The Distributed Ledger: Blockchain, Digital Assets and Smart Contracts

by Skadden, Arps, Slate, Meagher & Flom LLP
Contact

Skadden, Arps, Slate, Meagher & Flom LLP

This is the inaugural issue of The Distributed Ledger, a periodic publication covering the latest trends and developments in blockchain technology, digital assets and smart contracts. In this edition, we examine a federal ruling that boosts the CFTC's virtual currency enforcement efforts, a New York attorney general report on whether virtual asset trading platforms adequately protect customers and an Ohio law that brings blockchain records within the state's version of the Uniform Electronic Transactions Act.

My Big Coin Gives Big Boost to CFTC’s Virtual Currency Enforcement Efforts

New York Attorney General Report Criticizes Virtual Asset Trading Platforms for Failing to Adequately Protect Customers

Ohio Statute Facilitates Development of Blockchain-Based Business

My Big Coin Gives Big Boost to CFTC’s Virtual Currency Enforcement Efforts

In a recent case alleging virtual currency fraud, a Massachusetts federal district court handed the Commodity Futures Trading Commission (CFTC) a significant victory in its efforts to police fraud in virtual currency markets.

In CFTC v. My Big Coin Pay, Inc.,1 the U.S. District Court for the District of Massachusetts ruled that a virtual currency fell within the Commodity Exchange Act’s (CEA) definition of “commodity” and was subject to CFTC anti-fraud enforcement authority under CEA Section 6(c)(1) and CFTC Rule 180.1, even though no futures contracts for the virtual currency existed.2

The CFTC alleged that the defendants fraudulently offered the sale of a virtual currency called “My Big Coin.”3 According to the CFTC, the defendants made untrue or misleading statements and material omissions in touting My Big Coin as a “fully-functioning virtual currency,” when in fact My Big Coin was never a functional, traded virtual currency.4 The defendants moved to dismiss, primarily arguing that the CFTC failed to state a claim for relief because My Big Coin is not a “commodity” within the meaning of the CEA and therefore the CFTC’s authority did not apply to the allegedly fraudulent scheme.5

The court explained that while the CEA grants the CFTC exclusive jurisdiction over commodity futures contracts and the exchanges where they are traded, it also grants the CFTC anti-fraud and anti-manipulation enforcement authority over any sale of a “commodity in interstate commerce.”6 The CEA defines “commodity” as including a number of enumerated agricultural products, as well as “all other goods and articles ... and all services, rights, and interests ... in which contracts for future delivery are presently or in the future dealt in.”7

The defendants argued that because no My Big Coin futures are “dealt in,” My Big Coin is not a commodity under the CEA.8 But the CFTC pleaded that both My Big Coin and bitcoin are virtual currencies, and the court noted that it was undisputed that bitcoin futures contracts are currently traded.9 The CFTC argued that My Big Coin and bitcoin were “sufficiently related,” in light of certain characteristics common to virtual currencies, so as to justify treatment as part of the same commodity category.10

The court agreed with the CFTC’s argument that the term “commodity” is “broader than any particular type or brand of commodity.”11 The court observed that the CEA “defines ‘commodity’ generally and categorically,” rather than “by type, grade, quality, brand, producer, manufacturer, or form,” highlighting congressional intent to focus on categories of commodities rather than specific items.12 The court further noted that the CEA should be construed “flexibly to effectuate [its] remedial purposes.”13 Finally, the court found support in cases holding that the CEA covered certain natural gas contracts for which there were no futures contracts because futures contracts existed on other types of natural gas and natural gas is “fungible” and “may move freely throughout a national pipeline system.”14 Thus, the court concluded, the CEA “only requires the existence of futures trading within a certain class ... in order for all items within that class ... to be considered commodities.”15

The decision lends further support to the CFTC’s view that virtual currency is properly within the scope of its regulatory and enforcement purview. The CFTC first took the position that virtual currency is a commodity subject to the agency’s authority in a 2015 order settling charges against virtual currency firm Coinflip, Inc.16 Since then, the CFTC has remained firm on that position in statements from commissioners,17 guidance and interpretations18 and enforcement actions.19

James McDonald, director of the CFTC Division of Enforcement, stated that the My Big Coin decision “recognizes the broad definition” of the term “commodity” under the CEA, as well as the CFTC’s authority to prosecute fraud in the virtual currency space.20 Director McDonald likened the My Big Coin decision to that in CFTC v. McDonald, a recent New York federal district court decision that held that the CFTC could pursue a pure anti-fraud action under Section 6(c)(1) and Rule 180.1 against defendants who allegedly operated a fraudulent virtual currency trading scheme and misappropriated money from investors.21

The CFTC will no doubt view the My Big Coin decision as a green light to press forward with its virtual currency enforcement efforts regardless of whether the particular type of virtual currency is subject to a futures contract. And in light of the CFTC’s recent focus on virtual currency fraud, and continued growth and development in virtual currency products and markets,22 those efforts are likely to remain vigorous.

New York Attorney General Report Criticizes Virtual Asset Trading Platforms for Failing to Adequately Protect Customers

On September 18, 2018, the Office of the New York State Attorney General (the OAG) released a report criticizing virtual currency trading platforms for insufficiently protecting customers (the Report), following a fact-finding inquiry by the Virtual Markets Integrity Initiative.23 The Report’s key conclusion is that “[V]irtual asset trading platforms now in operation have not registered under state of federal securities or common laws. Nor have they implemented common standards for security, internal controls, market surveillance protocols, disclosures, or other investor and consumer protections. Accordingly, customers of virtual asset trading platforms face significant risks.”

The OAG launched its Virtual Markets Integrity Initiative in April 2018 by sending letters and questionnaires to 13 cryptocurrency exchanges requesting information regarding their policies and practices. Nine of the 13 exchanges participated in the inquiry.24 The four exchanges that declined to participate claimed that they did not allow trading from New York state.25 Following an investigation into whether these exchanges accepted trades from within New York state, OAG referred three of the platforms (Binance, Gate.io and Kraken) to the New York State Department of Financial Services for possible violations of New York state’s virtual currency regulations.26

The Report comes on the heels of a March 2018 public statement by the Securities and Exchange Commission warning investors about potentially unlawful online trading platforms for virtual currencies.27 It is unlikely to be the last word on such exchanges by regulators who are facing increased calls to regulate cryptocurrencies.

The Report identified three broad areas of concern: conflicts of interest, susceptibility to abusive trading practices, and limited or illusory protections for consumer funds.

Conflicts of Interest

  • The OAG found that there is little information available regarding how the exchanges determine whether or not to list a particular virtual currency on their respective platforms, and none of the responding exchanges conveyed a consistent methodology used to make this determination. The Report also highlighted that cryptoexchanges typically do not disclose whether they receive compensation for listing a particular virtual currency.
  • Several of the participating exchanges indicated that they allow owners and employees to trade directly on their platforms. The Report cautioned that if employees have access to nonpublic information, they may be engaging in insider trading at the expense of everyday investors.
  • A number of the participating exchanges indicated that they engage in proprietary trading on their own platform, to varying degrees. The Report noted that exchanges may thereby be acting as “market makers,” and to the extent that a significant volume of trades are attributable to proprietary trading, this could mask the true liquidity of the exchange.

Susceptibility to Abusive Trading Practices

  • The OAG found that most of the cryptoexchanges do not have a formal policy to monitor and prevent abusive trading. Unlike traditional exchanges, they lack robust market surveillance capabilities to spot and halt suspicious trading patterns, and fail to monitor pump-and-dump schemes.
  • The Report noted that few of the participating cryptoexchanges prohibit “bots” or the use of automated algorithmic trading or trading using application programming interfaces.

Protection of Consumer Funds

  • The OAG explained that there are no generally accepted auditing methods for virtual assets, and cryptoexchanges generally do not have a transparent or consistent approach to independent auditing. Several exchanges indicated that they do not hire independent auditors to conduct audits of their virtual currency holdings. The Report cautions that lack of independent audits makes it difficult to determine whether such cryptoexchanges are responsibly protecting the virtual assets over which they have custody.
  • Most but not all of the participating cryptoexchanges reported that they conduct penetration testing to identify security flaws in their platform. The Report notes that in the event of a hack or unauthorized withdrawal, customers are highly vulnerable.
  • The Report notes that insurance products for virtual currencies are underdeveloped and not well understood.
  • The OAG found that most exchanges do not have formal policies in place to protect customers during outages or trading suspensions, and customers have often been locked out of their accounts and unable to trade. According to the Report, cryptoexchanges have failed to adequately notify customers of any such outages.

Questions Customers Should Be Asking

The Report concludes with a list of questions that customers should consider before transacting with a virtual asset trading platform:

  1. What security measures are in place to stop hackers from unlawfully accessing the platform or particular customer accounts?
  2. What insurance or other policies are in place to make customers whole in the event of a theft of virtual or fiat currency?
  3. What guardrails or other policies does the platform maintain to ensure fairness for retail investors in trading against professionals?
  4. What controls does the platform maintain to keep unauthorized or abusive traders off the venue?
  5. What policies are in place to prevent the company and its employees from exploiting nonpublic information to benefit themselves at the expense of customers?
  6. How does the platform notify customers of a site outage or suspension, the terms under which trading will resume and how customers can access funds during an outage?
  7. What steps does the platform take to promote transparency and to subject its security, virtual and fiat accounts, and controls to independent auditing or verification?
  8. Is the platform subject to, and registered under, banking regulations or a similar regime — for instance, the New York BitLicense regulations?

Ohio Statute Facilitates Development of Blockchain-Based Business

Several states have introduced legislation to facilitate the use of blockchain technology in an effort to attract new technology initiatives to their state. While many such bills remain in committee, or states simply pass a mandate to study the issue, Ohio recently joined Arizona, California, Delaware, Nevada, Tennessee and Vermont by enacting somewhat more substantive statutes.28 Although the Ohio statute did not go as far as Arizona in specifically recognizing the enforceability of “smart contracts,” the statute nonetheless benefits developers by recognizing the use of blockchain technology to store and transmit electronic records.

The statute is actually a minor amendment to its version of the Uniform Electronic Transactions Act (UETA). Forty-seven states have enacted a version of the UETA, the language of which varies somewhat across states. The UETA generally states the following with respect to “electronic records” and other documents in an “electronic form”:

  • A record or signature may not be denied legal effect or enforceability solely because it is in electronic form.
  • A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.
  • If a law requires a record to be in writing, an electronic record satisfies the law.

Ohio’s amendment to its version of the UETA states that a record or contract that is secured through blockchain technology is considered to be in an “electronic form” and to be an “electronic record.” Therefore, records and contracts secured through blockchain technology may not be denied legal effect or enforceability solely because they are in electronic form or because an electronic record was used in the formation of the contract. Similarly, blockchain-based records satisfy written record-keeping requirements under the amended Ohio statute.

Ohio notably omitted language regarding the enforceability of smart contracts in its recent amendment. The term “smart contract” refers to computer code that automatically executes all or parts of an agreement and is stored on a blockchain-based platform. An earlier version of Ohio’s amendment suggested that the enforceability or legal effect of electronic contracts cannot be denied simply because a contract contains a “smart contracts term.” The enacted version does not include this language. However, this smart contracts-specific language may have been omitted on the theory that smart contracts are already enforceable under Ohio’s version of the UETA — which theory has not been tested or conclusively decided in Ohio state courts.

Key Takeaways

Given that contract law is ordinarily a function of state law in the United States, we will likely see further statutory developments regarding the legal effect of blockchain-based records and contracts at the state level. Some have asserted, however, that statutes like those in Ohio and Arizona are primarily marketing ploys to attract blockchain businesses, since blockchain-based systems likely already fell within the UETA’s definition of “electronic record.”

___________________

1 No. 1:18-cv-10077-RWZ, 2018 WL 4621727 (D. Mass. Sept. 26, 2018).

2 The court also ruled that Section 6(c)(1) and Rule 180.1 reached the pure fraud that the CFTC alleged in its complaint, and that the CFTC did not need to additionally allege manipulation. See Skadden’s October 1, 2018, client alert.

3 See My Big Coin Pay, Inc., 2018 WL 4621727, at *1.

4 See id.; see also Compl. at ¶ 2, CFTC v. My Big Coin Pay, Inc., No. 1:18-cv-10077-RWZ (D. Mass. Jan. 16, 2018), ECF No. 1.

5 See My Big Coin Pay, Inc., 2018 WL 4621727, at *1, *3.

6 See id. at *2 (citing Section 6(c)(1) and Rule 180.1(a)).

7 CEA Section 1a(9).

8 See My Big Coin Pay, Inc., 2018 WL 4621727, at *3.

9 See id. at *3 & n.6, *5 & n.8.

10 See id. at *5 & n.8. The CFTC described virtual currency in its complaint as a “digital representation of value that functions as a medium of exchange, unit of account, and/or a store of value,” which “does not have legal tender status in any jurisdiction.” Am. Compl. ¶ 25, CFTC v. My Big Coin Pay, Inc., No. 1:18-cv-10077-RWZ (D. Mass. Apr. 20, 2018). The CFTC cited as common characteristics of virtual currency the use of “cryptographic protocols to secure transactions,” use of “decentralized networks to track transactions between persons who are denominated only by publicly visible strings of characters” and transactions that are “captured in single blocks at a time” that are “confirmed by ‘miners’” who “perform[] algorithmic proofs of work ... for which they are usually awarded a sum of the virtual currency.” Id.

11 See My Big Coin Pay, Inc., 2018 WL 4621727, at *3 (emphasis added). However, the court rejected the CFTC’s argument that My Big Coin is a “good” or “article” and that the commodity definition’s “dealt in” clause does not apply to goods and articles. See id. & n.5.

12 See id. at *4.

13 See id. (citing SEC v. Zandford, 535 U.S. 813, 819 (2002)).

14 See id. (citing United States v. Brooks, 681 F.3d 678 (5th Cir. 2012); United States v. Futch, 278 F. App’x 387, 395 (5th Cir. 2008); United States v. Valencia, No. CR.A. H-03-024, 2003 WL 23174749, at *8 (S.D. Tex. Aug. 25, 2003), order vacated in part on reconsideration, No. CRIM.A. H-03-024, 2003 WL 23675402 (S.D. Tex. Nov. 13, 2003), rev’d and remanded on other grounds, 394 F.3d 352 (5th Cir. 2004)).

15 See id.

16 See In re Coinflip, Inc., CFTC No. 15-29 (Sept. 17, 2015) (finding that Coinflip unlawfully offered bitcoin options and ran an unregistered facility for trading or processing swaps).

17 See, e.g., “Written Testimony of Chairman J. Christopher Giancarlo Before the Senate Banking Committee, Washington, D.C.,” CFTC (Feb. 6, 2018); “Remarks of Chairman J. Christopher Giancarlo to the ABA Derivatives and Futures Section Conference, Naples, Florida,” CFTC (Jan. 19, 2018); “Chairman Giancarlo Statement on Virtual Currencies,” CFTC (Jan. 4, 2018); “Giancarlo Commends SEC Chairman Clayton on ICO Statement,” CFTC (Dec. 11, 2017); “Testimony of Chairman Timothy Massad Before the U.S. Senate Committee on Agriculture, Nutrition & Forestry,” CFTC (Dec. 10, 2014).

18 See, e.g., “Retail Commodity Transactions Involving Virtual Currency,” 82 Fed. Reg. 60,335 (Dec. 20, 2017) (proposed guidance); CFTC, “CFTC Backgrounder on Oversight of and Approach to Virtual Currency Futures Markets” (Jan. 4, 2018); CFTC, “Customer Advisory: Understand the Risks of Virtual Currency Trading” (Dec. 15, 2017); CFTC, “CFTC Backgrounder on Self-Certified Contracts for Bitcoin Products” (Dec. 1, 2017); see also Skadden’s December 26, 2017, client alert.

19 See, e.g., Compl., CFTC v. Blue Bit Banc, No. 2:18-cv-02247-SJF-ARL (E.D.N.Y. Apr. 16, 2018) (alleging virtual currency fraud); Compl., CFTC v. Dean, No. 2:18-cv-00345 (E.D.N.Y. Jan. 18, 2018) (same); Compl., CFTC v. Gelfman Blueprint, Inc., No. 1:17-cv-07181 (S.D.N.Y. Sept. 21, 2017) (same); In re Bitfinex, CFTC No. 16-19 (June 2, 2016) (finding that bitcoin exchange unlawfully offered off-exchange financed retail commodity transactions and failed to register as a futures commission merchant); In re TeraExchange, LLC, CFTC No. 15-33 (Sept. 24, 2015) (finding that swap execution facility failed to enforce prohibitions on wash trading and prearranged trading of a bitcoin swap).

20 Press Release, “Federal Court Finds That Virtual Currencies are Commodities,” CFTC (Oct. 3, 2018).

21 See CFTC v. McDonnell, No. 18-CV-361, 2018 WL 3435047 (E.D.N.Y. July 16, 2018), denying reconsideration in CFTC v. McDonnell, 287 F. Supp. 3d 213 (E.D.N.Y. 2018). See also Skadden’s October 1, 2018, client alert.

22 See, e.g., Sarah Hansen, “Guide to Top Cryptocurrency Exchanges,” Forbes (June 20, 2018) (noting that there are over 1,600 different virtual currencies).

23 The full text of the report is available here.

24 Companies that participated in the Virtual Markets Integrity Initiative are: Bitfinex (operated by iFinex Inc.), bitFlyer USA, Inc. , Bitstamp, Ltd., Bittrex, Inc., Coinbase, Inc., Gemini Trust Company, itBit (operated by Paxos Trust Company), Poloenix (owned by Circle Internet Financial Limited), Tidex (operated by Elite Way Developments LLP) and HBUS (the U.S. strategic partner of Huobi Inc.).

25 Four exchanges declined to participate: Binance Limited, Gate.io (operated by Gate Technology Incorporated ), Huobi Global Limited and Kraken (operated by Payward, Inc.).

26 The regulations are available here.

27 The public statement is available here.

28 The full text of the Ohio statute is available here.

Download pdf

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Skadden, Arps, Slate, Meagher & Flom LLP | Attorney Advertising

Written by:

Skadden, Arps, Slate, Meagher & Flom LLP
Contact
more
less

Skadden, Arps, Slate, Meagher & Flom LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.