Long gone are the days when people regarded cryptocurrencies as a joke or just a part of the dark web. Today investors build profitable portfolios based on crypto and small and big companies use them as a payment option for their goods. But as with any financial vehicle, there’s always a risk when investing your money. Digital assets aren’t heavily regulated worldwide just yet. While part of the community may enjoy this aspect of decentralization, many people worry that there isn’t a law to protect them if something goes wrong with their crypto investment.
The wide adoption of cryptocurrencies and the inevitable emerging legal cases have created a new kind of legal advisor, specializing in solving disputes, concerning digital finances. If you need law help, regarding your crypto assets, cryptocurrency lawyers are the professionals that should be able to answer your needs. Here we take a closer look at what they are and how they can help you.
Crypto Laws and Regulations
Cryptocurrencies are regulated locally, meaning every country, or sometimes even a state, has its own laws and policies, regarding the assets. As digital currencies are obviously establishing themselves permanently in the financial world, the laws, created to govern them also will increase. This may raise concerns in the decentralized community since many people use this type of money because they want to avoid third parties controlling their money. However, cryptocurrency laws are essential to help people reclaim possible losses and feel more secure about their finances. Let’s look at a few examples, provided by Comply Advantage, of how crypto is regulated in different places around the world, to help you get a better picture of different practices:
- Cryptocurrencies in the US: Cryptocurrencies in the US are monitored by agencies such as The US Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission, the Department of Justice, and the Internal Revenue Service and the Treasury Department. Different states may apply individual regulations.
- Cryptocurrencies in the UK: There aren’t specific laws regarding cryptocurrency in the UK, the Financial Conduct Authority (FCA) oversees their control, including the rule that exchanges need to be regulated by it.
- Cryptocurrencies in Canada: In Canada, the tax laws apply to cryptocurrencies since 2013. Exchanges need to be registered with the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC) since 2020.
- Cryptocurrencies in Australia: Since 2017 the Australian government stated that Bitcoin and cryptocurrencies with its characteristics are property and should be subjected to the Capital Gains Tax. The Australian Transaction Reports and Analysis Centre (AUSTRAC) is responsible for exchanges – if they want to operate legally in the country, they should be registered with the center, otherwise they are a subject of legal penalties.
- Countries that use cryptocurrency as legal tender: The mentioned above countries allow the usage of cryptocurrencies legally but don’t recognize them as satisfactory payment for any monetary debt, meaning they’re not officially a legal tender. At the moment, the only country that has adopted a cryptocurrency as a legal tender is El Salvador. The country officially announced its adoption of Bitcoin on September 7th, 2021. The country’s decision means that its citizens can now use Bitcoin in all transactions, alongside the US dollar.
- Countries where cryptocurrencies are illegal: According to a summary report by the Law Library of Congress, published in November 2021, the countries where cryptocurrencies are illegal currently are Algeria, Bangladesh, China, Egypt, Iraq, Morocco, Qatar, and Tunisia. In those places individuals can’t trade cryptocurrency, banks are restricted from using them and it’s illegal for cryptocurrency exchanges to operate within their borders.
As we’ve established, crypto is subjected to laws, meaning if you’re trading cryptocurrency in a country that allows them, you must follow the set regulations. In return, if something goes wrong, you’d be able to be protected by said regulations, and if a legal process issues, then you’ll need a defense that understands the specifics. This is where a cryptocurrency lawyer comes in.
What Is a Cryptocurrency Lawyer?
A cryptocurrency lawyer is a new type of legal defender, brought from the need of individuals who are knowledgeable in the cryptocurrency and blockchain matter, as well as other financial laws in their country. Recently law firms, specializing only in cases, concerning decentralized finances have been emerging. However, it’s still more common that cryptocurrency lawyers are attorneys who dealt with other cases before and changed their field of work because they recognized that cryptocurrencies have a place in the financial world’s future. A lawyer working in this field must be knowledgeable in the legal regulations related to digital assets in their country and other financial policies like Anti-Money Laundering rules, for example. Besides law knowledge, these specialists must be fluent in the latest crypto trends and how cryptocurrencies work in general.
Who Can Hire a Cryptocurrency Lawyer?
Both individual clients and companies can benefit from the services of a cryptocurrency lawyer when dealing with a problem in the area. Let’s see what cases can a crypto attorney take for both types of clients:
Individuals Using Cryptocurrency Lawyer’s Services
As with every financial investment, when you put your money into cryptocurrencies you should know the rules and regulations of the sector, to know your rights. You may experience losses due to a bear market and that can’t be helped. In some cases, however, the law can help you with cryptocurrency-related issues. A cryptocurrency lawyer may be of help to every investor who has law-related issues with his crypto assets as well as individuals who are creating cryptocurrencies or NFTs.
Investors and Traders Can Use a Cryptocurrency Lawyer For:
- Help if you’re a victim of cryptocurrency fraud, scam, or theft
- Advice on tax issues, related to buying, selling, and staking cryptocurrencies
- Resolving disputes between customers and cryptocurrency trading platforms
Crypto Developers and NFT Artists Can Use Cryptocurrency Lawyer For:
- Help with patents, trademarks, copyrights, intellectual property rights, and policies, related to digital media and the Internet
- Reviewing ICO and IEO documents
- Advice for tax and VAT for cryptocurrency or token sale domain
- Help with NFT listings, including applying the country’s trademark regulations and regulatory review
Trading Platforms Using Cryptocurrency Lawyer’s Services
As we’ve established, countries regulated cryptocurrency exchanges and brokers so the companies may benefit from the help of a specialized attorney too. However, not all exchanges for cryptocurrency can rely on this advisor. Decentralized exchanges aren’t subject to the rules of any regulative body. That’s why only centralized exchanges can use the help of a cryptocurrency lawyer. Here are some cases a crypto lawyer may assist an exchange in:
- Regulatory advice
- Dispute resolution between the platform and customers
- Help with tax-related issues
- Help with Know-Your-Customer (KYC) cases
A Cryptocurrency Lawyer – Your Legal Guidance With Crypto
Cryptocurrency lawyer is one of the many positions that have emerged thanks to the decentralized world. Skilled professionals with backgrounds in financial disputes who also educated themselves in blockchain and cryptocurrency, can be helpful to everyone seeking assistance on legal matters in the sector. As a cryptocurrency trader, you must know what the regulations and sector laws are, but this type of attorney can be your legal guide. Let’s hope you won’t need to seek a court when it comes to crypto, but if you do, these new types of advisors can definitely be of use.