Blockchain and cryptocurrencies

'Why is bitcoin difficulty so high? Too much hash'

Well, our lawyers found it funny because unlike many other firms they actually speak the language of Blockchain, cryptocurrencies, cryptojacking, hashes and consensus based algorithms. They understand what smart contracts are and what they are not. They appreciate that fraud prevention lies at the heart of blockchain solutions and yet with all the opportunities in this brave new world there are still many risks for the unwary.

We can help you navigate this new landscape.

Distributed ledger technology promises to be a game changer for many aspects of our economy. Businesses and governments are starting to experiment with the disruptive potential of the blockchain and the many different ways in which it may drive efficiency gains. Many earlier investors have made outsized returns trading the coins and tokens issued by players in the distributed ledger space. This has stoked a greater public interest in the investment potential as well as the practical application of smart contracts and blockchain immutability. The initial coin offering (‘ICO’) has quickly emerged as a competitor to early stage venture capital financing for many technology start-ups.

The legal and regulatory environment for participants in the distributed ledger ecosystem is undeniably complex and remains in a state of flux. Regulators around the world are starting to consider more closely the regulatory questions posed by the ICO in particular. As this sector continues to mature it can be expected that there will be an increase in regulation, which will likely be coupled with targeted guidance and further examples of enforcement action.

You may be looking to launch an ICO or invest into cryptocurrencies and tokens. Perhaps you are already a veteran and need to put in place a more robust asset and succession structure for your accumulated wealth. Our multi-disciplinary team is comprised of lawyers with knowledge and experience in securities law, corporate advisory, taxation and dispute resolution and are based in key locations around the world. They are able to assist whatever your legal needs may be.

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How we can help

For issuers

  • Reviewing the characterisation of a cryptocurrency or token from a securities law perspective
  • Designing token issuance and software development entity structures
  • Structuring pre-mine allocation and vesting arrangements
  • Preparing agreements with venture capital investors, advisors and other external stakeholders
  • Reviewing the terms of ICO documentation such as terms and conditions, information disclosures and privacy statements
  • Advising on AML/KYC requirements and ICO participation restrictions
  • Assisting with ongoing corporate secretarial, advisory and intellectual property requirements
  • Reputation management and dispute resolution

For promotors and investors

  • Developing ownership structures for promotors and investors
  • Advising on the taxation of trading gains as well as income derived from staking, forging, lending and airdrops
  • Designing asset protection and estate planning structures for promotors and investors
  • Advising on information exchange and reporting requirements
  • Reviewing OTC brokerage arrangements and escrow
  • Audit defense and litigation

For asset managers

  • Developing cryptocurrency focused fund structures
  • Reviewing fund offering and subscription material
  • Assisting with distribution and licensing requirements
  • Advising upon the taxation of trading gains and performance fees

Track record

US litigation counsel for the world’s longest standing crypto exchange

We serve as US litigation counsel for Bitstamp and advise on contract and fraud matters as well as advise the company’s board and executives regarding US regulatory issues and regarding a cross-border litigation. <br /> <br />

Bank Secrecy Act, FBAR compliance and reduction of penalties for clients with novel offshore cryptocurrency arrangements

Withers tax controversy team has worked with the Financial Crimes Enforcement Network (FinCEN) on behalf of clients with novel offshore cryptocurrency arrangements to establish Foreign Bank and Financial Accounts (FBAR) compliance, resulting in a seven figure reduction of possible penalties.

Aiding taxpayers with IRS compliance and audits

Withers tax controversy team has represented holders of cryptocurrency to address tax compliance matters with the Internal Revenue Service. We obtained stellar results for taxpayers who received IRS crypto currency letters notifying them of potential compliance issues, and those who have progressed to formal audits.

Aiding taxpayers with IRS compliance and audits

Withers tax controversy team has represented cryptocurrency holders to voluntarily correct tax non-compliance in amnesty filings and reasonable cause filings to minimize penalty exposure.<br />

SEC ICO investigation

Successfully navigated witness through SEC ICO investigation.<br />

Secured dismissal of former trading desk COO

Secured dismissal of former trading desk COO’s breach of contract action against leading fintech company.<br />

Won motion to compel against Glassdoor, Inc.,

Won motion to compel against Glassdoor, Inc., forcing Glassdoor to turn over identification information regarding anonymous individuals that posted reviews in violation of non-disparagement and confidentiality provisions in severance agreement.<br />