The blockchain revolution has taken the world by storm. Cryptocurrency law might have initially been slow to catch up, but it is picking up speed. Here are 6 reasons why every blockchain company needs to have legal expertise on its side:
Personal data protection law
Any blockchain company that holds personal data will need to prove compliance with all applicable data protection laws. These laws, such as the Data Protection Act, are likely to change and evolve along with the technology. Even more crucially, the law on data protection differs between jurisdictions. This means that cross-border transfers of data has to be compliant as well. Especially in light of Europe’s new GDPR, this is an area where legal advice is essential.
From a regulatory perspective, the blockchain landscape is set to change dramatically in the next few years. In the US, the SEC has announced that some cryptocurrencies will be treated as securities and subject to all relevant regulations. Similar statements have surfaced in Switzerland, Singapore, and the Cayman Islands. Complying with these regulations will require a startup attorney that not only knows the letter of the law, but also the nature of your product.
There are difficult legal questions surrounding the legal nature of an entirely-blockchain enabled organization. Regardless of what the answers will eventually turn out to be, it is bound to have important implications for blockchain companies’ liability. Think of 3rd party contracts, cases where the product is used in a way that causes harm and civil liability, underlying defects in the system, as well as ownership and control disputes.
The issue of jurisdictional differences can be especially pernicious in the blockchain world where the system is so decentralized and virtual. Different jurisdictions have different rules on contracts, title, ownership, data protection, and tort liability. The startup’s obligations with regard to performance assurance will also change between jurisdictions.
IP strategy has to be at the a core of a blockchain business model. Only a carefully planned and executed strategy will allow a startup to capitalize on the commercial benefits of its product and commercialize the underlying data set. For this, you need a thorough IP strategy and carefully crafted software agreements.
Enforceability of Contracts
With smart contracts on the blockchain, there is no need for an intermediary or for parties to even confirm the transaction. The contractual provisions are, in essence, self-executing. However, basic principles of contract still apply – how does one prove parties’ intent, the presence or absence of foreseeability of consequential damages, the bona fide purpose of the contract? These are questions best left to legal experts while you focus on growing your business.
The cryptocurrency lawyers on LawTrades can provide proactive online legal planning to keep your Bitcoin or other cryptocurrency business running smoothly during potentially rocky times. Emerging cryptocurrencies, wallet providers, smart contract services, digital miners, and cryptocurrency investors need a reliable legal service as they maneuver through complex financial cryptocurrency regulations and the legal ambiguities of this emerging digital market.