Blockchain Law

Practice Areas / Blockchain Law

What is Blockchain Law?

Blockchain law includes a range of legal issues faced by investors and technology companies pioneering new projects in this exciting field. A Blockchain lawyer will have expertise in the following disciplines:

  • Tax law
  • Contract law
  • Securities law
  • Banking and financial law
  • International law

It is challenging to keep up with multiple disciplines such as these, which is why you should look for a blockchain lawyer with years of experience in a variety of different fact situations.  Our clients include financial services companies worldwide, cryptocurrency exchanges, independent entrepreneurs and others who gain from our focus on the “big picture” when it comes to blockchain technologies and the related legal issues.

What Other Blockchain Law Issues Should I Consider?

A qualified blockchain attorney will have experience in matters ranging from purchase and sale agreements for cryptocurrency mining equipment to traditional employment agreements, services agreements and other contracts typical to businesses large and small.

Securities and Financial Services Law – More than ever, securities law issues are taking center stage in the blockchain world.  Since its Report of Investigation in the Dao matter, the SEC has been hard at work studying this field, especially as it pertains to Initial Coin Offerings (ICOs), which raised over $1.5 billion in investor funds in 2017. A central issue is whether a given coin or token is a “security” which must either be registered, or for which the issuer must qualify for an exemption from regulation. The SEC recently filed a landmark suit against Ripple Labs Inc. and two of its executives, who are also significant security holders, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.  FinCEN, a part of the US Department of the Treasury, is also considering onerous rules related to the transfer of cryptocurrency to or between what they term are “unhosted wallets”.  The Office of the Comptroller of the Currency, as well, has been very active in its commentary and rulemaking in matters that are critical to cryptocurrency investors, blockchain businesses and enthusiasts.  Keeping track of the “alphabet soup” of US agencies has proven too much for many US businesses, who are moving offshore to more lenient, or at least more transparent, jurisdictions.  The same is true of European businesses struggling with the EU’s Fifth Anti-Money Laundering Directive, which imposes strict compliance rules on virtual asset service providers and others.  International legal issues incorporate elements of all of the above areas of law and more. Clients often have questions as to the best jurisdiction in which to incorporate, which invokes traditional tax questions concerning citizenship, income sourcing and what opportunities are available to plan one’s tax affairs.  

Tax Law – Tax issues abound in the cryptocurrency world.  The Internal Revenue Service first weighed in on the nature of “virtual currencies”, declaring in 2014 that Bitcoin is to be treated as property.  An area of concern to many traders at the height of the crypto boom in 2017 was whether crypto to crypto trades could be considered “like kind exchanges”.  The Tax Cuts and Jobs Act, signed into law in December, 2017, for example, answered this question with a definitive “no” (at least going forward), removing personal property from the scope of 1031 like kind exchanges.

So what is the answer?

In short, there are few quick and easy answers to the most thorny blockchain legal issues, but the right professional guidance can help.  Allow us to discuss your case with you in a complimentary consultation, where we can explore your business goals and see if we would be a good fit to advise you as trusted counsellors and advisors.  Fill out the contact form today.

 

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