At a recent meeting, the ABA House of Delegates approved draft uniform legislation regarding virtual currency.
The law—titled the Uniform Regulation of Virtual-Currency Business Act—is purported to provide a statutory framework to regulate virtual currency business activity, a polarizing area of the law. The legislation does not deal with the underlying block chain technology, but rather with licensing of business activity.
The draft uniform legislation came about in part because of criticism of New York’s licensing law. In 2015, New York created a regulatory scheme called BitLicense. But the scheme has drawn criticism for imposing an overly burdensome regulatory bar, with only three companies receiving licenses over the past three years.
The draft uniform system provides that companies are subject to certain regulations depending on their aggregate activity volumes. The tiers operate as follows: businesses with aggregate activity volumes of (1) $5,000 or less are exempt from regulatory oversight; (2) $5,000 to $35,000 are required to obtain a “light license”; and (3) $35,000 or more are required to comply with a full regulatory scheme.
The law does not discuss the legal ethics nuances of lawyers accepting cryptocurrency for fees; however, it is interesting to note that on September 11, 2017, Nebraska issued an ethics opinion regarding virtual currency. The opinion provides a framework for lawyers who receive payment in digital currencies. It dictates, among other things, that lawyers should (1) notify the client that payment will be immediately converted to U.S. Dollars; (2) make the conversion through a payment processor; and (3) credit the client’s account at the time of payment.
The Uniform Law Commission’s website—which details the states that have introduced the draft legislation—can be found here. The Uniform Regulation of Virtual-Currency Business Act can be found here, and the article discussing it can be found here.
