Flying Into the Wherever

Anna Mercado Clark came to the U.S. from the Philippines in 1993, when the only conversational English she knew she’d picked up watching Sesame Street and the sitcom Perfect Strangers. She and her sister were reuniting with their mother, who’d been working in the States as a nurse while caring for their younger brother.

“I tried to stay up the entire plane ride because I wanted to see day turn into night,” Mercado Clark recalls. “I knew that when my mom would call me from the United States, it would be nighttime where she was and daytime where I was. It was an interesting lesson to learn that that’s not how it works, because you’re flying into the wherever.”

Flying into the wherever is an apt metaphor for the work Mercado Clark does. As Phillips Lytle’s chief information security officer, and its resident expert in artificial intelligence and cryptocurrency, some of her clients view her areas of expertise with trepidation, if not outright terror.

“I feel like I spend most of my time, when I’m talking about AI, calming people down,” she says. “People are very alarmed, partly because news coverage has sensationalized it a bit and also because there’s so much unknown.”

Mercado Clark’s clients range from high net-worth individuals to startups to multinationals in all industries: education, health care, tech, manufacturing, the financial sector. She helps them find or design AI software that will get them the results they want, while making sure to prioritize privacy and security compliance. People have been interfacing with common AI systems for years, of course. What’s new, Mercado Clark says, is generative AI: models that essentially mimic human neural pathways. They’re not just finding, they’re creating.

“And they’re designed to be continuously creating—new works of art, new music, new images, new written or language products,” she says. “In theory, they could continue to create and create and create, because that’s what they’re intended to do.”

Which does not necessarily quiet clients’ concerns about abetting their own obsolescence. “To some extent, there are some functions that might be supplemented or replaced,” says Mercado Clark, before adding, “Humans are resilient. We evolve. We’ve had different technologies come into the consciousness over the years. And AI is so far away from being able to essentially think on its own in the way that people think it does.”

Here’s a different kind of panic: A fire alarm rings on the 38th floor of a midtown Manhattan office tower, prompting lawyers and publishers and tech staff to emerge from their offices. As a fire marshal explains what to do, were this an actual emergency, people quietly catch up with one another.

“That’s such a pretty dress,” a woman says to Mercado Clark, who is wearing a Filipino top made of pineapple fiber.

“I appreciate beauty,” Mercado Clark says, as the practice drill ends and she settles back into a glass-walled conference room at Phillips Lytle. “I think it’s important.”

Twenty years ago, as a prosecutor trying criminal cases in the district attorney’s office in Queens, Mercado Clark leaned away from glamour. “My friends and I didn’t think you could be smart and also wear nice things, because you would be perceived as not serious enough,” she says. “Now we’re secure in our careers. We’re like, ‘We’ll do what we want to express ourselves.’ So I like beautiful things. It’s a gateway to good conversation with people about culture and diversity, which are important to me. It’s beauty with a purpose.”

It was politics that turned Mercado Clark toward the law—though not in the usual manner. In 2000, she was a junior at Rutgers, majoring in biology and studying for the MCATs. Then Bush v. Gore happened. “The whole hanging chad thing was all over the news, and I thought, ‘How fascinating,’” she remembers. “I started thinking: You can really make an impact being a lawyer, and on a more global scale, more than as a physician, where you’re dealing one-on-one with individuals.”

Without bothering with a practice test, Mercado Clark took the LSAT and ended up at Fordham University School of Law. She graduated in 2005 and, after a few years at the DA’s office and a few more working in commercial litigation, she joined Phillips Lytle, where she quickly became the firm’s go-to person about a non-government-backed currency relatively unknown outside of a few tech bros and businesspeople.

“I took it upon myself to start learning more,” she says, of her exploration of cryptocurrency.

Asked to explain cryptocurrency, she doesn’t miss a beat. “OK, let’s say you have a Bank of America account. Something goes wrong, you call Bank of America and say, please help me fix this. That’s what’s called a centralized authority that oversees all the transactions. They’re the only ones who can confirm that a transaction has been requested, it’s been validated, it’s a legitimate transaction and can move forward in a centralized system.

“Now, cryptocurrency is a blockchain transaction where more than one person makes the decision. Depending on how the network is set up, 51% or more of the nodes of the different individual computers that form the network have to agree that this is a legitimate transaction. And once that transaction is validated, it gets recorded onto a block. The block is full of other transactions that also get validated, and that gets tacked onto the blockchain. The block producer—or the miner who validates that transaction—gets rewarded with a transaction fee and cryptocurrency that’s generated when they are creating the blocks.”

All this takes enormous computational powers, as you’re trying to solve complex mathematical problems faster than anyone else. “Let’s say the two of us are mining and we both validate the transaction,” she says. “The way that the system determines which one of us gets the reward is which one of us has a longer chain behind us. … If I have a faster computing power and I solve it first, I’m more likely to get the longer chain and get the reward.”

How many people are doing this? Citing data on cryptocurrencies is difficult due to the anonymity, Mercado Clark says, but the exchange Bitfinex reported at the end of 2023 that the number of owners was north of 500 million. Investing can be as easy as downloading a crypto trading app, but there are no safety nets, no Bank of America to turn to should things go dreadfully wrong—as they did for the investor who could not access $321 million in bitcoin because he forgot his password.

“There’s also certain anonymity, too,” Mercado Clark says. “So there’s no accountability.”

This lack of regulation and oversight also makes for a shadow-rich environment propitious for hustlers and cons—from the FTX cryptocurrency exchange to those who phish for crypto keys: the string characters used to lock and unlock one’s encrypted data.

“When we have dealt with ransomware attacks, the attackers always ask for cryptocurrency because it’s so difficult to track and also difficult to control,” Mercado Clark explains. One client downloaded a wallet app that promised to keep track of his cryptocurrency, only to see millions transferred out of his account as soon as he’d entered his credentials.

“It was a fraudulent app,” says Mercado Clark, who worked with the FBI to establish that her client was the proper owner of the cryptocurrency, though this did nothing to get the client back his funds. “The miners were not supposed to validate transactions that involve the wallet, but they continue to do it,” she says. “You’re relying on a set of rules that have been developed, and if the miners and the nodes are not following those instructions, there’s little recourse.”

Little traditional recourse, that is. Since Mercado Clark’s client had identity-theft insurance, she was able to successfully argue that, since the thieves presented themselves as the proper owner of the cryptocurrency, her client was the victim of identity theft. “There is a provision in the policy that prohibits a recovery for non-fiat currency, essentially currency that is not recognized or not issued by the government,” she says. “Our argument was, ‘We’re not asking you for a reimbursement for the currency; we’re asking for reimbursement for the effort that we are undertaking in order to recover his identity, which is a separate but related issue.

“Another interesting footnote to that case,” Mercado Clark adds, “is it’s actually one of the few in which the government extradited the perpetrator, who was recently arraigned in the Western District of New York. There are very few cases where bad actors are prosecuted. This is one of them.”

Other crypto-related cases for Mercado Clark’s team include helping clients set up crypto mining companies and facilities. “Typically these are more environmental law-related, because a lot of governments are cracking down on the amount of power [crypto] uses as well as the carbon footprint and the noise,” she says. The effort often takes her to Buffalo, because of its existing manufacturing infrastructure and the massive power generated by nearby Niagara Falls.

Mercado Clark also sat on the U.N. World Food Programme external advisory team, assisting with their compliance and selecting a data protection officer, while looking for ways commercial sector technologies could be adapted to benefit the nonprofit sector. One example involved the blockchain helping people flee conflict zones with little more than the clothes on their backs. “They don’t have any identification. How can you provide services and track people if you don’t have their identity?” she asks. “One of the things we were exploring was using blockchain technology to track biometric data to identify that the person is who they say they are.”

No one can know where AI and cryptocurrency will take us, whether the combination of human ingenuity and the ghost in the machine will result in the miraculous or scorched earth.

“It’s exciting,” says Mercado Clark. “I spend half my time learning about what’s new and what’s next and where are we headed.”