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You should all understand crypto, lawyers told

By John Hyde in Miami >>

(2 November 2022)

Lawyers in all sectors should arm themselves with a basic understanding of cryptoassets, practitioners have told the largest international gathering of the profession. 

Addressing a session on digital assets and blockchain technology at the International Bar Association conference this week, Brown Rudnick partner Jane Colston Elliott said the volume of litigation in the sector is expected to increase massively as jurisdictions introduce new regulations. This was despite the so-called ‘crypto winter’ which has seen a downturn in the value of crypto products such as bitcoin. 

Last week, re-appointed city minister Andrew Griffith put forward an amendment to the Financial Services and Markets bill which gives regulators a remit to cover promotions for all cryptoassets.

Some lawyers may dismiss such developments as outside of their area of expertise, but Elliott stressed that understanding this new currency will be essential for everyone in practice.

‘There’s going to be such a huge amount of litigation, from family law to sanctions,’ said Elliott, who is secretary of the IBA’s litigation committee. ‘This is a space where the underlying disputes just happen to be linked to crypto and blockchain, so we need to know about it.’

Kate McMahon, partner at London firm Edmonds Marshall McMahon, agreed that the sector was now a key part of the law, adding: ‘If your grandmother knows what crypto is, which many grandmothers do, then it’s here to stay and we need to know about it.’

She urged lawyers to familiarise themselves with the different approaches taken by different jurisdictions, pointing out that it would be hard, for example, to recover assets in China because there is no ‘know your customer’ procedure there.

The session heard that crypto may also benefit lawyers because it runs on distributed ledger technology which records every transaction. This potentially makes cryptoassets more traceable than other assets, creating an evidence chain. ‘What’s great for litigators, especially asset recovery lawyers, and a negative for crypto criminals, is the immutable ledger,’ McMahon said. ‘It’s public, online and there’s no escaping it.’

(Courtesy: The Law Society Gazette)