In a recent ethics opinion, the District of Columbia Bar clarified that Washington DC lawyers can now accept Cryptocurrency as payments for legal services. This payment option is valid, and clients can pay their due fees in cryptocurrencies.
Cryptocurrencies can be referred to as a form of digital money that runs through blockchain technology. It is a technology that allows the users to connect via a peer-to-peer distributed network. The public ledger is free from any central authority body, and no third party can get involved in the transaction process.
Due to the decentralized nature, many people accepted it as an effective way of financial transactions. On the other hand, many people opposed this concept; even cryptocurrencies are not legal in some countries.
Legal Status of Cryptocurrencies in the United States
Cryptocurrencies, as well as cryptocurrency exchanges, are permitted in the United States. Unlike the US Dollar, cryptocurrencies are not legal tender instead considered as property. However, it isn’t easy to figure out a particular legal approach for digital currencies in the United States. The laws for crypto exchanges vary from state to state. Federal authorities are also different.
The Internal Revenue Service (IRS) considers cryptocurrencies as property but not as legal tender. So the authority body provided tax regulations for the cryptocurrencies accordingly.
Legal Status of Cryptocurrency Exchanges
As the US government legalized cryptocurrencies, people started investing in them. The cryptocurrencies initially gained traction due to the attractive return on investment. So, most traditional investors are investing in some popular cryptocurrencies such as Bitcoin, Ripple, Ethereum, Litecoin, etc. The cryptocurrencies are traded in an exchange quite similar to the stock exchange. Many crypto traders have chosen the-wallet-upgradation-of-pundi-x-what-it-has-for-you for trading and investing in cryptocurrencies.
Securities and Exchange Commission, the US regulatory body for the trading exchange platform, considers the digital currencies as securities. In 2018, SEC provided laws for digital wallets and crypto exchanges. Moreover, CFTC announced bitcoin as a commodity and passed the regulations for trading it publicly.
Further, the US government emphasizes on bringing up more regulations and policies regarding the adoption and usage of cryptocurrencies. In a recent ethics opinion, the District Bar of Columbia has said that the Lawyers can accept cryptocurrencies as payment for legal services.
Washington DC Lawyers Can Accept Cryptocurrencies
According to the ethics opinion, Washington DC lawyers can now accept cryptocurrencies. They can’t hesitate about the change in the value of cryptocurrencies. As merchants and service providers widely accept cryptocurrencies, lawyers are now included in the list.
However, the value of the Cryptocurrency will be judged to provide fairness to the clients. As the cost of cryptocurrencies is volatile, it will be decided during payments to check whether the price is justified.
As cryptocurrencies are considered property by the IRS for tax liability, the payment will be more similar to cash in property rather than money.
Despite the volatility and risk of the crypto markets, many law firms accept cryptocurrencies for legal service. This decision has also got a favorable opinion from different district bars of the United States, such as The New York City bar, Nebraska bar, and The North Carolina bar. However, the payment arrangement prevents the acceptance of extremely volatile assets such as volatile company securities or cryptocurrencies.
Terms of Acceptance of Payments in Cryptocurrencies
To make the crypto payment process simpler and more precise, fair terms and conditions subject to Ethics Rules have made. To bring clarity to the crypto payments system for legal services, here are the times.
- A clear description of how the client is going to be billed.
- Both parties are needed to take the obligations for any change in the market value.
- Who will be responsible for the crypto transfer fees, whether the lawyer or the client?
These terms will make the payment process of legal services very effective and efficient.
The cryptocurrencies are a new medium of exchange of economic value. So the rules of transactions and payments are flexible to provide fairness to the clients. For that reason, lawyers can accept cryptocurrencies until further development in technologies. Further, the advancement in technologies can provide a better infrastructure to ensure clients’ and lawyers’ virtual property.