Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates. Justin Wales is the head of legal for the Americas at Crypto.com. He is the author of “The Crypto Legal Handbook: A Guide to the Laws of Crypto, Web3, and the Decentralized World” (available at www.thecryptolegalhandbook.com).
The question seems almost rhetorical: Should lawyers deeply engaged in the cryptocurrency or digital asset industry understand the technologies they are paid to represent before regulators and courts?
Surprisingly, many legal professionals, including those actively tasked with navigating existential threats to the cryptocurrency industry or their crypto-wielding clients, treat cryptocurrency more as a novel curiosity than a transformative technology that requires intricate understanding and thoughtful consideration.
I’ve listened to presentations by highly sought-after attorneys with large “crypto practices” who charge thousands of dollars for an hour of their time and joke that they are “not a crypto person” when pressed on a question about the uses of the technology during formal proceedings. They treat the practicalities of using digital assets as an irrelevant afterthought that only complicates their other arguments.
This detachment between the industry and its advocates is not merely unhelpful – —it’s harmful. The industry tasks its lawyers with representing its interests before courts and regulators, who often need to consider the complex interplay of crypto applications and existing regulations for the first time.
If these advocates are unwilling to engage seriously with what the industry is building, how can they effectively persuade a court or regulator that their legal interpretation aligns with the realities of the technology or convey the philosophical foundations upon which the broader cryptocurrency space is built?
Top law firms charge thousands of dollars per hour for their services, yet too often, the senior-most partners on a case treat engaging deeply with their client’s crypto business as beneath them. This attitude forces clients to rely on the hope that some crypto-native associate will step in to prevent egregious errors or inefficiencies caused by the lack of interest from those at the top. This dynamic is inefficient and can be financially and strategically costly for those navigating the complicated regulatory challenges inherent to most projects in the space.
Fortunately, as crypto-native associates become more senior, the dynamics within law firms are beginning to change. Truly adept “crypto lawyers” have emerged at many prestigious law firms, and there are lawyers at specialized boutiques who certainly know their stuff, but this phenomenon remains surprisingly rare. This shift is crucial, as lawyers who understand and can innovate within the framework of cryptocurrency law are critical for the industry’s future.
A cynical response might equate demanding that a lawyer representing a crypto company have meaningful experience using cryptocurrencies to a tobacco company requiring that their lawyer smoke. But such glib comparisons reveal a misunderstanding of what cryptocurrency represents – —a potential paradigm shift in how we structure society and handle value, privacy, and trust that relies on first-of-its-kind technologies to further goals that were, until recently, confined to science fiction.
Lawyers are free to spend their time as they see fit, but those who believe they can coast on a superficial understanding of Bitcoin that hasn’t been expanded since 2017 and an attitude that “everything old is new again” will find their pool of clients diminishing as the industry progresses and demands more from them.
I’m not suggesting that a lawyer needs a computer science degree to be a successful advocate or that they must be a “degen” with their personal finances, but they should put in enough time learning about the industry and interacting with the different projects and protocols that make up the space so that they can speak authoritatively on what their clients do, how they do it, and why it matters.
Passion is a valuable asset for any professional, particularly in an industry that evolves as rapidly as cryptocurrency does. Lawyers wishing to stay up-to-speed with the continuous legal and technological changes that are characteristic of the cryptocurrency space must engage in continuous self-study – —a task that is incredibly difficult without a genuine interest in the subject matter.
This isn’t just about maintaining relevance; it’s about providing the best possible representation for clients who rely on their attorneys to understand not just the law but the essence of the technology they are dealing with to ensure their advocacy considers a comprehensive understanding of the facts, rules, and circumstances at play.
I get asked all the time by young lawyers or law students what they can do to start a career in crypto law. My advice is always to start using crypto and to see if they believe that technologies that permit people to interact without intermediaries are important and should be protected. If so, start reading about the industry’s history, and if you are still convinced this is a good thing for the world, develop expertise in the various areas of law and financial regulations that impact the field.
On the other side, I get asked by non-lawyer entrepreneurs or developers what they can do to ensure their relationship with their lawyers is successful. My answer is to make sure your lawyer understands what you’re trying to build and why and to learn enough about the rules regulating your business so that you can have critical conversations with your legal team about their understanding of the law and their strategy.
During conversations with young lawyers or entrepreneurs, I would be asked where they should start developing these informational skills, but I didn’t have a great answer. I put together a resource called “The Crypto Legal Handbook” to address this gap and serve as a primer on cryptocurrency’s technological and historical aspects, as well as a comprehensive overview of the various laws that govern the field.
The text is designed to, on the one hand, spur lawyers to engage with the crypto world actively, enhancing their ability to serve as true advocates for technological advancement and, on the other hand, to provide entrepreneurs with the tools they need to understand the state of crypto regulations.
I believe that most of us working in the crypto industry understand that it is more than just a niche asset class within the financial sector. The proliferation of technologies that allow for a variety of peer-to-peer financial and non-financial communications is a pioneering movement capable of reshaping our understanding of money, privacy, and governance that could substantially impact how we govern our economy and society at large.
Isn’t it time we started demanding all these so-called “crypto lawyers” be able to effectively articulate this vision for the future?
