Blockchain Technologies and Digital Assets

Overview

We help clients navigate the broad array of legal issues presented by blockchain technology and the rise of digital assets, including cryptocurrencies and non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs) and peer-to-peer economies in interoperable environments (e.g., the metaverse). The only law firm with a practice group dedicated to Digital Assets and Data Management, BakerHostetler remains at the forefront of this burgeoning space.

Our clients include businesses and not-for-profit organizations, from startups to Fortune 100 companies in local, national and international arenas. Our attorneys collaborate across practice groups to provide practical advice on how to maximize the opportunities presented by new and emerging technologies while steering clear of pitfalls in a rapidly evolving legal landscape. We help clients understand how current laws and regulations apply to these technologies, plan or advocate for changes in the regulatory environment, and provide thoughtful insight to companies integrating these technologies into existing and prospective product and service offerings.

Our team understands how and when a cryptocurrency, NFT or other digital asset may be property, a currency, a security or a commodity, and the legal and regulatory implications of such designations. We help clients design and work through the myriad of legal issues that arise in developing and launching smart contracts, blockchain network applications, and new technology and business models involving digital assets. Our services include assisting clients in technology design and cryptocurrency fund formation, raising capital and related corporate structuring (both U.S. and offshore), and advising on regulatory compliance for financial technology (fintech) and decentralized finance technology (DeFi) solutions.

Our full-service blockchain practice provides our clients with the deep expertise needed to navigate blockchain, cryptocurrency and digital asset legal issues involving tax, data privacy, securities, anti-money laundering, digital advertising, investigations, technology transactions, intellectual property (IP), policy advocacy and litigation/arbitration. We are also active members of the Chamber of Digital Commerce, the Enterprise Ethereum Alliance Legal Working Group and the Accord Project, all of which exist to develop standards and protocols to facilitate the legally defensible adoption of blockchain-related technologies.

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Our attorneys provide blockchain- and digital currency-related guidance in the following areas:
  • Anti-money laundering and “Know Your Customer” compliance
  • Corporate structures
  • Cryptocurrencies and tokens, including NFTs
  • Cybersecurity
  • DAOs
  • Digital identity
  • Fund formation, including hedge funds
  • Government relations
  • IP
  • Litigation, including class action defense
  • Mergers and acquisitions
  • Not-for-profits/foundations/charitable organizations
  • Privacy issues
  • Securities regulation and enforcement
  • Smart contracts
  • Startup companies
  • State money transmitter licensing
  • Supply chain and “provenance”
  • Tax strategies – U.S. and international
  • Technology transactions
  • Token offerings
  • Venture capital
  • White-collar defense and investigations
The industries we serve include:
  • Advertising
  • Energy
  • Financial services
  • Healthcare
  • Hospitality
  • Manufacturing
  • Real estate
  • Technology

Select Experience

Cryptocurrency Fund Receivership
  • On Jan. 21, 2021, Robert A. Musiala Jr. was appointed as the court-ordered receiver by the U.S. Southern District of New York in the matter captioned SEC v. Qin, et al., 20 CV 10849 (LGS) (S.D.N.Y.), with BakerHostetler as counsel to the receiver. The receiver and his team are currently investigating a $90 million cryptocurrency fraud scheme, with a goal of identifying and securing assets for return to investors.
Securities Law and Financial Services Regulation
  • Counseling multiple companies regarding the evolving regulatory landscape for token generating events such as ICOs.
  • Advising multiple cryptocurrency industry clients on Gramm-Leach-Bliley Act; federal and state money services business registration; Bank Secrecy Act compliance; and consumer protection, privacy and cybersecurity matters.
NFT Retail and Peer-to-Peer Marketplace Launches
  • Assess data collection requirements under applicable financial laws and the privacy risks of such collection related to indexing of Ethereum blockchain nodes via relational databases.
Government Relations
  • Provide government relations guidance to a prominent blockchain-enabled global payments company regarding federal and state legislative, regulatory and policy issues.
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Professionals

Name Title Office Email
Associate New York
Partner Atlanta
Partner Los Angeles
Partner New York
Partner New York
Counsel New York
Partner Cleveland
Chief Information Officer
Chief Information Officer Cleveland
Counsel Washington, D.C.
Partner New York
Senior Advisor Washington, D.C.
Partner New York
Partner New York
Partner Cleveland
Partner New York
Partner Washington, D.C.
Partner New York
Partner Cleveland
Partner Washington, D.C.
Partner Cincinnati
Partner Atlanta
Senior Advisor Washington, D.C.
Partner Washington, D.C.
Partner New York
Director of Practice Services
Director of Practice Services Cincinnati
Partner New York
Of Counsel New York
Partner New York
Partner New York
Counsel Chicago
Partner New York
Partner Philadelphia
Partner New York
Associate Los Angeles
Partner Philadelphia
Chairman Washington, D.C.
Partner New York
Partner New York
Partner New York
Partner Cleveland
Partner Cleveland
Partner New York
Partner New York
Partner Atlanta

Experience

Cryptocurrency Fund Receivership
  • On Jan. 21, 2021, Robert A. Musiala Jr. was appointed as the court-ordered receiver by the U.S. Southern District of New York in the matter captioned SEC v. Qin, et al., 20 CV 10849 (LGS) (S.D.N.Y.), with BakerHostetler as counsel to the receiver. The receiver and his team are currently investigating a $90 million cryptocurrency fraud scheme, with a goal of identifying and securing assets for return to investors. The receiver team has been coordinating with the Securities and Exchange Commission (SEC), the Department of Justice (DOJ), and dozens of cryptocurrency-based and traditional financial institutions around the globe to recover assets related to the Qin fraud scheme.
Securities Law and Financial Services Regulation
  • Assist dozens of clients in creating and launching blockchain protocols and platforms and integrating digital assets.
  • Counsel multiple companies regarding the evolving regulatory landscape for token-generating events.
  • Advise multiple cryptocurrency industry clients on Gramm-Leach-Bliley Act compliance; federal and state money services business registration; Bank Secrecy Act compliance; fair lending regulations; and consumer protection, privacy and cybersecurity matters.
  • Serve as outside general counsel to a next-phase blockchain company, providing advice on IP, employment, corporate and other matters.
  • Represent a blockchain startup in responding to an SEC subpoena related to a prior initial coin offering (ICO).
  • Represent a startup seeking to build a blockchain-based securities exchange regulated under Regulation ATS.
NFT Retail and Peer-to-Peer Marketplace Launches
  • Assess data collection requirements under applicable financial laws and the privacy risks of such collection related to indexing of Ethereum blockchain nodes via relational databases.
  • Provide counsel regarding regulatory risks of various types of NFT sales and campaigns to assist clients in developing legally compliant NFT sales.
  • Provide counsel regarding NFT media management best practices and risks, including data storage and IP issues.
  • Draft and negotiate tech vendor contracts and terms of use.
  • Represent an iconic brand in litigation involving NFT IP issues.

Clients include a major social media and communications company building out a global, interoperable, peer-to-peer marketplace to support NFTs and other digital assets; multiple national university sports teams launching NFTs associated with athletes’ IP; an environment-focused foundation building an NFT strategy; a major game and collectible company launching an NFT initiative; a digital media and event firm integrating NFTs into its business model; and multiple startups building NFT applications and designing niche NFT brands.

Protocol and Network Applications
  • Provide protocol and network architecture design and regulatory compliance counsel to clients, including an Ethereum-based network consisting of a collective body of open-source codebases; internet protocols and implementation of software that promotes personal data ownership on a secure communications network; an Ethereum-based network for advanced P2P proxy re-encryption services underpinned by open-source software; an Ethereum-based protocol focused on reducing the environmental impact of proof-of-work networks; layer one Kusama and Polkadot parachain networks providing blockchain as a service technology; and a layer one Polkadot network providing a biometric-based consensus mechanism.
  • Draft various contracts on behalf of clients and review/negotiate various contracts drafted by third parties as part of clients’ new and ongoing relationship with various technology vendors, as related to clients’ business models and technical platform.
  • Advise on various data privacy law implications of technical platforms, including analyses related to the European Union’s General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA), the Communications Decency Act, the Digital Millennium Copyright Act, the Clarifying Lawful Overseas Use of Data Act and applicable provisions of Title 18 of the U.S. Code.
  • Advise on various aspects of potential tax implications related to issues of first impression involving revenue recognition events and smart contracts.
Investigations (ICOs, DeFi and Cryptocurrency Exchanges)
  • Assist numerous clients subject to investigation, requests for information or subpoenas from/by the SEC and the DOJ, including clients that issued ERC20 tokens in an ICO and are subject to investigation by the SEC, witness to the DOJ’s investigation into BitMEX and witness to the SEC’s investigation into Uniswap.
  • Respond to SEC inquiries and manage defense to SEC investigations, including response to document requests, SEC inquiries and settlement negotiations.
  • Respond to DOJ inquiries, negotiate scope of response and compile tens of thousands of potentially responsive documents from 16 different sources, including email and hard drives; assess responsiveness of documents and produce under urgent timeline.
  • Negotiate scope of response and deadline, and compile and review responsive documents and associated production.
Government Relations
  • Provide government relations guidance to a prominent blockchain-enabled global payments company regarding federal and state legislative, regulatory and policy issues.
Digital Identity, Privacy and Data Protection
  • Advise prominent blockchain digital identity companies on strategies for achieving compliance with the GDPR.
  • Guide a digital currency platform services provider’s response to a multimillion-dollar cyber-theft of bitcoin, including:
    • Incident Response
    • Crisis communications
    • Interactions with compromised exchange
    • Client cybersecurity practices and personnel
    • Pre-litigation counseling and preparation
  • Advise a digital currency industry client on response to cyber-theft of data and attempted extortion.
Intellectual Property
  • Provide patent prosecution and IP advice to a distributed ledger platform client.
  • Prepare and file patent applications covering foundational blockchain technologies and application-level technologies layered on blockchain platforms.
  • Collaborate with technologists to develop an IP strategy to protect emerging blockchain-based technologies, including trademark, patent, copyright and trade secret strategies.
Industry-Specific Blockchain Advice
  • Represent a major U.S. cryptocurrency exchange in a tax controversy matter.
  • Provide fund formation and ongoing outside general counsel services for a global blockchain consulting firm.
  • Advise a high-net-worth individual on cryptocurrency asset recovery and tax compliance.
  • Engage in discussions on blockchain solutions for the real estate industry with various stakeholders, including government entities, blockchain technology startups and industry representatives.
  • Advise a major financial services company on developing and offering blockchain-enabled products and services, including on issues related to IP, technology transactions, cybersecurity and data protection.
  • Counsel several advertising industry clients on the use of blockchain technology in adtech, including issues related to patents, incentive and reward programs, and use of cryptocurrencies.
  • Participate in ongoing meetings hosted by a major global technology firm as related to blockchain supply chain solutions and other enterprise use cases.
  • Participate on a panel of academic, technology and privacy/cybersecurity leaders advising tech and government sectors on the use of blockchain technologies to secure and streamline elections.

Recognition

  • Selected as a 2020-2021 “Pacesetter” in Cybersecurity Services by ALM Intelligence Pacesetter Research
  • BTI Powerhouse for Cybersecurity Litigation (2022)
  • BTI Cybersecurity Powerhouse (2020)
  • BTI CyberSavvy Law Firm (2020)
  • Chambers Global
    • Privacy & Data Security: The Elite (USA) (2022)
    • Privacy & Data Security (USA) (2014 to 2021)
    • Privacy & Data Security: Healthcare Spotlight Table – Nationwide (2018 to 2022)
  • Chambers Fintech
    • Legal – USA (2018 to 2021)
  • Chambers USA
    • Advertising: Transactional & Regulatory – Nationwide (2018 to 2021)
    • Privacy & Data Security: The Elite – Nationwide (2021)
    • Privacy & Data Security – Nationwide (2013 to 2020)
    • Privacy & Data Security: Healthcare Spotlight Table – Nationwide (2018 to 2021)
  • Chambers USA Award: “Privacy & Data Security Team of the Year” finalist (2015, 2017)
  • The Legal 500 United States
    • Media, Technology and Telecoms: Advertising and Marketing: Transactional and Regulatory (2018 to 2021)
    • Media, Technology and Telecoms: Cyber law (including data privacy and data protection) (2021)
    • Media, Technology and Telecoms: Cyber Law (2016 to 2020)
    • Media, Technology and Telecoms: Data Privacy and Data Protection (2016 to 2020)
  • Law360: Privacy "Practice Group of the Year" (2013 to 2015, 2018)
  • Selected for Vault’s Guide to Legal Practice Areas
    • Privacy and Data Security (2017 to 2021)

News

News

Publications

Alerts

Articles

Blog Posts

Blog

In The Blogs

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Blockchain Monitor
Bitcoin Mining Difficulty Decreases; Crypto Addressed by CFTC Chair; Congress Addresses Crypto Tax, Accounting; Crypto Enforcement and Crimes Continue
By Lauren Bass, Christina O. Gotsis, Keith R. Murphy, Robert A. Musiala Jr., Jordan R. Silversmith
July 29, 2022
In this issue: Bitcoin Network Mining Difficulty Continues Downward Trend Amid Heat Wave CFTC Chair Addresses Crypto; Proposed Bill Would Simplify Crypto Tax Rules Congress Members Criticize SEC Bulletin on Crypto Accounting Treatment DOJ...
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Blockchain Monitor
SEC and DOJ Bring Parallel Crypto Insider Trading Cases; SEC Alleges Nine Coinbase-Listed Tokens Are Securities
By John J. Carney, Kevin R. Edgar, Jonathan A. Forman, Adam D. Gale, Teresa Goody Guillén, Robert A. Musiala Jr., Veronica Reynolds, Michelle N. Tanney
July 25, 2022
Significant parallel actions commenced this week by the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) bring crypto fraud enforcement into the spotlight, with the SEC alleging that multiple tokens listed on...
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Blockchain Monitor
Crypto Platforms Achieve Foreign Approvals; DOJ Seizes Crypto Ransomware Funds; CFTC Adds Crypto Firms to RED List; Crypto Fraud and Threats Continue
By Lauren Bass, Keith R. Murphy, Robert A. Musiala Jr., Michael A. Rivera
July 22, 2022
In this issue: • Foreign Regulators Approve Crypto Platforms; Ethereum Approaching PoS• DOJ Seizes $500K in Ransomware Crypto; CFTC Adds Crypto Firms to RED List• Fraud, Mixers, Ransomware and the Darkweb: Cryptocurrency Threats Continue...
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Blockchain Monitor
Taxation of Non-Fungible Tokens
By Nicholas C. Mowbray
July 21, 2022
Part Four in our series discusses U.S. federal income tax issues relating to Non-Fungible Tokens (NFTs) and provides an overview of how NFTs may be treated for U.S. federal income tax purposes. IRS Guidance 1. Notice 2014-21At the time of...
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Blockchain Monitor
USPTO to Address NFTs; Treasury Dept. Publishes Digital Asset Fact Sheet; Financial Regulators Address Digital Assets; Crypto Enforcement Continues
By Christina O. Gotsis, Robert A. Musiala Jr., Shade I. Quailey, Joanna F. Wasick
July 15, 2022
In this issue: • CryptoPunk Sold for $2.6M, USPTO to Address NFTs, Court Approves NFT Service• Treasury Dept. Publishes Digital Asset Policy Fact Sheet, Seeks Public Comment• Multiple Financial Regulatory Bodies Publish Reports on Digital...
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