Cryptocurrency

Virtual and cryptocurrencies are built on blockchain technology—a technological innovation that allows for a distributed, decentralized digital ledger generally built upon cryptographic mechanisms and complex consensus protocols. From a legal perspective, many of the tax, regulatory, and other legal issues associated with blockchain technology and cryptocurrency require an understanding of this underlying technology.

Cryptocurrencies involve unique tax considerations. Businesses and individuals need up-to-date guidance and insight regarding the tax law and its impact on virtual currency activities at the state, federal, and international levels. Freeman Law is positioned to advise clients on the latest cryptocurrency tax strategies and thinking.

Freeman Law also offers legal and regulatory guidance with respect to Initial Coin Offerings (“ICOs”). ICOs raise particular regulatory challenges and risks. Depending on the circumstances, an ICO may be classified as the issuance of a security subject to state or federal security regulations or a commodity subject to CFTC oversight. Investors and issuers need astute legal counsel regarding these risks and associated compliance measures.

Cryptocurrency and Blockchain transactions can raise a host of other regulatory compliance challenges as well. Cryptocurrency issuers and administrators may be subject to “money transmission” regulations at both the state and federal levels. FinCEN and state analog agencies administer “money transmission” regulatory regimes, which may include Anti-Money Laundering (“AML”) and Know-Your-Customer (“KYC”) compliance requirements. Violations and failures to properly register under these regimes may even give rise to criminal violations.

The cryptocurrency and blockchain regulatory landscape is rapidly evolving across jurisdictions. Compliance with this overlapping regulatory patchwork—at both the state and federal level—requires innovation and cutting-edge legal advisors.