26 September 2019

Dear readers

This issue highlights different perspectives on the digitization of the financial sector and the associated regulatory security measures. Thomas Hrdinka analyzes the security risks and limitations of blockchain-based currencies using Bitcoin as an example and concludes that it is only a matter of time before crypto currencies are legally regulated. The key is to determine which measures are necessary and sensible without restricting anonymous payment transactions. As part of his research, Maximilan Schwarzenberger stresses the need for regulatory measures to promote FinTechs in general. The article shows previous approaches in Switzerland and proposes specific targeted measures to promote innovation in an international comparison. In Manuel Stutz's view, Switzerland's good positioning in the regulation of FinTechs is not enough. Rather, he proposes an overall adaptation of the legal framework and as transition he suggests self-regulation of the FinTech market. Does Facebook's new Libra coin herald a new era in digital currencies? Lee Bacon and George Bazinas address the potential of digital currencies facilitating cheaper and faster cross-border money transfers and transforming the traditional financial services and payments industry.

In the Austrian project «Blockchain Grid» renewable energy communities (RECs) are realized based on a blockchain. In connection with this project Stephan Cejka et al. are concerned with the challenges of data protection.

The focus of the lecture on LegalTech at the University of St. Gallen in autumn 2018 was on automated support for lawyers. In this context, Benjamin Camavdic deals with the term «predictive policing» and its areas of application. David Koelliker presents a software solution for automated legal advice.

In the context of «ICAIL 2019 MWAIL Multilingual Workshop on AI & Law / JURIX 2018 Workshop on Legal Data Analysis» Aline Macohin and Cesar Antonio Serbena model and simulate the decision-making and voting behavior of judges in proceedings before collegial courts. Enrico Francesconi introduces a framework for the representation and reasoning on legal provisions, norms and facts in OWL 2, a language for the Semantic Web.

We hope you enjoy reading this issue!

Erich Schweighofer

Editor, ao. Univ.-Professor Vienna, AT

Franz Kummer
Editor, Co-owner Weblaw AG Bern, CH

FinTech and RegTech

Regulierung von Kryptowährungen

Thomas Hrdinka

Crypto currencies carry various risks which cause governments to regulate or even ban them. Building on exemplary weaknesses of Bitcoin, this article aims to highlight various aspects of the need for such regulation in terms of civil and criminal law. (kg)

Regulatorische Massnahmen zur Förderung von FinTechs

Maximilian Schwarzenberger

The financial sector is not immune to digitization and new technologies. Rather, innovative FinTechs put more and more pressure on traditional financial service providers. Regulatory measures were (and still are) necessary to enable FinTechs to enter the market. Following a basic section on banking law, the article shows what Switzerland has done from a legislative point of view to promote FinTechs and proposes further targeted measures. This is further illustrated by crowdfunding. Finally, a legal comparison puts the findings in an international context. (kg)

Die Regulierung von FinTechs aus Sicht des Anlegers

Manuel Stutz

This article shows that the applicable regulatory principles in the financial market are generally suitable for the «digital» financial market. Furthermore, the regulatory challenges will be presented. The focus is on the international competition which shows that Switzerland is well positioned. Nevertheless, the author believes that the actually pursued «quick fix policy» is unsatisfactory. Instead, a comprehensive regulation must be developed. Since this takes more time, (at least) as an interim solution, a self-regulation of the FinTech market is proposed.

Facebook’s Libra: Watershed Moment for Digital Currencies?

Lee Bacon

George Bazinas

Facebook’s Libra, a new global digital currency built on an open-source blockchain, with a payment system embedded into its messaging services, may have wide-reaching implications for finance, in particular cross-border payments. This article addresses the benefits of decentralisation in financial services through blockchain technology. It concludes that, the challenges of regulation and adoption to scale aside, digital currencies have the potential to become the predominate medium of exchange, which could transform not only the financial services industry but also alter the way companies and individuals interact and do business.

Data Protection

Datenschutz in Blockchain-basierten Erneuerbaren-Energie-Gemeinschaften

Stephan Cejka

Franz Zeilinger

Peter Stern

Mark Stefan

Ksenia Poplavskaya

Gregor Taljan

Julia Petek

The revised Renewable Energy Directive (RED II) introduces «Reneweable Energy Communities» (RECs) aiming to improve renewable energy's utilization by exchanging locally – within the community – generated energy. The Austrian project «Blockchain Grid» realizes a blockchain-based REC and validates it in a field test. In this article, the authors take a view on the challenges of RECs' operation regarding privacy and present a privacy-friendly implementation of such a blockchain application.

LegalTech

Predictive Policing in der Schweiz

Benjamin Camavdic

As part of the first LegalTech course in Switzerland, which was held in autumn 2018 by Franz Kummer at the University of St.Gallen (HSG), this paper answers questions on what is actually meant by «predictive policing» and in which areas it is already used today. After a brief look beyond the country's borders, predictive policing is discussed in Swiss law, taking into account the presumption of innocence and the suspicion of the offence.

Automatisierte Rechtsberatung: Urheberrechtsprüfung als Beispiel

David Koelliker

The merging of law and technology, LegalTech for short, will disruptively change jurisprudence. This work shows that legal service providers can gain a strong position in the technology-driven legal market of tomorrow by using software solutions that are already available today. Specifically, BRYTER, a software for automation based on decision trees, is used as an example to illustrate how the claim verification for possible copyright infringement can be automated. (kg)

Legal Informatics

Decision Making Model Applied to Collegiate Courts

Aline Macohin

Cesar Antonio Serbena

This article presents a decision making model of collegiate courts based on logistic regression and decision tree methods to project votes of collegiate members. The model is applied at the level of individual votes and generates information about how different influences can affect the votes within the collegiate chambers. The variables identified as significant in the regression model were the Collegiate, type of defendant and President of Brazil. The percentage of success obtained by the decision tree in the test sample was 81.33% and the regression model percentage of success was 65.4%.

Decidable Reasoning on Provisions and Norms for Legal Information Retrieval and Legal Compliance

Enrico Francesconi

The development of legal reasoning using decidable fragments of Semantic Web languages is essential to guarantee the computational tractability in the in the Linked Open Data cloud. This paper introduces a framework for legal knowledge representation and reasoning based on the distinction between the concepts of provision and norm, suited for different kinds of legal reasoning: legal provisions retrieval and norm compliance, respectively. The proposed framework allows the addressed types of reasoning to be implemented using OWL 2 decidable profiles and reasoners. Examples of decidable reasoning within the proposed framework are presented and tested.

News

Arbeitspapier Kryptowährung

Jurius

The Swiss Federal Tax Administration sets out its current practice with regard to crypto currencies in a working paper. (ph)

Prüfung von Algorithmenanwendung

Jurius

Against the background of possible effects of algorithm-based decisions on the democratic decision-making process, the Federal Government is examining which measures are necessary at national and European level. (ph)

Verantwortungsvoller Umgang mit Künstlicher Intelligenz

Jurius

In autumn 2018, the German government appointed a Data Ethics Commission (DEK) to develop ethical standards within one year and to propose concrete regulatory options in the areas of data handling, algorithm-based decisions and artificial intelligence (AI). (ph)

Online-Verfahren bei Zivilprozessen

Jurius

The FDP parliamentary group would like to know how the Federal Government assesses the results of the «Legal Tech» working group of the federal states on the mandate of the Conference of Ministers of Justice to review the possible introduction of an «accelerated online procedure» in civil procedural law. (ph)

Betreiber einer Website mit «Gefällt mir»-Button kann für das Erheben und die Übermittlung der personenbezogenen Daten mitverantwortlich sein

Jurius

ECJ – The operator of a website that features a Facebook «Like» button can be a controller jointly with Facebook in respect of the collection and transmission to Facebook of the personal data of visitors to its website. By contrast, that operator is not, in principle, a controller in respect of the subsequent processing of those data carried out by Facebook alone. (Case C-40/17)

Deutsche Regelung betreffend Pressesnippets nicht anwendbar

Jurius

ECJ – A German provision prohibiting internet search engines from using newspaper or magazine snippets without the publisher’s authorisation must be disregarded in the absence of its prior notification to the Commission. That provision constitutes a rule on information society services and, therefore, a «technical regulation» the draft of which is subject to prior notification to the Commission. (Case C-299/17)

Online-Plattformen müssen vor Vertragsabschluss keine Telefonnummer bereitstellen

Jurius

An e-commerce platform such as Amazon is not obliged in all cases to make a telephone number available to consumers before the conclusion of a contract. It is however obliged to provide those consumers with a means of communication allowing them to contact it quickly and to communicate with it efficiently.

Sicherheit der 5G-Netze: EU-Mitgliedstaaten schließen Risikobewertungen ab

Jurius

Following the Commission Recommendation for a common European approach to the security of 5G networks, 24 EU Member States have now completed the first step and submitted national risk assessments.

EU-Verhandlungsmandat für Beschaffung elektronischer Beweismittel

Jurius

EU Member States agreed to give two mandates to the Commission to engage in international negotiations to improve cross-border access to electronic evidence in criminal investigations.