Arbitration for AI software, crypto & payment processor disputes

Full transcript

0:12 Hi, I’m Max Dilendorf. I’m a digital asset lawyer based in New York.

0:16 I’ve been working in technology and digital asset/crypto industry since 2017, and over the years I’ve handled more than 130 Arbitrations across JAMS, AAA, and NAM.

0:31 These matters include breach of contract and hacking claims, software and smart contract liability disputes, and protocol failures. Our practice also covers SIM-swap and account-takeover claims against carriers such as Verizon, AT&T, and T-Mobile, as well as merchant disputes with payment processors and AI compliance issues.

0:58 My arbitration practice focuses on three main types of clients.

1:04 First, software and blockchain developers involved in disputes over code performance, integrations, service-level agreements, or software bugs that lead to significant financial losses.

1:19 Second, Web3 founders and crypto projects dealing with token-issuance, governance, or investor disputes. And third, victims of cybercrime and crypto theft—including SIM-swap victims—who are seeking recovery through arbitration after exchanges, telecom providers, or other service providers deny liability.

1:45 We also represent merchants in disputes with payment processors like Stripe, PayPal, American Express, and other acquiring banks— including account terminations, frozen funds, and MATCH list placements or removals. Like many of the other claims I’ve described, these disputes are typically governed by mandatory arbitration rather than court litigation.

2:12 One of the biggest mistakes I see is parties treating arbitration as if it’s just a faster version of court. It’s not. The rules are different. The procedures are different. And the strategy needs to start much earlier.

2:30 How you draft the arbitration demand, which rules apply, how discovery works, and if motion practice is even available can differ dramatically from traditional litigation in federal or state court.

2:44 The first major decision in any arbitration is choosing the right forum—and the right arbitrator. AAA (American Arbitration Association) JAMS (JAMS: Mediation, Arbitration and ADR Services) NAM (National Arbitration Association) all operate differently.

2:59 Their rules, fee structures, timelines, and arbitrator selection processes are not the same, and those differences can directly affect cost, timing, and outcomes.

3:13 In many crypto and software-liability cases, parties simply accept the arbitrator list they’re given without meaningful analysis. That can be a costly mistake.

3:28 Arbitration offers something you never get in court: a real say in who decides your case.

3:35 In crypto, software, and smart contract disputes, that matters more than almost anything else.

3:41 You want an arbitrator who understands technology and software, DeFi, smart contracts, and AI-related industry standards. You don’t want a construction or employment arbitrator learning the technology for the first time in your case.

4:01 At the same time, you need to strike arbitrators who aren’t the right fit for your case or your overall strategy. When my firm gets involved, we look at three layers of strategy at once. First, we analyze the arbitration clause itself—examining the forum, the applicable rules, and the degree of procedural flexibility.

4:26 Second, we focus on arbitrator selection, ranking and striking candidates based on their technical background, potential biases, and prior track record.

4:40 Third, we map out the case roadmap within each forum, because differences in timelines, discovery tools, and motion practice can materially affect your chances of success.

4:55 This level of planning is especially critical in software liability, crypto, and smart contract disputes. These cases often involve complex transaction histories, expert witnesses, software code, and cross-border issues.

5:14 You really need an arbitrator who can follow that complexity.

5:18 That’s why we’re often brought in not just to argue the case, but to help design the strategy from day one—who to file against, who to disqualify, and how to present the evidence.

5:31 If you’re a software developer, a Web3 founder, a merchant facing a payment processor dispute, or a victim of a crypto-related cyber incident - getting the arbitration strategy right early can make a real difference. If you’d like to discuss your dispute, my team and I consult on arbitration strategy across JAMS, AAA, and NAM.

5:55 Thanks for watching, and I’ll see you in the next episode.

A transcript of the recording, so it reads as speech rather than as prose. It explains the law in general terms and is not advice on your own situation, which turns on facts this video cannot know.