Berkeley Law Student’s Team Wins Inaugural Fintech Hackathon with Blockchain Stock Trading Idea

Kiyan Mohebbizadeh, a second-year law student at UC Berkeley Law also pursuing an MBA at UC Berkeley’s Haas School of Business, recently led a team to victory in the first-ever Paul Hastings fintech hackathon for law students. Mohebbizadeh collaborated with fellow students Yi Qu from the University of Chicago (who spent her 1L year at Berkeley Law) and Joey Yu from Georgetown Law.

Initially intending to concentrate on the rapidly expanding field of artificial intelligence (AI) at UC Berkeley Law, Mohebbizadeh’s path took a slight turn during orientation week. A phone call from a friend led him to co-found a startup and pursue an MBA concurrently with his Juris Doctor degree.

This detour also paved the way for his team’s success at the Paul Hastings hackathon. The competition challenged students to identify a regulatory issue within the fintech and cryptocurrency space and propose a potential solution.

Recounting his entry into the crypto legal tech world, Mohebbizadeh explained, “He called me and said, ‘Hey, I’ve been working on a startup where we want to issue corporate bonds on public blockchains in the EU and I need some help.’ So I went through the first year and a half of law school working on this digital securities legal tech startup. And in that process, I got in touch with a lot of lawyers in the crypto community.”

Upon returning for his second year of law school, Mohebbizadeh learned about the Paul Hastings fintech crypto legal hackathon. His team, consisting of Qu and Yu, decided to tackle the concept of reimagining stock ownership and trading by transitioning them to the blockchain.

Their proposal, outlined in a ten-page paper and a ten-minute presentation followed by a question-and-answer session with the firm’s fintech lawyers, explored the potential of tokenizing traditional stocks or securities. Mohebbizadeh elaborated, “Part of our paper was about what it would look like to tokenize a traditional stock or security and present them as a digital token, rather than a certificate or a centralized ledger. We analyzed the processes you could use today, based on the legal structuring that’s available. The other half was the policy side of things — the steps needed to enable a digital financial market.”

Mohebbizadeh noted that the idea of securities tokenization is a significant trend within the cryptocurrency sphere. Many of the questions posed to his team centered on the broader implications of this concept and whether it would genuinely offer benefits to investors in terms of their holdings.

Following the announcement of their victory at a dinner, Mohebbizadeh mentioned that the firm’s lawyers commended his team’s strong emphasis on the legal framework underpinning their proposal. “I think they appreciated that we really got down to a deep, detailed layer, and then also incorporated the broader policy implications,” he stated.

Mohebbizadeh further explained that utilizing blockchain technology for securities could enable direct interaction and transactions between parties, bypassing traditional intermediaries such as brokers. He pointed out that in the current system, each intermediary takes a portion of the value as the asset moves from the issuing institution to the individual investor. Implementing blockchain could enhance transparency by allowing investors to track an asset in real time, rather than relying on contractual agreements.

He illustrated this with an analogy: “You don’t actually own your stocks when you buy a stock from Charles Schwab. Schwab owns a lot of stock, and says they own some for you. Our policy proposal was to shift financial market infrastructure to be on the blockchain, so that each asset is represented by a token. And that token is what you take the court to settle disputes, that’s what you trade, that’s what the issuers deal with, that’s what the intermediaries deal with, and that’s what the retail investors deal with. Ideally, everything is on the blockchain.”

Mohebbizadeh’s involvement with the startup motivated him to apply to UC Berkeley’s Haas School of Business through the law school’s concurrent degree program. “I’m a very entrepreneurial person, and I feel like the business school is a great place to interact with the startup ecosystem,” he said. “I’m very interested in the intersection between law, technology, business, and finance. And the MBA with the J.D. will really let me do all of that.”

While pursuing his entrepreneurial interests, Mohebbizadeh also maintains his interest in AI and is currently involved in research within that domain, building upon his master’s degree in data science from Columbia. He chose UC Berkeley Law not only for its strong technology law program but also for its connections to other prominent research centers on campus, including the Center for Human-Compatible AI.

“I’m reintegrating with the AI space a bit more and researching some of the legal problems posed by AI adoption,” Mohebbizadeh stated.

One specific area he is exploring is the legal implications of AI agents – software programs powered by large language models capable of interacting with people, processing information, and making autonomous decisions. His focus is not on intellectual property issues but rather on the question of liability for an agent’s actions.

He provided an example: “One of the classic examples that’s being discussed right now is you type to an AI agent, ‘I want 10 bananas, and order them as soon as possible.’ And then 10 bundles of bananas — 100 pounds of bananas — show up at your door. Is it the grocery store’s problem for not checking if you wanted 100 pounds of bananas? Is it the AI agent’s problem, or is it your problem for not verifying it?”

Mohebbizadeh is grappling with the fundamental question of “How can you assign agency to a piece of software, and the liability that’s involved with that?” He noted that potential legal frameworks range from treating AI agents as employees to viewing them as contractors with limited liability, or even arguing that software itself cannot be held liable. As he continues his MBA coursework and finalizes his law studies, Mohebbizadeh is keen to delve deeper into these complex issues.

“Startups have to decide how integrated they want to be on a legal level, and if they want to assume some of that liability themselves,” he concluded. “There’s a whole array of problems that come with that, and solutions that are technical and legal.”