Deepfakes, Risk and Liability

“A lie gets halfway around the world before the truth has a chance to get its pants on.”

– variously attributed

As artificial intelligence (AI) advances it creates both benefits and dangers, and few applications illustrate that fact better than the emergence of “deepfakes.” A portmanteau of “deep learning” and “fake,” deepfakes are AI-generated audios or even videos of real people saying fake things. While, in the case of videos at least, it is still reasonably easy to distinguish between a deepfake and the genuine article, the gap is narrowing and it may not be long before seeing is no longer believing.

Read More

Canadian Competition Bureau Calls on Businesses to Provide Information on Anti-competitive Conduct in the Digital Economy

Like regulatory agencies everywhere, Canada’s Competition Bureau (the “Bureau”) is grappling with the fast-changing digital economy and its implications for competition and innovation. The development of new technologies, their rapid uptake by business, and the deployment of new data-driven business models has left regulators – chiefly privacy and competition regulators – examining whether these new types of business models now pose regulatory threats not previously appreciated.

On May 22, 2019 the federal government unveiled a Digital Charter with 10 principles by which the government proposes Canada should adapt to an economy characterized by artificial intelligence and data-driven products and services.

Read More

Use of AI Algorithm Triggers Lawsuit and Countersuit

As artificial intelligence (AI) becomes less of a curiosity and more of an everyday tool, disputes are increasingly arising over its operation and, when things go wrong, the question inevitably arises: whose fault is this and who’s liable? One high-profile example is the ongoing dispute between Hong Kong businessman Samathur Li Kin-kan and London-based Tyndaris Investments, in which Tyndaris is suing its client for $3 million in allegedly unpaid fees. In a countersuit, Mr. Li is claiming $23 million in damages allegedly resulting from Tyndaris’ use of algorithmic trading in managing his portfolio.

Tyndaris Case

The dispute centers around whether Tyndaris misled its client as to the AI’s capabilities, which means that the AI’s performance itself will be adjudicated.

Read More

NextBlock Global Limited and CEO to Pay $1M for Misleading Investors

On May 13, 2019, the Ontario Securities Commission approved a settlement agreement in the matter of NextBlock Global Limited (“NextBlock”) and its Co-Founder and CEO, Alex Tapscott. The settlement agreement acknowledged that Mr. Tapscott and NextBlock violated subsection 122(1)(b) of the Securities Act by making false representations in an offering memorandum used to solicit investors.


NextBlock was launched in 2017, and raised $20 million via convertible debentures – a type of debt instrument – to invest in blockchain companies. In order to solicit funds from investors, Mr. Tapscott and other NextBlock principals claimed that as many as four prominent individuals in the blockchain industry were serving as advisors to the firm.

Read More

Privacy Commissioner Proposes Consent be Required for Transborder Data Flows

On April 9, 2019, the Office of the Privacy Commissioner of Canada (“OPC”) announced it would be holding a stakeholder consultation on transborder data flows. The consultation paper (“Consultation Paper”) proposes a reversal of the two-decades old existing policy on consent.

However, the Consultation Paper simply stated the OPC’s position and invited the public’s views, with no indication of why the OPC thought the change was necessary or what the key issues were. Shortly thereafter, the OPC then issued supplemental consultation paper (“Supplemental Consultation Paper”), in which the OPC provided its rationale for its about-face, and posed specific questions for stakeholders to consider.

Read More

Securities regulators provide guidance on coin and token offerings

On June 11, 2018, the Canadian Securities Administrators (CSA) released CSA Staff Notice 46-308 – Securities Law Implications for Offerings of Tokens (Notice) providing guidance on the applicability of securities laws to offerings of coins or tokens, including those commonly referred to as “utility tokens”.1

While the tone of the Notice suggests that the CSA considers most crypto-coins and tokens to be securities, it includes guidance as to when they might constitute mere utility tokens not subject to securities laws. This note discusses and provides context on the key points in the Notice, including:

  1. The existing “investment contract” analysis will often guide regulators in determining whether an offering involves a security, i.e.,
Read More