accepts the offer, generates a real estate contract, performs an automated title search for underwriting, and secures title insurance. Upon input of a satisfactory inspection report and clear title, the smart contract can execute the real estate documents on behalf of the sellers. If needed, a sophisticated smart contract would require further inputs such as the number of inquiries for the property; the number of in-person walk-throughs; weather influences on showing; and periodic updates for comparable property sales. These inputs could alter the agreed upon time and price to maximize either the value of the estate or its present time value. Engaging the services of an independent appraiser to provide data inputs assures that the selling agent is not captive or swayed by the interests of a particular party.
Asset-Based Payment Contracts
Intellectual property licenses typically call for royalty payments based on net sales of a product or service. To reduce reporting requirements that many licenses require, all sales must be made through a single purchase point or internet platform; the licensee tenders monthly income statements from the licensee’s bank or credit card processing system; and the predefined royalty payment is calculated as a percentage of the net sales reflected in these monthly reports. The monthly bank or credit card processing records provide institutional trust to the transaction history as they are generated by an intermediary bank. In addition to automating these reporting requirements, a smart contract can automatically impose certain predefined remedies in the event of unanticipated issues relating to the licensor’s production of the good or service, a failure in a condition of performance by either party, or the licensee’s failure to timely tender reports and payment. The automated contract can also suspend performance of a license for a set time and require the parties to engage in automated ADR.
Digital Rights Management
Digital Rights Management (DRM) is software that tracks and polices authorized users’ access to copyrighted content. These software tools allow copyright holders to record how many times the content is viewed for marketing and licensing purposes. A smart contract could strengthen existing DRM for the benefit of copyright holders by automating licensed access and enforcement against infringers. Such a system linked to a content service can automate royalty payments and recordkeeping (as discussed previously) and enforce the licensor’s copyrights.
A DRM smart contract can have a list of authorized users, a time frame monitor, and a download counter that permits authorized users to view the movie a defined number of times. To access a movie, a user interacts with the licensor’s website, verifies their identity using blockchain technology, and is given time-limited access to the content. The blockchain smart contract verifies authorized access by recording the router address of the viewer and timestamping the viewer download count and other identifying data. Once thresholds are exceeded, the content no longer plays on the user’s device due to the lapse of the license based upon the limited play count. The computational operation of a blockchain ledger can be distributed onto the user’s content devices, allowing the copyright holder to pass some of the costs of maintaining its DRM blockchain onto the authorized user.
Securitized Assets, Replevin, and Attachment
A smart contract concerning rights to certain digital or tangible assets, whose title is digitally recorded in a smart contract, could automatically handle aspects of replevin actions, by digitally restoring access, possession, or title to an aggrieved rights holder in automated judicial proceedings. The smart contract could prepare pleadings, as in our domestic relations hypothetical, further automating and simplifying the dispute resolution process in determining lawful ownership over the disputed asset. Smart contracts should balance debtors’ and creditors’ rights and respect established legal norms in particular fields.
Transferable blockchain smart contracts and smart contract-enabled cryptocurrency may reach the scope of securities and commodities laws. The definition of a “security” is broad and generally encompasses any investment contract, regardless of its form or function. Under the landmark case, Securities and Exchange Commission v. W. J. Howey Co., 328 U.S. 293 (1946), a security is any “contract, transaction or scheme whereby a person invests his [or her] money in a common enterprise and is led to expect profits” from the efforts of another. For example, a smart contract may facilitate the purchase of investment tokens linked to a blockchain. Since 2013, the SEC has issued a number of cryptocurrency guidance statements concerning the use of cryptocurrencies in connection with securities offerings. Applying the Howey factors, a number of cryptocurrency investment contract offerings have been determined to fall under the reach of the Securities Act of 1933 and the Securities Exchange Act of 1934, as modified by subsequent enactments, such as the Sarbanes Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Developers of blockchain smart contract code that facilitate investment contract offerings may violate the federal securities laws, especially if the developer profits, facilitates, or promotes the sale of the underlying code supporting the tokenized offering. Tokenization of “utility” tokens, however, falls short of securities registration and disclosure requirements. In 2019, the SEC issued a no-action letter for the utility token offering of TurnKey Jet, Inc., which provides air charter services and offers a smartphone application linked to a tokenized wallet. Likewise, trading in cryptocurrency futures or options may implicate commodity trading regulations. The Ninth Circuit’s 2019 decision in CFTC v. Monex Credit Company, et al., 8:17-cv-01868, 16 (9th Cir. 2019), affirms CFTC jurisdiction over futures and option contracts for smart contract tokens and cryptocurrencies. On June 30, 2020, the Supreme Court denied certiorari, setting the case for a trial posture.
Decentralized Autonomous Organizations
A smart contract can automate aspects of traditional corporate governance. Decentralized autonomous organizations (DAOs) are a novel corporate entity form operating on smart contracts that have recently emerged but do not enjoy widespread legal recognition. In 2018, Vermont amended its limited liability statutes to include a new enabling act, which gives legal recognition to blockchain-based limited liability companies. Even absent an express enabling act, a centralized blockchain-based smart contract, owned and controlled by an existing corporation or limited liability company could, theoretically, be utilized to automate portions of a traditional corporate governance, including reporting, disclosure, and voting.
Blockchain smart contracts offer novel opportunities to reduce administrative, operational, and transactional costs. Private industries are investigating blockchain as a method of saving money on large-scale transaction costs by automating routine transactional practices. There are also public-use case benefits that reduce the needs and costs of court accounting practices, as we explored in the context of domestic relations and probate law. Careful drafting to minimize harmful economic and social externalities is needed if smart contracts are to receive legal validation by our judicial system.
 Blockchain is “a distributed ledger technology that records and shares every transaction that occurs in the network of users.” Heather Morton, Blockchain State Legislation, National Conference of State Legislatures (Mar. 28, 2019), available at https://www.ncsl.org/research/financial-services-and-commerce/the-fundamentals-of-risk-management-and-insurance-viewed-through-the-lens-of-emerging-technology-webinar.aspx.
 These technological components include a distributed and decentralized digital ledger or database in which blocks of data are shared between a network of peer-to-peer computers; the digital ledger or database data is distributed on a public or private computer network; the chain of blocks are uniformly ordered and chronological in nature; the records are either immutable or substantially immutable; the records are redundantly maintained and processed by a consensus of the networked public or private computers in the chain to guarantee the consistency and nonrepudiation of the recorded transactions or other data; and the ledger’s immutability is maintained by cryptographically policing the ability to alter informational content in the blockchain.
 “Substantially immutable” refers to the possibility of a fork in blockchain records caused when enough nodes disagree. The resulting fork splits the ledger into two separate but continuing ledgers. See Larry D. Lahman, Bitcoins, Blockchains and Satoshi Nakamoto: A Lawyer’s Primer, 89 Ok. Bar J. 18 (2018), available at www.okbar.org/barjournal/sept2018/obj8923lahman.
 “Smart contract” is a misnomer, as a smart contract may not meet all of the legal requirements of a binding and enforceable legal contract. See Nick Szabo, Smart Contracts: Building Blocks for Digital Markets (1996), available at http://www.fon.hum.uva.nl/rob/Courses/InformationInSpeech/CDROM/Literature/LOTwinterschool2006/szabo.best.vwh.net/smart_contracts_2.html. There are three essential technological components to a smart contract: encoding the transaction and hosting the same as blockchain ledger; programming for the occurrence of essential or material performance conditions; upon such occurrence or nonoccurrence, the code generates one or more prescribed outputs.
 A discussion of automating performance after probabilistic contractual conditions are met is beyond the scope of this article.
 Oracles are input and output submodules as part of the blockchain contract. See John Ream, et al., Upgrading Blockchains: Smart Contract Use Cases in Industry (2016), available at https://www2.deloitte.com/content/dam/Deloitte/nl/Documents/innovatie/deloitte-nl-innovatie-upgrading-blockchains-smart-contract-use-cases-in-industry.pdf.
 See IBM.com, IBM Blockchain Platform: The Next Generation of Blockchain for Business, https://ibm.co/3gQds5d; see also Steve Brown, Writing Ethereum Smart Contracts: Hands-on Step by Step Guide (2017).
 See Lucas Mearian, The Top 10 Companies and Cities for Blockchain Developers, Computerworld (2019), available at https://www.computerworld.com/article/3385052/the-top-10-companies-and-cities-for-blockchain-developers.html (listing Deloitte, IBM, KPMG, Accenture, Cisco, JP Morgan Chase, and Microsoft, among top 10 recruiters of blockchain programmers).
 See Oliver Wendell Holmes, The Path of the Law, 10 Harvard L. Rev. 457 (1897) (“Yet nothing is more certain than that parties may be bound by a contract to things which neither of them intended, and when one does not know of the other’s assent.”).
 Letter of Credit, Investopedia.com, https://www.investopedia.com/terms/l/letterofcredit.asp (“A letter of credit is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make a payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.”).
 See IBM News Room, IBM Introduces TradeLens Blockchain Shipping Solution (Aug. 9, 2018), available at https://newsroom.ibm.com/2018-08-09-Maersk-and-IBM-Introduce-TradeLens-Blockchain-Shipping-Solution (IBM’s venture with Maersk, an international shipping company).
 See, e.g., Michael Bernard, The Dark Side of Blockchain: Energy Consumption, Cleantechnica (Dec. 8, 2018), available at https://cleantechnica.com/2018/12/08/the-dark-side-of-blockchain-electricity-consumption-blockchain-report-excerpt/.
 A microeconomic energy demand breakeven analysis is beyond the scope of this paper.
 See Fla. Stat. Ch. 679, et seq.; see also U.C.C. art. IX, et seq.
 See Stefanie Brüninghaus & Kevin D. Ashley, Predicting Outcomes of Case-based Legal Arguments, available at http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.85.9499&rep=rep1&type=pdf.
 Pareto Efficiency, Investopedia.com, https://www.investopedia.com/terms/p/pareto-efficiency.asp (“Pareto efficiency…is an economic state where resources cannot be reallocated to make one individual better off without making at least one individual worse off.”).
 See O.W. Holmes, The Path of the Law, 10 Harvard L. Rev. at 466 (“You always can imply a condition in a contract. But why do you imply it? It is because of some belief as to the practice of the community or of a class, or because of some opinion as to policy, or, in short, because of some attitude of yours upon a matter not capable of exact quantitative measurement, and therefore not capable of founding exact logical conclusions.”); see, e.g., Amoroso v. Samuel Friendland Family Enterprises, 604 So. 2d 827, 832 (Fla. 4th DCA 1992) (citing W.E. Johnson Equip. Co. v. United Airlines, Inc., 238 So. 2d 98 (Fla. 1970) (extending implied warranty of merchantability and fitness to lease contracts on public policy grounds, due to economic bargaining power, information dissymmetries )). As a corollary, a contract that violates public policy is voidable. See American Cas. Co. v. Coastal Caisson Drill Co., 542 So. 2d 957, 958 (Fla. 1989).
 Henry Kissinger argues that AI may cause catastrophic results where ethical outcomes are desired. See Henry Kissinger, How the Enlightenment Ends, The Atlantic 11-14 (June 2019); see also Nicholas Christakis, How AI Will Rewire Us, The Atlantic 10-13 (Apr. 2019) (“[W]e must investigate systemically what second-order effects might emerge and discuss how to regulate them on behalf of the common good.”). Christakis points out that cooperation, trust, and generosity are essential for a functioning society. He further argues that social experiments injecting certain AI interactions into groups of human actors caused a demonstrated lack of cooperation, empathy, and generosity amongst the group, resulting in the so-called “tragedy of the commons” where “individual’s self-centered actions…collectively damage their common interests” in the group. Id. at 11.
 A neural network is a set of computer algorithms trained to recognize patterns. Its construction mirrors that of the neuron pathways in the human brain. See generally A.I. Wiki, A Beginners Guide to Neural Networks and Deep Learning, https://skymind.ai/wiki/neural-network.
 See Blai Bonet & Eric A. Hansen, Heuristic Search for Planning Under Uncertainty, University of California, Irvine, School of Information and Computer Sciences, available at https://www.ics.uci.edu/~dechter/papers/paginated_binders/PART%25201.pdf.
 See Tesla, Introducing Navigate on Autopilot (Oct. 26, 2018), https://www.tesla.com/blog/introducing-navigate-autopilot.
 See, generally, City of Gainesville v. Charter Leasing Corp., 483 So. 2d 465 (Fla. 1st DCA 1986). “The creditor does not own an interest in property and the debtor does not own a mere possessory right.” Martyn v. First Fed. Savings and Loan Assn., 257 So. 2d 576 (Fla. 4th DCA 1971). The debtor is fee owner and a creditor is limited to its remedies at law or equity: To sue on the note or foreclose the lien. Thomas v. Hartman, 553 So. 2d 1256 (Fla. 5th DCA 1989).
 See, e.g., Fla. Stat. §61.30 (schedule of child support payments).
 See, e.g., Fla. Stat. Ch. 733, et seq.; see also Florida’s Fiduciary Access to Digital Assets Act, Fla. Stat. Ch. 740, et seq.
 S. Dresden Brunner, Access to Digital Assets — Florida’s New Law for Fiduciaries: What Are Digital Assets and Why Are They Relevant? 90 Fla. Bar J. 9 (Nov. 2016) (“Digital assets relate to data, information, and intellectual property that is transmitted or stored on electronic devices, such as smartphones or computers. Digital assets can include email accounts, social media accounts, domain names, online businesses run through eBay, gaming characters, digital currency such as Bitcoins, digital photographs, online banking, PayPal accounts, and other similar items.”).
 Royalty, Investopedia.com, https://www.investopedia.com/terms/r/royalty.asp (“A royalty is a payment to an owner for the ongoing use of their asset or property, such as patents, copyrighted works, franchises, or natural resources.”).
 DRM, TechTerms.com, https://techterms.com/definition/drm (“DRM refers to a collection of systems used to protect the copyrights of electronic media. These include digital music and movies, as well as other data that is stored and transferred digitally.”).
 See Sijia Zhao & Donal O’Mahony, BMCProtector: A Blockchain and Smart Contract Based Application for Music Copyright Protection, ICBTA 2018 (Dec. 2018), available at https://dl.acm.org/doi/pdf/10.1145/3301403.3301404?download=true.
 See, e.g., Artory.com (a secure, public registry for art and objects utilizing blockchain technology and end-to-end encrypted messaging. Collectors confidentially register their artworks for digital signature by trusted art institutions). V. L. Hendrickson, Artory Announces Partnerships to Help Protect Digital Art, Barron’s (Aug. 2, 2019) (quoting Nanne Dekking, founder and CEO of Artory) (“Digital art can be reproduced millions and millions of times, which is fine, but it’s hard to know if the artwork is original. It helps the artist and the owner to have something unique to give the owner to prove he is the owner of an original artwork.”).
 Whether the copyright holder would pass these cost savings onto the consumer, or enjoy the increased profits as unjustified rents, is beyond this article.
 See, e.g., Fla. Stat. Ch. 78, et seq.
 See note 9.
 The SEC issued two major statements on the impact of securities law on cryptocurrency. The first of these, Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO, articulates the SEC’s position that certain cryptocurrency investment contract offerings are securities under the 1933 Act and require registration and disclosure compliance pursuant to §§5 and 12(g) of the 1934 Act unless the offering meets one of the registration exemptions found in either the statutory language of the 1934 Act or the SEC’s rules. U.S. SEC, Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO, SEC Release No. 81207 (July 25, 2017), available at https://www.sec.gov/litigation/investreport/34-81207.pdf. The second, The Statement on Digital Asset Securities Issuance and Trading, applies the registration requirements of the Investment Company Act and the Advisers Act to pooled investment vehicles trading in digital asset securities or cryptocurrency. U.S. SEC, Statement on Digital Asset Securities Issuance and Trading (Nov. 16, 2018), available at https://www.sec.gov/news/public-statement/digital-asset-securites-issuuance-and-trading.
 SEC v. Coburn, et al., SEC Release No. 84553 (Nov. 8, 2018), available at https://www.sec.gov/litigation/admin/2018/34-84553.pdf. Coburn violated the 1934 Act by failing to register EtherDelta as an exchange and by “operat[ing] as a market place for bringing together the orders of multiple buyers and sellers in tokens that included securities as defined by [§]3(a)(10) of the Exchange Act” despite not receiving any direct profits from trading activity on EtherDelta.
 U.S. SEC, Letter of the SEC to TurnKey Jet, Inc. (Apr. 2, 2019), available at https://www.sec.gov/divisions/corpfin/cf-noaction/2019/turnkey-jet-040219-2a1.htm.
 See Commodities Exchange Act §§2(c)(2)(D)(i) and (iii) (2010).
 In 2017, the CFTC brought action against Monex, a gold dealer offering cryptocurrency backed by gold, alleging that it had committed fraud by engaging in off-exchange gold transactions. Monex engaged in trading commodities for many years prior to 2017. The CFTC complaint alleged that this fraud cost investors collectively $290 million over a six-year period. The complaint also alleged that Monex failed to deliver control of the gold within the CEA mandated 28-day period (as required to avoid registration under the “spot market” requirements of the CEA known as the “actual delivery” exemption). The district court dismissed the CFTC’s claims on the grounds that the Dodd-Frank amendments to the CEA require both fraud and market manipulation to invoke the jurisdiction of the CFTC. The Ninth Circuit found CFTC jurisdiction and reversed and remanded the case on the grounds that the “actual delivery” was a sham.
 Barbara Grzincic, In Brief: Supreme Court Lets CFTC Proceed With Fraud Action Against Monex, Reuters (June 30, 2020), available at https://www.reuters.com/article/scotus-cftc/in-brief-scotus-lets-cftc-proceed-with-fraud-action-against-monex-idUSL1N2E70L7.
 12 V.S.A. §1913 (2018).
This column is submitted on behalf of the Business Law Section, Leyza Florin Blanco, chair, and Robert Charbonneau, editor.