Continuous advancements in the digital world have paved the way for the rise of cryptocurrency, a digital asset that can be used to acquire goods and services.
This new currency goes by many names depending on the area. For example, Australia uses the term ‘digital currency’ as a reference for cryptocurrency.
Cryptocurrency allows payments online through the use of various encryption techniques. These encryptions will secure your privacy so you can make transactions anonymously.
Thru cryptocurrency, it’s possible to make transactions with minimal to zero transaction fees because the system doesn’t rely on third party services such as banks.
Moreover, since there is no intervention from banks, you can have more control over assets bought by cryptocurrency. You can also directly send and receive money from other cryptocurrency users 24/7.
However, as the public gains more interest in cryptocurrencies, the legal issues that surround it has also come into light.
If you’re planning to enter the world of cryptocurrency, you should consider these 4 reasons to get an attorney for your future transactions:
Staying Updated With Relevant Cryptocurrency Regulations
Regulations on cryptocurrency differ from one jurisdiction to another. It will be difficult for you to comply with a certain country’s regulations if you don’t have sufficient knowledge about them.
Moreover, since it’s already mentioned that there’s no third party involved, there are no specific laws that are exclusive to cryptocurrency.
There are countries like Canada, the Isle of Man, and Australia that incorporate laws concerning money laundering and counter-terrorism in the cryptocurrency market.
However, you should still take note that cryptocurrency is not a government-issued form of legal tender, so it’s possible that the authorities might not be able to help you if you suffer from losses caused by cryptocurrency-based scams.
With help from a lawyer that focuses on cryptocurrency like blakeharrislaw.com, you’ll be guided accordingly.
There are also regulations in countries like Qatar and Bahrain that impose strict limits on cryptocurrency.
You can’t make any cryptocurrency-based transactions as long as you’re within these countries’ borders. In Qatar, banks that violate cryptocurrency regulations will be subject to penalties.
On the other hand, the Swiss Cantons of Zug and a municipality in Ticino accept the use of cryptocurrency as a mode of payment.
Educate About Cryptocurrency Values
Since there’s no central governing hub in the cryptocurrency market, the value of assets is unregulated and volatile. This means any given cryptocurrency’s value may change drastically within a short amount of time.
Like with non-digital commodities and currencies, the value of cryptocurrency will also depend on the supply and demand.
If there’s no sufficient supply to accommodate the surge of demand, the price of the cryptocurrency will inflate. On the flip side, if there’s enough supply on the market, then the price will drop.
You might want to purchase cryptocurrency during this time since you’ll get it at a much lower price. After that, you could wait for its value to increase before selling it away to earn a profit.
However, you can’t exactly tell when the value will increase so you can ask your lawyer for legal advice about when is the best time to purchase cryptocurrency.
A specialized lawyer can also educate you about the other factors that determine the value of cryptocurrency.
For example, since you can’t always expect the value of a specific cryptocurrency to keep increasing, getting help from a specialist would at least help you make trades that are less likely to result in losses.
Protect Clients Against Criminal Activities
As mentioned earlier, cryptocurrency allows its users to remain anonymous during transactions. It provides encryption to ensure the authenticity of transactions and avoid double-spending.
However, the anonymous nature of cryptocurrency makes a common payment option for transacting in criminal activities.
For example, culprits may use this platform to buy and sell illegal products without being identified. Since users can remain anonymous, there’s no definite way to pinpoint their identity and location.
The government won’t always have any pieces of evidence that illegal activity occurred during transactions.
There are countries that have already enforced their own limitations on cryptocurrency-related activities.
That said, the future of crypto may see its share of even more restrictions to help cut down on fraudulent crypto-based transactions.
You can also fall victim to financial fraud if you’re not careful with your transactions.
Remember that the value of cryptocurrency depends on its owner, so the fraudster may sell it at a convenient price to just to lure buyers.
Once you’ve already transferred money to their account, they might decide to reduce its value and run away with your money.
It better to have a lawyer who can confirm the validity and legitimacy of your transaction because they can help keep you safe from shady transactions.
Lawyers can also help settle disputes in case you do end up getting scammed by another party. Through their help, you can rest assured that your money will not go to waste.
Help Clients Understand Smart Contracts
One of the pressing issues of cryptocurrency is the nature of crypto-based contracts.
Since cryptocurrency operates in the digital world, agreements between both parties are solidified via smart contracts.
As long as the other party fulfills its promise, then payment should automatically be transferred. Sounds pretty simple, right?
The downside of this feature is that different areas have different laws when it comes to contracts. Unfortunately, there’s no specific law the encompasses the definition of what a smart contract is.
Therefore, if an issue occurred during one of your crypto-based transactions, you might have to undergo a lengthy litigation process.
If you have a lawyer, they can help you understand the contents of the contract and make sure that you’ll get a fair share of most of your transactions.
Conclusion
Remember: it pays to be careful when it comes to any kind of investment.
Dabbling in cryptocurrency is risky, perhaps even more so than with other types of transactions because its value is mostly decided by the other investors and owners.
There’s no certainty in the value of the digital asset since it’s highly volatile; it can always go down and up anytime.
There are also very few resources to use in case of transactional conflicts because some areas do not consider cryptocurrency as a proper form of legal currency.
In case of a downfall, the government is less likely to provide legal help.
Fortunately, you can seek help from cryptocurrency lawyers so you can mitigate the risks of dealing with cryptocurrency.
Jonathon Spire
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1 thought on “4 Reasons You Need An Attorney For Your Cryptocurrency Transactions”
Hi, I’m a retired attorney. You say “you can ask your lawyer for legal advice about when is the best time to purchase cryptocurrency.” Two points: 1) That would not be legal advice, that would be investment advice. 2) Any attorney who says he can give you reliable information on market-timing cryptocurrencies is either a criminal or an idiot, possibly both. There is special licensing required to give investment advice which is not part of the attorney licensing process. An attorney giving advice like this might put his license at risk. He would open himself to being sued for malpractice if his market predictions proved inaccurate (and he would likely lose these cases). It is also impossible to predict a market — this is investing 101. Any attorney willing to give advice like this is therefore either ignorant of the basics of his own profession, doesn’t have the intelligence to see his own malpractice risk, and knows nothing about investing, or he knows all this stuff but doesn’t care because he’s running a scam. You say a lawyer can: “confirm the validity and legitimacy of your transaction because they can help keep you safe from shady transactions.” Lawyers are not private investigators, and they are not wizards. The best they could likely do would be to look at a proposed transaction and tell you if they see any red flags based on their experience and awareness of current trends in the marketplace. That might help you avoid some scams. But if they did not see red flags, that would not mean the transaction was necessarily legitimate: often you just can’t know in advance what is going to happen, and not every scam throws up red flags to be seen. If you have an attorney who says he can guarantee that your transaction will be legitimate and that your money will be protected, then either he truly believes that he is a wizard, or he is happy to sell you bogus legal services. Either way, his advice would be worthless.