Matt Green on the developing blockchain litigation market

Matt Green, Blockchain Litigation Lead at Shoosmiths, joins Shieldpay's Daniel Dunne to explain the complex blockchain market, what is happening on the global stage and the role lawyers play in recovering digital assets.

Matt Green is the Blockchain Litigation Lead at Shoosmiths. 

Matt is a qualified solicitor with an initial interest in intellectual property and technology law. Now, he has a dedicated practice servicing businesses utilising blockchain technology, recovering crypto assets, and advising on copyright and trademarks. 

In 2019, he set the precedent in common law jurisdiction worldwide that crypto assets are property and he continues to develop proven best practices and build a catalogue of successful high court decisions.  

Alongside his legal practice, he's an active voice in the market regularly contributing to academic papers, lecturing at universities, and hosting his own podcast ‘In Early: the crypto podcast’.

In this Class Actions episode of Shieldcast, Matt and Daniel discuss:  

• What blockchain technology is and how to define it
• The role of a litigation lawyer in blockchain and crypto disputes, and the opportunity for law firms
• The four key areas of change, development and growth in the market
• Recent case examples in the UK and in the US
• Funding: the next big opportunity for opening up the market

Listen to this Class Actions edition of Shieldcast to find out more!

Disclaimer: Shieldpay Ltd is not involved in any crypto currency related activitiespursuant to our regulatory permissions. This episode has been produced with the sole purpose of informing and educating our audience regarding the subject matter.

Learn more about Shoosmiths: 

Website: Shoosmiths.co.uk

LinkedIn: Shoosmiths

Podcast: In Early - The Crypto Podcast

Thank you for listening. 

Find other episodes in the series on our website: Shieldcast library

Podcast brought to you by Shieldpay - learn more: shieldpay.com

Find other episodes in the series on our website: Shieldcast library

Podcast brought to you by Shieldpay - learn more: shieldpay.com

Transcript

[00:00:00] Dan: Hello and welcome back to the Shieldcast podcast in which Shieldpay friends, partners, clients come to tell us about their products, share industry insights and generally talk about all things that we think listeners would be interested in.  

In this series of the Shieldcast, we’re taking a deep dive into the class action market. The Shieldpay team will be inviting key industry leaders to join us for new episodes to discuss key challenges, opportunities in the space, share best practice, and explore the latest developments in this ever-evolving space.  

I'm Daniel Dunne, Head of Legal Sales at Shieldpay, and your host for the episode of Shieldcast. 

I'm joined here today by Matt Green, Blockchain Litigation Lead at Shoosmiths, to explore the rapidly emerging blockchain litigation market, learn about where we are with the cryptocurrency cases and where this trending area of litigation might be headed in the future.  

To summarise some of Matt's extensive career today, he's a qualified solicitor with an initial interest in intellectual property and technology law. Now, he has a dedicated practice servicing businesses utilising blockchain technology, recovering crypto assets, and advising on copyright and trademarks. In 2019, he set the precedent in common law jurisdiction worldwide that crypto assets are property and continue to develop proven best practices and build a catalogue of successful high court decisions.  

Alongside his legal practice, he's an active voice in the market regularly contributing to academic papers, lecturing at universities, and hosting his own podcast ‘In Early: the crypto podcast’. There's plenty more to add to this intro, but let's stop there as I'm sure we'll be covering a lot more throughout this conversation. Matt, welcome to the show. 

[00:01:41] Matt: Thanks for having me. Appreciate it.  

[00:01:43] Dan: Nice to have you here. Thank you. I suppose where I'd like to start with is the question that most people probably ask is, what is blockchain technology in its simplest form?  

[00:01:53] Matt: Yeah, I think it's a term that scares a lot of people off. I think it's useful to sort of think about it in four stages really. Hopefully I'll go through what those are in a way that people understand. 

So broadly, it's a technology by its design which:  

Number one: It is an immutable ledger of transactions.  

Two: It's decentralised. Which ultimately means the information is not hosted on a single individual place, but held and verified by a network and group of people, in their servers called nodes.  

Number three: It's permission-less, which ultimately means that, uh, no one needs permission to view it. It's open.  

And number four, it's stored cryptographically into blocks.  

So those are the four real things. Essentially, it's just an immutable ledger to make sure that you understand the movement of certain things. For Bitcoin, certainly it's the movement of Bitcoin. So you can see, on this ledger something being withdrawn, deposited, coming in. In that respect, it's a way of managing systems. And as I said, the most famous is bitcoin.  

[00:02:56] Dan: Right. Interesting. And what's actually going on in the market right now? I mean, what are the key challenges that have been facing the industry?  

[00:03:03] Matt: Yeah, when we talk about the markets, I think we could sit here and talk about what the future is for the industry or what value certain tokens have. We could be here all day doing that. So I think when we talk about the market, let's maybe try and limit to the legal market. Because there's all sorts of things going on in the world of law. 

I think it boils down, at least to my world, into, again, four things.  

There's fraud. Which covers a variety of things that I'll come back to.  

There's how we treat decentralised, autonomous organisations (DAOs). Sorry, which are called DAO for short. 

And three, the regulatory frameworks around the world and how that interacts with people on a day-to-day basis.  

And I guess number four is intellectual property, which I'll come to later (that's sort of how I got into this space).  

Just taking each in turn. Fraud is really my bread and butter in this space at the moment. In essence getting people's crypto assets back. And what does the market look like? Well, there's scams and ransoms and misappropriated funds everywhere.  

Chain Analysis produce a report each year…Chain Analysis is a blockchain investigations and analytics firm. They produce a report every year called the Chain Analysis Crypto Crime Report. And this year's has come out and it says, despite the market downturn, illicit transaction volume rose for the second consecutive year hitting an all-time high of $20.6 billion.  

Dan: So, there's plenty of work to do.  

Matt: Yeah. And a huge amount of loss in that space which means that there's a huge amount for law enforcement and civil lawyers, like myself, to get their teeth into. So that's something to work on at the moment.  

Then you have number two, which is DAOs and how that interacts with corporate governance and how we deal with new structures. So decentralised autonomous organisations are essentially a way for voting to occur for an establishment. 

If you think about, if I have two tokens I have essentially two votes. And, if there's a variety of people who hold those tokens and they have voting rights, then you can essentially create a policy within those DAOs.  

It’s sort of democratic. I was talking to my dad this weekend about whether it was democratic or not. He said it wasn't. But ultimately, it's a way for token holders…almost like people with equity to make decisions for the company.  

Some of the legal issues around this are…I was gonna say exciting there, but it depends who you're talking to. 

In the US, there was a case called…It was about a DAO called Ooki. And it was the idea if you were a token holder, you'd be liable. And that the specific DAO breached, according to those papers, the Bank Secrecy Act. Because it was held in America, token holders were liable, although they didn't really do anything. They voted in a certain way together to cause a loss.  

In this jurisdiction, we had Tulip trading, which is an ongoing litigation in the first instance. It was the idea that developers of software and developers of the software of the Bitcoin network were not liable, or didn't have a fiduciary duty to maintain, the blockchain in a particular way that the claimant liked. 

So, I suppose there was a dichotomy there. The American system was: “you are liable”. And the English one is: “you're not”. And we've be going back and forth on this issue.  

In the market, there's a consideration of how you treat DAOs legally. How you KYC them, how you receive payment from them. And there's all sorts of questions that are super interesting.  

Number three is sort of regulatory. There's a huge swathe of people trying to get regulation into the market at the moment. You know, you got, MiCA in the EU and the UK. We're still sort of figuring it all out.  

I purposely prepared a little quote, which I found on the Gov UK website from February this year. And it says the government will set out ambitious plans to robustly regulate crypto asset activities, providing confidence and clarity to consumers and businesses alike.  

[00:06:52] Dan: And what are the specifics of what they're trying to regulate? Are they trying to regulate the visibility, the transparency? What…?  

[00:06:59] Matt: Yeah, it's a little bit of everything. You've got the financial promotions issues that have occurred. The idea is if you are dealing with financial products, then you have to promote them in a certain way. 

Yeah. There's issues about consumer rights as well...[consumer duty].  

Exactly. Because a lot of people invest in crypto assets and then if they're lost, you have no real protection. Sometimes people see that as one of the risks. You lost all your Bitcoin, well you're dabbling in Bitcoin and that's part of the risk. 

So, regulation is about securities. It’s about financial products and it's about confidence.  

I think overall, generally as well, it’s also about how we classify NFTs. There's a case in the US at the moment where they've decided, that NFTs might be securities. They’re NBA, I think, sort of Top Trump cards. And the courts have come out and said that they, in this instance, they may well be securities. And you're thinking this is an NBA basketball card.  

So the answer is, we don't really know. So, what's going on in the market? To some extent, it's a bit chaotic and you really need people who know what they're doing to provide advice. 

I would say the last point really to think about is intellectual property because NFTs normally interact with trademarks and copyright.  

A few months ago, we had the European parliament's intellectual property rights and distributed ledger paper about tokenized art. They were dealing with transparency for rights holders and licenses and providence of ownership. There's a real appetite to understand how intellectual property plays a role in all this tech. And people are, seem to be, very aware of AI generated art and who owns what.  

And so the market is busy and you really need to keep up with it all. I mean, for me it's a struggle because there's just so much going on in so many different areas.  

[00:08:46] Dan: Would you say [blockchain litigation] is becoming more commonplace for all our firms or is this quite a new thing that people are exploring? 

[00:08:53] Matt: Yeah. I think law firms are trying to look into how this technology already interacts with what they do. I think it's a few things.  

Number one, that the firms want to future-proof themselves. Because if people are buying physical real estate, but they're also buying real estate in the metaverse, they're going to want a part of that. If there's regulatory and corporate advice to give, not only on traditional financial products but now new ones, lawyers are going to be a part of that process.  

I think law firms really need to beef up on this and understand it. I think a lot of them are doing so on a regulatory and corporate perspective, whether they're doing so sort of in my world, which is intellectual property and in asset recovery, I'm not so sure. 

[00:09:35] Dan: Right. Did that seem like a natural transition from you for intellectual property in your previous work and experience into the digital?  

[00:09:43] Matt: Yeah, the assets, it was. I mean, I got into it through a slightly less intellectual property background. 

My history was intellectual property. When I was younger, I ran a website and I was all excited about sort of naming cases and writing articles. And I did it with a friend of mine who works at Accenture. And off the back of that, we kept coming up with articles around blockchain and AI. And from that there was a momentum of interest. 

From the case that was done in 2019, that I led on, that sort of interest was cemented…[it came about because the team was ]sort of looking around the room [and asking] who wants to work on this case? And I had my hand up. Looking around, not many people did, if anybody.  

So it was a matter to try and jump on the goodwill of everything that I'd learnt when I was doing all my intellectual property stuff. See the marriage between IP and tech come together, and be able to work on that case and others going forward. It was a huge opportunity.  

[00:10:37] Dan: And presumably given the figures that you've just given there, the $20.6 billion of lost, you say…is that misappropriated, fraudulent…?  

[00:10:47] Matt: Yeah. It's all of that. The Analysis report goes into how a lot of the money is sent to sanctioned entities. It's all to do with a lot of North Korea and Russia and, stuff like that…you know, all the Russian stuff that's going on at the moment. 

So, you know, a lot of it is related to those kinds of issues. But my day-to-day is dealing with people who have legitimately lost those assets because there's some sort of fraud or scam. We look at those figures, the billions put in the Chain Analysis report, and even they say that that's probably a smaller number than reality because we're still trying to get the data sets together, which is crazy. 

[00:11:19] Dan: What about for you personally, is it the excitement of the technicality and the complex nature of these cases?  

[00:11:26] Matt: Absolutely. So, I mean, it's no shock to say that law as an industry is normally several years behind tech…and I'm getting a laugh from you, which means [you are] definitely in agreement, right? 

If you are coming into this as, as I was fortunate enough to do, to have an understanding of how some of this tech works, at least at a level where I could consider it for the purposes of litigation, then it put me in the place where I had a huge opportunity.  

I think it's that opportunity that I wanted to capitalise on. You know, the case that I did, ‘AA Persons Unknown’, years ago now set a sort of standard of how these processes are done and it sort of confirmed that crypto assets were property. And from there, there’s just a huge opportunity. It's a matter of making sure that you as a lawyer jump on those opportunities and make sure that there is room to grow in that space. 

Because, you know, all lawyers want to make a name for themselves. They want to be leading a market. And this has come out of, well, I suppose blockchain was sort of 2008, but in the legal world, as I said, it sort of falls behind. It’s new and if you can jump on it early and understand it and add value to the industry, then it's a great place to be. 

[00:12:30] Dan: Do you feel like, the sort of an education piece, you know, for the wider industry. And I know you've been leading on this, but, because people are still unsure of… 

[00:12:38] Matt: Oh, for sure. I mean, people are a bit scared by it. Where we met…so we met at conference. And I spoke on stage about asset recovery, crypto asset recoveries, and people just came up at the end and was just like, ‘great, but like what is that a thing…is that something that is possible?’. 

The podcasts and material that's put out there, at least by me is…how did I describe the other day…is designed for my dad to understand.  

So the idea is that I [host the conversation] and if someone says fractional mining, and I [take a minute to ask]: “Before we talk about fractional mining, [can you explain what that is]? You've got an ASIC miner. What is that?” If we're talking about proof of work, before we start gallivanting off about it, let's break it down. Basically, what is proof of state? What is a blockchain?  

It's just making sure that there is an accessibility to this space that may not necessarily have been there before. 

[00:13:29] Dan: I think there's so much of the unknowns isn't there? And I've educated myself on blockchain technology and cryptocurrencies but still, if you're not educating yourself in it every day…even the layman terms are quite technical. 

[00:13:41] Matt: Oh, exactly. [For example] these addresses. So if someone says, you know, send these funds to my address, and it's this long string of capitalised, non-capitalised numbers and letters, this alpha numerical string…it just looks a bit scary. 

But once you’re familiar with that, once you're comfortable with seeing something a bit foreign, it's actually really a good way to interact with money and digital assets. It's great. We just need to make everyone a bit more literate, I think, with that.  

[00:14:06] Dan: Yeah, definitely. It'd be interesting to know for the [audience] listening, the types of cases that you've already been involved in. You mentioned some of the misappropriation of funds and fraudulent…It'd be interesting to get a take on the cases that you've already been involved in and how you see them as emerging markets in the litigation space.  

[00:14:24] Matt: Yeah. First of all, I'll preface this by saying a lot of the decisions made are in private to protect the victim, right? 

You tend to anonymize their name. Make sure that they aren't subject to copycat attacks, or that there's retaliation. You normally hold them in private on the basis that you don't want to tip anybody off. So, the number of cases that exist is probably far greater than the number of cases that are reported. It’s worth just saying that.  

[00:14:51] Dan: And sorry Matt, is that individuals and corporates?  

[00:14:54] Matt: Yeah, it can be. I've done that for both. Where you want it to be held in private. Because ultimately, if you are saying “I'm the victim of a fraud and these people defrauded me”, you are opening yourself up. 

Dan: White flag.  

Matt: Exactly right. So, to some extent you want to make sure that you are protected. It's always useful to preface that question with a lot of the decisions are in private and will probably never come out.  

Dan: Understood 

Matt: Thinking about one of the latest cases that I worked on (it's to some extent still ongoing so I have to sort of give you an overview), it was a lady who, lost our husband last summer. She received life insurance money and went on Facebook to a bereavement page. A very long story short, she was conned out of half a million pounds worth of Tether (stablecoin linked to the US dollar), which is a horrible story in any event. Right? That is an example of what is a pretty ugly term called ‘pig butchering’. 

That is a phrase used whereby a victim is fatted up over a period of time. And in her case, it was ‘I'm very sorry for your loss…you know, I made some money during Covid’…over a period of time [the conversation] moves to WhatsApp and [she was] properly groomed and it's awful. 

That's a case whereby the funds were traced to certain exchanges. We used an investigator to consider the movement of the funds along the relevant blockchain. Those funds were traced to three exchanges. Those exchanges then provided disclosure as to who their customers were, because at that point we don't know who we're suing. 

If you think about it, and just to run through it, defendant one usually is the party who has defrauded the victim. You don’t know who they are really, and you may find out, but at the early stage you don’t know who they are. It's a category of unknown people. So [we refer to them as] Unknown Person who defrauded, who use this website, and or use this telephone number, et cetera. 

Defendant two is parties who receive those funds, who control the following addresses at the following exchanges. So, defendant two, you don’t know who they are at the early stage. You go to the exchanges and you…or [rather] you will get a court order, to cut a long story short, to provide disclosure as to who those individuals are so that you can then go and chase those guys. 

And that's essentially how this works. You go after the people who ended up with your funds. I'm a civil lawyer, so I care about the money. A lot of the time people go to the police and that's a good thing to do. They're interested in the money to some extent as well, but also catching the criminals. If I'm representing a client, I'm there to go and get the money.  

[00:17:23] Dan: So just taking it back to that example there, and I'm sure you can't probably gimme the granular, the sensitivities of the case, but just to understand the funds flow there. 

So is it pig butchering?  

Matt: Yeah, it's a really horrible term.  

Dan: It's a terrible…So essentially lady groomed over period time over the grief…  

[00:17:41] Matt: That's it. Well, it's vulnerable people, right? That's the point. It's you've been made vulnerable and someone is lurking in a group where vulnerable people are and take advantage of it. 

Dan: Yeah. Which you hear plenty of cases like that in the ‘real world’…I know this is the real world, but from a digital currency perspective or blockchain perspective, what does that look like there? What does that transaction look like?  

[00:18:07] Matt: So, what they do is they'll say, ‘if you set up an account with an exchange and you send me these assets to this address, then I will make your money back’. So sometimes they actually ask these individuals to provide access to their phones or their laptops and remotely go on and transfer the funds out. Other times, they say if someone is a relatively sophisticated user of crypto assets, and I say relatively sophisticated, I mean to some extent it's quite a basic thing to do to send money. But they'll say, ‘please send me…’, and they may even start in fiat money (so pounds and dollars), they may say, ‘send me some money and you'll get it back’. And then they get it back plus and more and they go, ‘ah, look how well you did. I've doubled your money for you. If you send me a bit more now there's an introductory bonus.’ 

They send the money, whether it's fiat or crypto, and the money comes back into the account whether it's a real account or not. Sometimes people are defrauded by using fake trading accounts that never even existed.  

But in this example, it was just payment made to an individual who she didn't know, but rather thought that she knew. Eventually it led to…’well, if you pay now and you give me half a million pounds worth of assets, then you'll double your money. Plus you get an introductory benefit plus all other benefits…’ and at that point the money's gone.  

So, you've been fed into it to some extent. You've seen a success and another one and another one, and it's a slow transition of trust. And then once you've provided enough, it goes.  

[00:19:38] Dan: So, they've built the confidence over time. They've shown evidence of a potential return. And then when the real money gets transferred, that’s when the defrauding…at a serious level. 

[00:19:49] Matt: That's right. But it's not just fraudulent cases for individuals like that. The first case I did was about a ransom that was paid. An insurer paid out a ransom and we traced that Bitcoin to the BVI.  

There's others where other clients, an individual, lost a load of money. He thought he was trading on a platform, on a legitimate platform, but it wasn't. They just took his money and then essentially showed him an Excel spreadsheet which looked like a platform, but it was completely fake. So, it's not just vulnerable people. It can happen to anybody. 

There's high up people in the world of crypto who have been scammed. It's not as if it's just, you know, your grandma who doesn't know what she's doing. There are sophisticated, legitimate scams. There are ransoms paid if there's an insolvency and someone's trying to obtain funds. It's also useful to asset trace on the blockchain in that respect.  

Matrimonial proceedings…if someone's trying to obfuscate funds, but all of a sudden you can see that, you know, the husband knows that the wife or vice versa have put their money into crypto but don't know what to do about it. 

This whole process of tracing, freezing, and recover and crypto funds is very useful.  

[00:20:58] Dan: You've seen people that are regularly involved in the movement of money, in digital assets, what's the general feel across that market? Is it more that they would like it to become regulated, so they have some level of protection? Would they prefer it to continue to be decentralized or…? 

[00:21:13] Matt: Yeah, it depends who you ask. It's a really good question because what may be termed as the sort of ‘Bitcoin maximalists’, those who really believe in the fundamental principles of Bitcoin…that money should be decentralized. There should be no authority which controls the movement access, or to some extent value. Bitcoin remains one of one. And the owners of it should remain private or be pseudonymized…what's the right word? I can never get that right. There's a pseudonymization of their name. 

Dan: It's hard word to say. It is really tough.  

Matt: Yeah. It's tough. But in any event, there's privacy, decentralization. There's anonymity and then there's pseudonym (I'll get there). 

So, there's those on the one side of the spectrum who want to leave it as it is, but then there’s too much freedom or secrecy. In that respect, it means that criminal enterprises and people who do illicit things are able to flourish. 

Then, on the other side, there's a feeling of…okay, this technology's great. Blockchain tech as a thing is great to be able to keep track of the movement of goods or to understand provenance of things, and we need to incorporate our Know your client strategies and your AML strategies into that tech. So, we understand it's really useful…but come on guys, there's a level of freedom, however, we need to remove all the criminality and we need to make sure that we know who we are dealing with.  

And then there's people in the middle who are agnostic, like myself, who understand the merits of both, and there has to be a middle ground.  

But ultimately my feeling is that policy may well be reactive rather than. proactive. So maybe something's going to go wildly wrong, and then we're going to regulate on that basis, which is a bit of a shame. I mean, I referred to earlier different thoughts on regulation, and maybe we are being proactive, but I'm not sure that anything substantive will happen until maybe something goes really wrong. 

It's sort of a space to watch. I'd like to think that the UK is making good progress. I know that other jurisdictions are looking as to how to capitalize, but, you know, we want to position ourselves in the UK as a crypto and blockchain hub. And what that looks like will depend on what regulation looks like.  

[00:23:24] Dan: With regards to the KYC information that's required, when you are doing the tracing of digital assets back, are you relying on the exchanges to be able to provide you that information? 

So essentially, when I've signed up with an exchange, is it commonplace that an exchange will do KYC in most cases?   

[00:23:44] Matt: This is one of the real issues that I personally have and, not naming any names at all, but you rely on the KYC that you receive from the exchanges to point you in the direction of who they are. 

Sometimes I receive email addresses, bank details that are just a nonsense. And for some reason the exchanges have accepted that as legitimate. When I'm tracing funds and you want to know what their linked bank account is, it needs to be a legitimate bank account. You know, if I sign up for an exchange now, they want my ID…they want all sorts of information. I've received fake IDs most recently, a fake Laotian ID, I think I've received bank account details that are just eight zeros in a row. I received one where it just said, ‘oh yes, this person is in X country’. And I said, how'd you know that? ‘oh, well, they just said that they are’.  

So, you know, it's laughable and I think my job would be a lot easier, and there would be a lot more certainty if the KYC and AML checks at the exchanges were more rigorous. Now some guys are doing it brilliantly and some are doing it less brilliantly, but I think by allowing fake IDs and ridiculous email addresses that are never going to be used again to be included in these checks, allows criminality and money laundering to take place.  

I guess the exchanges are complying as best they can, or as best as they want to. But as of yet, there hasn't been an obligation in this jurisdiction that has gone to court, as far as I'm aware, that has forced exchanges to provide legitimate, documents and information. 

And I'm sure all of them would say, you know, ‘if you look at our policy, we're doing the best we can, or we are complying with the rules in the local jurisdiction’. 

[00:25:35] Dan: Right. I get you. Presumably though that certainly within a case where there has been fraudulent activity or misappropriation, that becomes quite problematic for you when you're trying to trace back defendant number one, defendant number two, as an example. What do you do in them cases if you haven't got that information? What's the next stage? 

[00:25:54] Matt: The answer, as in a normal lawyer's answer and it's super frustrating, is it depends. 

It depends, number one, what other information you've got. If you've got absolutely nothing, then it may well be that the exchange has failed to comply with its AML and KYC obligations, and it may well be that you ask them what the hell's going on. It may well be that they give you enough information for you to carry on your journey to finding out who has got the funds. 

I haven't been in this situation yet where I've got absolutely nothing. So sometimes they may give you a little bit of information and go ‘look that way’.  It can be frustrating. It can be very helpful. I think exchanges are getting better, to be honest. 

But it also, to some extent, depends on how good your investigator is because you get a lot of documents as part of this disclosure process. I have a habit of giving it to an investigator if it's deemed to be the right thing and they look at it and in a nice report put together who this person is or who this person purports to be. What their relevant details are, who they are in the web of the larger fraud, if they are at all, and what the next steps are, or what the next steps might be. 

So actually, although the email address is rubbish and the bank account details are rubbish, we do have a linked account in whatever jurisdiction from this person. So, it gives you a starting point. But you know, when you do these injunctions, a lot of the time you want to make sure that there are funds in the account. 

You want to do your best to make sure that if you are serving a freezer on an exchange that there is money within. Because, if there's not, then you have to rely on the further information and the disclosure that they give you.  

[00:27:36] Dan: Yeah, kind of leads me onto the next question where you mentioned about the rapid rise…the $20.6 billion in the industry. It's becoming a global powerhouse, the industry as a whole. Where do you see it going in the next three to five years? Where do you see the rapid changes?  

[00:27:54] Matt: I think you have to understand, or to some extent, separate some of the issues that people have with crypto as opposed to blockchain. 

People will hear crypto and they think, oh, it's a lot of scams and there's initial coin offerings and rug pulls…and people get very nervous about it. What I think will happen in the next few years is people will hopefully move away from that frame of mind. And what they'll actually do is understand the underlying technology behind it and understand that that's not just designed for the benefit of issuing crypto tokens, but actually it's really useful for understanding the providence of goods or the movement of assets, whatever it may be. It just has so many different applications that we haven't really dug into yet. 

So, I'm hoping that there's going to be a better adoption for that. I think one of those is going to be gaming and video gaming. I know that there's been some question as to whether the metaverse is gonna be a thing. People seem to host meetings in there and there's no one around. But I think, in terms of video gaming and intellectual property, that's going to be a huge area.  

But yeah, transport, logistics, all that sort of thing. I think blockchain's gonna be super useful.  

Dan: Bringing it back to you, Matt. With your career, what's next on the horizon? Have you got any other big projects that you are able to share with us? 

Matt: One of the things that I think is important, or at least a challenge for people that I think is important to overcome, is I get calls from people, I've lost 20 grand, I've lost 40 grand, I've lost a hundred grand, whatever it may be. And on the basis that lawyers are expensive and court fees are expensive, you can't always help people. So those people who have lost a little bit of money, and who then can't afford…so you can have people even who have lost a million pounds, but that's all their money. They can't afford to litigate. The next step, I think, is to find a funding solution. 

To allow people to recover assets who can't otherwise do it. To unlock a market that is currently unavailable. I'm working on this at the moment, I’m in the final stages with some funders who really understand this and see the value of it.  

Because, you know, you've got a client, they've lost a £1m and they've got no money left. The investigator's done a report and you can see it, it's right there. And funds keep getting pumped into that wallet…can't do anything.  

Dan: Typically, how we would have litigation funding into…  

Matt: Well, it could be, right? I mean, it depends. My view of it would be that actually it would be a checklist of things. 

So, if 1, 2, 3, 4 happen, and the report says so, then you are entitled to take money from the pool and there is a facility available. That may not be the case with everybody, but it's certainly something that would be useful. Then you can also unlock people who, as I started out saying, have lost a couple of grand, 20 grand, you start to bring them as a group together. If you can fund that, then all of a sudden you're bringing large claims. You're bringing large claims against people who have money, but at the moment it's just inaccessible.  

There's representative actions and group actions. But you know, we've got to be clever in how we do it, and we've got to be clever in how we fund it. 

And it's a matter for certainly myself to educate and convince people to part with their money and take the risk knowing that they will get stuff back. I mean, again, you and I sat in that conference and people didn't even know that what I do is a thing. So, if people who are at a litigation conference don't even know that that's a thing, will litigation funders? Will investors? Maybe not. 

It's my job to sit there and convince them that this is a thing. It's tried and tested, and people can get their money back.  

Dan: I suppose it is no different to the conversation we had at the start where it's educating people in into the actual, the vertical itself. But ultimately, it's giving people a level of comfort, isn't it? 

Matt: That's it. And, you know, that's what regulation may do. It may give people a level of comfort knowing that they have consumer rights or at least a right to do something. Because at the moment, if you get defrauded…you can call up NatWest or Barclays or whoever, and they may be able to help you. If you call up an exchange and you can't get hold of them and then you find out that they're registered offshore and Cayman or Seychelles. It's not the same. If you oblige these entities or these businesses to be incorporated or have a specific presence in a relevant jurisdiction and they have to do certain things, then consumers, I think, are going to be far better protected. 

Dan: Makes a lot of sense. Matt, what a pleasure. Really interesting. Definitely learned a lot about the industry. You gave a really good overview of what it is, how the market's evolving, how lawyers fit into that equation and what the potential market looks like in the future as well, which is great. 

For anyone who is listening that wants to delve a little deeper into the topic…do you want a little bit of a plug for your podcast? 

Matt: Thank you very much. Yeah. I run a podcast with Shoosmiths. We put it out on YouTube, Spotify and Apple. It's called ‘In Early, the Crypto Podcast’. 

We talk about…I suppose we try to avoid legal things, but essentially we talk about the people who are developing and helping the industry, their stories, and making sure that those stories are told in a way that hopefully is educational, and easy to digest. It sort of goes through the growing pains of the industry as well as to what's going on. 

Dan: Great stuff. Thank you Matt.   

Matt: Thank you.  

Dan: I hope you enjoyed the conversation with Matt from Shoosmiths and feel like you understand the complex blockchain market more. What is happening on the global stage and the role lawyers play in it.  

This has been an episode of our Class Action podcast series. We have already released conversation with Clare Ducksbury, the founder and CEO of Case Pilots and James Vaga, Founder and CEO of DirectID, which can be streamed on our website, or wherever you listen to your podcasts. 

If you want to stay up to date with up and coming episodes, you can subscribe to the Shieldcast on Apple, Spotify or Google. We would appreciate it if you could review our podcast. If you have any comments, feedback or want to know more about Shieldpay, you can contact us via our website shieldpay.com.  

Thank you for listening.