Add another layer to your #Business literacy. We at Serebral360° would love to know if the Forbes – Entrepreneurs article was helpful, leave a comment, like and share. Let’s dive in and discuss the information and put it to use to grow your business. #BusinessStrategy #ContentMarketing #WebDevelopment #BrandStrategy
Info@serebral360.com 762.333.1807 www.serebral360.com
Grap a copy of our NEW Business Stratgety Books #FFSS VOL1 and #FFSS VOL2
Just last month, Canada’s largest cryptocurrency exchange, QuadrigaCX, closed following the unexpected death of its chief executive. When Ernst & Young accessed the cold wallets of the deceased CEO that were supposed to have $150 million in cryptocurrencies, they found that five of the six wallets were empty and the sixth contained a fraction of the missing millions.
Any system that is administered even in part by people is likely to be fallible on some level, and the inevitable consequence is legal action.
Legal Issues Surrounding Cryptocurrency
The emergence of cryptocurrency and blockchain in recent years has provided companies, as well as private investors, many exciting opportunities. However, these benefits often come with a generous slice of risk. Despite being around for a decade, cryptocurrency still operates in largely uncharted international legal territory because many of the legal frameworks that are now tasked with regulating cryptocurrency were written before things such as cryptocurrency existed.
I frequently see clients and potential cryptocurrency investors trying to navigate these legal issues. With collective experience spanning international exchange, SEC regulations and compliance, our law group has worked with clients all throughout the evolution of cryptocurrency in the past few years. We have seen a number of legal issues arise relating to cryptocurrency, as well as the technology that supports it. These include:
• The legal rights and obligations of corporate and private individuals
• Contractual issues — primarily focused on breach of contract
• Insuring cryptocurrency
• Cryptocurrency theft
The Rise Of Cryptocurrency Law Firms
To deal with the steady increase in cryptocurrency cases, large law firms have been steadily announcing the launch of specialist teams devoted to cryptocurrency and blockchain. That said, this type of work isn’t solely the preserve of industry giants. Smaller practices that focus on consumer-orientated work have been taking on a diverse range of cryptocurrency cases.
I have heard cryptocurrencies described as “the new offshore account,” as they can be extremely time-consuming and expensive to trace. As more individuals invest in cryptocurrencies, there’s also a greater need for estate and family planning attorneys who are familiar with the disposition of this type of asset in the case of death or divorce.
Essentially, cryptocurrency offers a new way to invest and manage assets. With the uncertain regulatory status and shifting designation of crypto changing based on jurisdiction, businesses that want to take advantage of the blockchain or diversify their investments are likely to face a number of legal hurdles.
There are two fairly major takeaways from this. First, demand dictates volume; more businesses are branching out into crypto, so more law firms are opening branches or full firms in response. The second, and arguably more important aspect, is that cryptocurrency is legally complicated enough to warrant whole firms and specialized branches. For a business considering investing in crypto, the biggest issue will likely be dealing with the array of regulatory statuses that crypto faces.
Blockchain Applications For Attorneys
Attorneys should be aware that blockchain is very much on the horizon. Understanding a few of the potential applications of blockchain in the legal sector could help them win business and get a head start on the competition in the future. From a business perspective, much of the benefit attorneys see comes from the merits of blockchain itself.
Processing claims, processing payments and keeping track of transactions with the ledger reduces the margin for error because the information is tied to a shared history. The shared history is an incredibly useful element of blockchain because it can be used as a means of maintaining the security of data and as a means of recording and communicating data.
Creative applications of blockchain have the greatest potential impact for entrepreneurs and founders looking to innovate. While the financial capacity of blockchain plays out in the cryptocurrency world, there are a number of other applications that take advantage of the transparent and efficient technology.
Accepting Cryptocurrency Payments
Businesses, including attorneys, have already encountered clients who ask to pay for services using cryptocurrencies. There are certain advantages associated with accepting cryptocurrency payments. For instance, it allows clients to pay in a way that suits them and provides a high degree of privacy and security for the client.
While it might seem dangerous to start accepting cryptocurrency payments, the process is a lot easier than you might think. However, there are a number of factors to consider before you start accepting crypto payments from your customers and clients.
The vast majority of accounting systems only work to two decimal places, while cryptocurrencies can have up to 18 decimal places. Businesses will have to keep track of their income in fiat currency but also find a way to account for the fluctuation of price when it’s time to pay bills or do taxes. This can get messy for businesses that aren’t strict with record keeping.
Also, if your client is not careful, they could accidentally send the funds to an incorrect wallet address, resulting in the funds being lost forever. Every time cryptocurrency is transferred from one wallet to another, there is a chance at the funds being lost due to human input error. Funds can also be lost if the firm loses the private key to their public wallet that contains the funds, or the funds can be stolen if it isn’t careful about who has access to the key.
With cryptocurrency gaining more mainstream use and attention, the legal community will continue to see new applications and use cases in all of its many forms and functions. I take the position that cryptocurrency is permeating the world and, in particular, the legal industry; it would be wise for attorneys who wish to advance their practices into the future to learn about cryptocurrency and adapt with the times.
April 8, 2019 at 08:56AM
Forbes – Entrepreneurs