Mahmoud Abuwasel: Cryptocurrency Disputes and Litigation

(upbeat music) - Have you tried these on like a video call? - Well, I have, but I would have to have the entire thing connected and then from here going to a video call. But I have, and it sounds amazing, but the problem with really good audio is that whoever doesn't have it, it sounds terrible. - How are you? - Nice to meet you. - It's a pleasure to have you. - What kind? - One keyboard, two. - Yeah. - I was just enthralled by the crispness of the sound. I've never heard myself. - Please tell me that you want it. - I don't know. - We're trying to be professionals here. I don't know if you've ever been on a phone call where the audio is bad or you can't hear them and after a while you, it gets frustrating. - You just stop trying. - Yeah. (laughing) - You do. - Okay. - Okay. So we're just checking levels. - Oh, hello. - Making sure you're okay. - Yes, I am. - Okay. - Perfect. Thank you. - All right, so we'll go ahead and start. - Sure, yes. - Yeah, perfect. (upbeat music) - All right, welcome back to another episode of the African Next Door. My name is Kelly Baleno. We have a very special guest and I'm here with my wonderful co-host. - Hello everybody. Welcome back to the show. My name is Margarita Rango. - In the audience today, we have MacMood Abu Wazel. Am I seeing your name correctly? - Yeah. - So right now you're a partner at Wazel Wazel. - Wazel Scar. - You handle a lot of litigation. You're an arbitrator. You've been an expert witness. And you're in many different fields, but one of the fascinating areas that you're a thought leader in is cryptocurrency. Now, for a general audience who may not have any idea what cryptocurrency is because not everybody does have a crypto account or even realizes what this is, how would you kind of explain cryptocurrencies? - As a firm, we decided to focus on crypto disputes five, six years ago when crypto became mainstream. And the reason is that we saw a lot of talk in the market and district professionals on the crypto industry and where it's going and so on with no clear government guidance. This is back in 2020, 2021. - Oh yeah. - Before COVID even. And I thought, well, that is unforeseeable. But what's foreseeable is that it disputes, right? What forms they will be held in and issues people will be looking at, what evidence trail will likely facilitate or need to facilitate and so on. And look, I can tell you, my exposure to crypto is back in 2012, 2013. I was messing around on the dark web. - As we all like to do at night. - And I'm seeing all the stuff happening. And I'm thinking, how are these people transacting? And Bitcoin kept coming up. - What the hell is this? What's Bitcoin? And I think after a few weeks of dark web that got too strange, too fast, and I can't, I never use it again. (laughing) But I kept looking into it. - It's scary. - Yeah, I mean, it's just, it's not natural to look at daily or anytime, actually. But then I looked into Bitcoin and I started looking. Binding capabilities and hash rates mean and all that. And I ordered the mining grid end of 2013. - I was supposed to get it in a month or two. And it ended up getting delayed and I got in mid 2014. And by that time, operating it would have been at a loss because the hash rates increased. I don't know if this makes any sense. But the more Bitcoin is mined, the more facilities you need to mine it so that it's worthwhile because the hash rates increase. And that company that sold me the miner back then was closed by the Federal Trade Commission. (laughing) I shut down because I guess a lot of people complained, they were sending out their products in time. It was 6, 7 months late. - So the way I understand it then, Bitcoin is a type of cryptocurrency. It's one of, but you were talking about mining it. So is it like gold with a has of value? - The value of cryptocurrency increases with more transactions taking place because when you transact, the crypto doesn't move from A to B. Like on a bus, it dissolves in the sender's control. And then a new set is created in the recipients control. And so the more transactions, the more codes are created, let's say, as opposed to gold, where if you're trading gold on paper, that's maybe some similarity there, but the crux of gold trade would be me giving you gold and you paying me, it's a map, right? And also gold at a geopolitical point there, and with respect to who protects the gold, as opposed to crypto or that question, is not so clear who protects the crypto, right? - That's true because it's not locked away. - Well, it's not so much protecting it and fencing it, but protecting its value. So there's a story, I think during the Roman Empire, the induced region, modern day India, would manufacture their gold and stamp it with the current Roman emperors, the stage. And the interesting question is, well, why would they do that? Because it's the same gold, it's the same value. Why wouldn't you use your own? Well, the reason was, the value isn't so much inherent in the critical minerals itself, it's inherent in being able to protect its supply chain and flow and so on, right? And so gold with the stage of the current empire at the time, maybe more stable, may have more continuity, and so would be more reliable for circulation. That question is a much more difficult question with crypto. - Yeah. Who can protect its circulation and so on? And then you say, well, we don't need to protect the circulation because the whole point of it is that it's decentralized. It's outside the banking system. It's outside any centralized system of control or protection. - And that's where the disputes get complicated. - Yeah, so that would make next questions. And this is where-- - Because you are-- - Or litigation happens or disputes happens. - Well, that's where they get difficult to navigate by methods of standard practice because you're taking this item from supposedly outside the ecosystem and you want to bring it into the ecosystem to resolve your dispute, right? You want to bring it into the courts or into the arbitration forums. And you want to utilize whatever legislation you want to utilize the litigation act, the civil procedures law, the arbitration law, whatever it is. And then you get a judgment and you want to utilize the enforcement systems and the bank systems and so on to collect what you're owed. And so it's really interesting to see how different forums around the world have addressed many, many questions. There's been a recent judgment out of the UK in respect of servicing a party through NFT. - Like giving service or servicing them like-- - Like court summons. - Like a court summons via NFT. - Yes. - Wow. - Can you imagine what that must be like, okay? - You wouldn't manifest these questions until you're put into a situation, right? You're put into a situation while you're pursuing the dispute and you look at all the options. And suddenly the over-tune window expands and you have these new options coming from this system that's been historically outside the standard ecosystem. - So turning then to a book that just has been released, you wrote a book, UAE Crypto Litigation. What was your inspiration to put this book together? - Well, we've been covering crypto judgments from different jurisdictions since, like as soon as we started working on this five, six years ago, while we started investing into crypto dispute practice. And the UAE, the United Arab Emirates, particularly Dubai and Upper Lobby and their financial free zones, the Dubai International Financial Center and the Upper Lobby Global Market. They've had an exponential adoption of cryptocurrency. And right now the UAE is at the latest statistics were at 32 or 33% adoption rate, the highest in the world. Almost double or more than double of the United States. And so there's a lot of economic activity that ends up in the courts with a lot of interesting questions. Every time we've covered a particular item, a development in the courts or so on, a lot of times it goes viral or has more viewership and interest than some of the other items that we're covering. And so you have this jurisdiction that acts as a sort of gap analysis as a case study for other jurisdictions to look at. But the information isn't that accessible, either language wise, right? Or because you need to have the law research tools, right? Your general person, your layman, would not have. And so is there enough information out there that it could be read intelligibly as a whole, right? And so the first thing I did was I took out all the crypto judgments I can find, right? And not all, but it's a 90%. And the really difficult part was seeing if that information could be parametered into a particular journey or someone looking at the information or. Whether it's haphazard is the only way to read an asylum, each information item has to read it on its own or can it be read in a holistic manner. And that's really what took a lot of work. It's structuring the information for someone reading these and then ended up with over 100 judgments. But the difficult part was whether someone reading these 100 plus judgments can do so in a way where if they go from start to finish, they have a holistic view of a particular journey. And then the question is, well, what is that journey? And the journey for being thematic with the book is the litigation journey. First, you want to characterize what you're bartering or what you're trading with. Then you want to characterize the underlying agreement. I bartered this or I traded this. Is it actually an agreement? Is there an agreement at all? Is it a partnership agreement, a management agreement, an investment agreement, and then looking at the appropriate forum, and looking at liability, establishing who could be liable and then the evidence established that liability and then enforcement and collection and then if there is any fraud and so on. And so that made sense. The judgments could be the subject matter and the court rationale and so on. Could be distributed in a way that it's the life cycle of dispute journey through these chapters. You could read it holistically in that manner, but then there was another problem. And the first problem was, can you read this as a journey? You want to read a book, you want to go from start to finish. The second problem was, well, what if you don't want to? You've got 600 pages here. You're a busy professional. Maybe you don't have time to sit down and read. As much as we would want to. Everyone wants to, but time is a finite resource. So, well, maybe they want to use this as a resource model. Is there enough variation in the issues brought to courts and the court rationale and so on that it could be topically variable enough that you would look at it for different sets of problems and then it would be worth the money to buy. Because you may buy it and put it on the shelf, not read it immediately and say, there's enough there that I can have this on the shelf for a year or two or three and refer to it every now and then. Because there's enough topical variation in there. And so if you go through the chapter titles, you'll get an idea of how everything's in there. But that will make a very helpful for students and professionals. Like, were you the order to have this source where you can get everything you need from, you know, that makes it easier to teach a class, to learn. I mean, either students that want to learn about crypto or professors that want to teach about crypto and don't have cases or mining ideas. You should hear some of these chapters. We have the burden approved for wallet ownership. There's already so many questions I would have that are on. What forcing unlicensed management agreements, step innovation in crypto trading. I mean, you're going into very interesting topics and cases, coercion and robbery using crypto assets. Militious, that are also not easy to find. I think this would be relevant and helpful to us. I would like to know malicious prosecution in mining disputes. But are you really fascinated to know more about all of these topics? So I think there's a lot of great areas of interest here for many different people thinking about different perspectives. You have titles here about fraud and Bitcoin and liability transactions. Like, yeah, so it sounds like there's a lot of areas, a lot of great things that you've covered in this book. So I hope that some people find something that they're actually interested in. Not only that, like learn a little bit more about this type of litigation because I up until I had met you, I even know there was crypto litigation that was out there. It's a growing market. Many disputes are resolved in arbitration. Our months of disputes though in the UAE or our other countries handling these kind of disputes. Oh, well, not there all over. Singapore, Hong Kong, London, the UAE is unique because of the higher adoption rate. Okay. And that's why you chose the UAE for your book. Well, that's one of the reasons, right? The other reason is if someone else wanted to look at the information, then it's not as accessible because of the language barrier or the usual. I mean, if you have a West law subscription in the US, you can easily expand it to include the UK. You can easily explain it to include Australia, right? West law doesn't do that for UAE court judgments. They're issued differently. Alexis Nexus has a system. Now I'm promoting it. But the point is it's a different resource database and they're even better ones that are grassroots from the country of the region for that information. So for the outsider, if you're a practitioner on the outside, it's not as easy to extract the information. And then there's the actual subjective understanding of these judgments. This is civil law jurisdiction. And so you need to understand the predisposition of the judge. Of the judge. When reading the judgment dozens or hundreds of pages long, there's a philosophical explanation to the rationale. And these are civil law based on the statutes. So you need to know what the statutes mean. And to know what the statutes mean, you need to know the legislators, legislative intent behind the statutes and so on. So you need also to have that market experience. To be able to translate the information for the average reader. That's very interesting. Is this translating civil law? You are easy with law to come on law. That makes it easier for people who are commonly working in come on law to get access to that information. Yeah. Yeah, I think I see some great value in it. So congratulations on some releasing this book. I'm sure it's going to be very useful. But when you were younger, what do you want to be a lawyer? I don't. I can't. I don't think I, I think I thought things would work themselves out. Sometimes it's even better not to have a plan. Yeah. I'm in a good life. Go with scores. I was having fun. I was having a good time and things would work out. I did well in school, right? I did well. You went to school in Canada? That was a different place. The US. Yeah. And the GCC as well. But when I started practicing, I had a good feel for TMT at the time. I don't know if that's still the common practice area name, technology, media, telecommunications. I think now it's a lot more diverse. Now you have AI practice areas and web 3.0 practice areas and so on. But 15 years ago, TMT did a lot of work. Did work for Snapchat, for Amazon. You mean unique things like geolocation and geotagging and all the social media apps and to you've always been very involved with technology. At the time, I wasn't a decision maker, but I had a feel for this. I would build good hours and clients were happy and so I did more of that work. My understanding is that crypto, it's untraceable. Then if it's untraceable, how do you claim? How do you know who to pay what it's owed? If you want to talk about investment arbitration, traceability wouldn't overlap with arbitration. Right? If you're pursuing because you have an arbitration agreement, then it's about proving you're right. The traceability issue comes in scam fraud, cross-border crime. Traceability and an arbitration dispute, there could be a situation where you are a user of one of the large exchanges and by virtue of being a user, you have an arbitration agreement. And aside from that fact, separately, you get scam from someone completely unrelated. But then you trace the funds and coincidentally, they're at the exchange that you are a user of. Right? And so I imagine that would be a situation where there would be an overlap between scam and tracing and arbitration, whether that situation was followed within the arbitration agreement. That's a different question. It's a fantastic question because you've identified the two sort of verticals and crypto disputes. One is quasi-crime, right? The two sort of disputes and fraud. And now in the US, the nomenclature for what's happening is a pig butchering. That's a terrible name. I've never heard of it. It's used by the judges on the courts. I have five judgments, let's say. Pig butchering. Yeah. Interesting. That's in the judgment, everyone knows what the judge is talking about. What it is is when a victim is lured into making a minor investment and then they get a little bit back, they make a little bit more, they get a little bit more back and so on. So someone is asked to tell if you put a thousand, it's a great investment. They put a thousand, they get two thousand back. And then there's a well, it was great. Put five down, they put five, they get ten back. And then they're told, how about you put 50? Right. They put 50 and the money disappears. And it's done and it's done through different mediums. And I've got one of these cases in the book, by the way, in the UAE. The United Arab Emirates, a case that happened in that sense where someone is told. Then money through WhatsApp and then do a YouTube tutorial, pay for it this much and then invest money here. And usually the end platform is some sort of fraud website. Right? This website looks completely legitimate and so on but the money goes into a black hole and the best it never shows up again. So there's a lot of that happening. There are a lot of victims making their claims, winning their claims because the fence never show up. And the crypto technical experts who we work with a lot are able to trace those funds and find where they land at what exchange. Like a bank? No. It's like crypto.com or Binance. So these are exchanges. Yes, yes, yes. Binance has the 300 million users. It's like the stock market exchange for crypto. Yes, exactly. Exactly. But anyway, the crypto's traced and it's found that it's particular exchange or somewhere else. And an American judge and whatever district issues of judgment and says this victim has been scammed with a million dollars. And we know that assets have landed here at this exchange or this company and you're instructed to either hold a million of constructive trust is established or tear it down the way. But the entity that's received the crypto assets, they're not in the US somewhere abroad. And that's where a lot of difficulty is and the cross-porter stuff. Now I haven't seen an ISDS claim related to crypto so far. No, I haven't heard about it. I think-- You never truly-- Yeah, well, I'm sure we will. We will find eventually. Yeah, I think so too. Yeah. This crypto topic makes me think a lot. I have a lot of questions. I'm definitely reading your book by the way. But now I'm thinking, do you think there's any BAT that talks about crypto or understands? Crypto per se as an investment? I haven't seen one. They're making their way into a tax radius. You see? Interesting. Interesting. Information sharing or double taxation and so on. You will find language coming up more and more that addresses digital assets. Governments are looking at-- And how they tax digital assets with their crypto or whether it's NFTs or whatever. And so a lot of trees are being renegotiated, as you know. That the lens is renegotiating everything in India as well. And so language is making its way into-- From a tax perspective. I think you'll be smart. Not so much as a standard investment. The investment percentage will just cover everything. But from a tax perspective, they are like trying to identify. Or governments are trying to identify digital assets within the tax. Generally, what advice would you give students who are interested in crypto litigation? The very nacular around the crypto industry is very noisy. And the language is not very sophisticated most of the time. And so I would advise students to watch hearings, read transcripts and judgments from common law jurisdictions, London, the DIFC, that's the Dubai International Financial Center. Their hearings are recorded and students can watch them. There was a recent five-day hearing in which my book was referenced. So a student has five days' worth of hearings where they can watch these very senior English baristers, King's Council advocate for a very intelligent judge. And you can see there the vernacular being used in the crypto industry. It's very serious, very sophisticated. And that should be what populates a student's mind. As a student, that should be what populates your mind to help you create an inner monologue or an introspect towards the crypto industry. So that when you speak of it or think of it, you do so in a serious and intelligible manner. There are live recorded hearings, there are transcripts, the court sub transcripts here, the judgments and so on. And from the common law jurisdictions as well, across the board, that should be the resource model. And because the discussions are advocacy, everyone's philosophizing. Yeah, you're bringing your own philosophy into the judges, bringing their own philosophy into it and so on. But what that does is for a student, it helps them create their own frame of reference, not parrot, what is being said or written or so on. But when that's the resource to an extent, it helps the student develop their own unique perspective on things, their own voice and from their have their own clients and their own business and so on. Which case in your book will you say that someone like me who is new to crypto can breed and have a good understanding on how crypto disputes work? If there was an answer to that question, the book would be one case. [LAUGHTER] There are seven years worth of cases here. And so you're looking at the evolutionary lifecycle and we're still in the evolutionary lifecycle. But then there are things that are topical. I mean, now there's a case where someone tried to get out of the crypto deal because of the Russia Ukraine war. And now we have much more severe geopolitical instability. And so we have some foresight into, well, if you have some crypto transaction taking place and it's disrupted, what do you expect the court to say? What's your evidentiary threshold? How do you have standing with grounds can you rely on and so on? So things are topical. And there could be either a macro economic issue that's topical. Or it could be my personal. Just in your industry or in your particular service line and so on. But just to finish, I would like to know you're saying that this crypto industry can get very noisy. And I'm sure it can get stressful eventually. How do you distrust? How do you relax? How do you recharge your energy after a hard day of work? Well, I've got five kids. I've got two boys and three girls. And whatever free time I have, I try to spend with them. But also sometimes they want to do repeatedly boring things. So I try to get them interested in more exciting stuff. So last year, they were four. We built a skateboard. Oh, nice. We built two quarter pipes in Spain. Grind rail and everyone gets on the skating fine. Nice. And then last year, we got a drum set. So everyone could start drumming. I ended up being a really good drummer. I didn't know I had a talent. I can drum really well. Because I used to skate when I was in college. So I spent my time with the kids mostly. The girls-- this is all fun for them. They just rather go to the mall. Whatever we do-- I understand that. Whatever we do, I'm way over much fun it is. At any point, say, well, I go, yes, please. Hey, well, I go to the mall, yes, please, please take me. Otherwise, if I want something more calm, like reading, then I would be-- I'm not reading much fiction or nonfiction. I'm mostly reading judgments. And put colleagues are working on in different places. There's a lot of interesting things happening all the time. Different jurisdictions. I think thought leadership online is becoming a bit difficult to navigate. There's a lot of AI clop out there. And it's becoming more and more difficult to find a raw voice, as opposed to just reiteration of something new happening. But you can usually pick up when it is a raw voice song, writing what they really see. But that's how I-- I guess, distressed, as you would say. Well-- Anyone who's interested in the book, where could they actually find your book now? It's available on uaicryptolitigation.com. And you can see a preview of the book. See a couple of chapters. You can order it, access the companion podcast for the book through the website as well. We have quizzes that will be available soon. And the purchase or delivery is available worldwide. Thank you so much for coming. Mahmouda was a pleasure to have you. Thank you for being a raw voice on this one. I'm going to cry. Very welcome. Thank you. Thank you. [MUSIC PLAYING] (upbeat music)