You will need a Lawyer when you launch or invest in a crypto project. YOU may also need the lawyer on other occasions. Therefore, following we are giving you a quick guide about how when you need a lawyer, and how to find a reliable one.
Launch an ICO or Issue Tokens
A Crypto Lawyer helps you understand whether your tokens are good enough to qualify as a security (investment) by carrying out the “Howey Test” The test evaluates the value of your token based o:
- It Being an Investment of Money
- Expectation of Profits from Investment
- Money Invested in Common Enterprise
- Profit coming from the efforts of a promoter (third-party)
To avoid being considered as a security, the asset has to fail in (at least) one of these criteria to fail. Security shows an ownership stake within a publicly traded corporation. Owning a security offers certain benefits like monthly payments, and the chance to profit from capital gains when the stock sell securities or even voting rights.
Selling a security needs registry with the Securities and Exchange Commission. You need to abide by laws when disclosing your company records to protect users from being defrauder from their investment. Most Companies offering tokens are classified as both as security as well as utility.
Every token has a function within the Blockchain Ecosystem. But the issue is, Cryptocurrencies fall in a gray area from a legal standpoint, and it can only be defined on individual cases. For this reason, you must consult with ICO Lawyers.
Trading Crypto and Filing Taxes
Virtual currency is seen as an actual asset in different parts around the word. This means you maintain a record and report capital profits onto the Cryptocurrency holdings.
Most people don’t understand if this applicable once you convert the cryptocurrency into actual money , or if you are needed to track capital gain for every trade you carry out on the exchange.
As a trader or a company owner, you need an expert on cryptocurrency law to help you benefit from opportunities and avoid risk in respect of the ever-evolving crypto tax codes. Therefore, in the end it doesn’t matter if you broke the rule with or without knowing it, the fact remains you violated a law.
Find a Reliable Lawyer
There are many bitcoin lawyers offering advance on crypto services. However, not everyone is qualified, and you need to know how to find a reliable one. Look for a law firm that has a deep understand of sector with strong services and securities.
An ideal person needs to be creative with years of experience under his belt. They have to strike a balance between following the law and promising growth as well as innovation. Don’t look for easy answers to fix complex issues.
ICO Laws require cryptocurrency companies to offer tokens in a more regulated way. Investors offer finance in return for a right to tokens once the company flourishes. These laws make sure every party keep their end of the promise, and offer value.