Can the Old Bottle Hold the New Wine When Blockchain and Jurisdiction Rules Collide

Abstract

The current legal system is challenged by the distributed nature of blockchain, particularly the 
jurisdiction rules that deal with court jurisdiction and regulating legislation. This specific difficulty 
was encountered in the In re Tezos case, a securities law issue filed in the US District Court of the 
Northern District of California. In order to demonstrate how the distributed character of blockchain 
affects the choice of court jurisdiction and controlling legislation in the context of securities 
regulation, I perform a case study of the In re Tezos case in this article. I contend that blockchain 
makes those conduct-based jurisdiction standards much more difficult, even if the internet has 
already made those effect-based jurisdiction rules more difficult. In light of this knowledge, I 
provide a number of guidelines for handling jurisdictional concerns in situations involving 
blockchain-based securities. In order to lessen the effects of blockchain technology, improve legal 
clarity, and encourage global cooperation, I specifically suggest an effect-based jurisdiction rule 
that is constrained by a de minimis exemption.