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2018 U. Ill. L. Rev. 1361 (2018)
The Distributed Liability of Distributed Ledgers: Legal Risks of Blockchain

handle is hein.journals/unilllr2018 and id is 1377 raw text is: THE DISTRIBUTED LIABILITY OF DISTRIBUTED LEDGERS: LEGAL RISKS OF BLOCKCHAIN Dirk A. Zetzsche* Ross P. Buckley** Douglas W Arner*** The transformative potential of distributed ledger technology (DLT), especially in the financial sector, is attracting enormous interest. Many financial institutions are investing heavily in proof-of-concept demonstrations and the rollout of pilot applications of DLT technology. Part of the attraction of distributed ledger systems such as Blockchain lies in transcending law and regulation. From a technologicalperspective, DLT is generally seen as offering unbreakable security, immutability, and un- paralleled transparency, making law and regulation unnecessary. Yet while the law may be dull and the technology exciting, the impact of the law can- not be simply wished away. With data distributed among many ledgers, le- gal risk remains. DLT projects may well be found by courts to constitute joint ventures, with liability spread across all owners and operators ofsys- tems serving as distributed ledgers. Instead of being subject to law no- where, organizers may instead be subject to the law wherever there are system users. Regulators seeking to support appropriate approaches to . * Professor of Law, ADA Chair in Financial Law (Inclusive Finance), Faculty of Law, Economics and Finance, University of Luxembourg, and Director, Centre for Business and Corporate Law, Heinrich-Heine-Uni- versity, DUsseldorf, Germany. ** Scientia Professor, KPMG Law - King & Wood Mallesons Professor of Innovative Disruption, and Member, Centre for Law, Markets and Regulation, UNSW Sydney. * Kerry Holdings Professor in Law, University of Hong Kong. The authors gratefully acknowledge the financial support of the following: the Luxembourg National Research Fund, project A New Lane for Fintechs-SMART Regulation, INTER/MOBILITY/16/11406511; the Australian Research Council, project Regulating a Revolution: A New Regulatory Model for Digital Fi- nance; and the Hong Kong Research Grants Council Theme-Based Research Scheme, project Enhancing Hong Kong's Future as a Leading International Financial Centre; and the research assistance of Katharine Kemp, Jessica Chapman, Tsany Ratna Dewi, Paul Friedrich, and Cheng-Yun Tsang. The authors are grateful for comments and remarks provided by Michael Aaron, Jdnos Barberis, Iris Barsan, Isabelle Corbisiere, Scott Farrell, Holger Fleischer, Annabel Griffin, Rob Hanson, Katja Langenbucher, Alain Pietrancosta, Gerald Spindler, Erik P.M. Vermeulen, Markus Willms, as well as participants at conferences and workshops organized by IJRS Sorbonne-Paris I, the Max Planck Institute for Comparative and International Private Law, Humboldt University Berlin, Tilburg University, and University of Luxembourg. All responsibility is the authors'. 1361

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