Steptoe & Johnson LLP, a global law firm, has launched a multidisciplinary blockchain practice to help blockchain companies and businesses that are affected by blockchain with the legal issues related to the technology, according to Forbes. The law firm defends companies under government investigation and has worked with blockchain organizations.
Steptoe & Johnson is currently defending companies being investigated by the U.S. Department of Justice (DOJ) and the Commodities Futures Trading Commission (CFTC). The law firm also serves as an adviser to the Chamber of Digital Commerce and the Coin Center.
Lawyers Have Government Expertise
Jason Weinstein, a former deputy assistant attorney general for the U.S. Department of Justice who led the agency’s cybercrime efforts, will co-lead the new practice. He said the blockchain, like the Internet, will affect every type of institution. A multidisciplinary blockchain practice will put the law firm in a strong position to help a variety of clients in a large number of industries prepare for the transition to blockchain technology.
Alan Cohn, a lead attorney for the blockchain practice, oversaw the U.S. Department of Homeland Security’s cyber policy office. Cohn said the multidisciplinary practice is a recognition that blockchain technology is not something that exists apart from established businesses.
Steptoe & Johnson advises entrepreneurs, exchanges, processors, retailers, and investors on cryptocurrency and blockchain.
The firm co-founded the Blockchain Alliance, a coalition of 25 blockchain firms and 25 law enforcement and regulatory agencies, including the Securities and Exchange Commission, the Federal Bureau of Investigation, Europol, Interpol, and local officials. The alliance educates enforcement agencies about blockchain technology and digital currencies.
Blockchain Brings Legal Issues
Cohn said blockchain smart contracts present new legal issues. These include how terms are interpreted, how they are written, what recourse parties have should a contract not be executed according to its terms, and how smart contracts intersect with established legal areas such as laws governing insurance contracts or governing releases, Cohn says.
Applying a smart contact to an insurance contract requires going through the principles in that particular area of the industry – how insurance contracts work and are interpreted – but in a way that a blockchain smart contract would work.
Retailers face similar questions when opening e-commerce sites and are not clear about applying sales tax or how to document activities in cases of legal disputes, Weinstein noted.
A financial institution seeking to adopt blockchain technology faces similar types of questions about handling payments or what constitutes an ownership transfer if blockchain is used to trade shares or issue stock.
Technical decisions can impact how companies are regulated, Cohn noted. A company deploying a real-time auditing system could create legal questions about using a permissioned or private blockchain in which ledger maintainers are a private group that needs permission to join the network.
Steptoe & Johnson could work with enforcement agencies and regulators on developing their thinking about these technologies.
Blockchain Laws in Development
Many blockchain regulations are still under development. Where regulations apply is not always clear.
Companies could find themselves subjected to different laws in separate jurisdictions.
This is why the firm has included people from its Asian and European offices in the multidisciplinary blockchain practice.
To what extent design features of the technology will govern how the law should look at the technology, and in what ways it should fill in gaps around the technology to protect consumers or counterparties to contracts or theft victims, will need to be learned over time, Cohn said.
If a smart contract states how a rental car agreement or an auto lease or a home lease payment should execute, it doesn’t mean the contract law no longer exists, Weinstein noted. Instead, the contract execution becomes automated.
No matter how well code is written, there is a broader context to consider to understand what other laws apply to a transaction, Weinstein noted.
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