Posted on Categories fintech, startups

Cross-sector regulatory sandbox

Last year I proposed that Poland should take a broader approach to the issue of regulatory sandboxes, not merely copying solutions adopted in other countries. Now we see the first steps towards creation of multi-sectoral (not exclusively financial) regulatory sandboxes.

The trend started by the Financial Conduct Authority in the UK of creating regulatory sandboxes for the financial sector has spread around the world, including Poland. Although many voices from major jurisdictions, such as the United States and Germany, are skeptical, this solution undoubtedly has its advantages. Market participants usually rate this concept very highly, even if in reality the sandbox does not deliver immediate regulatory benefits (for example, it does not enable limited operation of regulated activity without a licence, which would be difficult in EU member states due to the harmonised regulatory regime).

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Posted on Categories changes in law

Another attempt to capture the essence of digital money

The bill to amend the Criminal Code currently being processed (Sejm print no. 3451) is generating lots of controversies. For persons involved in FinTech, the draft of the proposed new Art. 279a of the Criminal Code is particularly interesting. It is another attempt to define new forms of commission of offences on financial markets for purposes of the criminal law. This attempt once again demonstrates what a difficult task faces lawmakers.

The problem is not new. Progress in digitalisation is accompanied by dynamic growth in various types of digital assets. The law does not keep pace with this development, and consequently is unable to ensure adequate protection to participants in digital economic exchange. This makes it necessary to adapt the existing regulations to suit the realities of the new economy.

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Posted on Categories artificial intelligence

AI must not predict how judges in France will rule

For a long time, much has been written about artificial intelligence in the legal profession. We discussed various types of solutions in this area on our blog. One is predictive analytics, i.e. using algorithms to anticipate the judgments that will be issued by a given judge under a given state of facts. Such tools rely mainly on an analysis of rulings issued in the past and draw various types of conclusions from them, e.g. with respect to the chances for prevailing in a dispute.

Along with a recent reform of the justice system in France, a ban was recently introduced against using data concerning the identity of judges to evaluate, analyse, compare or predict their actual or supposed professional practices. Violation of this ban can lead to up to five years in prison.

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Posted on Categories blockchain, changes in law

Clear path for trusted technologies in Liechtenstein

The Principality of Liechtenstein will become one of the first countries with its own act on trusted technologies, approved by the Liechtenstein parliament at the first reading on 6 June 2019.

As reported by local newspapers Volksblatt and Liechtensteiner Vaterland, the parliament of this small Alpine state approved a new act on trusted technologies, and Prime Minister Adrian Hasler and his team thus achieved their aim. For nearly two years the government of Liechtenstein has been working on ensuring that the country becomes a global pioneer in blockchain technologies.

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Posted on Categories blockchain

“On-chain” and “off-chain” arbitration: Using smart contracts to amicably resolve disputes

Recently counsel, arbitrators and potential parties to proceedings have been examining with interest attempts to streamline arbitration using blockchain technology. We mentioned this in our 2018 report for Rzeczpospolita (in Polish), but in the industry so much is happening around “blockchain arbitration” that the issue deserves more attention.

Currently there are at least ten projects around the world, at various phases of realisation, using blockchain to automate alternative dispute resolution at least to some degree. There isn’t room here to describe them all in detail, but Kleros, CodeLegit (discussed also in our earlier publication), Juris and Oath seem particularly noteworthy. We examined what problems they may entail from a legal perspective. All of the comments below are based on publicly accessible materials (such as project websites and whitepapers), but are limited as these projects have not yet been thoroughly tested by end users (tests of beta versions are underway for some of them).

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Posted on Categories privacy/personal data protection

Profiled ads on Google: Irish regulator calls the question

Ireland’s Data Protection Commissioner has commenced the first proceeding against the US giant Google since the General Data Protection Regulation entered into force. The case involves processing of users’ personal data for delivery of profiled ads.

The case was launched following numerous complaints, primarily from the makers of the Brave web browser, whose main selling point is built-in ad-blocking tools. The allegations against Google Ireland Ltd boil down to the issue of forwarding users’ personal data (particularly involving their online activity), without their knowledge, to an indefinite number of entities for the purpose of delivering profiled advertising materials.

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