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Blockchain and Digital Currency


Overview

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.

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 


Litigation Support

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

 

Experience

  • 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 businesses 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 processor 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 date stored on decentralized networks

All Insights

SEC: Ether and Bitcoin Are Not Securities

SEC: Ether and Bitcoin Are Not Securities

October 1, 2018

Cryptocurrency investors were concerned following the SEC’s July 2017 investigative report on digital token sales by a virtual organization known as “The DAO.”

Is Cryptocurrency Money? Depends on Your State

Is Cryptocurrency Money? Depends on Your State

August 29, 2018

Is cryptocurrency money? In America, the question is largely decided by the regulators charged with overseeing their state's money transmitter rules.

State Regulations on Virtual Currency and Blockchain Technologies

State Regulations on Virtual Currency and Blockchain Technologies

June 27, 2018

State-by-state guide to case law and regulations impacting businesses dealing in blockchain and cryptocurrencies.

In Crypto Litigations Mandatory Arbitration Agreements May Not be Immutable

In Crypto Litigations Mandatory Arbitration Agreements May Not be Immutable

June 4, 2018

Permissionless blockchains, like the one underlying the bitcoin payment network, were created to provide the public with transparency over transaction information and records. Attorneys draft arbitration clauses primarily to do the opposite.

SEC Sidelines Funds Focused on Cryptocurrencies

SEC Sidelines Funds Focused on Cryptocurrencies

March 31, 2018

In a January 18 letter to two of the fund industry’s leading advocacy groups, the staff of the SEC’s Division of Investment Management advised fund sponsors not to initiate registration of funds that intend to invest substantially in cryptocurrency and related products until the staff’s questions, which the letter identified, are satisfactorily addressed.

The US Supreme Court Just Opened the Gates to Filing Crypto Class Actions in State Courts

The US Supreme Court Just Opened the Gates to Filing Crypto Class Actions in State Courts

March 22, 2018

The U.S. Supreme Court decision in Cyan v. Beaver County Employees Retirement Fund could have a major impact on how and where we see class action securities claims brought against issuers of new cryptocurrencies.

Virtual Currency Tax Consequences

Virtual Currency Tax Consequences

February 22, 2018

A growing number of startups are offering virtual currencies to investors through initial coin offerings (ICOs) as a way to raise capital, often with little or no awareness of the tax consequences of their actions.

IRS and Cryptocurrencies: Coinbase is Just the Beginning

IRS and Cryptocurrencies: Coinbase is Just the Beginning

January 26, 2018

The IRS may soon discover a need for a more administrable approach to taxing crypto gains.

Regulators Continue to Scrutinize Initial Coin Offerings

Regulators Continue to Scrutinize Initial Coin Offerings

December 29, 2017

As reported in the most recent issue of Expect Focus, the SEC issued an investigative report in July cautioning market participants that distributed ledger (blockchain) technology-based offers and sales of digital "tokens" or "coins" in a so-called initial coin offering (ICO) may be subject to federal securities laws, depending on the circumstances.

Bitcoin And Taxes: If Not HODLing, Consider Donating

Bitcoin And Taxes: If Not HODLing, Consider Donating

December 19, 2017

A mantra among cryptocurrency investors is “HODL.” The phrase originated in a December 2013 post on the Bitcoin Forum message board by an admittedly less-than-sober investor attempting to announce his plans to “hold” on to his Bitcoin in the wake of a 25% drop in market price. At the time of his misspelled posting the price of per bitcoin was around $400.

When High-Tech Cryptocurrencies Meet Low-Tech Scammers

When High-Tech Cryptocurrencies Meet Low-Tech Scammers

September 27, 2017

The reality that cryptocurrencies are susceptible to online theft may surprise those familiar with the security promises associated with the blockchain technology underpinning virtual currencies like bitcoin.

SEC Cautions on Use of Distributed Ledger/Blockchain Technology to Raise Capital

SEC Cautions on Use of Distributed Ledger/Blockchain Technology to Raise Capital

September 26, 2017

In July, the SEC issued a report addressing the applicability of U.S. federal securities laws to the offer and sale of securities by "virtual corporations or capital raising entities that use distributed ledger or blockchain technology to facilitate capital raising and/or investment."

The SEC Addresses Initial Coin Offerings

The SEC Addresses Initial Coin Offerings

September 26, 2017

Are virtual coins or digital tokens created and disseminated using distributed ledger or blockchain technology “securities” under the federal securities laws? Maybe, depending on the facts and circumstances.

Invasion of the Smart  Contract Hackers

Invasion of the Smart Contract Hackers

August 29, 2017

This article explores two important blockchain attributes and why they cause so much uncertainty when existing law is applied.

Blockchain Technology: Inevitable Disruption or Inflated Hype?

Blockchain Technology: Inevitable Disruption or Inflated Hype?

August 23, 2017

This article offers a high-level overview of blockchain technology and how it might impact industries such as finance, insurance, smart contracts, real estate and logistics.

Podcast: What is so important about blockchain?

Podcast: What is so important about blockchain?

August 1, 2017

It seems everyone today is talking about blockchain and cryptocurrencies. In this podcast, you're going to hear from David Adams, Matthew Kohen, and Justin Wales, who consult on these exciting emerging technologies.

Featured Insights

Disclaimer

The information on this website is presented as a service for our clients and Internet users and is not intended to be legal advice, nor should you consider it as such. Although we welcome your inquiries, please keep in mind that merely contacting us will not establish an attorney-client relationship between us. Consequently, you should not convey any confidential information to us until a formal attorney-client relationship has been established. Please remember that electronic correspondence on the internet is not secure and that you should not include sensitive or confidential information in messages. With that in mind, we look forward to hearing from you.