As more and more assets are stored and processed electronically, opportunities for fraud and inefficiencies by transacting through central authorities, including banks and other financial institutions, increase. Blockchain technology enables transactions through a peer-to-peer ledger with improved efficiency and without the need for a centralized authority. The most prolific use of blockchain technology today serves as the backbone for cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and others. However, many new uses for this cutting edge technology are on the horizon, including voting, health record management, insurance claims, title management, cross-jurisdictional payments, smart contracts, and supply chain management.
Members of Ice Miller’s Blockchain Practice bring a multidisciplinary approach to work hand-in-hand with clients to navigate the legal risks associated with this technology. We provide counsel on the uncertain regulatory compliance regimes at both the state and federal level, assist clients in the acquisition of funding for startup ventures reliant on blockchain, and help clients procure cryptocurrency in response to cyber extortion or as investment opportunities.
For cryptocurrencies, Ice Miller counsels clients on emerging regulatory guidance at the state and federal levels, including BitLicensing, the Bank Secrecy Act, FinCEN regulations, anti-money laundering requirements, and securities and commodities laws and regulations. This counsel may also include assisting clients in navigating investigations and defending clients from criminal and civil allegations of fraud, money laundering and other misconduct related to cryptocurrency use.
Our lawyers also have experience assessing legal risk related to the acquisition of cryptocurrencies. We assist clients in procuring large sums of cryptocurrencies from miners while mitigating both the legal and technological risks associated with these transactions. For example, our attorneys evaluated the use of cryptocurrency exchanges, multi-signature transactions, contract protections, and cryptocurrency wallet options to provide recommendations that mitigate risk to clients procuring large values of cryptocurrencies.
Ice Miller’s attorneys include seasoned white collar defense attorneys, former federal prosecutors, and data privacy and security professionals. Together, our knowledge allows us to assist clients under investigation for matters involving cryptocurrency, including allegations of money laundering or potential violations of the Bank Secrecy Act. Our experience in large financial investigations positions the firm to advise clients when they are contacted by the IRS on a tax matter or by the FBI about a cryptocurrency transaction. When businesses receive a subpoena seeking records related to cryptocurrency, our attorneys can help navigate them through the process.
Like all new industries and technologies, blockchain will be subject to potential regulation or utilization by governments, which could impede its efficacy or accelerate its growth. Ice Miller’s Public Affairs professionals are well versed in the government processes and driving forces at the federal, state and local levels of government. Our professionals can advise clients in advocating for positive growth in the technology and ensure clients are aware of threats to the industry and how best to address them. Like at the inception of the internet, now is the time where educating policymakers can facilitate the industry and the expansion of your company’s blockchain initiatives.
Examples of our experience include the following:
- Assessing legal risk in the acquisition and sale of large sums of various cryptocurrencies as investments;
- Advising clients with respect to acquiring Bitcoin in connection with cyber extortion (e.g. ransomware) threats;
- Aiding numerous start-up ventures building technologies with blockchain in seed rounds and entity formation;
- Evaluating insurance coverage options related to loss of cryptocurrencies, regulatory issues, blockchain misuse, and others;
- Addressing tax implications for the procurement or sale of cryptocurrencies; and
- Drafting and negotiating contracts for services that utilize blockchain technology.