Attorneys are flocking to the crypto industry as it matures and manages its regulatory obligations
In the US, the crypto currency industry is ramping up its legal presence, poaching attorneys from law firms and other crypto companies, according to a recent article in the Wall Street Journal. We see this as good news for the industry. It means crypto is coming of age and the regulatory environment is maturing. Crypto companies want to navigate the regulatory landscape and ensure they stay on the right side of the law, as crypto currency becomes more and more of a target for cyber criminals.
In its infancy, crypto currency was unregulated, and there is still no regulatory framework in place to ensure assets are protected. But that is changing. Many in the industry favour regulation, to increase investor confidence and to allow the industry to grow. Some crypto exchanges seek to comply with various federal and state regulators in the US, although regulation of the crypto exchanges doesn’t equal the protection investors enjoy on public stock exchanges, With regulation comes a need for legal and compliance expertise.
Credibility
If a crypto company or exchange has a visible legal presence, i.e., an in-house lawyer or department with knowledge of the international crypto environment, investors are more likely to trust the credibility and professionalism of the firm. There will be an expert able to “chaperone” the process.
Competition
In the US, employers are competing for talent. Young lawyers (and they’re all young!) have their pick of positions in the crypto and fintech (financial technology) sectors. Some choose to work for law firms with a specialist crypto department; others find in-house jobs with the crypto companies and exchanges themselves.
Meanwhile, in South Africa
It’s natural that the US is the trend setter. Here is South Africa, expertise is beginning to grow, but is currently confined to Cape Town, Johannesburg and Pretoria. There is only a handful of crypto legal experts in South Africa today, but we expect that to change rapidly.
Protecting your crypto investment
Meanwhile, there are steps you can take to protect your digital investment from hackers. Most investors keep their crypto currency on the exchange where they bought it. However, a more secure way to store it is through the use of a hot or cold wallet. These “cryptic” names have a simple meaning: a hot wallet is software and is connected to the internet. Therefore it is less secure and more vulnerable to a cyberattack. A cold wallet is hardware. It looks similar to a USB drive and keeps your holdings offline.
If you have questions
SD Law is a firm of experienced attorneys based in Cape Town, with offices in Johannesburg and Durban. We don’t claim to be crypto currency experts, but we can assist with your other legal matters, including compliance with POPIA, cyberbullying and cybercrime. If you have a query specifically related to crypto currency law, we can connect you with a relevant professional. Call Simon on 086 099 5146 or email sdippenaar@sdlaw.co.za for a confidential discussion.
Further reading:
Cybercrimes Act 2020 and data messages
SD Law
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