Media Coverage
Source: Law360, CryptoCoinNews
Media Coverage
02.10.16
According to some accounts, blockchain—the technology behind bitcoins—could be the latest “game changer” for the legal industry. From creating so-called smart contracts that automatically execute payments to validating ownership information, blockchain technology promises to change how lawyers do deals — and to open up a whole new avenue of contract litigation.
Large banks and financial institutions, for instance, are all developing pilot programs in this area, according to Marco Santori, Pillsbury lawyer.
"I think the growth of using the blockchain as a clearance and settlement system for all kinds of digital assets is on the horizon," he said.
Santori noted that the technology, which cuts out intermediaries that would often charge a fee or take a percentage of a transaction, can lower costs for lawyers and others looking to create records for a deal or case.
In other developments, Pillsbury lawyers Steven Farmer and Matthew Oresman said that remaining sanctions against Iran may cause complications for those in the U.S. and EU conducting bitcoin transactions with parties in Iran.
If an entity is on an asset freeze list, there is a prohibition on dealing with “economic resources” or funds controlled by that entity. Farmer and Oresman said bitcoin complicates due diligence in such situations.
“The bitcoin system does not lend itself to traditional screening processes,” they report.
The lawyers advise those using the emerging payments technology to know how to protect themselves against risks posed by a decentralized system like bitcoin. One option is to ask counterparties to prove they own the bitcoin ID they use on a network and to provide a track record for that ID. They should also avoid dealing with counterparties that use “stealth addresses” that can hide the identity of bitcoin payer or payee.
To read more on the latest developments in digital currency, visit Law360 and CryptoCoinNews.