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With the price of Bitcoin going absolutely bonkers, law firms, like many other businesses, are wondering whether they should accept, or even invest in, new, and even old, cryptocurrencies.
However, few cryptocurrencies will ever make it off the ground, and there are quite a few different ones out there. Choosing to accept one as payment for services has been okayed by at least one state bar, whose guidance seems to be good for just about every jurisdiction. However, you may want to think twice about whether or not you want to be the one to convert a digital currency to dollars or if you should leave the crypto-to-dollar conversion to the client that wants to use it.
One significant issue facing individuals that buy, sell, and own, these currencies is taxes. Particularly given the massive spike in Bitcoin's value, an owner could face some serious tax liabilities when they cash out depending on their gains. In the Bitcoin boom over the past few years, there have been quite a few millionaires made.
Another issue for firms to be wary of is money laundering. Because cryptocurrencies are rather popular among criminals, accepting one as payment for services could implicate you in a client's money laundering scheme or criminal enterprise.
Not surprisingly, the ICO (initial coin offering) market is exploding. Recently, the SEC issued a warning to the attorneys helping get these ICOs in motion. That warning explained that attorneys are putting their licenses at risk, depending on the nature of the ICO. Many ICO are done before a company actually has a product or service that runs off the coin, which as the SEC notes, can be deceptive.
One such example could come from a company seeking to establish the first cryptocurrency specifically targeting the legal industry. Though the company seeking to develop the legal crypto-coin touts an end goal of closing the access to justice gap, it also sounds much like the companies the SEC recently warned lawyers about as it wants to ICO before a real product or service exists.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.