Distributed ledger technologies, including blockchain, are transforming industries and revolutionizing the ways companies and governments operate. From shipping to banking, logistics management to digital advertising, the legal profession to insurance, and the entertainment industry to the Internet of Things (IoT), decentralized applications and smart contracts built on blockchain platforms are becoming more widely adopted across a range of use cases for businesses, governments, individuals, and even IoT devices. The successful creation and deployment of these technologies requires effective collaboration between clients and their attorneys.
Lowenstein is among the first in the nation to establish a Blockchain Technology & Digital Assets Group to address this rapidly emerging and quickly evolving field. Our group includes more than 30 attorneys across the country from Silicon Valley to New York. The team spans multiple legal disciplines, including capital markets, intellectual property, privacy, cybersecurity, tax, tech, venture capital, and insurance. Our multi-disciplinary, cross-functional teams enable us to carefully anticipate and evaluate the technical, legal, business, and regulatory issues facing our clients today and tomorrow.
Over the years, we have advised clients in a variety of industries with a broad array of legal issues, including:
Drafting and negotiating commercial contracts for a cryptocurrency exchange-as-a-service, which has white labeled its blockchain technology platform for numerous clients across five continents;
Counseling clients on their initial coin offerings (ICOs) and addressing the panoply of existing and anticipated laws, regulations, enforcement actions, and technical developments;
Advising clients on the development of smart contracts;
Ensuring compliance with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations;
Prosecuting patents in the blockchain & digital assets fields;
Advising clients on open source software issues as they relate to Ethereum and other open source platforms, with an emphasis on smart contracts and decentralized applications;
Counseling clients on privacy and cybersecurity issues relating to their decentralized applications, with a particular emphasis on General Data Protection Regulation (GDPR) issues;
Negotiating complex intellectual property licensing agreements for algorithmic cryptocurrency trading;
Advising clients on ransomware attacks involving Bitcoin and proactively recommending tailored insurance products to address these unique issues;
Advising blockchain consulting experts on various intellectual property and commercial contracting issues relating to trusted computing, identity, and human/machine authentication;
Assisting clients on tax issues related to cryptocurrency trading; and
Participating in working groups to increase the utilization of blockchain technologies to enhance the digital advertising ecosystem and radically transform and improve the contracting, acquisition, and logistics systems within the Department of Defense.
From Altcoins to Zcash, Lowenstein Sandler has you covered.
Matt Savare is quoted in a multipart series by Hedge Fund Law Report on artificial intelligence in the hedge fund industry. In Part 1, which focuses on ways fund managers and financial services companies can use artificial intelligence to streamline operations, Savare notes that most, if not all, hedge funds and financial service companies are using AI or third-party software embedded with AI to inform their trading decisions, assist with customer service, extend credit, detect fraud, among many other things. In Part 2, he responds to President Trump’s Executive Order on AI: “AI is critical not only to the economy and society, but also to national security. … Therefore, it is not surprising that the federal government is taking it so seriously.” Savare further addresses the need for conducting due diligence with respect to data security when an “AI company offers its solution as a software-as-a-service, [as] it may have access to a manager’s systems, nonpublic financial information.” Given the risk of bias in AI, Savare states that “software makers who are coding their systems, or the employers who are utilizing the AI and feeding more data into it, must be mindful that the AI’s decisions be fair and equitable.” In Part 3, Savare addresses how AI can be used to conduct routine legal work for the benefit of clients and attorney alike. He uses the example of a large quantitative hedge fund with hundreds of different data‑licensing contracts in differing forms: instead of using “an army of contract attorneys…it would be better to engage a AI service provider that could use optical character recognition, or OCR, to convert non-digital data into machine-encoded text … The AI platform could then conduct a large portion of the diligence for them, including summarizing contract provisions, finding material information and identifying anomalies.” He also suggests AI can be used when a hedge fund or private equity is researching whether to buy or invest in a company. Generally, AI allows lawyers to focus more on “high-value strategic services,” and allows an organization to “service more clients; be more organized and consistent; use fewer people; and develop deeper connections among employees.” However, “human involvement is still needed, “says Savare. “People will always be more important – the machines are there to help them and their businesses grow.” (subscription required to access article)
Ethan L. Silver is quoted in The Wall Street Journaldiscussing concerns by the Securities and Exchange Commission surrounding digital-securities firms and their ability to safeguard investors’ funds and assets. (subscription required to access article)
Valeska Pederson Hintz is quoted in Bloomberg Law discussing the $20.8 million valuation of Slack, a work-messaging tech unicorn, prior to its direct listing. She explains that, when a company pursues a direct listing instead of an initial public offering, “you need enough brand recognition and people need to understand what your product is.” She also suggests that Slack should look to the Spotify precedent and disclose stock prices from recent private sales in its registration statement ahead of going public: “You have to really help people with price discovery.” (subscription required to access article)
Matt Savareis quoted in ComputerWorld and The Economic Timesregarding IBM’s new blockchain initiative with Stellar and the increased usage of blockchain in fin tech and cryptocurrencies in consumer transactions.
Ethan L. Silveris quoted in ComputerWorld and The Economic Timesregarding blockchain and the possibility of cryptocurrencies eventually becoming a platform for consumer transactions. Silver asserts that companies must be aware of existing regulations for financial networks and how they may be applied to evolving technologies.
Ethan L. Silver is quoted in Financial Planning discussing the Securities Exchange Commission’s increased enforcement of regulations for robo-advisory firms. Silver affirms the necessity of strong, ongoing compliance programs as a key to minimizing the risk of penalization. He stresses the importance of firms to enhance disclosures and limit claims on social media, to ensure that they are “delivering on what was promised through marketing channels.”
Matt Savare and Bryan Sterba address the major elements of open-source software (OSS) and how it is being utilized by fund managers, in an interview with the Hedge Fund Law Report. In the first of a three-part series, Savare explains blockchain’s relation to open source, and how it can facilitate the settlement of international transactions in a fraction of the standard time. Sterba provides insight into the workings of copyleft licenses, including how some organizations navigate stringent licensing requirements. In part two, Savare and Sterba discuss the benefits of OSS, including its proper use and how it can equal cost savings if implemented correctly, as well as the security risks and license restrictions. In part three, Savare and Sterba evaluate actions fund managers can take to mitigate OSS risks, including policies, procedures and controls to adopt; ways to deal with third-party vendors; and due diligence.
Ethan L. Silver was featured in both American Bankerand Interactive Investor, commenting on the US Securities and Exchange Commission’s (SEC) reticence to approve new cryptocurrency, despite encouraging more discussion. Silver states that: “the practical realities are that there has been a lot of meetings and discussions that have yielded little progress." He agrees with SEC Commissioner Hester Peirce that the Howey Test – used by US regulators to determine what should be considered a security – is “overly broad.” Silver asserts that until the SEC provides clarity on how digital assets should be custodied under its existing rules, a bitcoin exchange-traded fund (ETF) will never be approved.
Ethan L. Silver is quoted in CoinDesk,CoinWire, Invest in Blockchain, and XBT.netregarding the U.S. government shutdown’s effect on cryptocurrency progress on Wall Street. Silver anticipates that, should the shutdown continue, any remaining staffers would most likely reject the rule change proposal for the highly anticipated exchange-traded fund, in lieu of allowing it to be approved on a technicality.
Ethan L. Silveris quoted in InvestmentNewsaddressing cryptocurrency market manipulation and custody as it relates to the possibility of a crypto-ETF entering the market in 2019. Silver states that the challenge for the SEC is how to integrate this new technology into the existing SEC rules.
Matt Savare is quoted in Bloomberg BNAin an article discussing how online advertisers are utilizing blockchain to fight fraud. Savare, who is noted as a member of the Interactive Advertising Bureau’s blockchain working group, recommends the tactic and comments that blockchain “dramatically reduces the incidence of fraud.”