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Cryptocurrency adoption: Crypto-payments between lawyers and clients under scanner for ethical issues

Akash Anand

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Cryptocurrency adoption: Crypto-payments between lawyers and clients under the scanner for ethical issues
Source: Pixabay

The mainstream adoption of cryptocurrencies has been the major focus of a lot of crypto companies, with many citing examples of success by tying up with financial institutions. Despite the positive push received by mainstays and financial bigwigs, reports have surfaced that the use of cryptocurrencies may have legal issues associated with it.

Sources claimed that client cryptocurrency payments may pose an ethical risk for lawyers, especially since the push by cryptocurrencies into the world of law and order was very recent. Law firms have increasingly started accepting cryptocurrencies as a form of payment, but the march forward has been hampered by supposed potential risks.

Officials from companies such as Frost Brown Todd LLC, Steptoe & Johnson LLP, and McLaughlin & Stern LLP earlier confirmed that they were looking at crypto as a payment option. An overall analysis of the claims made by the firms points to the fact that these companies are willing to venture into the cryptosphere because it diversifies their customers’ options.

Mathew K Roskoski, the deputy general counsel at Latham & Watkins, admitted that some lawyers chose to accept digital assets to portray that they are “hip and cool and on top of stuff”. The main point of discussion seemed to be the appreciation of assets when transferred from a client to a lawyer. Roskoski added:

“Cryptocurrency does not fit with the model for trust funds — lawyers should not accept cryptocurrency as trust money.”

Reports show that during a cryptocurrency exchange between a client and the lawyer, a lot of rules come into play that require both parties to be fully committed to the deal. Some states in the US have worked a way around the issue of appreciation of assets by ruling that these payments are acceptable as long as the assets are sold or liquidated into fiat money right away.

Law firms raised the issue of ICOs too, with many positioning themselves against the model and the confusing regulations surrounding it, put forth by the Securities and Exchange Commission [SEC]. The SEC has been in the news multiple times over the past couple of months with its officials assessing the crypto-space with caution. Recently, Hester Pierce, the Commissioner of the SEC, stated:

“At the SEC we’ve been unwilling to sign off on a Bitcoin ETF, an exchange-traded product based on Bitcoin. My concern about our approach in that area is it looks a little bit like a merit-based approach judging the underlying bitcoin markets.”





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Engineering graduate,crypto head and Arsenal fan. Is fascinated by technology and all its marvels. Strictly against pineapple on pizza.

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Facebook’s Libra is a double edged-sword, but will benefit Bitcoin, says Caitlin Long

Priya

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Facebook's cryptocurrency Libra is a double edged-sword, but will benefit Bitcoin [BTC], says Caitlin Long
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On 18 June, the world’s biggest social media platform, Facebook, introduced its new cryptocurrency, Libra, set to launch in the first half of 2020. The coin that would have its own blockchain will be backed by several sovereign currencies, and these reserves would be managed by the Libra Association. The association will also be engaged in several other key activities, which would focus solely on the development of the Libra ecosystem.

Notably, the coin has brought together major players in both the financial and technology industry including, MasterCard, Paypal, and Coinbase. Despite such strong backing however, the concept of the coin was soon shot down by several influencers and government authorities.

The French Minister of Finance and Economy, Bruno Le Maire, released a statement asserting that Facebook’s digital currency becoming a sovereign currency was “out of question,” adding that “it can’t and must not happen.” Along with this statement, the Finance Minister also raised concerns about money laundering and terrorism funding and urged G-7 countries Central Bank Governors to draft a report on the new “global currency” for their meeting in July.

Further, Facebook’s cryptocurrency is also facing hurdles in its native country. Maxine Waters, Chair of the House Financial Services, has requested the social media giant to hit the pause button on the development of Libra, until Congress and regulatory authorities hold a discussion on the digital currency. This request was put forth mainly because of the firm’s “troubled past.”

In an interview with WhatBitcoinDid, Caitlin Long, Co-founder of the Wyoming Blockchain Coalition, stated that Libra had its pros and cons, adding that it was a “double-edged sword.” However, the blockchain evangelist continued to assert that this was going to benefit Bitcoin, stating that the social networking platform was “making cryptocurrency a mainstream word.” She added that Facebook would introduce the concept of digitally scarce money to people and that these people would look for the best cryptos that would retain the most value over time. That crypto was going to be Bitcoin, she said.

Long stated,

“This is a detour kind of like Andreas analogy, it’s the intranet before internet. We’ve even seen it in this industry, it’s blockchain not Bitcoin but people are coming full circle back around to Bitcoin. These are detours that are ultimately helpful to gaining adoption and wider support, but they’re not where we end up and I think we will end up in Bitcoin.”

Further, Long was asked whether Libra was going to be its own currency, considering it will not be pegged to a specific currency, but several fiat currencies. To this, she stated that Libra was indeed going to be a currency of its own, similar to Bitcoin. She stated that it was going to function like a “central bank,” remarking that it would be a “private version of a central bank.” Long went on to add,

“They’re going to be managing reserves against the liability. For them it will be the people who own the coins and they will be managing the reserves against that […] they are going to be marketing this in the developing world, this is going to be a developing world concept probably more than a developed world concepts […] so my guess is this is mostly an emerging market phenomenon secondarily a European phenomenon and lastly a U.S. phenomenon.”





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