Discover and read the best of Twitter Threads about #bailment
Most recents (6)
1/ MY SUMMARY🧵re: today's SEC #Custody Rule proposal, which is here: sec.gov/rules/proposed…
*NONE OF THIS IS LEGAL ADVICE*
tl;dr--it doesn't kill #crypto custody; it's a move against state-chartered trust companies; there's one big issue, tho, which will trigger huge pushback
*NONE OF THIS IS LEGAL ADVICE*
tl;dr--it doesn't kill #crypto custody; it's a move against state-chartered trust companies; there's one big issue, tho, which will trigger huge pushback
2/ THE BIG ISSUE (& I haven't seen anyone point this out yet)=the rqmt for custodians to indemnify for "negligence, recklessness or willful misconduct." All the banking, #WallSt, commodities & #crypto industries will push back together on this bc it could kill custody biz broadly 
3/ What's the issue? Proposal wld apply Custody Rule to all asset classes incl commodities & #crypto (ie, not just securities)--OK, fine. But SEC also wants custodians to indemnify FULL asset value for losses in which custodian played ANY role (eg, an oil tanker sinks; cows die).
1/ SO MANY TRUTH BOMBS in this terrific blog post.🧐MUST READ for US customers of #crypto exchanges/custodians (hint:😱, if yours goes bankrupt). Note @AdamLevitin analysis applies US-wide *EXCEPT* in #Wyoming bc it mostly fixed the very issues he lays out creditslips.org/creditslips/20…
2/ Truth bomb #1: "I do not think customers understand the legal nature of the custodial relationships, and exchanges have no incentive to make the legal treatment clear to customers." ...
3/ "In bankruptcy, it is likely to be treated as a debtor-creditor relationship, not a custodial (#bailment) relationship. That means that customers are taking on REAL CREDIT RISK with the exchanges, which is a particular problem because of the opacity of the exchanges..."🎯
1/ JUST READ opinion in latest lawsuit against #crypto exchanges/custodians over whether customers are owed forks/airdrops. As discussed on podcasts (@APompliano, @PeterMcCormack, @stephanlivera, @PrestonPysh+others), these contracts tend to be 1-sided...
law.justia.com/cases/californ…
law.justia.com/cases/californ…
2/ ...& judges generally will uphold the contract to which parties agreed, so breach of contract & conversion claims not likely to win (& they aren't). This is why these 1-sided contracts are a prob for institutional investors who owe a #fiduciary obligation to their customers...
3/ ...a fiduciary asset manager who agrees to a vague, 1-sided contract will get sued by its clients for breach of fiduciary duty if something goes wrong (& if it's an #ERISA fund, that fiduciary has PERSONAL liability & will be sued personally, not just sued professionally)...
1/ INTRODUCING AVANTI BANK, a new US #bank to serve #digitalasset industry, offering new products & svcs not currently available in USD mkts along w/ tech partner @Blockstream. #Wyoming-based. We’re preparing long process of charter application & aim to open early 2021. @AvantiBT
@Blockstream @AvantiBT @adam3us 2/ Co-founder/team news soon. I’ve founded @AvantiBT w/ key support from top people in #crypto + important innovators from traditional finance. Seed funding round recently closed. Avanti will serve institutional customers that need services around #Bitcoin & #cryptoassets.
@Blockstream @AvantiBT @adam3us 3/ A critical piece of US mkt infrastructure is missing—a regulated #bank that can act as bridge to Fed for pymts + custody #crypto for BIG institutional money (pensions/endowmts/foundtns/corps/sov wealth) who need this b4 entering #crypto in a big way. Regulation had blocked it.
1/ HEY CRYPTO LAWYERS--@AndreaTinianow analyzes #Wyoming's commercial law for #blockchain assets & wrote a definitive guide to it for blockchain lawyers. She also compares it to @uniformlaws proposed Supplemental Act & favors WY's approach. @ForbesCrypto forbes.com/sites/andreati…
2/ Best quote: "As the founding director of the #Delaware Blockchain Initiative, I cannot stay silent about a law (the @uniformlaws Supplemental Act) that would extinguish the power of #blockchain technology to clean up problems in capital markets." So much here--will post more
3/ .@AndreaTinianow explains how #Wyoming confers "super-negotiability" to digital assets. She calls super-negotiability the "holy-grail" of commercial law (called the #UCC). I'd worked w/ Andrea before but hadn't realized she's a UCC expert from her prior work in #Delaware--wish
1/ TWEETSTORM about #Wyoming’s BIG REVEAL. This is long & info-packed, so buckle in. My native state is about to do bigger things for #blockchain, & the sector is about to pay Wyoming back big-time. Win-win! @Tyler_Lindholm @SenatorDriskill @TraceMayer @ForbesCrypto
3/ New bill 2 parts. 1-Digital asset custody via #SEC #CustodyRule wld create first true #QualifiedCustodian for digital assets (for investors who by law can’t self-custody). 2-Defines property rights for digital assets—doing something HUGELY IMPT for #bitcoin/virtual currencies
