If you are a bit confused about cryptocurrency, you are not alone. Most attorneys are understandably flustered by cryptocurrency as those who understand the letter of the law are well aware of the fact that it is illegal to create an alternative currency. There is an argument to be made that cryptocurrency is a store of value rather than a currency yet it can also be considered an alternative to the United States dollar. Let’s take a look at how attorneys should view cryptocurrency and the law.
Cryptocurrency in the Context of the Law
When it comes to cryptocurrencies such as Ethereum and bitcoin, the average attorney understands these digital currencies are backed by blockchain technology. Though the blockchain was initially touted as impenetrable, it has been hacked several times in recent months. The hacking of the blockchain has led to financial fraud and data theft that has put crypto privacy into question.
The bottom line is the “smart contracts” that characterize crypto as a seemingly infallible digital value store and means of exchange are anything but secure. Furthermore, there are common bitcoin legal issues every attorney should be aware of.
Federal contract law in the context of relatively new cryptocurrency is still evolving. There is some question as to whether the legal validity of cryptocurrency will be recognized across posterity. The United States government may follow in the footsteps of the Chinese and Russian governments by implementing a broad ban on crypto. However, for the time being, the federal government is likely to regulate the crypto industry with new laws passed as early as next month.
It is in Your Interest to Pay Attention to Crypto’s Evolution
Though the blockchain that underlies cryptocurrency may never spill directly over into the mainstream, there is also the possibility that the blockchain will serve as the foundation for a nationwide digital currency in the decades ahead. Add in the fact that more businesses are turning to blockchain-based cryptocurrency for transactions and attorneys have even more reason to develop an understanding of the rapidly evolving cryptocurrency industry.
In particular, conflicts are bound to arise in the context of contract law. Attorneys who can navigate the legal maze in the context of cryptocurrency will expand their client base as well as their practice area, potentially future-proofing their firm for years and decades to come.
Attorneys are also advised to develop a thorough understanding of cryptocurrency simply because there is the potential for the economy to shift to the point that clients favor law firms that accept crypto as payment for legal services. Remain open to the idea of accepting bitcoin, Ethereum, and additional cryptocurrencies at your law firm and you will expand your potential client base all the more.