Whether you turn on your TV and see a celebrity endorsing it or flip the channel to the news and catch up on the latest headlines, much has been discussed in recent months about the complex topic of cryptocurrency.
It’s now made its way to the classroom at the University of Denver Sturm College of Law and other law schools across the country. Attorney Jay Stolkin teaches “Introduction to the Regulation of Cryptoassets,” which is a one-credit class at that law school. This is the third semester he’s taught the course.
Stolkin, who’s currently in-house counsel at a venture capital firm focused on investing in the blockchain and cryptocurrency space, said calling it “cryptocurrency law” is a little bit inaccurate as it touches so many different practice areas including intellectual property and licensing rights, venture capital transactions, securities, commodities and derivative regulations and tax issues.
“There’s just a wide range of different areas of the law and different regulators that touch the cryptocurrency space,” Stolkin said, adding the class begins with an introduction of what cryptocurrency and blockchain is.
The class Stolkin teaches is mainly focused on federal securities regulations and its applicability to the issuance, transfer and transactions in cryptocurrency. He noted that to have a single class that covers every aspect of law associated with cryptocurrency would be difficult as there’s many intersections within the space.
“Truly for any one practitioner to say that they have expertise in crypto law generally is a bit of a misnomer,” Stolkin said. “It’s lawyers who have experience in a particular area of the law or a few areas of the law, and have grown expertise in the intersection of those areas [in] the crypto space.”
With cryptocurrency being relatively fresh and constantly changing, laws for it are somewhat stagnant for now.
In a December interview with Yahoo Finance, Securities and Exchange Commission Chair Gary Gensler reinforced the idea of following existing laws for cryptocurrency exchanges. Gensler didn’t say whether the SEC would write new rules in 2023 for cryptocurrency. Meanwhile, the Responsible Financial Innovation Act has been introduced in the U.S. Congress. The act hopes to “To provide for responsible financial innovation and to bring digital assets within the regulatory perimeter.”
“We have existing laws, and applying those laws to new technologies that don’t necessarily fit within the boxes outlined by existing law, makes things a bit more complicated and leaves a lot of gray area,” Stolkin said. “The technology itself is complex and always changing. As a lawyer … one of the hardest parts about my job is staying up to speed on the latest and greatest developments within the space.”
Stolkin said he talks a lot about the uncertainty of the law in his class. He added one of the main focuses of the class is whether the issuance of a cryptocurrency and the cryptocurrency itself constitutes a security. It’s talked about in the context of the Howey Test, which can be used to determine if a transaction is an investment contract.
“We largely focus on the enforcement actions and the lawsuits and guidance from the SEC and other regulators that have addressed this subject and run different fact patterns through the Howey Test,” Stolkin said. “In the course we do talk about the fact [that] the regulatory landscape is changing rapidly and we talk a little bit about what’s being considered.”
Stolkin noted cryptocurrency courses have been popping up in other law schools around the country including Duke University School of Law, the University of Michigan Law School and the University of New Hampshire Franklin Pierce School of Law, among others.
“It’s an interesting area of the law,” Stolkin continued. “It’s an industry that needs good practitioners getting up to speed. … I think it’s a trend that will likely continue.”
Law Week did reach out to the University of Colorado School of Law and a spokesperson said they haven’t had a full course on it. A spokesperson at the University of Denver Sturm College of Law said Stolkin’s class is the primary cryptocurrency course at the law school, but added they believed cryptocurrency is touched on in other business law classes.