Coindesk has penned the following article so clients can actually understand why they might need an attorney with experience in the field.
Crypto Lawyers Guiding Us Through an Unregulated Jungle
Lawyers are specialized in many fields, from animal law to timeshare law. And as the popularity of cryptocurrency grows, so does the need for crypto lawyers. The laws surrounding cryptocurrency can be vague, and vary from place to place. Along with these muddled regulations, cryptocurrency has brought about its own brand of lawsuits. While these lawsuits can seem similar to those in the financial world, many still require a crypto expert to help during litigation.
Crypto lawyers are experts in blockchain technology and cryptocurrency regulations. They help break down the technology to court during litigation. They also help break down the laws for cryptocurrency developers, exchanges, and startups. These lawyers are the designated liaison between the crypto world and lawmakers. The two biggest areas where cryptocurrency lawyers are important are ICOs and Exchanges.
It’s easy to fall for a phony crypto whitepaper, just look at HoweyCoins. Investors also tend to skim through whitepapers and invest in a cryptocurrency purely because of the hype around it. Or even if the whitepaper is solid and the hype is real, sometimes developers are just unable to deliver. It’s not an easy task to determine whether an ICO is a scam or not. However, when we choose wrong, it’s time to call in a crypto lawyer.
One example of an ICO not living up to expectations is Centra Tech. The company’s founders are facing charges after raising $32 million through an ICO and endorsements from DJ Khaled and Floyd Mayweather. This ICO scheme lured investors in with claims of major credit card partnerships, fake founder biographies, and price manipulation of its Centra tokens (CTR).
In cases like the one above, a crypto lawyer is a necessity. Investors know they were victims of fraud, but pointing out fraud in the unregulated legal world of crypto takes experience. In the US, one important factor that connects fraudulent ICO’s to the legal system is the SEC’s definition of a security. But even with the SEC’s definition, it’s up to a crypto lawyer to convince the court whether or not an ICO is a security. In the case of Centra Tech legal crypto experts were able to define CTR tokens as a security, and tacked on securities fraud along with the other charges against the company.