November 11, 2022

Digital Assets Download - October 14, 2022


In case you weren’t keeping up with the Kardashians, one of them agreed to pay the SEC $1.26 million to settle an ongoing investigation into her promotion of the Ethereum Max token. To see what else you may have missed in the world of digital assets, check out the latest edition of Digital Assets Download, Powered by Mayer Brown.

For the Uninitiated: Digital Assets Download is a curated mix of insights and headlines that provide a Layer 3 Legal Perspective™ on the digital assets multiverse—created by Mayer Brown’s global Digital Assets, Blockchain & Cryptocurrency group. (Check out all of our previous editions of the Digital Assets Download)

The Lead Block

Perspectives and insights from Mayer Brown lawyers and other thought leaders that touch on digital assets, decentralized finance, cryptocurrencies and related fields.

EU Commission Proposes New Liability Rules on Products and AI

On 28 September 2022, the European Commission adopted proposals for two directives adapting non-contractual civil liability rules to artificial intelligence (“AI”). The proposed AI Liability Directive aims at targeted harmonization measures on civil liability for AI among the EU member states. The revised Product Liability Directive proposes adaptations to the producer’s no-fault (strict) liability for defective products that have caused damage to health or property or loss or corruption of data. Under the proposed Product Liability Directive, compensation is available when defective AI causes damage, without the injured person having to prove the manufacturer’s fault. Not only hardware manufacturers but also providers of software and digital services that affect a product’s function (such as a navigation service in an autonomous vehicle) can be held liable. Further, manufacturers can be held liable for changes they make to products they have already placed on the market, including when these changes are triggered by software updates or machine learning. The parallel proposal for an AI Liability Directive seeks to ensure that, where an injured person has to prove that an AI system caused damage in order to obtain compensation under national law (e.g., if someone failed a job interview because of discriminatory AI recruitment software), the burden of proof can be eased if certain conditions are met. The proposed liability rules for AI will complement other proposed EU legislation such as the AI Act, the Digital Services Act and the Digital Resilience Act.

Select Events

Selected events for deeper dives into different parts of the digital assets and DeFi world.

Cyber Spotlight: Ransomware 3.0 War Stories – Triple Extortion, Sanctions Risks, and Best Practices from the Trenches
The Biden administration and US regulators continue to assess how to fight ransomware cybercriminals using digital assets for illicit means. As part of our Cybersecurity & Data Privacy group’s commitment to Cybersecurity Awareness Month, our team is hosting “Cyber Spotlight: Ransomware 3.0 War Stories – Triple Extortion, Sanctions Risks, and Best Practices from the Trenches” on Tuesday, October 18, 2022.

Learn the Lingo

For those new to the digital assets and DeFi world, each edition of the Digital Assets Download will highlight a different term to help you be a part of the conversation.

Proof of Work (PoW)

Proof of Work (PoW) is the consensus mechanism (see our July 22 Lingo here) used by the Bitcoin blockchain (among others). PoW blockchains are secured and transactions on them are verified by network participants—called miners—that compete to be the first to solve a mathematical puzzle. The miner that completes the puzzle first adds the newest batch of data or transactions to the blockchain. Miners are incentivized to participate in this system with a reward of new cryptocurrency for the miner that is the first to solve each puzzle and accurately validate the new data (corresponding to each transaction being validated on the network). PoW requires a large amount of computer processing power and the energy required to power those processes is one source of criticism of PoW consensus mechanisms.

Writing on the Wall, Translating ‘Crypto’ Terms with Mayer Brown

From Airdrop to Wrapped Token, our illustrated glossary, “Writing on the Wall, Translating Securities with Mayer Brown,” has been updated with additional digital assets and cryptocurrency terms. Check out our “featured” list for the crypto terms and the full list of terms.

Digital Assets Download

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