Cryptocurrencies are no longer regarded as the latest internet trend bound to die out in a few days. Individuals and small and big companies have turned to cryptocurrencies as a way of profitable investments and fiat alternatives. However, digital money hasn’t been around for long enough yet to be regulated everywhere. This means that cryptocurrency investments carry risks, just like any investment, but also leave more law-related questions unanswered. The lack of current policies contributes to cryptocurrencies’ decentralized nature while making some investors anxious about who would help them if something goes wrong with their money.
This has led to the creation of a new kind of legal advisor, who specialized in solving disputes involving cryptocurrencies. Whether you’re an investor, exchange, or play any other part in the blockchain world, a cryptocurrency lawyer should be able to help you in need of legal guidance about cryptocurrencies. In this article, we will explain what a cryptocurrency lawyer is and how they can help different individuals and companies in the decentralized world.
Cryptocurrency Laws and Regulations
At the moment, there isn’t a global law, regarding cryptocurrencies. Every country, in some places even every state, puts out their own laws and policies about digital assets. As the popularity and adoption of cryptocurrencies grow, so will the laws about them. While this may not appeal to the people who seek escape from third-party regulators, others find comfort in the existence of laws that would support them if something goes wrong with their cryptocurrency investment. The website Comply Advantage provides information about the different cryptocurrency regulations around the world. We’ll examine them to provide examples of how different places treat the assets in regard to laws.
Cryptocurrencies in the USA
In the USA agencies like The US Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission, the Department of Justice, the Internal Revenue Service, and the Treasury Department monitor cryptocurrencies. States are allowed to apply individual regulations as well.
Cryptocurrencies in the UK
In the UK the Financial Conduct Authority (FCA) controls digital assets and cryptocurrency exchange regulations. There aren’t specific cryptocurrency laws in the country.
Cryptocurrencies in Canada
In Canada, exchanges are registered with the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC) since 2020. Since 2013 tax laws apply to cryptocurrencies.
Cryptocurrencies in Australia
The Australian Transaction Reports and Analysis Centre (AUSTRAC) regulates cryptocurrency exchanges in the country, allowing their legal operation and registering them. Since 2017 the Australian government stated that Bitcoin and cryptocurrencies with its characteristics are property and should be subjected to the Capital Gains Tax.
Countries That Use Cryptocurrency as Legal Tender
The mentioned above countries allow the trading of cryptocurrencies legally but don’t recognize them as satisfactory payment for any monetary debt. This means 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. In simple words, this means that El Salvador’s 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 from November 2021, the countries where cryptocurrencies are currently illegal are Algeria, Bangladesh, China, Egypt, Iraq, Morocco, Qatar, and Tunisia. In the mentioned locations, individuals can’t trade cryptocurrency, it’s illegal for cryptocurrency exchanges to operate within the borders of the countries and banks can’t use digital assets either.
From the examples above it can be concluded that cryptocurrencies are subjected to laws and regulated by different agencies. This means that if you trade digital assets in a country that legally allows it, you must follow the set boundaries by law. If something goes wrong with your digital asset investment, these same laws should serve to protect you. The specialist who should know them and be able to assist you is a cryptocurrency lawyer.
What Is a Cryptocurrency Lawyer?
As more people began using cryptocurrencies, for trading, investing, or as a payment method, the need for specialized legal counsel to guide them through any financial hardships, pressed on. A cryptocurrency lawyer is an individual, fluent in the financial laws in their country, as well as with extensive knowledge in cryptocurrencies and blockchain matters. There are now emerging law firms that specialize exclusively in cryptocurrency legal cases. However, it’s more common that a cryptocurrency lawyer is someone who worked with other cases before and later requalified when saw the potential of the new type of money and its technology. A lawyer in this sector must know all the regulations, regarding crypto assets, as well as other financial policies, for example, anti-money laundering laws. What makes a cryptocurrency lawyer different than other lawyers dealing with finances, is that crypto attorneys should also have up-to-date information about the cryptocurrency market, blockchain technology development, and all innovations in the sector.
Who Can Use the Services of a Cryptocurrency Lawyer?
Individuals, as well as companies, can hire a cryptocurrency lawyer if they need legal help in the industry. We’ll now take a closer look at who can use the services of the crypto attorney and how.
Individuals as Clients of a Cryptocurrency Lawyer
If the cryptocurrency market experiences a downturn and the price of your holdings drops drastically, nobody can help you in this case. However, if you are following the rules and regulations about digital money in your country, there are certain cases where a cryptocurrency lawyer can assist you. The crypto attorneys could be helpful to traders, investors, cryptocurrency developers, and NFT creators.
Investors and Traders Using a Cryptocurrency Lawyer For:
- Help for if they fall, victims of cryptocurrency scams, fraud, or theft,
- Advice on tax issues, related to trading and staking cryptocurrencies
- Resolving disputes between them and cryptocurrency trading platforms
Cryptocurrency Developers and NFT Creators Using a Cryptocurrency Lawyer For:
- Help with trademarks, copyrights, patents, intellectual property rights, and policies, related to online media and the Internet
- Reviewing ICO and IEO documents
- Advice for tax and VAT for cryptocurrency or token sale domain
- Help with NFT listings like compliance with the country’s trademark regulations and regulatory review
Trading Platforms as Clients of a Cryptocurrency Lawyer
As mentioned earlier, cryptocurrencies exchanges are subjected to regulations in order to operate legally in every country. That is why they can also use the help of a cryptocurrency lawyer. Not all exchanges can use a crypto attorney, though. Decentralized exchanges which aren’t under regulatory control can’t benefit from this advisor, only centralized can. These are some instances when a crypto lawyer may assist an exchange:
- Regulatory advice
- Help with tax-related issues
- Help with Know-Your-Customer (KYC) cases
- Dispute resolution between the platform and customers
Would You Use a Cryptocurrency Lawyer if You Need Legal Help?
The cryptocurrency and blockchain industry has opened up many new job positions, this includes the role of a cryptocurrency lawyer. Every cryptocurrency trader or company should abide by the laws of their country, in order to operate with digital assets legally. The law specialists who have decided to partake in the growing decentralized world, by helping others in their crypto-related law disputes, may come of assistance to anyone who needs it. If you seek legal help with your cryptocurrency assets, whether you’re an individual or a platform, a cryptocurrency lawyer may be a good option.