Posted by & filed under Legal.

Richa Jain

Bitcoin – the most prominent digital currency in use today – is here to stay. The cryptocurrency, which has been around since 2008, has generated a lot of media as well as government interest. Several major investors, well known businessmen, CEO’s of large organizations and heads of governments have publically expressed their support for the digital currency. Richard Branson, the founder of Virgin Records, had this to say about Bitcoin, “Virgin Galactic is a bold entrepreneurial technology. It’s driving a revolution and Bitcoin is doing just the same when it comes to inventing a new currency.”

Lawyers, and law firms, are optimistic about Bitcoin and digital currency in general. “I think the whole protocol where you have a peer-to-peer, direct currency will still be around. That whole concept is amazing and will stay for a long time. It might be called something else or exist in a totally different form but it is here to stay,” said Christine Duhaime, a partner at Vancouver- and Toronto-based Duhaime Law and soon-to-be author of Bitcoin and Digital Currency Law.
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Posted by & filed under Accounting.

marty-zigman

Recently, I gave a Webcast presentation to AICPA members to help accounting professionals understand Bitcoin and how to treat it on the general ledger. If you are an AICPA member, the webcast is available for your viewing. In this article, the key points from that presentation are outlined and will help accountants fundamentally understand and approach business based Bitcoin transactions.

Bitcoin and General Ledger Treatment

There are three key processes that ultimately produce different accounting practices and general ledger treatment when Bitcoin is involved. These three processes coincide with Bitcoin’s adoption phases as follows:
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Posted by & filed under Finance.

Richa Jain

Bitcoin has created waves worldwide since the digital currency was introduced in 2009. Investors backing Bitcoin believe that it has the potential to become a global currency – that could change the way people use and send money everywhere.

Instead of the conventional model of banks managing money and its movement, Bitcoin presents a new, hitherto unexplored form of decentralized, unregulated value creation. Bitcoins are a type of digital currency that is created by computers and stored in electronic wallets. They can be used for online payments, traded or exchanged for regular currency.
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Posted by & filed under Legal.

dberger002

Bitcoin and other digital currencies are attracting a wide array of attempts to regulate and define their use in commerce. This is a natural response from governments to a new medium of exchange, which could end up competing with their own legal tender, commodities and other assets as a store of value and alternative method of transacting business. Predictions on Bitcoin’s future range from outright failure as a passing fad, to filling a role as a new global currency.   The answer probably lies somewhere between these extremes, and will depend on the legal and regulatory structure that ends up defining Bitcoin’s use in each country. At the moment, there are a few areas that could set that direction near term and form a regulatory basis for the coming years.
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Posted by & filed under Accounting.

Richa Jain

Years after Bitcoin made its way into the world, in March 2014, the IRS has made an attempt to clarify taxation guidelines for convertible virtual currencies (like Bitcoin). The key guideline is to treat bitcoins as property, and not currency. While it is a good move to clarify the government’s stance on Bitcoin taxation to the average tax payer, it has met with mixed feedback, and could still do with further work to streamline it.

Each country seems to have it’s own view on Bitcoin. Germany deems bitcoins as “personal money” to be used akin to cash. Singapore had planned to treat bitcoins as products and levy a goods and services tax. The UK is still unclear.
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Posted by & filed under Legal, Member Spotlights.

marco-santori

New York City lawyer Marco Santori has worked with Bitcoin clients for a little over two years. E-commerce, web, financial technology and the evolving digital currency space are all specialties of his, and his business practice focuses on early-stage high-tech companies.

Santori chairs the Regulatory Affairs Committee of the Bitcoin Foundation, and he represents exchanges, payment processors and clients in digital currency litigation, securities, mining, Bitcoin payments, smart contracts, chain of title and other Bitcoin 2.0 applications. He is recognized as an authority on Bitcoin law, and an American Banker reporter recently described him as “the dean of digital currency lawyers.”
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Posted by & filed under Finance.

anita-kulp

As the owner of a business in the West African nation of Cameroon and someone who saw first hand the challenges faced by that nation while married to a presidential candidate, I am keenly aware of the need for a solution to the problems of the unbanked in emerging markets. In Cameroon itself, there are some 20 million plus unbanked citizens – almost 90 percent of the overall population of the nation.

The unbanked in Cameroon live in a “gray economy”, cut off from much of the world by the lack of connectivity and the significant friction impeding the transfer of value. This limits their opportunities and contributes to their continued impoverishment. While mobile devices have begun to bring banking-like services to the people – particularly in rural areas where mobile phones are readily available but banks are few and far between – the mobile payment networks, like intermediaries in transactions across the globe, take significant processing fees. Western Union, for example, charges fees from 9 to 20 percent of each transaction.
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Posted by & filed under Legal, Professional.

dberger002

The New York State Department of Financial Services (NYSDFS) has proposed regulations for virtual currency use in that state, which if implemented could dramatically affect the future of Bitcoin transactions. The proposed regulations will affect businesses that function as exchanges or otherwise convert Bitcoin into currency, even if those businesses are out of state and simply interact with New York residents. Under the proposed language, the requirement of obtaining a Bitlicense and adhering to its rules could potentially affect a Bitcoin exchange operating in any location if they have a New York State customer. For this reason, it is important for every attorney to understand the scope and application of the proposed rules to prepare clients to meet the requirements.
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Posted by & filed under Finance.

Richa Jain

There is much, much more to Bitcoin’s underlying protocol – the block chain – than is apparent at first glance. The digital currency could potentially change the way the world operates – and not just by challenging existing financial systems and decentralizing monetary transactions. Bitcoin evolved from the vision of enabling peer-to-peer transactions, without the need for a trusted third party. Block chain entrepreneurs are now taking this beyond financial transactions and leveraging the protocol for smart contracts as well.

A smart contract refers to a digital agreement that gets executed automatically when certain conditions are met, without the need of a third party, like a judge, to be the adjudicator. Smart contracts are typically self-enforcing as well as self-executing. To understand how the block chain protocol could be applied to smart contracts, you need to first understand the block chain in more detail.
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Posted by & filed under Finance.

Richard Lyons

As the use of Bitcoin expands as a medium of exchange there are questions emerging about its fluctuating price and whether it has value as a stand-alone investment. Some price swings can be extreme due to its new and unknown role in global finance. Under IRS guidelines, Bitcoin is treated as an asset rather than a currency, putting it in a class along with commodities and stocks. Whether speculative traders or long-term investors, those seeking to capitalize on the Bitcoin market should consider the following:

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