The cryptocurrency and blockchain technology industry is already crowded with firms eager to nab high-tech startups as clients or help legacy clients navigate a brave new world.
But some BigLaw firms have gone further. Over the past 2½ years, several of the largest firms in the world have joined legal working groups aimed at bringing crypto and blockchain attorneys together to share information, learn from one another, and help craft best practices.
“You can open the champagne now.”
Joyful celebration lit up online groups for creditors of the bankrupt MtGox exchange on June 22, when a Japanese court decided to move the company into “civil rehabilitation,” a new legal process that promises to deliver a windfall of bitcoin for creditors.
It’s spectacular news for the 24,750 approved MtGox creditors, because based on today’s bitcoin value they will end up with more money that they actually had at the time MtGox went into bankruptcy. The original bankruptcy proceeding, by law, would have paid creditors just $483 per bitcoin—the value when MtGox went bankrupt in 2014. Under civil rehabilitation, they will receive bitcoins, which are now trading at around $6,000 each, plus their share of whatever cash remains in the MtGox estate. While they missed out on the peak price of almost $19,000 last December, this is still more moolah than they ever dreamed back in 2014.
“This is the best news in this case since years,” wrote one man on the MtGox Creditors Telegram group, just after someone posted the MtGox trustee’s June 22 announcement that the Tokyo District Court approved MtGox’s move.
But a more tempered response came from Josh Jones, CEO and founder of Bitcoin Builder Inc., whose claim towers at 43,768 bitcoins—though he’s quick to point out some belongs to him, and some to his site’s users. Jones’s group is the second-largest MtGox creditor, right behind New Zealand’s bankrupt Bitcoinica exchange with 64,673 bitcoins.
Although it might go against a lawyer’s natural propensities toward risk aversion, some practitioners have started accepting payments in digital currencies amid the bitcoin boom.
“I’ve known for a long time that my opportunity to expand in certain areas has been affected by not taking it,” said Carol Van Cleef, a Washington, D.C. lawyer who for 10 years has represented cryptocurrency clients with regulatory compliance.
As far back as 2013, a handful of big law firms that represented the earliest cryptocurrency entrepreneurs started accepting bitcoin payments. Today, big and small firms alike, as well as solo practitioners, have followed their lead and have accepted cryptocurrency’s risks in order to meet clients’ needs and get paid.
Once upon a time there was a hero who took down the corrupt French Maid, who had manipulated and stolen from the Dread Pirate Roberts on The Silk Road.
It sounds like the plot line of a swashbuckler movie, but actually, it’s part of the tale of Kathryn Haun’s rise as a federal prosecutor who helped lay the groundwork for the government to capture cryptocurrency criminals.
Right now, the value of just one bitcoin is hovering around $5,000, leading to rampant media coverage, pushing digital currency lexicon into the mainstream. But wide adoption depends much on the safety and security of the new technology, which is often compared to the Wild West.
Haun, first as a federal prosecutor and now as a bespoke legal consultant for emerging technology companies, has contributed much to beefing up security in the industry. In the U.S. Attorney’s Office for the Northern District of California, she was the first digital currency coordinator. She handled cases that taught prosecutors to work through challenges in convicting cryptocurrency criminals, and sent loud-and-clear messages to digital currency companies to increase financial safeguards.
Bitcoin. Ethereum. Blockchain. It sounds like a foreign language, clouded in mystery.
But with billions of dollars flowing through cryptocurrency systems, and governments and major companies looking to blockchain technology to reform a wide variety of critical record-keeping systems, law students and lawyers need to get up to speed.
Even with great change brewing, only a smattering of law professors have published research in the area, and even fewer have launched formal classes for law students.
Angela Walch is one of the first law professors who have latched on to the importance of digital currencies and blockchain technology. Starting research in 2012, Walch, who is a professor at St. Mary’s University School of Law in San Antonio, has made a mark in the cryptocurrency community with research that suggested—despite the decentralized promise of blockchain technology—that actual identifiable people govern the systems, and furthermore, they should owe users a fiduciary duty. Walch’s law school course she started in 2013 was pioneering in teaching students about bitcoin and the blockchain.
A federal judge has ordered the return of 11,000 bitcoins worth about $30 million in a decision considered the first of its kind.
The ruling by U.S. District Judge Kenneth Marra of the U.S. District Court for the Southern District of Florida stems from a class action in which plaintiffs alleged that the defendant had stolen their money and fled to China.
In today’s cryptocurrency world, however, the legal victory might only be worth the paper it’s printed on.