Block & Order Weekly Docket (March 23, 2026)

Zack Shapiro, founder of Raines LLP, joins hosts Kyle Lawrence and Moish Peltz for a revealing discussion on how artificial intelligence is transforming the legal profession. They explore how new AI tools are transforming workflows, the rise of “Claude-native” law practices, and why judgment and decision-making skills remain crucial for lawyers in an AI-driven future.

🏛️ Crypto Policy & Regulation

• The Taxonomy Has Landed: 16 Crypto Assets Are Now Commodities. On March 17th the SEC and CFTC just released a 68-page joint interpretation explicitly designating 16 digital assets (BTC, ETH, SOL, and thirteen others) as digital commodities, not securities. The interpretation also carved out staking rewards, mining proceeds, and airdrops from securities treatment. Chair Atkins said: “most crypto assets are not themselves securities,” and investment contracts “can come to an end.” This provides clarity that tokens which launched as securities can graduate out of that designation. The Howey test now has a new limiting principle, and enforcement actions premised on “crypto = security” have a shelf life. Separately, Chair Atkins clarified that NFTs “typically fall outside securities laws” (though “typically” is doing a lot of work in that sentence). Commissioner Peirce is meanwhile continuing to tell tokenization projects to “come in and talk to us.” CFTC Release No. 9198-26 | Bloomberg
• CFTC Blesses Self-Custody: Phantom Gets No-Action Letter. The CFTC issued a no-action letter (Release 9197-26) to Phantom Technologies confirming that self-custodial wallets can facilitate trading with registered FCMs without registering as introducing brokers. This is a clear signal that non-custodial infrastructure isn’t regulatory intermediation. CFTC Release 9197-26 | CoinTelegraph
• CLARITY Act Breakthrough: Stablecoin Yield Survives? Senators Tillis and Alsobrooks reached an “agreement in principle” with the White House on the CLARITY Act’s stablecoin provisions. The fight was over whether crypto exchanges can pay yield on stablecoins. Banks wanted it dead over deposit flight concerns, while crypto industry wanted it blessed. Trump sided with innovation over incumbents. The compromise language reportedly “prevents widespread deposit flight while protecting innovation,” which sounds like everyone gets to declare victory while kicking the real fight down to rulemaking. Still, this unblocks what’s been frozen since January, and the actual bill text will be the test. DL News | Politico
• Kalshi Under Siege: Federal Appeals Lost, State Criminal Charges Filed. Prediction markets are getting hammered from every angle simultaneously. The Ninth Circuit denied Kalshi’s administrative stay motion, clearing Nevada to pursue a TRO blocking Kalshi from statewide event contracts and remanding to state court. Meanwhile, Arizona’s AG filed criminal gambling charges. Argentina blocked Polymarket entirely. The legal theory that CFTC-regulated contracts preempt state gambling law isn’t holding up well outside federal court, and the multi-jurisdiction exposure is metastasizing. CoinDesk | 9th Cir. Order | CoinTelegraph (TRO) | CoinTelegraph (Arizona criminal) | The Block (Argentina/Polymarket)
• Fork Proceeds Are Taxable Income (Sorry, OGs). The U.S. Tax Court denied partial summary judgment for two early Bitcoin adopters sitting on ~$12M in coins from nine hard forks (2017-2018). Judge Buch found they failed to prove lack of “complete dominion” under Glenshaw Glass. The taxpayers argued forked coins appeared involuntarily in wallets they couldn’t access. If you could theoretically claim it, you owed tax on it. Miranda v. Commissioner, No. 17513-24 (T.C. Mar. 18, 2026). The “I didn’t ask for this” defense is nearly dead. Bloomberg Tax | Opinion
• New York Moves to Tax QSBS Gains. New York is advancing a budget proposal to decouple state tax law from the federal QSBS regime under IRC §1202, which would eliminate the state-level gain exclusion for qualified small business stock. As currently written, the decoupling would apply retroactively to January 1, 2025. If enacted, founders with New York exits would owe state tax on gains already excluded federally, potentially turning long-planned liquidity events into surprise tax bills. The provision is in the Senate’s one-house budget; the April 1 budget deadline is the countdown clock. Founders with imminent exits should be talking to counsel now. JD Supra

⚖️ AI Law & Liability

• Federal AI Preemption: Washington Wants the State Patchwork Dead. The White House released a legislative framework March 20 explicitly calling for federal preemption of “burdensome” state AI laws. Senator Blackburn dropped companion legislation promising to protect “children, creators, conservatives and communities” (quite a coalition) by wiping out state requirements. Meanwhile, Washington and New York passed new chatbot disclosure laws the same week. The race is on: does Congress preempt before the state patchwork metastasizes, or do states establish facts on the ground first? Neither outcome is clearly good for compliance departments. Law360 (White House) | Law360 (Blackburn draft bill) | NYT | State Law Tracker
• Delve’s “Fake Compliance” Scandal: AI Compliance Theater Gets Exposed. YC-backed Delve ($32M Series A, ~$300M valuation) is accused of generating fabricated compliance evidence ( fake board meeting minutes, rubber-stamp audits, certifications for processes that never happened) potentially exposing hundreds of clients to HIPAA and GDPR liability. Delve denies everything, calling the accusations “misleading.” If even half of this is accurate, it’s the nightmare scenario for every tech company that outsourced compliance to automation (not to mention companies relying on faulty SOC2 statements). TechCrunch | Substack (DeepDelver)
• Britannica Sues OpenAI for Plagiarism and Making Things Up. Encyclopedia Britannica (which owns Merriam-Webster) filed suit alleging “massive copyright infringement” from ~100,000 scraped articles, plus Lanham Act violations for hallucinated content falsely attributed to Britannica sources. The false advertising claims premised on hallucinations make this case novel. The complaint targets RAG workflows and alleges infringement at inference time, not just in model development. The trademark angle is clever: when your model invents citations to real publications, that’s potentially false advertising, not just bad AI. TechCrunch | Complaint | Law360
• Super Micro Co-Founder Charged in $2.5B AI Chip Smuggling Scheme. DOJ dropped criminal charges against Super Micro co-founder Yih-Shyan “Wally” Liaw and two associates for conspiring to route $2.5 billion in Nvidia GPU-packed servers through Taiwan to Southeast Asia and ultimately to China, evading export controls. One defendant remains a fugitive. This is the highest-profile AI chip export enforcement action to date, and it signals that DOJ is treating compute smuggling as serious national security crime. Time to audit your supply chains. Bloomberg
• AI-Generated Music Fraud Gets First Major Criminal Conviction. A North Carolina man pleaded guilty in SDNY to using AI-generated songs and bot farms to inflate streaming royalties and forfeited $8M in earnings. This is the first major criminal prosecution of AI-assisted streaming fraud, and creates precedent for treating synthetic content manipulation as a federal crime. Law360
• AAA’s AI Arbitrator: Intriguing, But Nobody Wants to Go First. The American Arbitration Association launched an AI arbitrator for documents-only construction disputes, and the legal profession is intrigued but paralyzed. The first-mover liability exposure is obvious: if you’re the first to use it and lose, you’ll spend the next year explaining to your client why you trusted a robot. The harder question nobody’s asking yet: is an AI arbitration award judicially reviewable on the same manifest disregard grounds as a human award, or does the FAA framework need to be rebuilt from scratch to accommodate it? Law360
• Colorado Gives AI Legal Tools a UPL Safe Harbor. Colorado’s Office of Attorney Regulation Counsel adopted a first-of-its-kind “nonprosecution policy” deprioritizing unauthorized practice of law prosecutions for AI legal tool developers who expand access to legal services for low- and moderate-income users. The logic: these tools aren’t practicing law, they’re expanding access to it and prosecuting their developers doesn’t serve the public. While courts sanction firms for misusing AI, regulators are starting to carve out space for AI to help the underserved. ABA Journal

📚 Sunday Night Readers

• Nifty Gateway Closes — NFTs’ Retail Moment Is Over. Nifty Gateway’s shutdown is a milestone worth marking. The infrastructure built to serve a speculative retail moment is unwinding, and the legal questions about abandoned digital assets, orphaned smart contracts, and platform liability for promised future functionality are just getting started. No platform lasts forever (but the NFTs might?). The Art Newspaper
• The Great AI Disconnect: Law Firms and Clients Aren’t Talking. Thomson Reuters Institute survey: 68% of corporate legal departments have no idea whether their outside counsel are using AI on their matters. 85% of both sides admit they aren’t measuring it. This is a trust and governance gap, and will create some uncomfortable billing conversations when clients figure out they were charged 20 hours for a memo that took 45 minutes. The firms that get ahead of this conversation now will own the ones that don’t. Thomson Reuters Institute
• The New York Congressional Race Turns Into an AI Proxy War. A New York congressional race has quietly become a battleground for AI lobbying and midterm strategy. This means AI is moving from a policy debate to a genuine electoral wedge issue (like crypto in the last cycle). WSJ
• The Hawk Tuah Postmortem: Traumatized and Still Liable? Hailey Welsh says the $HAWK memecoin collapse “traumatized” her. The legal exposure for celebrity token promoters still isn’t fully resolved (and sympathy isn’t a defense to securities fraud). CoinTelegraph

Block & Order Weekly Docket | Week of March 16–22, 2026

For legal professionals navigating crypto, AI, and emerging technology law. The materials in this article are for informational purposes only and are not legal advice. Do not act upon this information without first seeking advice from an attorney licensed in your jurisdiction.