Blockchain technology is known primarily as the underlying shared database technology that enables Bitcoin transactions, but it will play a much larger and game-changing role in business and the law in coming years. Holland & Knight has assembled a team of attorneys drawn from key practice areas to explain to clients how blockchain works, how it may benefit their business operations, as well as understand the impact of emerging legal and compliance issues.
Our blockchain lawyers draw on substantive backgrounds in financial services and banking, real estate, gaming, taxation, intellectual property, mergers and acquisitions, data security, anti-money laundering, corporate law and insurance. These attorneys combine hands-on knowledge of technology – some are even active coders – with the business perspective that comes from decades of experience serving clients in the industries likely to be most affected by blockchain. Our lead blockchain attorney, Josias N. Dewey, is a thought leader who is educating businesspeople and lawyers across the United States on the impact of blockchain technology. He has published and presented on the topic more than a dozen times in the past year, and he competed in a blockchain coding competition in London, co-sponsored by Thomson Reuters and Ethereum. Our professionals understand blockchain technology at the deepest level and can navigate clients through complex decisions such as which platforms to consider (e.g., Bitcoin, Ethereum, Hyperledger), whether permissioned or public blockchains are best suited for their specific use cases, as well as the particular legal regime for compliance.
We also advise on the use of Bitcoin and other virtual and cryptocurrencies, with special emphasis on emerging laws, conflicting federal and state tax treatments, and compliance with federal and state licensing and registration requirements, as well as anti-money laundering laws.
We expect financial services and supply chain management to be the first industries to be altered by the creative disruption of blockchain technology, with eventual opportunities in estate planning, real estate, securities, retail and other industries where intermediaries play a pivotal role in transactions.
Want to know how blockchain will change your industry? Call Holland & Knight for insight into how you can prepare for the opportunities and risks that accompany this exciting new technology.
Preparing Clients for the Coming Blockchain Revolution
We have advised clients in the Bitcoin and Ethereum hard wallet space, which provides the tools for convenient and secure storage of Bitcoin, Ether and other cryptocurrencies – and all the complex and sometimes contradictory regulations that govern virtual currency. While this nascent currency remains a novelty to most businesses, we believe that an evolving regulatory structure eventually will bring it into widespread use, particularly in financial services, money transfer services and the technology sector. We advise businesses on how they should position themselves to benefit from digital currency under the dynamic regulatory environment when seeking to address issues with its various applications.
Most current federal and state laws governing currency, taxes and money laundering did not contemplate the use of digital currency, such as Bitcoin and other virtual and cryptocurrencies. Only a handful of states have laws that directly address these digital currencies, and there is little case law. The Internal Revenue Service (IRS) treats Bitcoin as property that is subject to gains and losses for tax purposes, while most state revenue departments designate it as a currency. The U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) requires administrators or exchangers that accept and transmit a convertible virtual currency such as Bitcoin or those who buy or sell convertible virtual currency to comply with laws applicable to money services businesses, including anti-money laundering laws and U.S. economic sanctions and trade embargoes. Holland & Knight advises clients using, administrating, exchanging or mining Bitcoin and other virtual and cryptocurrencies on how to navigate this labyrinth of regulations governing digital currency.
Preparing Businesses for the Future of Blockchain
The promise of blockchain is that it offers an autonomous and decentralized store of value – not just for money but for intellectual property, real property and anything that can be owned – that is not dependent on a government or central bank. Blockchain's distributed and networked ledger of ownership drastically reduces transactions costs, offers the safety that comes with a transparent network that is visible to all users and provides real-time speed for transactions. Businesses don't need to understand the complex algorithms that make this automated ledger possible, but early adapters will gain an immense competitive advantage in costs and security.
Ask our blockchain team how your business can prepare for this giant leap forward in transaction technology.
We wrote the book on blockchain technology and the law. Holland & Knight Partners Josias N. Dewey and Jeffrey R. Seul, along with Associate Shawn S. Amuial, are co-authors of The Blockchain: A Guide for Legal and Business Professionals, a Thomson Reuters book scheduled for publication in the fall of 2016. Mr. Dewey, a software developer and active coder as well as an attorney, is a sought-after speaker on blockchain technology. Mr. Seul chairs Holland & Knight's Technology Industry Sector Group.