In 2023, Jurat demonstrated its importance in the blockchain industry’s legal sector when it was used in a US federal court to freeze multiple suspect Jurat wallets. To gain a deeper understanding of Jurat, Legal3, and how this legal framework can improve the security, fairness, and accessibility of the blockchain space, let’s closely examine this case study.
Jurat and JTC Explained
Jurat provides technology that brings legal protections to your cryptocurrency transactions by bridging the blockchain to state and federal courts. We call this technology “Legal3” because it creates new use cases for blockchain by strengthening the relationship between cryptocurrency and the law.
Jurat has introduced these new capabilities to the cryptocurrency community by incorporating Legal3 into the Bitcoin core software. The result is a new branch of Bitcoin called JTC. Like prior Bitcoin branches (BTC, BCH, and BSV), JTC maintains the fundamental protocols for decentralization specified by the creator of the Bitcoin software, Satoshi Nakamoto, including a hard limit of 21 million coins to prevent inflation, and the ability to avoid intermediaries by self-custodying assets.
Jurat adds the Legal3 protocol for users to protect their legal rights in digital assets through on-chain enforcement. The core protections that Legal3 provides:
- Freezing disputed JTC assets.
- Recovering lost or stolen JTC assets.
- Enforcing remedies for legal recourse in JTc transactions.
JTC offers all the utility of Bitcoin combined with legal remedies.
Jurat, US Courts and On-Chain Enforcement
A recent case in the United States demonstrates Jurat’s effectiveness for on-chain legal protections. The case involved an international crypto fraud network that included the North Korean state-sponsored ‘Lazarus Group’ and over a dozen other sanctioned criminals.
The focus of the case was cryptocurrency accounts containing JTC that the criminals had stolen and obtained through other illegal activities.
The U.S. federal district court utilized Jurat’s Legal3 technology to resolve the case. The court entered a judgment to freeze the coins to comply with the law. However, the judgment included a unique feature only available with JTC – hash codes that informed the JTC blockchain what the court had decided. When the JTC nodes were informed of the order, they reviewed it for the hash codes and automatically ensured that the blockchain followed the law. The result is that JTC miners kept the criminals from using the ill-gotten funds while using only Nakomoto consensus and avoiding intermediaries. The importance of this result cannot be overstated!
Legal3, closing the gap between blockchains and law
The case result demonstrates the power of Legal3 technology to move blockchain forward and bring about mass adoption of cryptocurrency, digital assets, and DeFi.
Legal enforcement is vital to commerce and every other human endeavor. For example, a buyer and a seller both need to know that their legal rights are protected if the other side fails to perform fairly, or they will not enter into a deal in the first place. This presents a problem for bringing commerce on-chain and impedes those who wish to adopt blockchain and digital assets.
Legal enforcement typically occurs through intermediaries, which are absent from decentralization by design. For example, by transacting through a bank instead of directly, the bank customer can reverse a transaction in case of fraud or if something goes wrong. But, by using a bank, they have to give up the benefits of decentralization that Satoshi demonstrated. Crypto custodians do not change this scenario. They are simply another intermediary stepping into the role of the bank. Accordingly, to become a cryptocurrency user, it was necessary to cross the line into a system where one sacrificed their legal protections if they were victimized by fraud, hacks, and mistakes. Most people are not willing to do that, and so cryptocurrency adoption has lagged.
Legal3 solves this through decentralized law enforcement as decided by actual judges and courts. Every Legal3 user is, therefore, protected by the rule of law while doing business in the decentralized realm that Satoshi invented.
Lessons Learned From The Jurat Case
The Lazarus Group demonstrates the significant potential of blockchain-driven legal solutions. The inherent immutability of blockchain transactions has made Web3 an attractive platform for criminals and hackers. In the absence of comprehensive Web3 regulation, the adoption of blockchain technologies remains hindered as individuals are reluctant to embrace cryptocurrencies due to the associated risks. However, Jurat shows a way to bring legal protections to the blockchain without compromising the core values of the decentralization that Satoshi invented.
Furthermore, this case underscores Jurat’s ability to safeguard individual users in the crypto space. Every year, crypto scams, rug pulls, and fraudulent ICOs result in significant financial losses. Jurat technology empowers individuals to retrieve their $JTC from fraudulent actors and enhances the industry’s safety by deterring further scams.