Whatever your thoughts on blockchain technology and crypto assets, they are here to stay. According to Crunchbase, investors have doled out approximately $23.2 billion to global blockchain companies since 2016, and, once the economy starts to recover from the pandemic, investment is likely only to increase again.
In addition, the surge in the creation and sale of nonfungible tokens, or NFTs, on the blockchain has only further driven investment in blockchain-based assets and means of conveying them. This means that, as companies further develop blockchain infrastructure and services, there will be more room for disputes among companies, governments and consumers transacting on the blockchain.
This is all notwithstanding one of the blockchains’ primary goals of making all transactions transparent and available to everyone and thereby reducing the need for resolution of ambiguity.
So, in this brave new world of transparent transactions between anonymous individuals spread across numerous national and international jurisdictions, who becomes the arbiter of the truth? And, how will conflicts be resolved when the components of the transaction are already written, albeit in a different language?
Commercial counsel and commercial litigators need to prepare to assist blockchain clients and consumers to help mitigate, and address, these disputes, particularly in the product supply chain where blockchain companies are adopting new technologies at a rapid pace.
The following is a brief overview of what attorneys should consider as they dive into this emerging area.