Cryptocurrency & Blockchain

Overview

Our experience combined with our integrated, cross-practice approach positions us at the forefront of the market, advising a wide variety of clients on the full range of matters related to digital assets, including fund formation and investing, securities laws (or SEC regulation), commodities laws (or CFTC regulation), enforcement matters and tax planning.  Our cryptocurrency and blockchain practice is also fully integrated with our comprehensive FinTechservice offering.

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SEC, CFTC & Other Regulations

• Counseling on SEC, CFTC and other regulations applicable to asset managers, issuers of virtual currencies and tokens, foundations, DAOs and other entities operating in the crypto and blockchain space
• Analysis of whether coins/tokens, NFTs and other digital assets may be securities or commodities, and the implications of any applicable regulatory frameworks
• Advising on novel issues related to cryptocurrency derivatives, both OTC and cleared
• Considerations related to the formation of DAOs, initial coin/token offerings, minting of NFTs, grants and other token disbursement programs
• Advising on the restrictions and requirements for reselling tokens that are securities, including applicable waiting periods

Fund Formation and Investing

• Formation and structuring for registered funds, ETFs and private funds, including venture and hedge funds
• Advising clients regarding investments in ICOs, SAFTs, token warrants and equity and debt investments in blockchain-focused companies and with respect to staking, decentralized finance (DeFi), lending of digital assets, offshore trading considerations and other similar investment activities
• Preparation of fund documents such as private placement memorandums, limited partnership agreements, subscription booklets and investment management agreements
• Negotiating side letters with investors and arrangements with administrators and other service providers
• Negotiation of cryptocurrency custody agreements and derivatives trading documentation
• Advising institutional investors on due diligence considerations associated with investments in private funds investing in digital assets

Liability Management and Restructuring

• Advising institutional clients on potential insolvency and bankruptcy-remoteness risks related to cryptocurrency acquisitions or investments in crypto-focused companies
• Assisting sophisticated creditors involved with distressed crypto-focused companies, including in connection with potential acquisitions pursuant to the bankruptcy code and claims management in a bankruptcy case
• Working with crypto-focused companies on potential out-of-court liability management transactions and in-court bankruptcy transactions

Litigation, Enforcement & Compliance

• Guidance through evolving regulatory and enforcement landscape, including proceedings and investigations involving federal and state regulatory and law enforcement authorities (DOJ, SEC, CFTC, SROs)
• Risk management and compliance guidance regarding custody, AML, MNPI, registration, and other digital asset enforcement priorities, including developing bespoke compliance manuals, policies and procedures
• Securities, class action, and trademark enforcement litigation

Strategic Transactions and Licensing Practice

• Advising clients on public market mergers and acquisitions with and of crypto and blockchain companies
• Guidance on infrastructure partnership and commercial arrangements with organizations that mint and issue digital assets
• Assistance with entity formation, financings and joint ventures for companies creating and developing digital assets
• Advising on the integration of digital assets into advertising, marketing and other consumer facing activities and related legal considerations
• Integration of expertise in data privacy, cybersecurity, anti-trust, securities/commodities regulation, tax and brand protection and enforcement into strategic and commercial transactions

Tax Planning and Structuring

• Evaluating tax consequences of cryptocurrency investments to different taxpayers in light of IRS guidance that cryptocurrencies are ‘property’ and applicable tax treatment of air drops, staking, lending, other DeFi activities
• Determining whether a fund is engaged in a US-trade or business and evaluating the application of safe harbor rules to various cryptocurrencies
• Evaluating the treatment of cryptocurrencies and derivatives on cryptocurrencies under rules applicable to repurchase and lending transactions, straddles, wash sales, constructive sales, mandatory and elective mark-to-market recognition of gains and losses
• Advising nonprofit organizations regarding acceptance of cryptocurrency donations