Blockchain and Digital Currency

Carlton Fields is at the forefront of identifying the numerous complex legal issues faced by today’s innovators.

Digital currencies, smart contracts, and blockchain/distributed ledger technologies have ushered in a new era of innovation that we believe has the potential to disrupt the way we interact with one another, our governments, and private industry. As innovation continues, the technology’s potential to transform how business is conducted presents new challenges and opportunities across nearly every conceivable industrial sector.

As the law in this area develops, Carlton Fields has taken a forward-looking approach to working with clients on blockchain-related issues, including those arising from the use of cryptocurrencies and smart contracts. The members of our interdisciplinary blockchain practice are committed to embracing and maximizing the transformative potential of this technology.

Digital Currency and Blockchain Technology Solutions 

Our attorneys provide counsel for a wide range of industries, including insurance, financial services, health care, digital media, entertainment, interactive gaming, and technology. We handle legal issues related to blockchain technology, including distributed ledger technology, initial coin offerings, smart contracts, and Internet of Things (IoT) and machine-to-machine payment systems.

Litigation

Our litigators bring deep experience to the fast-evolving world of digital assets, regularly securing favorable outcomes in high-stakes disputes. We have achieved major successes in cryptocurrency litigation and arbitration, including defeating high-value claims, compelling arbitration in class actions, and obtaining dismissals at early stages of litigation. These results demonstrate both our ability to defend cutting-edge businesses and our skill in shaping precedent in this rapidly developing area of law.

While our litigators primarily work with major cryptocurrency exchanges, we also represent ATM operators, mining entities, and company executives, as well as banks and financial services companies in connection with their digital assets. Our matters include litigation in state and federal courts across the county, responding to SEC and DOJ enforcement actions, and AAA and JAMS arbitration.

Litigation Support

• Regulatory/enforcement actions 
• Privacy and cybersecurity 
• Asset seizure and forfeitures 
• Smart contract issues

Statutory and Regulatory Compliance Advice

• FinCEN compliance and enforcement proceedings 
• Internal Revenue Service and tax advice/planning 
• Securities and Exchange Commission compliance and enforcement proceedings 
• Commodity Futures Trading Commission compliance and enforcement proceedings 
• State money transmitter licensing and money services business compliance 
• Anti-money laundering and “know your customer” compliance 
• Congressional/legislative hearings

General Corporate and Business Transactions Assistance

• Mergers and acquisitions 
• Venture capital and private investments 
• Capital markets and securities 
• Data privacy and cybersecurity 
• Intellectual property protection

Representative Matters - Litigation

• Represented leading cryptocurrency exchange in multiple high-stakes actions arising from allegations of bitcoin theft and laundering, including obtaining order compelling arbitration of a putative federal class action on equitable estoppel grounds, effectively eliminating the claims.
• Secured dismissal of a $100 million claim for lack of personal jurisdiction and failure to state a claim against leading cryptocurrency exchange in bitcoin theft and laundering action, establishing key precedents limiting future suits.
• Represented senior executive of cryptocurrency company in SEC and DOJ enforcement actions.
• Representing leading cryptocurrency exchange in class action alleging violations of various consumer protection statutes. Obtained order staying discovery not related to arbitration pending consideration of a motion to compel individual arbitration.
• Represented leading crypto exchange in a series of consumer arbitrations in JAMS, including obtaining a no-liability award with attorneys’ fees in a fraud-related dispute and successfully confirming the award in federal court.
• Represented a subpoena recipient in connection with the disposition of assets related to an SEC cryptocurrency investigation.
• Represented cryptocurrency exchange in compelling international arbitration of lawsuit brought by information service provider.
• Represented cryptocurrency ranking website in lawsuit brought by cryptocurrency consumer alleging market manipulation.
• Representing major cryptocurrency exchange in connection with grand jury and regulatory subpoenas.
• Represented individual in federal criminal prosecution alleging conspiracy to commit securities fraud and money-laundering in connection with an initial coin offering and a digital asset mining and trading platform.
• Represented individual in SEC enforcement action alleging sale of unregistered securities and fraud in connection with initial coin offering.
• Defended individuals in state court actions alleging fraud based on recommendations to invest in cryptocurrency trading companies.
• Representing digital asset investment fund in connection with investigation by regulators and federal prosecutors.

Select Representative Matters

• Represented cryptocurrency exchange in connection with corporate formation and regulatory advice, including issues relating to SEC and CFTC licensure.
• Counseled developers and entrepreneurs on the legal issues pertaining to the development and maintenance of permissionless and permissioned blockchain protocols, including regulatory and corporate advice.
• Represented digital currency exchanges and money transmitters in conducting 50-state analysis of application of state money transmitter rules to cryptocurrency-focused business models.
• Represented cryptocurrency companies before various state regulators in order to obtain or receive clarity on application of state money transmission license.
• Advised numerous digital currency payment processors on issues pertaining to capital formation and early stage financing, as well as corporate formation issues such as registration in foreign jurisdictions including Gibraltar, Malta, Singapore, Mexico, Bermuda, Puerto Rico, and Cayman Islands.
• Advised high-frequency/algorithmic trading funds dealing in various digital currencies on issues related to fund formation and regulatory compliance.
• Counsel to several digital currency payment processors on anti-money laundering and "know your customer" compliance.
• Counseled numerous companies in conducting technical analysis, building “minimum viable ecosystems” and token design.
• Pre-litigation and settlement counseling regarding liability associated with attempts to hard fork the Bitcoin blockchain.
• Analysis of securities and other regulatory issues related to token sales, including analysis of regulatory implications of security token offerings, initial coin offerings, token curated registries, air drops, and applications utilizing the Lightning Network.
• Provided numerous instances of litigation and regulatory mitigation strategies for completed token sales.
• Provided analysis and privacy counseling regarding application of the GDPR and other privacy regulations to data stored on decentralized networks.