interest Archives -
Treasury Secretary Steven Mnuchin said the Internal Revenue Service will issue guidance within the next two weeks to prevent hedge fund managers from dodging new tax rules on carried-interest profits.
“I’ve already met with the IRS and our Office of Tax Policy this morning as a result of that article,”…
Financial markets delivered an unwelcome gift for Jerome H. Powell when he was sworn in last week as chairman of the Federal Reserve — a nosedive.
Triggered by fears of rising inflation and interest rates, the Dow Jones industrial average’s record 1,175-point plunge on Feb. 5 kicked off the worst…
Stock prices fell sharply from near record highs Friday, with the Dow Jones industrial average tumbling 666 points, or 2.5%, to close out the worst week on Wall Street in years.
The main trigger was growing concern about rising interest rates and inflation, and their impact on stocks going forward,…
An increasing number of lawyers are taking payment in bitcoin and other cryptocurrencies. With many ICO startups destitute until their crowdsale, ether or tokens are often all they can offer. Rather than turn away business, some lawyers have admitted to taking payment in crypto. While increased acceptance of cryptocurrency – especially in such circles – is to be welcomed, it’s led to concerns that lawyers who are financially invested in a project may struggle to dispense impartial advice.
Meet the Crypto-Chasing Lawyers
It would be easy to assume that cryptocurrency acceptance in the legal profession is limited to a handful of fringe mavericks and libertarians, but it’s attracted a number of mainstream advocates. A recent article in Law.com (paywalled) quotes several lawyers who now accept crypto including Washington-based lawyer Carol Van Cleef, who helps crypto clients with compliance matters. She explains: “I’ve known for a long time that my opportunity to expand in certain areas has been affected by not taking [cryptocurrency]”.
Historically, lawyers who’ve served the poorest and most marginalized members of society have done so for ideological reasons rather than pecuniary gain. In times gone by, it was not unheard of for defense attorneys to take payment in the form of firewood, food or whatever else their clients could spare. Had Breaking Bad been filmed five years later, it’s easy to imagine wheeler-dealer lawyer Saul Goodman accepting crypto and using it to help Walter White account for his vertiginous pallets of $ 20 bills.
Tokens for Attorneys
As cryptocurrencies have entered the mainstream, their association with illicit activities has diminished, and so has the stigma of accepting them. Lawyers must tread more carefully than professionals from other sectors however and accepting crypto from startups they’re advising raise possible conflict of interest concerns. It’s common practice for cash-strapped startups to offer team members payment in tokens.
Everyone from web designers to marketers can be pacified with the promise of tokens as soon as the project launches. Any legal expert entering into such an agreement would be obliged to rule that the token constituted a utility and not a security, as to do otherwise would mean they wouldn’t get paid.
Conflict of Interest or Credibility Booster?
If a lawyer has never sent or received cryptocurrency, they seem ill-equipped to advise crypto startups on their structuring model. Cryptocurrency theory is all well and good, but to truly appreciate and understand it, proponents insist, it is necessary to experience it in action, and not just once for test purposes, but as part of everyday life. Lawyers who have gotten their hands dirty, so to speak, by using crypto should be able to understand and explain it more effectively than their counterparts who are still crypto virgins. It would be hard to see bitcoin or ethereum acceptance as presenting a conflict of interest; a lawyer taking tokens for the platform they’re advising on, however, would be a much narrower crypto case, and one that is much harder to defend.
Mainstream media organizations such as the New York Times forbid their bitcoin reporters from owning cryptocurrency, while other news sites expect their journalists to disclose any potential conflict of interest. While scribes such as the NYT’s Nathaniel Popper have earned praise for the quality of their reporting, it’s hard to shake the feeling that by watching from the sidelines, their reporting is in danger of being too detached. Just as Vietnam war journos had no qualms about hunkering down with the troops, crypto reporters with personal experience of the subject matter are likely to be better informed and more attuned to community matters.
Dirty Digital Money
Accepting crypto is “a symbol for the client about how vested you are in the area,” says DC lawyer Carol Van Cleef. Defense attorney Jay Cohen also accepts bitcoin but confesses “We cash it out when it comes in, because of the volatility”. This practice tallies with an opinion delivered by a Nebraska Supreme Court committee which advises lawyers to convert crypto to fiat expeditiously to prevent conflicts of interest caused by lawyers getting vastly over or underpaid due to bitcoin volatility.
There’s another problem though that defense lawyers accepting crypto from their clients must address: ensuring that it has not come from illegitimate activities. Cohen confesses to having to turn down bitcoin payment from a client who was charged with money laundering. Obvious red flag-raising cases aside, there’s nothing to stop lawyers from accepting crypto, as a number of firms in the U.S. and elsewhere do.
Former assistant U.S. attorney Kathryn Haun put it best when she told Law.com via email: “There is no reason to believe that cryptocurrency is illegitimate and criminally-derived any more than any other form of currency or payment. Cryptocurrencies are not special in that regard and I would think would be treated like any other funds.”
Do you think lawyers should be entitled to accept payment in crypto? Let us know in the comments section below.
Images courtesy of Shutterstock, and AMC.
Need to calculate your bitcoin holdings? Check our tools section.
The post Lawyers Are Taking Payment in Bitcoin Despite Conflict of Interest Concerns appeared first on Bitcoin News.
Texas police have issued an Amber Alert for two girls, 14 and 7, who may be with a man described as a “person of interest” in a suspicious death.
Chinese cloud-based solutions service, Seven Stars Cloud Group, Inc. (SSC), announced this week its 27 percent purchase stake of US crypto blockchain exchange Delaware Board of Trade Holdings Inc. (DBOT). SSC is owned and run by entertainment mogul Bruno Wu, who many analysts believe is trying to get in on the near-half a trillion cryptocurrency market.
Also read: Ron Paul, Tequila, Sun, Fun, and Crypto
Bruno Wu Buys Delaware Crypto Exchange
China’s SSC sent out a press release claiming “today a 27% purchase of The Delaware Board of Trade Holdings Inc. (“DBOT”), the first and only blockchain based Alternative Trading System fully licensed by the SEC, for 1,627,869 shares of SSC common stock. The transaction will make SSC the largest shareholder of DBOT”.
Referring to Mr. Wu as “One of China’s biggest business and entertainment moguls,” Jon Najarian also described DBOT as “a ‘dark pool’ operator” and how SSC had “plans to expand into the trading of ‘bitcoin-like’ securities,” he tweeted. The Delaware company is the only trading system of its kind licensed by the SEC, if the SSC press release is to be believed.
The announcement sent the Chinese company’s stock soaring on Nasdaq, up over 25 percent.
According to Seven Stars Cloud website, the company is “aiming to become a global leader in providing next-generation Artificial-Intelligence (AI) & Fintech Powered, Supply Chain + Digital Finance Solutions.” By purchasing a controlling interest in DBOT, SSC hopes its “regulatory approved platform will be the cornerstone for a ‘plug & play’ and blockchain based, Initial Exchange Offering (IEO) Network.”
John Wallace, CEO of DBOT, was quoted as saying, “We are thrilled to further partner and form a deeper business relationship with SSC as DBOT and its various business lines become key engines that power SSC’s Global Trading Platform Network for Initial Exchange Offerings.”
Mr. Wu’s Big Plans
Early this year, China’s Chongqing Casin Enterprise Group’s efforts were halted by the Securities and Exchange Commission (SEC) just as they tried to snap up the Chicago Stock Exchange. Legislators complained about the lack of transparency in the Chinese company’s corporate structure.
So far, the SEC hasn’t commented on Mr. Wu’s acquisition. Nevertheless, his company has big plans for the merger. It will “leverage DBOT’s established and regulatory approved ATS for powering SSC’s blockchain based Nextgen X, which focuses on the trading of financial products including ETFs backed by digital assets, that can be tokenized and settled (including digital currency options) via Initial Exchange Offerings (“IEO”),” the company stated. It hopes to establish a “plug and play” solution spread over 30 different exchanges in Japan, UAE, Singapore, Africa, Korea, China, Germany, and the United States.
The New York Post reports Mr. Wu has also purchased “a majority share of a Youtube-like company called YOU On Demand, which was owned by World Wrestling Entertainment scion and professional wrestler Shane McMahon — son of WWE founder Vince McMahon and his wife, Linda McMahon, the head of the Small Business Administration,” the paper explained.
For its part, SSC, based on the cryptocurrency-related rumors in the press, issued yet another release. In it, Mr. Wu himself explains, “Seven Stars Cloud is in no way a Bitcoin-related company and it must be highlighted that the opportunities and possibilities of Blockchain extend far beyond the world of cryptocurrencies,” he stressed. “Although initially created for Bitcoin, Blockchain provides a more secure and transparent way of managing all kinds of data and therefore, the numerous applications and uses of this technology are infinite.”
What are your thoughts about Chinese businesses buying US crypto companies? Let us know in the comments section below.
Images courtesy of Pixabay, SSC, DBOT.
Need to calculate your bitcoin holdings? Check our tools section.
The post China’s Bruno Wu Takes Controlling Interest in Licensed US Crypto Exchange appeared first on Bitcoin News.
The U.S. and Japan have urged Saudi Arabia to pursue an international listing for oil giant Aramco, fearing the possible sale of a stake to China would give Beijing too much sway in the Middle East.
WSJ.com: What’s News Asia
Federal Reserve monetary policymakers on Wednesday nudged up their key interest rate again and sharply increased their forecast for the economy’s performance in 2018 as Congress neared passage of a large tax cut package.
Fed officials voted 7-2 after a two-day meeting to increase the rate by a…
Federal Reserve officials generally believe that it’ll soon be time for another increase in the Fed’s key interest rate. However, a few felt any further rate hikes should be delayed until they see inflation moving higher, minutes of their last meeting revealed.
Minutes of the Fed’s Oct. 31-Nov….
The tax deduction for student loan interest would be eliminated as part of the sweeping tax changes proposed by House Republicans on Thursday.
The changes also call for levying a 1.4% tax on the investment income earned by private colleges and universities that have sizable endowments, which would…