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Blockchain and distributed ledger technology

Blockchain and other distributed ledger technology have the potential to materially transform entire industries. In this area, where market developments and regulatory developments occur at a sometimes blinding pace, our experienced and cross-disciplinary global team of lawyers advises a diverse group of clients on the uses and applications of blockchain and other distributed ledger technology. We also defend clients against related lawsuits and regulatory investigations brought by agencies including the Securities and Exchange Commission (SEC), the Commodities Futures Trading Commission (CFTC), the Financial Industry Regulatory Authority (FINRA), and other federal and state regulatory agencies.

Eversheds Sutherland has assisted clients with many challenging and novel coin and token offerings globally. We also work with clients in transactions and regulatory challenges associated with the use of blockchain. Many clients ask for our counsel in understanding how distributed ledger technology, including smart contracts, might allow them to lead change in their industries.

Our clients include coin and token issuers, technology firms that are developing new applications for distributed ledger technology, commodity trading and logistics firms looking at smart contracts, insurance companies considering issues such as record maintenance, and financial firms assessing disintermediation possibilities.

We help our clients understand and navigate legal issues in securities regulation, derivatives regulation, exchange licensing, patent protection, banking regulation, cybersecurity, and anti-money laundering and know-your-customer compliance, among others. For a select group of companies, we also provide regulatory advocacy, particularly regarding the issue of tailoring cryptocurrency regulation so as not to limit the application of distributed ledger technology in other areas, such as physical commodity transactions.

Our team includes an attorney who, during his previous role as Counsel at the New York State Department of Financial Services (NYDFS), helped lead a policy team that developed, drafted and implemented the world’s first cryptocurrency-specific regulation. Following implementation of the regulation, he worked to establish and supervise the NYDFS's cryptocurrency license application and supervision process, including the review of cryptocurrency license applications and limited purpose trust company charter applications for compliance with the Bank Secrecy Act/anti-money laundering (BSA/AML) regulations, and capital, risk management, cybersecurity, and business continuity and disaster recovery (BCDR) requirements.

Additional highlights of Eversheds Sutherland’s capabilities and experience include the following:

  • Advised on the first UK-based initial coin offering (ICO) in, among other things, drafting the terms and conditions.
  • Advised a client on a US-based Simple Agreement for Future Tokens (SAFT) offering and related consulting and developer contracts.
  • Advised a cryptocurrency exchange on meeting AML requirements, as part of building its business.
  • Advised a blockchain solutions business on becoming one of the first entities in the UK to become authorized as a blockchain business. This work involved dealing with the Financial Conduct Authority (FCA), through the sandbox, as well as determining the position of the firm within the UK regulatory regime.
  • Defended a client being investigated by both the US Securities and Exchange Commission and the Commonwealth of Massachusetts regarding a cryptocurrency platform.
  • Represented a client in connection with a FINRA review of possible insider trading related to an ICO.
  • Advise clients in litigation matters relating to theft or conversion of coins and tokens; actions to recover virtual currency; and disputes involving allegations of fraud, misappropriation, negligence, breach of contract and unregistered securities offerings.
  • Hosted events with Ethereum Classic, and are well-known as legal advisers in the Ethereum community.
  • Provided training on cryptocurrencies and blockchain technology to a range of clients in a range of sectors. For example, Eversheds Sutherland attorneys presented in Latvia on the practical implications of moving from a proof of concept to a real world application of blockchain models, along with representatives from Nasdaq and Microsoft.