Is “Private” the new “Public”? The End of IPO-exits as we know them.
IPO windows can reopen quickly, and the past year has proved that point. Recent data from Pitch Book shows a rebound in U.S. sponsor-backed listings, with 2025 on track to be the strongest year since 2021. Roughly 59% of these issuers are trading above their offering prices, with sectors like energy, infrastructure, and financial services leading the resurgence. Yet these deals remain selective, concentrated, and exposed to macroeconomic volatility. They mark a cyclical uptick, not a structural reversal. For Founders globally, IPOs are no longer the inevitable liquidity path but one tactical tool among many. Liquidity, price discovery, and governance are increasingly negotiated privately through secondary transactions, structured processes, and disciplined valuation strategies. This shift reflects a new equilibrium where public-market scrutiny coexists with private-market structure, and where Founders must navigate strategic trade-offs deliberately to preserve flexibility, control, and value. This article analyzes this structural shift and outlines how Founders can use secondaries and valuation processes as strategic levers, anchored in clean process, strong governance, and defensible execution. Private markets are no longer the exception; they have become the core of how capital forms and circulates globally. Valuations, Secondaries, and the New Private Market Private markets have moved to the main stage. Companies like Open AI, Stripe, and SpaceX now set headline-grabbing valuations while regulators retrofit disclosure-heavy rules built for public markets to the opaque and fast-moving reality of private capital formation. The legal question is no longer whether private markets are like public markets, but how to preserve pricing integrity, manage conflicts, and protect stakeholders without dulling the control and flexibility advantages of staying private. Put differently: valuations and secondaries have become twin pillars of a new private-public equilibrium, where ownership, control, and staged liquidity are negotiated on founder-driven terms. This new dynamic has turned valuation into more than a pricing exercise and secondaries into more than a liquidity tool. Valuations now shape governance, deal strategy, and investor signaling, while secondaries give Founders flexibility to manage ownership and timing on their own terms. Together, they define how value is distributed, who stays at the table, and how long companies can choose to remain private. The shift: staying private is becoming the default The last decade entrenched an issuer choice regime: successful private firms can raise deep pools of capital, stage liquidity, and remain private indefinitely; going public is a choice, not a necessity. Secondary markets ranging from company led tenders to GPled continuation funds now perform some of the public market’s core functions, most notably price discovery and liquidity. Mutual funds invest in mature private firms; latest age financing round that look more like a good IPO set reference prices; and platforms like Forge, Car tax, Nasdaq Private Markets, among others, have improved intermediation for private share transfers. In this environment, the category “public company” has grown less coherent, and the tradeoffs Founders face between “public” and “private” have become highly firm specific. Private markets have absorbed functions once associated with public markets, while public markets have imported private style governance devices such as dual class stock and shareholder agreements. The collapse of the SPAC boom only accelerated this trend. As an exit vector, SPACs briefly promised a “third way,” but regulatory response, litigation risk, and market discipline have largely restored SPACs to a niche. Continuation funds, reorganized portfolios, and structured secondaries stepped into the gap. For venture backed companies, the consequence is straightforward: in today’s environment, secondaries are often a more realistic route to recurring liquidity than an IPO timetable that is beyond any one company’s control. What secondaries are and why they matter Secondaries operate at three levels: LP-led, GP-led, and company-level transactions. LPled deals: a limited partner sells its interests in one or more private funds to a buyer that assumes the remaining obligations and economics. GPled transactions (continuation funds and related recapitalizations): the sponsor creates a new vehicle to acquire one or more assets from an existing fund, offering existing LPs a choice to sell or roll and often bringing in new capital aligned to a longer hold. Company level secondaries: private company securities are sold by insiders, employees, or early investors, sometimes alongside a primary raise. For Founders, these mechanisms deliver three concrete benefits. First, liquidity and retention: staged liquidity supports recruitment and retention by allowing employees and early builders to realize value without forcing a premature exit. Second, price signals: carefully designed tenders and market checked processes can validate (or challenge) internal valuations, inform option pricing, and calibrate future financing strategy. Third, capital structure management: can refresh the cap table, consolidate small positions, and introduce aligned, value add holders while honoring transfer restrictions and information controls. The valuation tension: fair value versus negotiated price Founders live in two valuation regimes at once. On the one hand, negotiated round prices and secondary tender prices that reflect momentum, optionality, and bargaining dynamics, and represent how much control is given up.9 On the other, fair value marks are produced for financial reporting, fund net asset values (NAVs), or specific tax compliance regimes (such as 409A in the U.S.) using formal valuation frameworks. The gap between them is usually material. Empirical research consistently shows that headline post money valuations of venture backed companies often overstate fair value when the protective terms embedded in preferred stock, liquidation preferences, participation, IPO ratchets (contractual anti-dilution or price-adjustment mechanisms that protect investors if an IPO occurs at a lower valuation than expected), and conversion vetoes are ignored. Adjusting for those terms, the implied value of common equity can be substantially lower than the headline valuation.10 That does not invalidate negotiated pricing; it highlights that different instruments (preferred versus common) and different contexts (a competitive round versus a technical mark) price distinct economic rights. For Founders, the practical implication is twofold. First, be intentional about which valuation you are signaling, to whom, and why. A company run tender that prices at or near the most recent preferred round sends a different message than a narrow, negotiated block sale at a discount. Second, document the rationale. Even if you are not a registered public company, regulators and counterparties increasingly expect public like process discipline. Well organized valuation files, methodology, discount rationales, and board materials can help align expectations, support auditor and fund LP reviews, and reduce the risk of criticism. The
KLIP and the Future of Legal Strategy: What the Chicago Seven Can Teach Us About Information Overload
Every generation of lawyers has faced the same question: how do you find truth in a sea of information? From handwritten depositions and boxes of evidence to terabytes of digital data, the legal profession has always wrestled with complexity. But never before has that challenge been so immense—or the tools so powerful. Today, case files are no longer just stacks of paper; they’re sprawling ecosystems of documents, emails, text messages, videos, and digital transcripts. Managing that volume while maintaining clarity, confidentiality, and consistency has become one of the profession’s defining challenges, where technology, when done right, can redefine the craft of lawyering. Lessons from a Landmark Trial To see how far we’ve come, and how far we still have to go, it’s worth revisiting one of the most turbulent and revealing trials in modern history: The United States v. Dellinger et al., better known as the Chicago Seven trial. In 1969, the federal government charged a group of anti–Vietnam War activists with conspiracy and incitement to riot following protests at the Democratic National Convention. The proceedings were as much a reflection of the political climate as they were a test of the justice system’s ability to manage chaos. The trial became a cultural flashpoint, blending politics, free speech, and public dissent into an explosive courtroom drama that spanned months. The courtroom itself was a theater of contradictions. Thousands of pages of testimony, conflicting eyewitness accounts, and hundreds of motions created an almost unmanageable web of information. Witness contradictions were buried deep in transcripts. Precedents were debated in real time. Attorneys were forced to balance strategy with improvisation as new evidence surfaced daily. Behind every argument was a mountain of paper, and behind every missed connection, a lost opportunity for clarity. What If the Chicago Seven Had Modern Tools? Now, imagine if that same case were to unfold today. Instead of combing through boxes of handwritten notes, the defense could instantly search across every deposition, motion, and prior ruling. Contradictory testimony could be identified within seconds. Each attorney could view, annotate, and collaborate on the same secure digital workspace—eliminating the silos that slow strategy and weaken communication. That’s the kind of transformation the legal world is now experiencing. And it’s what platforms like KLIP are built to enable—not as a replacement for legal expertise, but as an amplifier of it. The Next Era of Legal Intelligence The truth is many “AI-powered” tools in the legal market promise transformation but deliver little more than automation. They make it faster to find files or summarize text, but they stop short of enhancing real insight or strategy. They digitize workflows but rarely understand them—offering speed without substance. KLIP takes a different approach. It’s designed around how attorneys actually think and work: building arguments, testing credibility, managing client data, and weaving evidence into coherent narratives. It’s not about replacing lawyers; it’s about empowering them to see patterns, contradictions, and connections that would otherwise remain hidden. KLIP combines several capabilities that make it stand out in this evolving landscape: Purpose-Built AI Agents – Instead of using generic, one-size-fits-all models, KLIP allows firms to deploy secure AI agents trained exclusively on their internal documents and case files. Each agent operates within the firm’s private environment—no leaks, no shared data, and no external training pools. Multi-Modal Intelligence – Modern cases involve more than Word documents. KLIP can interpret contracts, PDFs, transcripts, exhibits, and multimedia files, integrating them into a single, searchable, and analyzable ecosystem. It’s built to handle complexity, not avoid it. Accuracy + Speed – Rather than returning broad or shallow results, KLIP’s intelligence engine cross-references context, precedent, and evidence with remarkable precision. It doesn’t just retrieve information, it helps attorneys understand why it matters. Unified Collaboration – Law firms often juggle multiple tools for research, client communication, and document management. KLIP consolidates these into a single secure environment, seamlessly blending collaboration, AI interaction, and client data rooms. Beyond Automation: Building Strategic Clarity Consider how this might have changed the Chicago Seven trial. A KLIP-enabled defense team could have uploaded every transcript, deposition, and motion into the platform. Within minutes, it would identify patterns in testimony—where witnesses contradicted themselves or where prosecutorial statements deviated from earlier filings. Attorneys could generate cross-examination strategies directly from those insights. Expert witnesses could collaborate remotely in a secure workspace, seeing real-time updates without compromising confidentiality. That’s not about speed for its own sake; it’s about clarity—and clarity is what wins cases. Had such technology existed then, the defense could have reframed the narrative more quickly, highlighting inconsistencies that were otherwise obscured. The verdict might not have changed, but the process would have been more transparent, more strategic, and arguably more just. From Historical Lessons to Modern Demands The Chicago Seven trial may seem worlds away from the digital legal battles of today—yet its themes are more relevant than ever. In an age where data is limitless, but attention is finite, the challenge isn’t just managing information; it’s transforming it into actionable knowledge. Litigators, in-house counsel, and transactional attorneys now face a similar dilemma: information overload. Whether it’s a high-profile criminal defense, a billion-dollar merger, or complex IP litigation, the question remains the same—how do you make sense of it all, quickly and confidently? Technology, when thoughtfully applied, doesn’t diminish the art of lawyering; it enhances it. It gives attorneys back the one resource that matters most, time. Time to think strategically. Time to craft arguments. Time to serve clients with precision. KLIP’s Role in the Modern Legal Ecosystem KLIP isn’t a magic wand—it’s a framework for better thinking. Its search and interaction features are designed not to replace the lawyer’s instinct, but to refine it. Attorneys can engage conversationally with their data: ask nuanced questions, surface relevant context, and explore new connections—all while maintaining complete control over confidentiality and accuracy. A new kind of partnership between lawyer and machine—one built on trust, not dependency. Instead of automating decisions, KLIP strengthens them. As firms adapt to new expectations—faster client turnarounds, growing
CROSS BORDER ENFORCEMENT OF JUDGMENTS – AN OVERVIEW
In recent decades, international trade has seen significant growth due to a combination of technological advancements and the reduction of trade barriers. Innovations in transportation and communication technology have made it easier and cheaper to move goods across borders. Additionally, trade agreements and organizations, like the World Trade Organization, have played a crucial role in lowering tariffs and promoting free trade. Increased cross-border trade can lead to more complex contractual relationships, and with that complexity often comes a higher likelihood of disputes. Different legal systems, cultural differences, and varying regulations can all contribute to misunderstandings or disagreements between parties. The biggest fear of a potential Claimant when commencing cross boarder litigation is whether, if successful, the Claimant would be able to enforce the judgment in the jurisdiction where the Defendant is present. To the Claimant, there will be little commercial sense to expand costs and time only to obtain a paper judgment which cannot be enforced against the Defendant in its jurisdiction. Under the common law rules, there is a long-standing requirement that before a foreign judgment is recognized and enforced, it must be established that the foreign court had jurisdictional competence to deliver the judgment. It is immaterial that the foreign court had jurisdiction pursuant to the laws of its jurisdiction but rather the jurisdiction of the foreign court must be established pursuant to English conflict of laws rules. The common law approach has been heavily criticized for being very narrow in the recognition and enforcement of foreign judgments in the United Kingdom. The other issue that has been raised in relation to the common law rules is that it indirectly protects judgment debtors from liability in a foreign jurisdiction. This situation was most notable in Adams v Cape Industries Plc, a leading case on separate legal personality and limited liability of shareholders where the employees of Cape Industries who developed a serious health condition due to the poor working conditions at a subsidiary of Cape Industries, could not seek damages as the judgment obtained by the employees in that foreign jurisdiction was not recognized and enforced by the English courts. In the European Union, the Brussels Convention 1968 was the first piece of legislation formulated to govern matters of jurisdiction and the recognition and enforcement of a foreign judgments in civil and commercial matters. The Brussels Convention was later replaced by the Brussels Regulation in 2002 and was revised in 2012 and is now known as the Brussels Recast Regulation. The Brussels II Regulation was also adopted in 2003 which concerns the jurisdiction of courts and the recognition and enforcement of foreign judgments in matrimonial and family matters. On recognition and enforcement, Article 36 and Article 39 of the Brussels Recast Regulation succinctly puts it that any judgment given in any European Union Member State shall be recognized and enforced in any other European Union Member State without the need to adhere to any special rules. The Hague Convention on the Choice of Court Agreement was adopted on 30 June 2005 under The Hague Conference of Private International Law and is enforceable in all European Union Member States from 1 October 2015. It is a set of rules which deals with exclusive choice of court agreements and the recognition and enforcement of those judgments. Article 8 of the Hague Convention makes it clear that a judgment given by a court selected in an exclusive jurisdiction agreement shall be recognized and enforced by other Contracting States and the enforcing court shall not review the merits of the selected court. Another product of the Hague Conference on Private International Law is the recent Hague Convention on the recognition and enforcement of foreign judgments in civil or commercial matters which came into force in 2019. The Hague Convention on Judgments can be said to be a significant improvement from the Hague Convention as The Hague Convention on Judgments lists out in clear terms the situations in which a court in a Contracting State may recognize and enforce a foreign judgment. This clear and organized list is a breath of fresh air as it sets out clearly the requirements an enforcing court would need to look out for in finding that a judgment is eligible for recognition and enforcement. The Brussels Regulations, The Hague Convention and the Hague Convention on Judgments are all instruments that have been adopted to govern jurisdiction, recognition and enforcement of foreign judgment in civil and commercial matters applicable between European Union Member States and Contracting States outside the European Union. However, there is a lack of uniformity or predictability that can be applied across the board in recognizing and enforcing foreign judgments. At best, the Hague Conventions offer a seemingly clear and uniform set of rules which any party around the world could utilize in recognizing and enforcing foreign judgments.
“Maria1” is “Maria”, or Would AI promptly say otherwise?
Maria is not a statistical datum; she is a subject of rights. Categorized by algorithms yet not understood by them. Her resilience, her origins, her history; elements that should be recognized in all their complexity are often reduced to risk variables, exceptions, or noise. Rendered invisible in data, marginalized by patterns, Maria represents womanhood: strong, combative, and, often, misaligned with the predefined models of Artificial Intelligence (AI) and its multifaceted expressions. In these terms, if the legal universe were a stage, AI technologies would undoubtedly take center spot. It is common knowledge in this sphere that AI is and – spoiler alert! – will continue to be the protagonist when the discussion revolves around the triad of innovation, rights, and regulation. Maria is complex; Maria is multifaceted. However, so-called discriminatory biases bring to light a heated debate, fueling legal discourse on the matter. The increasing adoption of AI systems in sensitive areas, such as public safety, employment recruitment, criminal justice, credit approval, social benefits, among others, has revealed a concerning layer of technology: the reproduction and amplification of algorithmic biases that disproportionately affect historically marginalized groups. Despite being presented as advanced and objective tools, these systems are built on datasets often marked by structural inequalities, including racism, sexism, and socio-economic exclusion. Beforehand, it is worth noting that, according to the Department of Computer Science at Stanford University, AI is “the science and engineering of making intelligent machines, especially intelligent computer programs” (NATIONAL GEOGRAPHIC, 2023). In other words, these so-called “intelligent machines” or even “robots” aim to execute tasks and processes characteristic of human behavior, reproducing human intelligence through algorithmic learning from past experiences, known as “Machine Learning”. Given this context, it is necessary to promptly identify the various biases embedded in AI systems, many of which are considered discriminatory and directly impact fundamental human rights. These biases challenge the very structure of the internationally recognized and protected human rights framework, raising substantial regulatory challenges both globally and within Brazil’s emerging legal debate. In her book Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy (2016), Cathy O’Neil categorizes certain algorithms as “Weapons of Math Destruction” (WMDs) due to their opacity (“black box” nature), mass impact, and their potential to amplify social inequalities. Though seemingly neutral and objective, these systems are fed by biased historical data, which leads them to reproduce and reinforce racial, gender, and class prejudices, thereby violating fundamental rights. Operating from the premise that society itself is inherently biased, other scholars contribute enriching perspectives to this ongoing discussion. In the article Why Fairness Cannot Be Automated (Computer Law & Security Review, 2021), Sandra Wachter, Brent Mittel Stadt, and Chris Russell of the Oxford Internet Institute criticize attempts to address algorithmic bias solely through technical “fairness” metrics. For these authors, “fairness” is a legal and moral concept that cannot be automated by statistical measures such as equal opportunity or demographic parity. They highlight the tension with European anti-discrimination law, which is grounded in individualized treatment, and rejects the legitimization of discrimination through seemingly favorable aggregate statistics. Accordingly, while these metrics may be valuable in engineering contexts, they are legally insufficient within the European framework. However, it is worth noting that the ‘Old European Continent’ is not so old when it comes to addressing this issue, while it has proven anything but outdated in its approach. Quite the opposite, Europe Union’s AI Act (2024) and General Data Protection Regulation (GDPR, 2016) demonstrate advanced and innovative regulatory frameworks with growing concern for algorithmic bias and discrimination. The AI Act, for instance, mandates that data used to train AI systems must not reinforce historical discrimination. This requirement compels companies to reassess their models before entering the European market, with detailed provisions on bias, oversight, and potentially strong sanctions enforced by competent authorities. Moreover, the GDPR addresses automated individual decision-making, including profiling. Brazil, in contrast, still lacks a specific AI law. However, regulation is under debate through the proposed Bill No. 2,338/2023, drafted by a commission of jurists and currently under consideration in the Senate. The Bill outlines general principles such as non-discrimination, transparency, accountability and explain ability regarding algorithmic discrimination. It also includes provisions for risk analysis and impact assessments for high-risk systems, similar to the European standards. In the United States, regulation remains more fragmented and sector-specific, as there is no unified federal AI law. Instead, civil litigation and regulatory agency action, driven by strong civil society advocacy, guide the approach. Federal agencies are pressured to ensure greater algorithmic equity across sectors such as public services, employment practices, and facial recognition, seeking to mitigate the risks posed by discriminatory AI biases. Globally, there is a growing consensus on the need for ethical data treatment and human oversight, particularly in decisions that affect fundamental rights. This happens because the realm of human rights is breached when AI systems operate based on probabilities and generic patterns, triggering exclusionary automated decisions without considering individual context, relying solely on mathematical justifications that lack legal grounding from the perspective of fundamental rights frameworks. There are, unfortunately, numerous real-world examples across diverse domains, including criminal justice, education, labor markets, and police surveillance, which underscore issues such as racial bias, lack of explain ability, socio-economic inequality, privacy violations, and gender discrimination. One particularly emblematic case involves a major Tech Company that developed an AI system to automate résumé screening. The algorithm, however, began to reject female candidates, favoring male applicants because it had been trained on the company’s own historically male-dominated data. As a result, the system was internally scrapped in 2018 before public release, exemplifying how biased historical data can perpetuate discrimination. This historical context conveys important messages about social biases and distorted algorithmic forecasting, leading to stereotyped and discriminatory outcomes. One must then ask: How – and from whom – are these AI systems learning? The answer, though complex, is relatively straightforward: from people. And people are embedded in a society marked by inequality and bias, which inherently amplifies the risk of
DEMOCRACY AND JUSTICE
In democratic countries, their Constitutions are a series of first-order mandates. It is the will of the people translated into words with enough force to dynamite one Constituted Power and, in its place, form another, with the same name, but ultimately different. Constitutions should be constructed from the law, for the law, in protection of the law, and with the neutrality of the law. This latter task is impossible if their creators or reformers are not neutral jurists, but politicians with deeply rooted ideologies. Constitutions, although they are supreme laws, are loaded with political decisions, which, in itself, is not a bad thing; the problem begins when they are not conceived from the neutrality of a rule of law designed to achieve justice for the population. In Mexico, a reform to the Constitution was recently carried out, although it was publicly known within the institutions that it was necessary to force, through apparently undue pressure, key votes from senators from other political parties. The reform basically consisted of placing dynamite in the columns of a Constituted Branch, such as the Judiciary; the lighting of the dynamite was scheduled for June 2025 and was called “judicial elections.” Judicial elections are historic, but not positively historic. In Mexico, federal judges have been elected through competitive examinations for some time now. The competitive examinations are very rigorous and conducted in stages; therefore, many of the public servers who gained access to the position of judge, in addition to their vast experience, had also prepared themselves years before the examinations were held. These are known as career judges. While the competitive examination system for accessing the position of judge is not perfect, it did guarantee that the most qualified candidates were selected. Thus, the people, who operate within a democratic system, did not elect their judges by direct vote, which is not undemocratic and, furthermore, guarantees a trial by someone not only qualified but also knowledgeable in the intricacies of the courts and tribunals. But why the destruction of a constituted branch of government in Mexico? In early 2019, I had the opportunity to attend a national meeting of Federal Judges Coordinators (I was the coordinator for my area). The meeting was convened by the then Chief Justice of the Supreme Court of Justice of the Nation and the Federal Judiciary Council—the collegial body that administers the Federal Judicial Branch—Arturo Zaldívar Lelo de Larrea. Minister Zaldívar’s administration of the Federal Judicial Branch coincided with the first four years of the government of constitutional president Andrés Manuel López Obrador. Outside the chamber, our cell phones were confiscated; this level of secrecy drew attention. Already at the meeting, Justice Arturo Zaldívar told the magistrates and coordinating judges that the people had spoken in the last presidential and legislative elections, saying that the people wanted change, and therefore, he said, the Judiciary could not be exempt. He also mentioned that if the Judiciary was not reformed from within, it would be reformed from without, because the government had sufficient political power to achieve it. He also warned that within the government, there were radical groups seeking a reform that would truly affect the members of the Federal Judiciary. For his part, former President Andrés Manuel López Obrador, among his various campaign promises, had one in particular directed at the Federal Judiciary: to lower the salaries of Ministers, Councilors, Magistrates, and Judges. It was with the Federal Law on the Remuneration of Public Servants that an attempt was made to reduce the salaries of the Federal Judiciary. However, amparo lawsuits were filed by those affected. In Mexico, the amparo lawsuit is the preeminent means for the protection of human rights. As fate would have it, I was assigned to decide on the first amparo lawsuit against salary cuts. It was brought by a then-serving judge. I knew any decision would cause a stir for many reasons: 1. A federal judge ruling on an issue that was detrimental to him. 2. It was a campaign promise of the ruling political party. 3. The Constitution establishes that no public server can have a higher salary than the President of the Republic, but it also establishes that federal judges’ salaries cannot be reduced. The injunctions continued, and some federal judges, like myself, granted the injunction to prevent the salary of another colleague from being reduced. Legal action was presented in the Mexican Supreme Court, which ordered, for the time being, that the challenged law not be applied and, therefore, that salaries not be reduced. Also due to fate, when I was a judge in Mexico City, I was responsible for coordinating the Economic Competition judges (there are only three courts for the entire country). In my capacity as coordinator, I was invited to Justice Arturo Zaldívar’s last meeting, which took place at the end of 2022. It should be mentioned that Justice Arturo Zaldívar’s administration was highly criticized within the Federal Judicial Branch due to its closeness to the Executive Branch. At the meeting, Justice Arturo Zaldívar explained that during his tenure, the salaries of magistrates and judges had not been reduced by a single cent (in which he was right). This task was not easy, as it involved various negotiations with the ruling political force. He basically asked that this achievement be recognized. What is a fact is that during the entire term of former President Andrés Manuel López Obrador (December 1, 2018, to September 30, 2024), the salaries of federal judges were not reduced, which meant he failed to fulfill his campaign promise. Former President Andrés Manuel López Obrador felt attacked by the Federal Judiciary, which he openly expressed. In his morning press conferences, he projected the names of the federal judges who issued many decisions that, in his view, constituted an attack on his government. His emblematic projects, such as the cancellation of the new Mexico City airport, the construction of the new Santa Lucía airport, and the construction of the Maya Train, were delayed because some judges ordered
Non-litigious Litigation: Strengthening the Rule of Law through Judicial Review
Indonesia’s legal landscape is dynamic yet entangled. Beneath the surface of abundant legislation lies a persistent structural problem: overlapping, inconsistent, and linguistically obscure regulations. The consequence is uncertainty—where even public officials struggle to determine which rule governs and how it should be applied. As a practitioner in constitutional and administrative law, I have seen that one of the most effective ways to untangle this web is through judicial review—a form of non-litigious litigation. Judicial review before the Constitutional Court (Mahkamah Konstitusi) and the Supreme Court (Mahkamah Agung) allows the judiciary to restore order to Indonesia’s legal hierarchy without waiting for political compromise or the slow legislative process. Looking ahead, the system can be strengthened by improving transparency in the Supreme Court’s judicial review and introducing a constitutional-complaint mechanism at the Constitutional Court—creating a more balanced and responsive architecture of constitutional justice. Overlapping and Obscure Regulations Indonesia’s hierarchy of norms—from the 1945 Constitution to regional regulations—continues to produce 3 recurring forms of disorder: horizontal overlap, vertical inconsistency, and linguistic obscurity. Horizontal Overlap Conflicts often emerge between regulations of equal rank enacted by different sectors. A clear example appears between Law No. 12 of 2012 on Higher Education and Law No. 17 of 2023 on Health. Article 24 paragraph (2) jo. Article 1 point 2 of the Higher Education Law limits the organizer of professional programs—including medical-specialist education—to colleges (perguruan tinggi). In contrast, Article 187 paragraph (3) of the Health Law introduces hospitals, in cooperation with colleges, as organizers. This expansion generates uncertainty over the division of roles, accreditation, and supervision between universities and teaching hospitals. A similar overlap exists in defining “state finance (keuangan negara)”. Law No. 17 of 2003 on State Finance adopts an expansive concept covering assets of state-owned enterprises (SOEs), while Law No. 19 of 2003 on SOEs defines them as independent legal entities with separate assets. This tension has led to conflicting interpretations in corruption cases and audits, where the line between public and corporate assets remains contested. Together, these examples show how horizontal inconsistencies at the statutory level weaken legal certainty and blur institutional accountability. Vertical Inconsistency Vertical inconsistency arises when subordinate regulations deviate from their parent statutes. The Committee of State Receivables Management (PUPN), established under Government Regulation in lieu of Law No. 49 of 1960 on PUPN, saw its powers significantly expanded by Government Regulation No. 28 of 2022 on Management of State Receivables by PUPN, introducing enforcement mechanisms not contemplated in the 1960 framework. This raises ultra vires concerns and blurs the boundaries of lawful delegation. A further example appears in the regularization of forest areas (penertiban kawasan hutan). Articles 110A and 110B of Law No. 18 of 2013 on the Prevention and Eradication of Forest Destruction, as amended by Government Regulation in lieu of Law No. 2 of 2022 on Job Creation, establish mechanisms for administrative settlement of past land-use violations within forest zones. Yet Presidential Regulation No. 5 of 2025 on Forest Area Regularization goes further by introducing a new sanction—repossession (penguasaan kembali)—not envisaged by the parent law. This illustrates how lower level regulation can quietly expand state authority and alter the balance of rights and obligations originally set by laws. Linguistic Obscurity Even when hierarchy is respected, ambiguity in legislative language can still derail justice. A striking example is Article 14 of Law No. 31 of 1999 on the Eradication of Corruption Crime, as amended by Law No. 20 of 2001 (Anti-Corruption Law), which enables an expansive application of corruption offences beyond those originally defined. The provision’s vague syntax and circular logic have long caused confusion. In Circular Letter No. 7 of 2012, the Supreme Court acknowledged two competing interpretations and noted plans for internal revision. Yet the article remains unrevised, continuing to blur the boundary between general and sectoral criminal liability. I am currently contesting Article 14 before the Constitutional Court, seeking a definitive interpretation that restores the principle of legality and prevents indiscriminate extension of criminal liability. This uncertainty exemplifies how linguistic obscurity in legislative drafting can distort the reach of criminal law, threaten individual rights, and erode the credibility of anti-corruption enforcement. Judicial Review as Non-litigious Litigation Against this backdrop, judicial review functions as a disciplined, non-adversarial mechanism to correct defective norms. Petitioners do not seek compensation but legal coherence. At the Constitutional Court The Constitutional Court reviews laws (undang-undang) against the 1945 Constitution. It may annul, reinterpret, or conditionally uphold provisions. Through these powers, it acts as the guardian of constitutional supremacy, offering a rapid remedy to systemic uncertainty. A significant example is the judicial review of online-defamation and hate-speech provisions in the Electronic Information and Transactions Law, a case I had the privilege to lead. The Court narrowed the scope of those offences, emphasizing freedom of expression and proportionality in sanctions. This decision not only aligned Indonesia’s cyber-law enforcement with constitutional guarantees but also showed how judicial review refines legislative language to prevent misuse. Another landmark is Decision No. 62/PUU-XXII/2024, which eliminated the presidential threshold that had long restricted nominations for president and vice president to parties or coalitions commanding 20% of parliamentary seats or 25% of the vote. By striking down this limitation, the Court reaffirmed equal political participation and expanded democratic space for both voters and parties. The case illustrates judicial review’s role as a non-litigious instrument of structural reform, reshaping Indonesia’s political framework through legal reasoning rather than political bargaining. At the Supreme Court The Supreme Court reviews regulations below the law—government, ministerial, and regional—against higher-level regulations. Many regulatory conflicts occur here, where agencies exceed delegated authority. The Court’s annulments restore legal hierarchy and coherence. An illustrative case is the judicial review of the Minister of Industry’s Regulation on the Tobacco Production Roadmap 2015–2020, which I structured on behalf of public-health advocates. The regulation drastically increased production limits, reflecting regulatory capture by commercial interests. The Supreme Court granted the petition, annulling the regulation and affirming that industrial policy cannot override public health. The ruling reframed tobacco not merely as an economic commodity but as a constitutional concern, showing how judicial review can curb executive excess and safeguard public welfare. Yet a major institutional gap
CSDs Between the past and the future
Financial Market infrastructure entities (FMIs) like central securities depositories (CSDs) are at the core of the financial system and critical for financial stability. CSDs are essential for the proper functioning and security of financial instrument markets. They play a key role in maintaining the integrity of securities issues from fraud and loss. They provide three core services notary services, central securities accounts maintenance services, and security settlement systems. In addition to auxiliary services such as supporting the processing of corporate actions, tripartite collateral management, the organization of a securities lending mechanism between its participants, services to issuers. The CSDs are also active participants in the integration of financial markets by establishing links between CSDs as a way for participants in a given market to be able to access securities issued in other jurisdictions. In the second annual survey of the World Forum of CSDs (WFC) which is composed of the five regional Central Securities Depositories (CSD) associations, i.e., Asia- Pacific CSD Group (ACG), Americas’ Central Securities Depositories Association (ACSDA), Association of Eurasian Central Securities Depositories (AECSD), Africa & Middle East Depositories Association (AMEDA) and European Central Securities Depositories Association (ECSDA), in their Fact Book dated 2019, it cited that from the 100 CSDs responded to the survey, 56 CSDs mentioned that they have links with other CSDs. Those links to make cross-border trade and settlement and to create full interoperability between different domestic systems and to access systems outside the domestic market with respect to each party regulatory requirements and multiple legal regimes which are considered from the beginning in their memorandum of understanding and conventions. Recent technological innovation has made this integration process realistic as countries continue to adopt international standards and conventions (International Securities Identification Number (ISIN) standards or Bank Identification Codes (BIC)), and have considerably increased investments in straight through processing (STP) solutions (SWIFT or FIX (Financial Information eXchange) protocols). Because of the central role central securities depositories play, it is important that the intermediaries be structurally, financially and operationally sound. This requires proper supervision by the public sector, an adequate capital base, rigorous risk management tools and business recovery plans. CSDs can vastly improve the efficiency, transparency, and safety of financial systems but also concentrate systemic risk. If not properly managed, they can be sources of financial shocks, such as liquidity dislocations and credit losses, or a major channel through which shocks are transmitted across domestic and international financial markets. CSDs Traditional vs Disruptive business model The world of finance is evolving drastically. CSDs are required to find opportunities to grow and to have an effective impact on the market, start providing services beyond their conventional area of business, and seek to meet the expectations of their clients and regulators. Diversification is affecting financial metrics and service level, cost management, market needs, and the regulator’s mission to ensure evolution of the domestic market are among the crucial drivers of diversification. They need to ensure global integration, attract foreign investors, or provide more opportunities to local investors. They must seek to disrupt their current business model. Previously, it took them more than a decade to conduct the dematerialization of share certificates from physical state. Some of them were the monopolist of this industry relying on their current legislation. They had the time needed to invest and cope with technological changes and their repercussions to offer sustainable services to all stakeholders. In this era, technological innovation and digitization will be both challenges and opportunities for CSDs. Regulators and the infrastructure should maintain their competitiveness, including in front of FinTech businesses. Many competitors are facing CSDs and are creating a parallel financial market infrastructure using the internet of value. Fintech technologies like blockchain, Distributed Ledger Technology and tools like tokenization which are based on these new technologies are the next step in the evolution of the way securities are cleared, settled. In the European Union T+1 Industry Committee summit held in Brussels, 3 July 2025, the committee presented its high-level roadmap to guide market participants through the transition to a shorter securities settlement cycle, scheduled for implementation on 11 October 2027. It reflects their commitment towards innovation and aligning European markets with global best practices to attract international investors. The technological improvements needed to the core functions of traditional CSDs All the functions – settlement, registration, custody, and asset servicing- performed by a CSD in a transaction can now be performed using blockchain technology. And the aspect of blockchain technology that underpins these functions is the digitalization of securities, or tokenization. To remain relevant in this new era of finance, CSDs need to adapt to tokenization of securities. (Tokenization simply refers to the digitalization of securities. The ownership of the security is associated with a digital token on a distributed ledger, and the ownership can only be transferred with the transfer of the token, and vice-versa.) Tokenization is the next step in the evolution of securities are cleared and settled. The transparent nature of the distributed ledger technology (DLT), which powers DeFi (Decentralized Finance) and tokenization, ensures that transactions can be traded, cleared and settled directly between a buyer and seller. This facilitation of peer-to-peer transactions, without an intermediary to facilitate the exchange. The exchange is facilitated in real time, in the internet of value without the use of legacy technology that relied on SWIFT messages. The most impactful Fintech-led innovation on CSDs: Digital cash. Blockchain technology, a distributed ledger technology (DLT) that maintains records on a network of computers, but has no central ledger. Smart contracts, which utilize computer programs (often utilizing the blockchain) to automatically execute contracts between buyers and sellers. Open banking, a concept that leans on the blockchain and posits that third-parties should have access to bank data to build applications that create a connected network of financial institutions and third-party providers. Reg-tech, which seeks to help financial service firms meet industry compliance rules, especially those covering Anti-Money Laundering and Know Your Customer protocols which fight fraud. Cybersecurity, given the proliferation of cybercrime and the decentralized
Beyond Jurisdictions: How to Operationalize Extraterritoriality in AML/CFT and Sanctions
Extraterritoriality isn’t a conference theory—it travels with your payments, your partners, your data, and your supply chains. A flow that touches rails in another jurisdiction, a third party processing from abroad, a brand that embeds financial services across markets…and suddenly a local institution is being judged not only by its domestic law, but also by the reach of foreign regimes that can trigger obligations, restrictions, or expectations within days. The relevant question isn’t whether extraterritoriality “should” exist, but how to operate safely when the signals move and the business cannot stop. In plain language, extraterritoriality appears when a rule or authority crosses borders if certain triggers are present: currency (e.g., USD), counterparties involved, touchpoints with a foreign financial system, or facilitation by a covered person. In practice it shows up as reporting duties, prohibitions on specific transmittals of funds, lists and sanctions that “stick” to particular corridors or jurisdictions, or due-diligence standards that are expected even if your local rulebook doesn’t call them by that name. Three misunderstandings are worth avoiding: thinking that “not being on a list” equals safety; assuming this only applies to global banks; and betting on “waiting for the final verdict” to move controls that, day to day, are essential to manage risk. Preparing without panic requires discipline. First, decide with verified facts and current notices, not adjectives. Second, apply proportionality: the right control for the actual risk of a product, channel, geography, or counterparty. Third, leave traceability: if it isn’t documented, it didn’t happen. And finally, communicate calmly and respectfully; communication is also a control because it reduces rumor, error, and friction with customers. The roadmap starts with an exposure map that anyone in management can read. It doesn’t have to be perfect or encyclopedic; it has to be useful. List products and channels (retail vs. corporate, cross-border payments, trade finance, acquiring, wallets), sensitive corridors and currencies, critical counterparties and third parties (correspondents, processors, program managers, marketplaces), and—above all—the points in the process where things really happen: where screening occurs, who escalates, who decides, by what criteria, and within what time window. That map isn’t a slide for the board; it’s a living work tool. With exposure in sight, convert notices and rules into operational requirements. What is prohibited? What requires reporting? What merits escalation? That “operational dictionary” prevents each area from interpreting the same notice differently. Assign single-point ownership for each requirement (Policy, Operations, Legal, Tech) to reduce gaps and overlaps. If your organization belongs to a group, synchronizing policies across parent and subsidiaries avoids a decision in one country leaving another entity out of step with shared clients, channels, or vendors. Controls must go beyond name screening. Screening is necessary but insufficient if there aren’t contextual rules by transaction type, corridor, and client role; if escalation paths aren’t clear; or if time-to-decision isn’t measured. An alert that ages without resolution is real risk: it exposes customers, erodes partner trust, and, under supervision, becomes a finding. Assessing quality—what was escalated, why, with what evidence, and with what outcome—matters as much as counting alert volumes. The biggest exposure often hides in third parties. Contracts with explicit AML/sanctions clauses, audit rights, an operational kill-switch, data-sharing for investigations, and periodic effectiveness tests (walk-throughs, samples, evidence) separate “we comply on paper” from “we comply in practice.” Outsourcing processes does not outsource decision accountability: if your brand is on the front, your board owns the risk and must be able to demonstrate control. Evidence matters. Keep data hygiene (names, IDs, jurisdictions), version your lists, and maintain a decision log with facts considered, reasoning, approvals, and timestamps—this makes decisions explainable that might otherwise look discretionary from the outside. A small anonymized case library helps train teams, align criteria, and speed up future decisions. Traceability isn’t bureaucracy; it’s the institutional memory that protects you when the conversation gets demanding. Communication is also a control. Pre-approved customer messaging for common scenarios—delays due to review, enhanced due diligence, blocks—reduces friction and complaints. A stakeholder matrix clarifies who must be informed and when (board, regulators, key partners). Training spokespeople avoids promises that outpace the facts or silences that feed speculation. Well-managed calm is part of the internal control system. Business continuity completes the picture. Identify alternative rails or corridors in case one pathway is restricted, run table-top exercises for liquidity, client service, and operational rerouting, and time-box decisions: 48–72 hours. In a crunch, what you decide in the first three days defines downstream risk; better reasonable, documented decisions than perfect decisions that never happen. Measurement gives visibility. Coverage (what and who is screened and how often), effectiveness (time-to-decision, escalation quality, repeat findings), remediation velocity (how quickly fixes are implemented and verified), and culture signals (early issue reporting, training retention, first-line challenge) tell the operational story that boards and authorities expect to hear. A few anonymized examples help anchor this. A payments fintech processing indirect routes into sensitive jurisdictions via aggregators learned to segment by corridor, raise due diligence when in facilitation roles, and negotiate a kill-switch with its rails partner. A non-bank lender financing supply chains with potential dual-use goods mapped proliferation/sanctions exposure, added documentary verification of the commodity, and set up a rapid committee for justified holds. An embedded finance model with a multi-country marketplace reinforced contracts, implemented quarterly “proof-of-life” tests on the partner’s controls, and prepared clear messaging for preventive blocks. There’s no magic here—just method, discipline, and learning. If you need a practical sequence without turning this into a manual, consider this cadence. In the first thirty days, stabilize and see clearly: refresh the exposure map and gap list; freeze contradictory procedures; issue a plain-language memo with current facts and interim guidance; and confirm contractual levers with critical third parties (rights to information, audit, termination). Between days thirty and sixty, calibrate and document: update policies and define thresholds that trigger holds, EDD, or escalation; roll out decision logs and case templates; run a QA pass on recent escalations; align customer messaging and publish a brief FAQ for frontline teams. Between
Zweig’s dream: reforming Brazil for the future
In his last years of life, when Stefan Zweig published Brazil: Land of the Future, a feeling became so embedded in the Brazilian subconscious that paradoxically explains both national joy and melancholy: that prosperity is always just around the corner. Of course, today we are mature enough to recognize that Zweig’s book, although insightful, was like a love letter written by someone dazzled, always ready to turn a blind eye to problems. This does not mean we have stopped waiting for our promised land. Comprehensive reforms in Brazil are often presented by political leaders as our ultimate ticket to the future. In practice, the future is usually postponed to the next reform, but the quest for a utopian Brazil has undeniably led to political actions that have realigned the country economically and made us more open to foreign investment. I had the honor of contributing to Brazil’s first major step in this direction when, in 2019, we passed the Economic Freedom Act, which fostered the opening of new businesses as never before since the turn of the millennium. There is no doubt, however, that the most significant and controversial reform has come recently, with Constitutional Amendment No. 132/2023, known as the Tax Reform. Like any major reform, its impacts are still subject to debate, but it was marked by an attempt to simplify the previous tax system: by instituting the dual IVA (dual value-added tax), composed of the IBS (property and services tax) and the CBS (property and services contribution), it replaced a series of old taxes. It also created the IS (selective tax), an extrafiscal tax aimed at regulating the consumption of certain goods and services deemed harmful to health or the environment, rather than merely generating revenue. It is the IS that we need to clarify to the public. Its regulation came this year, through Complementary Law No. 214/2025, which defined its applicability to products and activities with negative externalities, e.g.: alcoholic beverages, sugary drinks, tobacco products, high-polluting vehicles, gambling, mineral resource extraction etc. The IS is a federal tax, levied once on the good or service, with no credit offsets allowed. The calculation base will vary depending on the type of transaction and may be: sale value, book value, or a reference value set by regulation, and it will not include amounts owed for IBS, CBS, or the IS itself. The taxpayers of the IS are producers, importers, and traders of goods and services subject to taxation. The tax is due at the following times: (1) first commercialization of the good; (2) auction acquisition; (3) non-onerous transfer of extracted or produced mineral goods; (4) incorporation of the good into the manufacturer’s fixed assets; (5) export of extracted mineral goods; (6) consumption of the good by the producer or manufacturer; or (7) service provision or payment, whichever occurs first. In this context, it is important to highlight that the Executive Branch vetoed the provision of Complementary Law No. 214/2025 that excluded IS from being levied on the export of mineral goods. The technical justification was that the exemption would violate Article 153, Paragraph 6, Item VII, of the Constitution, which requires taxation on mineral extraction regardless of whether the destination is domestic or international. At the time of writing this article, the decision on whether to uphold or overturn the veto is still pending before Congress. If upheld, IS will apply to mineral extraction even when destined for export. If overturned, exports of these goods will be exempt, with taxation limited to domestic operations. This latter scenario may make exports more attractive for oil and natural gas producers, potentially reducing the supply of raw materials for domestic refineries, which today face logistical obstacles and reliance on imports. IS rates will be defined by ordinary federal law and may vary depending on the nature of the good or service. For mineral extraction, for instance, the rate will be capped at 0.25%. For alcoholic beverages, the law may set differentiated rates by product category, applying progressive rates according to alcohol content. In the automotive sector, rates will be scaled based on environmental criteria related to pollutant emissions, encouraging the acquisition of electric and hybrid vehicles and promoting a more sustainable transportation matrix. As can be seen, the creation of the IS is an innovation in the Brazilian tax system, aligning with international practices for taxing harmful products. However, its implementation requires taxpayers to exercise extra care regarding compliance with new ancillary obligations, the correct classification of taxable goods and services, and the assessment of tax risks arising from potential interpretative divergences, especially in sectors with high regulatory complexity such as fuels and mining. Despite its narrower scope compared to the IBS and CBS, the economic effects of the IS may be significant, particularly in price formation and the competitiveness of companies subject to progressive rates based on environmental or health criteria. Companies in sectors sensitive to this tax should incorporate the potential tax impacts on their margins, market positioning, and investment decisions into their tax and strategic planning. That said, although it is a tax with specific reach, the IS has structural influence on the production chains subject to its incidence. Proper understanding and monitoring will be essential for taxpayers to adapt to the new tax model, mitigate risks, and seize opportunities within the regulatory logic ushered in by the Tax Reform. As can be seen, the IS is just one part of the broader reforms Brazil is currently undertaking; and the oil & gas sector still faces many challenges to ensure the sustainable development of Brazil’s private refining industry. A parallel issue, also of great impact, is the revision of the reference price calculation methodology for oil, set monthly by ANP (the Brazilian National Agency of Petroleum, Natural Gas, and Biofuels), which serves as the calculation base for the collection of royalties and profit-sharing for the Union, States, and Municipalities. Currently, the reference price lags behind actual market prices for oil, resulting in (1) lower royalty and profit-sharing
Deepfakes and Image Rights: Legal Challenges in the Age of Artificial Intelligence
In the digital era, technology evolves faster than the laws that attempt to regulate it. Among the most striking examples are deepfakes—realistic but entirely fabricated images, videos, or audio generated by artificial intelligence. While these tools can be used for satire, education, or entertainment, they also present new challenges to personal rights, particularly the right to one’s image. Deepfakes raise questions about consent, misuse, and legal liability. Across continents and legal systems, these synthetic creations have already prompted legislative debates, artistic controversy, and new concerns over how identity can be digitally rewritten without consent. This article explores the intersection between deepfake technology and image rights, highlighting the legal vacuum, the potential for abuse, and the need for effective legal and contractual safeguards. What Are Deepfakes and How Do They Work? Deepfakes are synthetic media generated using artificial intelligence. These neural networks train on large datasets to create hyper-realistic content that mimics real individuals’ faces, voices, and expressions. Common use cases include inserting a person’s face into a movie scene, creating fake news clips, or mimicking a celebrity’s voice. Initially a niche technology, deepfakes have now proliferated through apps and open-source tools, making their creation accessible to anyone with a smartphone and an internet connection. Their impact is significant. Viral videos of public figures making statements they never uttered or influencers appearing in fake promotional content illustrate how deepfakes can distort public perception and damage reputations. This is where the right to image comes into focus. Image Rights and the Deepfake Dilemma The right to image generally refers to a person’s control over the commercial and public use of their likeness, including their face, voice, or other identifying attributes. Deepfakes challenge this right in multiple ways. First, by simulating consent: a deepfake may appear as if someone has willingly participated in content they never approved. Second, by blurring the line between parody and defamation, as it becomes increasingly difficult to distinguish fiction from fact. A clear illustrative example of this dilemma appears in the popular TV series Black Mirror, in the episode where actress Salma Hayek portrays a version of herself. In the narrative, a streaming platform uses her digital likeness—via deepfake technology—to create fictional films that damage her reputation, without her consent. This dramatized yet eerily plausible scenario demonstrates the emotional and reputational toll of synthetic media, especially when image rights are not properly safeguarded. Legally, the situation is complex. In some jurisdictions, image rights are grounded in privacy law, while in others, they fall under intellectual property or tort law. What is clear, however, is that current frameworks often fail to adequately address the unique threats posed by synthetic media. There is also an enforcement gap: once a deepfake is posted and shared, removing it entirely from the internet is nearly impossible. Comparative Approaches and Legal Gaps Different regions have started to address deepfakes in their legislation. In the United States, states like California and Texas have introduced bills banning deepfakes in political campaigns and non-consensual adult content. These statutes reflect a growing recognition of the real-world harm deepfakes can cause, particularly when used to manipulate elections or spread false information. The European Union’s proposed AI Act includes provisions on transparency and accountability for synthetic content. Under this regulation, AI-generated media must disclose its artificial nature, which could help reduce confusion and misuse in public discourse. In Asia, countries like South Korea have criminalized the creation and distribution of certain types of deepfake content, especially those that involve sexual exploitation or impersonation. Meanwhile, China has implemented a rule that requires providers of deep synthesis services to notify users when content is generated using AI. Latin America is still developing its response to deepfake risks. Most countries rely on traditional legal frameworks, such as defamation and privacy laws, but lack tailored provisions for synthetic media. This presents both a challenge and an opportunity for legal innovation. Given the region’s growing digital influence, especially in content creation and influencer marketing, proactive legislation could help prevent future harms. In Mexico, legislators are already pushing to penalize deepfakes used to simulate explicit content without consent. Meanwhile, in Brazil, the Superior Electoral Court has explicitly banned the use of deepfakes in political campaigns and requires clear labeling of any AI-generated media in electoral content. These measures reflect growing institutional awareness in Latin America, not only of the reputational harm these tools can cause but also of their potential to mislead voters and undermine democratic processes. A notable real-world example of deepfake misuse occurred in 2018, when a video surfaced of former U.S. President Barack Obama apparently insulting then-President Donald Trump. Although it was later revealed to be a deepfake created for educational purposes, the clip demonstrated how easily synthetic content could mislead the public. Another high-profile case involved actress Scarlett Johansson, whose image and voice were digitally manipulated for adult content without her consent. Hypothetical Scenarios and Legal Implications The potential legal implications of deepfakes become even clearer when we look at how such content could play out in real-world scenarios grounded in plausible real-world contexts. Imagine a deepfake video featuring the CEO of a major corporation delivering a fabricated apology for financial fraud. Within hours, the company’s stock value collapses, investors panic, and the damage is done before the video is debunked. The legal consequences would involve not only reputational harm but also financial loss and potential securities fraud inquiries In another case, imagine that just days before a national election in Brazil, a deepfake video circulates showing a presidential candidate appearing to accept illicit funds from a foreign government. The video goes viral before fact-checkers can intervene, swaying public sentiment and influencing voting behavior. The consequences could include investigations for electoral manipulation and reputational damage. Consider also a marketing campaign where a beauty brand digitally inserts the likeness of a well-known influencer into an advertisement, promoting products the influencer has never used. Not only is this a clear case of commercial appropriation of image without consent, but it could also lead
