Robert E. Levy
Partner
201-896-7163 rlevy@sh-law.com
Blockchain, Cryptocurrency Defense & Investigations
The advent of blockchain technology and cryptocurrency has ushered in a new era in the financial and technological sectors. These innovations offer tremendous potential but also come with significant legal complexities. At Scarinci Hollenbeck, LLC, we recognize the transformative impact of blockchain and cryptocurrency on various industries and are dedicated to providing comprehensive legal services that address the unique challenges and opportunities they present.
Key Contacts
Blockchain, Cryptocurrency Defense & Investigations
Overview
Cryptocurrency Lawyer: Understanding Blockchain Offerings
Our team of New Jersey, DC, and NYC blockchain attorneys and NYC cryptocurrency lawyers at Scarinci Hollenbeck, LLC possesses deep experience in navigating the intricate regulatory landscape that governs blockchain and cryptocurrency. We understand that the regulatory environment is continually evolving, and our mission is to ensure our clients remain compliant with all federal and state laws. Our attorneys are well-versed in the latest developments and provide strategic counsel across a broad spectrum of matters, including:
- Regulatory Compliance: Ensuring compliance with regulations set forth by key agencies such as the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and the Financial Crimes Enforcement Network (FinCEN). Our team stays up-to-date with regulatory changes and helps clients understand their obligations, thereby avoiding potential legal pitfalls.
- Token Offerings: Advising clients on the complexities of Initial Coin Offerings (ICOs), Security Token Offerings (STOs), and other token-based fundraising mechanisms. We assist with the legal structuring, documentation, and compliance aspects to ensure successful and legally sound token offerings.
- Blockchain Development: Providing legal guidance on the development and implementation of blockchain technology across various sectors, including finance, supply chain, healthcare, and more. Our blockchain attorneys help clients navigate intellectual property issues, regulatory considerations, and contractual obligations.
- Cryptocurrency Transactions: Structuring and negotiating cryptocurrency transactions to ensure they are compliant with applicable laws and regulations. Our cryptocurrency lawyers assist with drafting and reviewing agreements, addressing tax implications, and ensuring secure and legally sound transactions.
Services We Offer
At Scarinci Hollenbeck, LLC, our blockchain and cryptocurrency legal services are comprehensive and designed to support your business’s growth while protecting your interests. Our services include:
- Regulatory Advice: In the rapidly evolving landscape of blockchain and cryptocurrency, staying compliant with regulations is crucial. Our team provides experienced guidance on navigating the complex regulatory environment, helping clients understand and adhere to the requirements set by regulatory bodies.
- Smart Contracts: Smart contracts are self-executing contracts with the terms of the agreement directly written into code. Our attorneys offer legal analysis and drafting services for smart contracts, ensuring they are enforceable and compliant with existing laws. We help clients leverage smart contracts to automate and streamline their operations while mitigating legal risks.
- Litigation & Defense: Our robust litigation and defense services include representing clients in disputes and investigations related to blockchain and cryptocurrency activities. Whether facing regulatory scrutiny or civil litigation, our experienced blockchain attorneys and cryptocurrency lawyers provide vigorous representation to protect our clients’ interests.
- Taxation: The tax implications of cryptocurrency transactions and holdings can be complex. Our team advises clients on tax strategies to minimize liabilities and ensure compliance with tax regulations. We provide guidance on reporting requirements, tax planning, and structuring transactions in a tax-efficient manner.
- Anti-Money Laundering (AML) Compliance: Cryptocurrency businesses are subject to stringent AML regulations. We help clients develop and implement AML programs tailored to the cryptocurrency sector, ensuring they meet their regulatory obligations and mitigate the risk of financial crime.
Blockchain and Cryptocurrency Legal Insights
The legal landscape for blockchain and cryptocurrency is continually evolving, and it is essential to stay informed about the latest developments. Our attorneys at Scarinci Hollenbeck, LLC provide thought leadership and insights on key legal issues affecting the blockchain and cryptocurrency sectors. Here are some of the areas we focus on:
- Evolving Regulatory Frameworks: As regulatory bodies around the world develop new frameworks for blockchain and cryptocurrency, staying informed about these changes is critical. We provide updates and analysis on regulatory developments, helping clients understand their implications and adjust their strategies accordingly.
- Security and Privacy: Blockchain technology offers enhanced security and privacy features, but it also raises new legal questions. Our attorneys address issues related to data protection, privacy laws, and cybersecurity, ensuring that clients’ blockchain implementations comply with relevant regulations.
- Intellectual Property: Protecting intellectual property (IP) in the blockchain space is crucial. We assist clients with IP strategy, including patent applications, trademark registration, and protection of proprietary technology. Our goal is to safeguard our clients’ innovations and maximize their competitive advantage.
- Cross-Border Transactions: Blockchain and cryptocurrency transactions often involve cross-border elements, raising complex legal and regulatory issues. Our blockchain attorneys provide guidance on navigating the international legal landscape, ensuring compliance with multiple jurisdictions and facilitating smooth cross-border operations.
FAQ about Blockchain, Cryptocurrency Defense & Investigations
Blockchain is a decentralized software application that tracks data by validating and storing data in blocks that are strung and linked together chronologically in an immutable chain. The data blocks are linked together by using a cryptographic “hash” of the previous block, a timestamp, and transaction data. “Hashing” is a method that uses algorithms to both mathematically encrypt the data blocks and connect and string them into a chain.
The data commonly consists of transactional information recorded in ledgers, such as cryptocurrency exchanges, property purchases, health records, credentials, and many others. The ledgers are distributed across many individual computer servers (called nodes) through a peer-to-peer (P2P) network.
All nodes across the blockchain ecosystem receive the same continuous stream of data and updates simultaneously, which can be transmitted privately and anonymously. The network does not use a third-party intermediary to manage, monitor, or interfere with transactions. There is no central authority to approve transactions.
The blockchain system is self-regulating due to the P2P computer network of nodes which all verify incoming data and distribute copies of the data across the network. Once all the nodes verify and agree on the data, only then does the data become recorded into blocks and linked into a chain.
The data chain is immutable and irreversible due to the hash encryptions, and because all activity on the chain is public across the network and seen by all the nodes. Altering a block of data is virtually impossible because doing so would necessitate, publicly across the P2P network, cracking the encryptions of all subsequent blocks of data on the chain to get to the block one wants to alter.
Blockchain technology was created to allow for the existence of cryptocurrency like Bitcoin. However, Blockchain technology transcends cryptocurrencies and has applications for all types of data storage.
Cryptocurrency “coins” are digital currencies that are powered and secured by blockchain technology, rather than a centralized government authority. These coins are essentially packets of immutable math code that a blockchain P2P network of computer servers (nodes) allows to be distributed, bought, and sold on the network.
Transactions on the blockchain are only recorded after unanimous validation by all the nodes in the network. Transactions are validated securely and publicly on the blockchain. At the inception of a blockchain’s creation, irreversible rules are set regarding how many coins there ever will be and how to create new coins (mining).
Miners are networks of computer servers that validate coin transactions to enable their recording on the blockchain. Built into a blockchain’s software are rules that encourage miners to validate these transactions. Miners that solve certain mathematical problems fast enough will then link the next block of data onto the chain and receive a coin as a reward. Often the number of coins that can ever be available is finite; therefore, over time the blockchain software makes the mathematical problems harder for miners to solve.
There are hundreds of different types of cryptocurrencies. Some of the most well-known include:
- Bitcoin
- Ethereum
- Tether
- XRP
Cryptocurrency has both risks and benefits.
Advantages of using crypto:
- No central government authority to create excess coins / Protection from Inflation
- Secure and private
- Removes the middle man aka a bank, hence cost-effective
- Greater liquidity
- Widely and universally used
- High transaction speeds with low costs
- Transparency
Disadvantages:
- No refund or cancellation policy for incorrect transactions
- Risk of data loss
- Hard for the government to track illegal transactions and theft
- High risk and high volatility
- More vulnerable to scams and hackers
- High energy consumption due to miners
Like cryptocurrencies, NFTs are immutable code and cryptographic assets, transacted and recorded on a blockchain. They differ from cryptocurrencies in that they are non-fungible; in other words, they are not identical. A unique encrypted identification code and metadata distinguish one NFT from other NFTs. Bitcoin, for example, is fungible; if you trade one Bitcoin for another Bitcoin, you’ll get exactly the same thing. A one-dollar bill is fungible because any particular one-dollar bill in your pocket is no different from any other one-dollar bill circulating. It is this very fungibility that allows dollars, other fiat currencies, and cryptocurrencies to be mediums of exchange in commerce. On the other hand, a famous Picasso painting is non-fungible as it is unique.
Congress has not yet adopted comprehensive cryptocurrency regulations. Several federal agencies, including the Department of Treasury, Securities and Exchange Commission (SEC), Internal Revenue Service (IRS), and Financial Crimes Enforcement Network (FinCEN), have issued guidance regarding digital assets. In seeking to regulate digital assets, the agencies largely rely on the application of existing regulations. For instance, the IRS has advised that digital assets constitute property for federal tax purposes and, therefore, are subject to capital gains taxes. The SEC also regulates cryptocurrency, arguing that many digital assets meet the definition of “security” under federal securities laws.
States are also increasingly adopting cryptocurrency regulations. New York was one of the first states in the country to enact a regulatory framework for virtual currency like Bitcoin. Under New York Division of Financial Services (NYDFS) regulations enacted in 2015, businesses must obtain a license, commonly referred to as a “BitLicense,” before engaging in any virtual currency business activity.
In an initial coin offering or ICO, buyers may use fiat U.S. dollars or virtual currencies to purchase virtual coins or tokens. The capital raised from the sales may be used to fund the development of a digital platform, software, or other projects. In addition, investors may use the virtual tokens or coins to access the platform, use the software, or otherwise participate in the project. After they are issued, the virtual coins or tokens may also be resold to others in a secondary market on virtual currency exchanges or other platforms.
OUR commitment to excellence, combined with our mission to deliver outstanding client service, has earned our firm a solid reputation.
Scarinci Hollenbeck is a business law firm based in New Jersey, New York, and Washington, D.C servicing clients worldwide.
If you have a legal need that is not mentioned, please contact us to discuss how we may help you.
Contact us today to learn more about how we can assist you.
Practice Area Attorneys
Why Choose Us?
At Scarinci Hollenbeck, LLC, we pride ourselves on combining deep industry knowledge with a practical approach to deliver effective legal solutions for our clients. Our team of blockchain attorneys and cryptocurrency lawyers brings a wealth of experience. Here are a few reasons why you should choose us:
- Innovative Solutions: The blockchain and cryptocurrency landscape is constantly evolving, and so are the legal challenges it presents. Our attorneys leverage their understanding of blockchain technology to provide innovative legal solutions that address our clients’ unique needs.
- Client-Focused Approach: We understand that each client has specific goals and challenges. Our services are tailored to meet the individual needs of our clients, ensuring personalized and effective legal counsel. We work closely with our clients to develop strategies that align with their business objectives.
- Experienced Team: Our team comprises seasoned blockchain attorneys and cryptocurrency lawyers with extensive experience in blockchain and cryptocurrency law. We have successfully represented clients in regulatory matters, litigation, and complex transactions. Our experience enables us to provide insightful and strategic legal advice.
- Commitment to Excellence: At Scarinci Hollenbeck, LLC, we are committed to delivering high-quality legal services. We stay at the forefront of legal and technological developments, ensuring that our clients receive up-to-date advice and representation.
Contact Us
Navigating the complexities of blockchain and cryptocurrency law requires a trusted legal partner. At Scarinci Hollenbeck, LLC, we are dedicated to helping our clients achieve their goals and safeguard their interests in this rapidly evolving field. With our locations in DC, Redbank, New York, and Little Falls, we are here to help you. Whether you are launching a new blockchain project, conducting a token offering, or seeking regulatory compliance, our team of blockchain attorneys and cryptocurrency lawyers is here to provide the legal advice you need.
Contact Scarinci Hollenbeck, LLC today to learn more about our blockchain and cryptocurrency legal services and how we can assist you in navigating this dynamic and complex area of law. Our attorneys are ready to help you leverage the potential of blockchain technology while mitigating legal risks and ensuring compliance with regulatory requirements.
