The Top Legal Fields Being Influenced by Blockchain
In the article 5 Professions That Need To Understand Blockchain, attorneys were placed first on the list. Over recent years, blockchain technology has developed into its own practice area of specialization for attorneys. However, the technology’s growing adoption is affecting other practice areas not directly related to blockchain.
In no specific order, here are 7 legal practice areas that are being most affected by blockchain technology right now:
Business & Corporate Law
According to a Deloitte study of over 1,300 business executives around the world, 86% believe that blockchain technology will eventually achieve mainstream adoption. Some industries that are utilizing blockchain technology the most are: banking, finance, shipping, digital media, gaming, real estate, and the arts. If the executives from the Deloitte study are correct, we will see a significant increase in the applications of blockchain technology and the business industries being affected. This will of course lead to an increased demand for business and corporate attorneys who have at least a fundamental understanding of how blockchain technology works.
The IRS has been talking about cryptocurrencies for a while and are increasing their efforts to enforce regulations. They recently issued new tax guidance on cryptocurrencies and are proposing updates to their tax forms to include virtual currency. Today’s businesses are providing blockchain-based services, accepting payments in cryptocurrency, and using cryptocurrencies to pay for services. Additionally, there is a growing number of people in the United States, who are buying, selling and trading crypto. All of these activities have potential tax implications. Any tax attorney that provides guidance to businesses or individuals involved with cryptocurrencies, must first learn how cryptocurrencies work, and then stay abreast of the tax regulations affecting these activities so they can properly guide their clients through each circumstance.
A common yet unfortunate consequence of marriage is divorce. What does crypto have to do with divorce? Central to most divorce matters is the marital assets, and spouses often try to hide assets from each other.
A well known feature of cryptocurrencies is the pseudonymous nature in which they can be purchased, sold and stored. This feature makes cryptocurrencies very attractive to anyone trying to hide funds from say- their spouse. Divorce attorneys are not expected to act as forensic accountants but, they are expected to be aware of how cryptocurrencies can play a role in divorces. Divorce attorneys need to identify and anticipate the potential issues involving cryptocurrencies so they can design strategies to protect their clients from this type of asset hiding activity.
Trusts & Estates
We live in an increasingly digital world and digital asset management has become a growing focus in estate planning. Cryptocurrency is an emerging digital asset class that cannot be ignored by trusts and estates attorneys when providing estate planning or estate administration services for their clients. Cryptocurrencies aren’t held in banks with routing and account numbers. They are stored in hot or cold wallets with private keys. What are cold wallets and private keys? How is crypto left in a will? How is crypto transferred after death?
Attorneys are going to need to be able to answer those questions because these are real issues affecting trusts and estates practices right now. It is imperative for trusts and estates attorneys to understand how cryptocurrencies are stored and transferred so they can effectively provide estate planning services and thereafter assist in the probate or administration of an estate.
The word “criminal” is usually the first thing that comes to mind when people talk about crypto. The early days of Bitcoin will be forever associated with the underground marketplace known as the Silk Road, in which Bitcoin was the dominant currency used to purchase illegal goods and services. Those were not the only uses of cryptocurrency, but the criminal element cannot be ignored and will probably grow. The Silk Road has been shut down but, as the level of cryptocurrency use and understanding increases, so can the sophistication of criminal activity. Cryptocurrencies have been used for money laundering, embezzlement, cyber ransom, cyber thefts and more. As mainstream adoption grows, so unfortunately, is the likelihood of criminality. Criminal attorneys on both sides, prosecution and defense, need to be prepared.
Privacy & Cybersecurity
Speaking of cyber ransom and cyber thefts, data privacy and cybersecurity may be one of the hottest if not the hottest legal topic in 2019. There has been a significant amount of proposed cybersecurity legislation this year and many of them have included the study and use of blockchain technology. Blockchain technology’s strongest application may be in privacy and cybersecurity. Even companies that are not necessarily blockchain companies are exploring using blockchain as an enterprise solution. For privacy and cybersecurity attorneys, understanding blockchain technology is going to be vital to the future of their practices.
The total number of blockchain patent applications around the world have grown at a ridiculous rate. According to Statista, the industry went from 72 applications in 2013 to 4,673 last year, and the United States is the leading country in filings. With this blockchain space rapidly growing, it is likely for this trend to continue. For any patent attorney looking to carve out a special niche, this is a trending area that they should find attractive to know and learn.