Law, Society & State: Derivatives Law & Crypto Contracts

Introduction course – Derivatives products have exploded in the last 30 years from being used for important risk hedging in the institutional sector to large speculative trading.  We are now seeing a similar explosion of activity for retail investors particularly in the crypto trading area.
 
This is a two hour weekly seminar that provides a history of the development of derivatives,  and overview and explanation of derivatives and derivatives regulation in Canada and internationally, including crypto assets and the regulation of crypto trading, from the perspective of a regulator. We will review the Ontario Securities Act, regulations and policies, as it relates to derivatives and also look at futures oversight under the Commodity Futures Act and have an in-depth discussion of the post financial meltdown derivatives regulatory reform.  We will also provide an introduction to documentation of OTC derivatives.
 
We will examine blockchain technology and how it is used in crypto contracts and currencies, Defi, NFT’s, stablecoins, and staking. We will review the developing oversight regimes for these products and participants in Canada and internationally.  We will discuss the gaps in regulation in this area and look at the Canadian Quadriga and the FTX collapse examples to assess the risks involved in trading in these markets and the role of regulation to prevent further investor losses.
   
In a fast developing new area of the law this will provide students an up to date discussion that will be adjusted through the course to accommodate new developments, particularly as it relates to the oversight of the crypto markets.  We will also ask questions regarding these new volatile markets like: Is there anything underlying these assets?  Is this the present day version of tulip mania? Will crypto currencies be around for decades or will they be short term speculative investments that benefit some to the detriment of many?  Or are they the future that will replace sovereign currencies and provide cheaper sources of payment that will remove the costs associated with financial intermediation from Banks?  Who should invest in these products?  Who shouldn’t?
The goal is to have students leave the course with a solid grounding in derivatives and crypto trading and the related areas of law.  We will use a multi media approach using a variety of related printed and online materials.  There will also be expert guest lecturers for some of these topics.