Why The Open Internet Matters for Blockchain: Lee Schneider on Avalanche’s Advocacy

In this insightful episode, Lee Schneider, General Counsel at Ava Labs (the company behind Avalanche), joins hosts Kyle and Moish to explore how blockchain companies balance innovation with compliance, global regulatory alignment, the importance of token classification, and the future of financial infrastructure.

Lee shares insights from his work bridging regulators and builders, the role of custom blockchains, stablecoin regulation, and why tokenization is shaping the future of finance. He also discusses the challenges around the Howey Test, the Clarity Act, and why open access to the internet is critical for blockchain innovation. The conversation also covers what it will take to bring true clarity to the digital asset space.

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Please note that this show is meant for informational and entertainment purposes only. This is not legal advice. Please hire your own attorney. The hosts or guests appearing on Block and Order may hold cryptocurrency, NFTs, or other digital assets from companies mentioned during our programming. This possession of digital assets does not constitute a professional endorsement, legal advice, or financial advice. Listeners are encouraged to consult with their own legal and financial advisors for personalized guidance in the blockchain and cryptocurrency space.

Transcript

Lee Schneider [00:00:00]:
From my perspective, the Howey test is actually not that hard. What's been hard is convincing people to give a diligent application of the law as opposed to trying to use the Howey test to shoehorn anything they want into the definition of investment contract.

Kyle Lawrence [00:00:34]:
So when we think about all of the guests we've had on block and order over the few years that we've been doing it, we've had gcs, we've had project founders, we've had people in government. But I honestly think when I was looking over your bio, you might actually be the most interesting person because you're in the sweet spot, right? You have the unenviable task of explaining decentralized tech to regulators, which I don't understand how you do that. And then you have to turn around and explain the ensuing regulations to the actual crypto founders, often in the same meeting. How do you, how do you. I don't even know how to ask that question. How do you do that?

Lee Schneider [00:01:11]:
I mean, the short answer is I'm very simple minded, so I like to make things in bite sized chunks for my own brain. And so I'm pretty good at, because I got to make it into bite sized chunks for this. I'm pretty good at making it into bite sized chunks for everybody else. But that's a, you know, that, that's a, that's a skill that I have developed over, over the years and it's finally serving me well to be simple minded.

Kyle Lawrence [00:01:44]:
Pretty, pretty salient advice there for all you junior associates out there. Pay crystal clear attention to that because that's, that's, that's better the life advice than I could possibly give. So thank you. That is a, a wonderful segue into our introduction. Block and order is very pleased to welcome Lee Schneider. Lee is the GC at Ava Labs, the company behind the Avalanche ecosystem. And his main task is helping shape how digital asset companies navigate U.S. law.

Kyle Lawrence [00:02:12]:
And I was thinking of a title. The one that popped in was Building Building the Future while being Compliant in the Present and a self described tokenization General Nuisance, which I absolutely love. Let's give it up for a warm B and a welcome for Mr. Le Matter.

Lee Schneider [00:02:27]:
Thank you very much. Very happy to be here and really appreciate you all inviting me to be on the podcast. Yeah, when people ask me to introduce myself, you know, I say general counsel and general Nuisance. So it's a nice symmetry there.

Kyle Lawrence [00:02:43]:
We may just flash General Nuisance up whenever we post your name on the screen, please.

Lee Schneider [00:02:46]:
No one's ever done yet,

Kyle Lawrence [00:02:50]:
so Wonderful things going on at Avalanche over the past year or so. My understanding is you've been there since 2021, but just in the 12 months with coinciding with the new administration and a gentler, friendlier SEC and CFTC. Avalanche has seen the Avalanche 9000 upgrade launched on mainnet, reducing transaction costs. Network transactions have surged sevenfold in 2025, reaching 2 1/2 million daily transactions, which is great. The ecosystem has surpassed over 550 projects by early this year. And one of these projects includes the Wyoming launched Frontier Stable Token FRNT on Avalanche, the first fully back state issued stablecoin in the United States. Where do you attribute all this growth to? What's, you know, if you can drill it down to, you know, one or two things, what has Avalanche done to take that next step?

Lee Schneider [00:03:41]:
I think it's a great question and it's one of the things that I talk a lot about with regulators. Right. Because they want to understand that the technology is actually getting used for stuff that they can, that they can understand. I think there's, there's one major factor about the Avalanche technology that's really helped spur the recent growth, which is that Avalanche allows for custom blockchain building. So you're not a slave to a single chain and that's not a value judgment about other chains. That's just a difference between other chains and Avalanche. So you can launch a custom Avalanche blockchain that fits directly in your tech stack and that you customize to make it function in a way that you think works best for your target audience, whether that's event tickets, which need NFTs and all of the stuff that goes along with events. Or it's something like the Frontier Coin, or it's something like a trading venue, or it's something like registering real property or car titles on your own custom blockchain.

Lee Schneider [00:04:58]:
And that level of customization is frankly one of the things that drew me to the Avalanche technology. And when I was first interviewing with the team here five years ago, it's what really sold me on the tech.

Kyle Lawrence [00:05:14]:
Just to let the folks out there know Moishe and I are going to be in Vegas for Bitcoin 2026, which is April 27th through the 29th. If you're going to be there and want to meet us, please reach out. We'd love to set up a meeting time. We're also probably going to throw an event or two and we'd love to have you there. So if you're going to be in Vegas at the end of April, Please look us up. Thanks. And we'll see you there.

Moish Peltz [00:05:34]:
See you in Vegas.

Kyle Lawrence [00:05:36]:
Yeah, that's, that's really fascinating stuff. I've always kind of had my eye on Avalanche. You know, it's, you always hear about the Bitcoins and Ethereums and, you know, Solanas, but I've always liked Avalanche. I've always liked how smooth it is. And I like all your subnets and the fact that people are able to do that, which is not something that's available on all the other URL once. That's. Congratulations on all your. On all of that stuff.

Lee Schneider [00:05:57]:
Yeah, I mean, that's the sort of business first focus that we've had with the Avalanche technology. It's how can we have blockchain technology that anybody can use, that any business can use? So of course we like the crypto native folks and there's plenty of activity for them on the C chain. But our thesis is that everybody's going to be on a blockchain in one way or another in the future and that there are business use cases for blockchains, either as database technologies or tokenization technologies or a combination of the two that really demand the kind of flexibility that you can get with customized layer ones or subnets.

Kyle Lawrence [00:06:47]:
Yeah, that's fantastic. And I completely agree. I'm going to pivot slightly because something that you have intrigues me. As a securities attorney by trade, I've been doing this 20 years and with the launch of the Digital Assets Practice group here at our firm, I've spent a lot of time and a lot of sleepless nights looking at the Howey test and how the Howey test gets applied and see where I'm going in the SEC and all this. And he's like, well, the Howey test doesn't apply, so let's just create this fifth little factor that we're just going to use as a catch all. But you, I understand, have your own signature Howey test. And inquiring minds want to know what is your Howie test and how does it apply?

Lee Schneider [00:07:27]:
Well, I mean, you said earlier that the SEC is kindler and gentler, which is true, but they are no less hard working and they are no less stringent in their application. Look, my, my thesis has always been that oranges are not securities. And that's starting point, right? So for me, the nature of the asset is what matters. And if at the end of the day what we're talking about is whether or not there is an investment contract, then we need to understand what the underlying subject matter of the investment contract is. So, for example, you could have, I suppose, an investment contract related to intellectual property rights. You could have, I suppose, an investment contract related to anything else, any other type of asset. But to me, that's the key is. Right, we forget that it's not the underlying asset that is potentially an investment contract, but rather an investment contract relating to that asset.

Lee Schneider [00:08:42]:
And so what flows from that, naturally is contract law. And contract law is a creature of state law, as lawyers know. But guess what? So are stocks, so are bonds, so are LP interests. So we shouldn't be afraid of the fact that we, you know, have to look at state law because. Right. The SEC doesn't regulate the. The way that the capital stack of a company is built. What they regulate is the offers and sales of securities.

Lee Schneider [00:09:18]:
And so from my perspective, the Howey test is actually not that hard. What's been hard is convincing people to give a diligent application of the law as opposed to trying to use the Howey test to shoehorn anything they want into the definition of investment contract. So that's sort of my take on the subject. And by the way, like, the CFTC regulates a type of investment contract, right. They're just futures and swaps. And so there's a lot of law around this already. And I think the. Those people who want to give super expansive interpretations to the Howey test need either to get better lawyers or be better lawyers.

Moish Peltz [00:10:19]:
I know there, there was an article drafted by Louis Cohen in Electable Modality of securities Laws, which I just looked up and you're credited in there as well. And then there's.

Lee Schneider [00:10:35]:
I tease Louis about that. He, I tease Louis that the title should have been the Ineluctable Modality of why Oranges Are not securities. Oh, I love it.

Moish Peltz [00:10:46]:
That. That would have been a bit. Yeah, like, I love that. And I've seen the two of you and, and others debate and now in many conferences about the ins and outs and the contours of the Howie test and as applied to not just oranges, but tokenized securities or things that are not. But I guess the courts have been less clear in their application of maybe Lewis's view. I don't know if that mirrors your view. I know that's been cited in some courts. And then many of these actions were.

Moish Peltz [00:11:23]:
Then they could have been appealed. Most of them have been dismissed since then. And so I don't think we have too much appellate clarity as to whether this new application of. Or maybe it's not even a new application, but this particular Application applies to tokens. Do you think we'll get that clarity anytime soon? Do you think it matters whether this happens in the courts? Do you think it may be the Clarity act or some other act of legislature should help clear this up? How's your view on how we get from this kind of amorphous, ambiguous view? And you have your view and the SEC is their view and I have my view to something that is a bit more practical and even keeled.

Lee Schneider [00:12:01]:
Yeah, it's a great question. I fervently hope that we get market structural legislation to clarify this. And you know, it's interesting, I talk with a lot of other lawyers and about this and one of the common themes is we all think that everybody needs to remember that Congress gets to define this however they want to. Right. As long as they're not violating the Constitution, which it would seem hard to figure out how that would be the case. On defining, better defining investment contract, better defining the regulatory treatment of protocol tokens or network tokens or whatever you want to call them. Right. So this is pretty GREENFIELD opportunity for Congress and a lot of us lawyers, at least a lot of the folks I talk to, want Congress to take this opportunity to really make things clear for everybody so that we don't have to rely on courts and different interpretations and then ultimately reaching the Supreme Court, etc.

Lee Schneider [00:13:05]:
Etc. And so that is what I think I'm hoping for, what a lot of us are hoping for. So if, if there's anything to do right now is to continue to advocate with Congress to get good market structure legislation passed. You know, failing that, I think the SEC and the CFTC, especially with this new MoU between them, have a real opportunity to give some interpretive relief either as guidance or, or no action relief or something along those lines or preferably in rulemakings that would help further define investment contract. We've written a bunch of comment letters to both agencies where we've suggested language that they could use and tests that they could use to help refine that. But obviously that's going to be something that will be the subject of a lot of discussion and debate.

Kyle Lawrence [00:14:11]:
We've talked a lot about the Clarity act on this show with other guests and as part of our just ordinary course, obviously we have a lot of eyes on it. I know at the outset, before we started recording, not to avoid thorny issues, but there's a pretty high profile statement from the guy in charge who says I'm not signing anything until the SAVE act goes through. And yet, you know, the Clarity act is still languishing a little bit in the Senate. Gun to your head, is this happening this year?

Lee Schneider [00:14:36]:
So as I just said to somebody at lunch today, when I talk about it out loud, I get less hopeful, but I still have my in, in my head saying 50, 50, 50, 50. I look, I do think everybody recognizes that there needs to be something done right. If you think all of blockchain and crypto is fraud, then you should want federal regulation. I don't think it's all fraud, but I do think getting federal regulation is important because we are dealing with this network token protocol. Token that seems to be a new type of asset that doesn't fit comfortably within any definitions of security, doesn't fit comfortably within any definitions of commodity. And so let's come up with some regulation for that. Right? This is what we lawyers go to law school to be able to do. Right.

Lee Schneider [00:15:44]:
Help draft this stuff and help interpret it. So I do think that the time is right and I do have, I am still of the view that we've got a good shot of getting this done this Congress, and it would be a shame to waste that opportunity.

Kyle Lawrence [00:16:05]:
Completely agree.

Lee Schneider [00:16:06]:
Yeah.

Kyle Lawrence [00:16:07]:
If it doesn't happen this year, I mean, who knows? I mean, we could have a changing of the guard and a lot of things might not be on the table for at least the next term, the next immediate term. So I completely agree with you there. I, I remain a little more pessimistic about it just looking at the numbers, but I trust me, I hope you're right.

Lee Schneider [00:16:27]:
Like I said, when I talk about it out loud, I get more pessimistic than when I think about it in my brain. But yeah, I hear you.

Kyle Lawrence [00:16:36]:
And along those lines, when we talk about educating people and pushing policy initiatives, Avalanche is one of the formed industry group. The Avalanche Policy Coalition, which has been working with D.C. regulators, was formed in February of this year and. Excuse me, earlier this year you unveiled your inaugural advisory council of which you lead with three core priorities for 26 that I'd like to talk about these. Can you. And you kind of touched upon it a minute ago. Token classification standards defining intermediaries and protecting Internet accessibility. Token classification standards, I mean, you were talking about it before, is a must.

Kyle Lawrence [00:17:15]:
And it kind of dovetails into not just Clarity act, but the Innovation exemption and these joint SEC CFDC rulemaking processes that, that we are learning about that are on the table and are currently being contemplated for you. What would be the sort of ideal structure for this? What would the token classification standards that you envision working in the United States.

Lee Schneider [00:17:40]:
So we've been talking about this issue for many years. And the point, the basic point is what I said earlier, which is that the nature of the asset matters. And so when we talk about tokenizing assets, whether it's protocol tokens or whether it's tokenized stocks or tokenized event tickets, just to pick three examples, right, there's some bundle of rights that is represented by the token and rights and obligations. And understanding what those rights and obligations are is key to determining the nature of the asset. And the nature of the asset is important not just for sort of legal classification, but for utilization valuation for all kinds of reasons. So from our perspective, we need people to, we want people to focus on the nature of the asset when determining token classification. The SEC's guidance recently on tokenization of securities I think did a great job of highlighting this point. They show how there's different ways you can tokenize securities and that sometimes that leads to different classification of what the asset is because it might be an option, it might be a swap, you know, security based option, security based swap.

Lee Schneider [00:19:10]:
And that can lead to different regulatory treatment as a result. Similarly with event tickets, right? Nobody is thinking that that ticket to the Beyonce concert or to the super bowl or whatever is a security. At least I hope they're not, right?

Moish Peltz [00:19:30]:
I don't know. New York State just sued Valve for their loot boxes. Well, I don't know, security basis, but you know, it's that kind of thinking that I'm concerned about also.

Kyle Lawrence [00:19:41]:
Oh, New York, Yeah.

Lee Schneider [00:19:44]:
I mean, look, this is why we need to have very disciplined analysis of what the asset is that is tokenized. And we need to recognize that tokenization of an asset is just a way to digitally represent that asset. Just the way stocks and bonds used to get representative with paper certificates, just the way tickets used to be represented with a paper ticket. I actually, I went to, I was in Australia last week and I went to a rugby match and I just walked up to the, to the ticket counter at the, you know, an hour before the match started and I was like, hey, you got any tickets left for tonight? And they said yes. And they printed me out a physical ticket, which I have not received, to go to a sporting event in I don't know how long. And I'm sure it's just because when you walk up and buy, that's just the easiest way for them to give it to you, right? But it reminded me of all these ticket stubs I have for Yankees World Series games and playoff games and Everything somewhere in a shoebox. But, you know, that's the way the world used to operate. And the world is moving away from operating that way.

Lee Schneider [00:21:02]:
Now that we have computers and now that we have blockchain and the ability to represent things digitally in a digitally

Moish Peltz [00:21:10]:
unique format, is there any hope of that type of token classification rubric being consistent from jurisdiction to jurisdiction? So when you try and do business on a global network that's globally distributed, you don't have to then go country by country and adapt and change. That, I think is, I know that's part of the conversation and part of, you know, policy coalitions that you're involved in. What, what's the hope of that happening and how does that happen?

Lee Schneider [00:21:38]:
Yeah, no, I think that's, I think you've hit the nail on the head there. Right. Is this is a jurisdiction specific point because different assets are treated differently in different jurisdictions. There's different requirements. But so getting the nature of the asset right is super important. I, I do think that many jurisdictions have gotten this right, but by the way, I think the SEC and the CFTC understand this. So, so it's not like there's a lack of understanding with the US Regulators. But similarly, I think a lot of other regulators understand this and other regulators spend, have spent time refining their analysis to get to the right place.

Lee Schneider [00:22:32]:
Is it a hundred percent? Probably not. But I think that, you know, most major jurisdictions that I've seen, they get this, they understand what tokenization is and they understand that it does not change the nature of the asset.

Kyle Lawrence [00:22:49]:
So when Moishe talks about, you know, I asked about what it would look like here in the United States and one of the top priorities of your coalition is seeking the global synergy you've mentioned. Other jurisdictions have gotten it right, but we still have a hodgepodge framework and we probably will for the foreseeable future. What would a harmonized classification framework look like and what would be the primary obstacle in getting there? Is it just one jurisdiction sets the standard that works for everyone and everybody adopts it, or are we all going to have to sit down at a table and try to figure it out in a way that works best not just the United States, but for everybody in the world? I know that's pie in the sky and is hard to envision, but how would we get there?

Lee Schneider [00:23:33]:
Yeah, I mean, that's why we keep doing the advocacy that we do everywhere in the world. We've written comment letters to most major jurisdictions on this point, the token classification point, and on the intermediary versus infrastructure point. That's, that's a second pillar of ours for 2026. And so I, I do think, you know, going back to the theme of education that you mentioned before, I do think that's just what it is. You know, the old saying, repetition is the parent of memory. We just have to keep repeating this theme over and over again. And that's why token classification has been at the top of our list for a long time. Its core to everything that can and will be built here.

Lee Schneider [00:24:24]:
And so from our perspective, we can't lose sight of it and we need to keep advocating for it.

Kyle Lawrence [00:24:32]:
If we can shift back a little bit to the Clarity act and the stalemate we've talked a lot about on prior episodes, you know, Coinbase famously withdrawing their support that not just leaving the discussions together, but we don't support it in its current iteration. There's been pressure from the White House to get this done, and there have been meetings in recent weeks, but it is still stuck in the Senate, most recently delayed by disputes over stablecoin yield. You know, understand, understand where both parties are coming from. As someone who is so deeply entrenched in advocacy, how do we break that log jam and what's it going to take? What's at stake for the industry? If, if, putting aside the obvious, you know, if this just doesn't pass, you know, where does that leave us? I know we're hearkening back to in earlier conversation, but I'm just curious to see how this gets broken up and

Lee Schneider [00:25:17]:
which side blinks first on the stablecoin yield. You're going to have to ask somebody else, because I thought stablecoin yield was solved in the Genius Act. So it's not clear to me why this has suddenly become the log jam again. I mean, I understand why the banks are worried, but if their main worry is whether or not stablecoins will be paying yield, then I think they're missing the forest for the single tree. So I, I mean, I can think of five other reasons why they should be worried about stable coins that have nothing to do with yield. But anyway, leaving that aside, look, I, I am still fairly confident that the logjam gets broken, because it's my view that all of the parties at the end of the day recognize how important market structure, legislation is. And whether you're a Dem or a Republican, whether you're a banker or a crypto native, you understand why this is important to get done. You're probably in the position of being not ecstatically happy about whatever gets done.

Lee Schneider [00:26:40]:
But, you know, that's the nature of politics. That's the nature of negotiations. That's the nature of the beast here. And frankly, there's enough rulemakings that are required in, in whatever there will be in whatever the final version of the law looks like that there will be plenty of time to, that's true, you know, settle out all of the issues in front of the SEC or the CFTC or in the case of stablecoins, the banking regulators. So, you know, my view is it's, it's time. Lfg.

Kyle Lawrence [00:27:19]:
There we go. You know, the, as a, in addition to being a securities attorney, I'm also a mergers and acquisitions attorney. And the general rule of thumb is the best deals are the ones where everybody feels a little pain.

Lee Schneider [00:27:29]:
Exactly.

Kyle Lawrence [00:27:30]:
And there's got to be some of that here. You can't let perfect be the enemy of, of the good. You know, we do need progress. You're not going to get 100% of everything. So. And you know, I have a more obnoxious view about what the banks are doing here, which I don't need to repeat here because, because it's, it's rude to the banks, but whatever, they make all the money, they make all the rules.

Lee Schneider [00:27:50]:
So I, I mean that, that's part of why they feel threatened here. Right. Is because they, they see that there are alternatives that are, that are coming up and. Right. And that that's threatening. Obviously they don't want to lose their businesses and, and I can understand that. I don't think Satoshi understood that, but I mean, he understood it, but I think he was not sympathetic to it. Right.

Lee Schneider [00:28:17]:
Just as I may not be as sympathetic to it as, as other people might be.

Moish Peltz [00:28:22]:
I think, I think that plays into the idea though that, you know, you said there's four or five other things that might be scarier to them and I, but I do think deposit flight and the attractiveness of yield leading directly to that might be for them, number one. And so you can see why they're fighting back. And I guess it just, it gets that adage of, you know, first they, so this is the fighting stage, right, is they're fighting back because they see the, the concern. So I guess it's, do you hold, from the crypto industry perspective, do you hold the line and say, well, this is, if we win this fight, then that's it. We've conquered the, the evil dark banks that we've been trying to overcome since 2009 and are the backbone of the reason why bitcoin exists or is this just a compromise that's worth striking? I think there's an ideological answer and there's a practical business minded industry answer. And I don't, I think you're seeing different viewpoints from the contingencies. So it's interesting, it's interesting to see.

Lee Schneider [00:29:27]:
Yeah, I think that's right. I mean, so my question would be like, do the banks think that yield is going to be the only reason there would be deposit flight?

Kyle Lawrence [00:29:41]:
They must.

Moish Peltz [00:29:42]:
I don't think they know what that can't. I think they've been told that stable coins are bad and that's the thing they can fight on now with genius act. I don't know, maybe you see a

Lee Schneider [00:29:51]:
different way except if it, if it made sense. I personally think many banks are going to start issuing their own stable coins. They're going to call them tokenized deposits or deposit tokens or some other nonsense like that that will be probably less flexible and they'll realize that those are less flexible and then they'll realize, you know what, actually if I get into the broader stablecoin game, then that's a good thing for me. I think JPM realized that a number of years ago with JPM coin and, and my guess is that that becomes a broadly circulated coin over the course of time as opposed to just internal to the J.P. morgan network. But you can see banks having lots of use cases for their own stable coins. And so like to me, we're fighting over peanuts here when there are bigger issues at stake from the bank's perspective. By the way, you know, a bunch of these stablecoin issuers are going to go and get banking licenses and they're going to compete with the banks anyway.

Lee Schneider [00:31:04]:
So you know, love it.

Moish Peltz [00:31:08]:
Yeah, you're already seeing that. And I saw, you know, over the weekend Wells Fargo filed a trademark for wfusd. So you know, top five bank in the world is likely moving in that direction based on that. So it's going to converge. Right?

Lee Schneider [00:31:26]:
Sorry, wfusd. They should have said WTF USD? Too late. That would have been a much catchier name. That's really funny actually. You guys, you want to go in with me? We can trademark that and get the, the domain name WTF USD?

Moish Peltz [00:31:45]:
All right, let's, let's do it right now. Written down can get the trademark filed before we finish this recording.

Lee Schneider [00:31:54]:
Exactly. No, but I, but look, I, I think that's, I think the banks recognize this. Right? So what are they trying to do? They're trying to, they're trying to just give themselves a little bit more time to get their arms around this. But scuttling market structures seems to be a very inefficient way to do that because that also means that then they're not going to be able to trade protocol tokens and other things. So it's just it. Again, Lee Schneider's view. I don't, you know, Jamie Dimon hasn't called me, ask my views what, nor has anybody from Citibank or Wells Fargo or any, any other banking institutions. But, you know, developing a strategy around this is going to take a little bit of time.

Lee Schneider [00:32:51]:
But if, if you don't get your strategy soon, you're going to be left behind. And arguably, if you don't have your strategy already, you're probably already behind because we see so many people making moves in this direction,

Moish Peltz [00:33:09]:
pivoting a bit. The general counsel of Anthropic came out this past week and said that AI is going to kill the billable hour. And I'm curious how you as a general counsel view. I'm sure there's, there's things happening with AI within your company and you're responsible for working with outside counsel and I presume to some degree the efficiency at which they work on their matters and whether they will become more or less relatively efficient by the use of AI. I'm curious how you see the use of AI in your role within your organization more generally and then in interacting with outside counsel and how that might change the way businesses work together from a, you know, delivering legal services.

Lee Schneider [00:33:58]:
Yeah, it's a really good question. I was chatting with a friend of mine about this the other day, and she made the excellent point that the thing that lawyers have that AI doesn't have, at least not yet, is discernment. Right. You know, we are still better at figuring out what the needs are for the particular facts and circumstances in front of us for the particular needs of a particular client that we're dealing with than what AI is capable of, at least for now. So do I think that it spells the death knell for the billable hour? I mean, I've been thinking that the billable hour was going to be dead for the last 20 years, and I've been consistently wrong on that prediction. But, but, you know, lawyers are, are not necessarily known for being great business people. And so I haven't seen a lot of law firms come up with alternatives that they've gotten super comfortable with. And I haven't, by the way, also seen a lot of clients pushing for alternatives to, to get comfortable with.

Lee Schneider [00:35:12]:
So I do think it's something that will continue to persist. You know, the author William Gibson is credited with saying, the future is already here. It's just unevenly distributed. And I, I think that's, you know, going to continue to be true. There will continue to be clients who are okay with billable hours and, and will continue to use them for the foreseeable future. There are going to be other clients who are going to really delve into AI and figure out what it can do for them. And then there's going to be clients who will be somewhere on the spectrum in between those two polls. And I think we at AVA Labs are going to be one of those folks.

Lee Schneider [00:36:01]:
We'll find some good ways to use AI. I've already found it as a huge productivity boost. My workflow now is I receive a document, I put it into ChatGPT and find out what ChatGPT thinks about it. I still read it, I, I still form my own views about it, etc. Etc. But right now I have two minds looking at it instead of just one mind looking at it. And that redounds to my benefit as a lawyer. You know, am I going to have CHAT GPT drafting my contracts and sending them out sight unseen or drafting my comment letters and sending them out sight unseen? Absolutely not.

Lee Schneider [00:36:49]:
I think the human in the loop is still necessary. The only other thing I would say on this topic is I do think that law students need to be trained how to use AI as part of their legal education. And you know, one of the things that, that law students can do is they can program an agent for each class that they take. And that agent can then continue with them throughout their careers, depending on what their specialization and areas of expertise are and whatnot. And, you know, that can be a really valuable thing for law students because it's like having a senior lawyer around all the time. Just so long as you don't, you know, let it. Just so long as you don't become its slave. Right.

Lee Schneider [00:37:51]:
You continue to make sure that it's doing your bidding rather than the other way around.

Moish Peltz [00:37:57]:
Yeah, and I think that's. I agree the young attorneys have the biggest opportunity, but I'm also very concerned about how they, like us, develop independent judgment and the ability to think critically without the tool. Like, if the tool goes down, all of a sudden their brain doesn't work. How do we train that next generation up to develop those critical thinking skills? And I don't know that I've heard a good answer for that.

Lee Schneider [00:38:26]:
Well, I very much agree with you on that. And that's why I don't see the Socratic method leaving law schools anytime soon. Right.

Kyle Lawrence [00:38:37]:
Why'd you have to say that?

Lee Schneider [00:38:39]:
I mean, look, there's different applications of the Socratic method. I prefer the kinder and gentler version of the Socratic method, where you ask questions and, and get answers without trying to embarrass somebody or make them look foolish. Right. But I. I mean, look, as a lawyer, you're going to face those kinds of situations whether you like it or not. There are going to be people who go after you for the position that you hold in a way that may not be respectful and, and thoughtful, in part because that's what advocacy is all about. Right. Like if the person across the table negotiating a contract decides to take a position, they may advocate for it in a way that is just not pleasant.

Lee Schneider [00:39:30]:
And you need to learn how to cope with that. I mean, we're all human beings. We're going to face people who are wonderful, and we're going to face people who are jerks, and we're going to face people who are everywhere in between, and we've got to learn how to cope with it.

Kyle Lawrence [00:39:46]:
That's a really fair point. And one of the things that I've. I've come to accept because you hear all of these, you know, fears, AI is going to kill the junior associate. It's going to kill this, it's going to kill that. And, you know, I remember being in law school and, yeah, the Internet had been around, you know, for a handful of years, but it wasn't this. It wasn't everywhere like it. Like it is now. But there was probably a lot of trepidation when the Internet came out about, well, I don't need to go to the library anymore to do legal research.

Kyle Lawrence [00:40:13]:
I have everything right here that's going to make everything faster. Well, if it makes everything faster, it's going to kill my time output, it's going to kill the profitability of the firm, et cetera, et cetera. To me, this is another version of that. It may be a little more extreme and a little more advanced, but it's that kind of thing. And I think you're exactly right. I mean, Moishe and I, we've been doing this a long time, and you can't replace 20 years of experience with. Even though it's a compendium of all knowledge, it doesn't have the practical application that we have. And I think that's where the art

Moish Peltz [00:40:43]:
lies Although, Kyle, one of our recent guests called you out for. For Boomer thinking along, I said, all

Kyle Lawrence [00:40:51]:
right, you know what needs to be in the office? They. They need to at least sit with me in the room, and I need to be able to yell at them to come into the office immediately. I'll stand by that.

Lee Schneider [00:41:02]:
Okay, But. But, I mean, you know, look, one of the things that the whole work from home world has. Has shown in, I think, is that working from home is great and working from the office is great. And getting the balance between those two things, while sometimes difficult, is the right way. Is the right way to go. There is no reason people need to be in the office five days a week or more most of the time. But there are really good reasons why people need to be in the office, because that's how they will learn the best. That's how the incidental things will happen the best.

Lee Schneider [00:41:48]:
You know, this. This whole idea that AI agents are going to be communicating with each other on our behalf all the time, etc. Etc. So that we don't need to communicate with other human beings. Like, if that's the world people want to live in, okay, I guess that's fine. I can tell you that that is not the world that I want to live in. I like going places and seeing people and getting hugs from people and shaking hands with people and discussing things with people in person and having a drink with people and eating a meal with people and going to a museum with people and. Right.

Lee Schneider [00:42:26]:
So, like, for me, this whole idea that. That the world is moving towards everybody in their own bubble at home, not being out and communicating and being social beings, that just doesn't make sense to me. That just feels there are many aspects to humanity, and that, to me, is one of the key aspects of humanity,

Kyle Lawrence [00:42:59]:
even from a professional standpoint. Like, we can argue back and forth about going to the office, but. But online networking is. I just want to set myself on fire when. I mean, it's, like, ridiculous. What are we doing here, guys?

Lee Schneider [00:43:12]:
Well, along those lines, tweet some stuff, and that's how everybody will know me. Yeah, right.

Moish Peltz [00:43:18]:
No, I see you at many of the industry events, and I can tell you wouldn't be doing it as often as you do if you didn't have some love. I'm curious, just what are your, you know, favorite industry events and the ones that you most look forward to on the calendar and why?

Lee Schneider [00:43:37]:
Yep. So before last week when I was in Australia for Blockchain apac, I would not have included Blockchain apac. I now must include Blockchain APAC because I had a fabulous time there. It was my first time in Australia which was great anyway. But Sydney is a great town and I saw and met so many great people while I was there and it was great because the regulators all show up and they're in the sessions too. And so it was a really good community feeling while I was there. So high marks to Steve and Rochelle for what they do@blockchain APAC. If you get the chance to go next year, I highly recommend it.

Kyle Lawrence [00:44:23]:
I'm going to sign up for next year.

Lee Schneider [00:44:26]:
It was really good. It was really good. You know there's a lot of great events like I'm going to miss Paris Blockchain Week this year and I always enjoy that. London has had a number of good events. Digital Asset Summit, there's the FT conference in November, in May that I'm going to be there for. You know, East Denver is a great event that I have unfortunately never been to just because of when it falls in the calendar. It just ends up being very difficult for me to go. DevConnect is another great event.

Lee Schneider [00:45:07]:
Avalanche Summit. You know we're doing Avalanche Summit in September in New York this year. I always have a great time at Avalanche Summit. It's like part tech thing, part legal and policy thing and part Woodstock thing. So I, I have a fabul time at that.

Moish Peltz [00:45:28]:
We're excited to welcome you guys to New York and that'll be a fun one for sure.

Lee Schneider [00:45:32]:
Yeah, yeah, that'll be great. DC fintech week is great. You know, Chris Brummer and the fintech foundation team have done a great job building that conference into a world class event and they get a lot of extremely good speakers. They do a lot of good panels there. I don't know frankly how they are able to coordinate everything that they do because it's a huge event and, and yet it feels like just a great community. Consensus is always good. You know, I'll miss Austin for the barbecue and, and whatnot. But Miami is a fun town too.

Lee Schneider [00:46:14]:
So I, I plan to go this year. I went for the first time to Korea Blockchain Week last year and that was a blowout festival. I mean just crazy, crazy token 2049 in Singapore. I went there for the first time last fall and I had a lot of fun it, I had a lot of fun in Singapore. So look, the key though for me at going to those big conferences, it's not about going to the big panels, it's not about you Know, getting to speak or whatever. It's about the side events that we organize and do and the people that I see there. So, you know, we did a side event at Token 2049 last year. We did a side event at DC Fintech Week.

Lee Schneider [00:47:12]:
We did a side event in London during Innovate Finances Fall Conference. We did a side event at DevConnect in Buenos Aires last year. And so the reason to go is because a lot of people that you want to see are there. And so organizing time with them is, to me, the great thing about those events.

Kyle Lawrence [00:47:37]:
Definitely agree about the side events. They're definitely fun. And, you know, Moishe and I frequent a lot of. I feel like we've crossed paths probably at a lot of the conferences together. Who knows, maybe we did shake hands at one point.

Lee Schneider [00:47:52]:
I'm sure we did. Yeah.

Kyle Lawrence [00:47:54]:
Well, we are running close to bumping up on our time here. Do you have any final thoughts you want to share? Any pithy pearls of wisdom that you can share with our audience out there? What to expect from avalanche in 2026 and beyond and all the great things you guys are doing? What do we have to look forward to?

Lee Schneider [00:48:10]:
Yeah. Well, I will touch on our third priority for the year, which is open, uncensored access to the Internet. I do think it's something that doesn't get acknowledged as much as it should because blockchains are creatures of the Internet. So to the extent that the Internet, that Internet access is not available to people, that means that blockchains don't function. So when Iran has the protests and they shut down the Internet, that means that nobody in Iran is participating in validating transactions, mining transactions, contributing to the blockchains. And I'm. I. I don't mean to say that sanctioned people should be welcomed in blockchains or anything like that, but judging from the size of the protests, there's plenty of people in Iran who we would want helping to validate and.

Lee Schneider [00:49:07]:
And mine. And so I think this is an area where, although it's not directly under threat in the west, quote, unquote, it's something that we in the west need to keep very much in mind. And we need to be advocating for that freedom in addition to things like freedom of speech, freedom of assembly, freedom to transact, because the Internet is now infrastructure for these other freedoms. And so open, uncensored access to the Internet supports all of the other freedoms that we hold dear. And so that, for me, would be something we all should be advocating for.

Moish Peltz [00:49:55]:
Yeah, I think that's one a Fantastic point to underscore here. And two, a continuation of there's a lot of just Internet academia and, and the way the, the Internet came around and the self governance of domain names leading to ICANN and and so forth. I think there's a lot of lessons that were learned the hard way in the 90s and early 2000s that I, you know, before my time, but I've had to learn as part of my work that I think we can, we can look back on and say, hey, how did icann, even if it's arguably dysfunctional, come around as a international global force for clearinghouse for these things? And so I think that's a great point and there's a lot, I think, where we can collaborate with other academia and industry folks that came into it from the Internet side that don't know that there's a blockchain effort that, that coincides with their Internet freedom push. So great, great point though.

Lee Schneider [00:50:58]:
Yep. Thank you.

Kyle Lawrence [00:51:00]:
That wraps up this edition of Block in order. Very special thank you to Lee Schneider, GC of Ava Labs, for coming by. Greatly appreciate your time. It's good seeing you and I look forward to seeing you at, at the summit in mid September, I believe, right?

Lee Schneider [00:51:13]:
That's right. I really appreciate you all inviting me on. This was, this was fabulous. And yeah, please come to New York, everybody, and enjoy the Avalanche Summit. It's going to be a big party. I think we're going to do a policy legal day the day before the summit starts. I'm talking with the folks at Columbia and at Florida State University Law School and the folks at Sidley to organize that. So more to come in the coming weeks and lots of fun stuff to do.

Kyle Lawrence [00:51:47]:
And when Clarity act gets passed, we're going to have you on and we'll see whose timing was right.

Lee Schneider [00:51:51]:
Sounds good. I will bring the champagne or whiskey as you prefer.

Kyle Lawrence [00:51:56]:
It takes all kinds. Lee Schneider, thank you so much for coming by.

Lee Schneider [00:52:00]:
Great to see you both.