Digital Assets: Crypto and Blockchain 101 – An Introduction to Legal and Regulatory Issues

Over the past few years, Bitcoin, Ethereum, and other digital assets have transitioned from an obscure preoccupation of software programmers to a mainstream asset class that is being hailed as the future of the financial system.  An increasing number of public and private companies are including digital assets as part of their business strategies, by:

• Incorporating digital assets as a means of engagement and entertainment on online platforms

• Partnering with digital asset developers to explore how blockchain technology can enhance business operations

• Integrating digital asset payment solutions

• Investing in digital assets for balance sheet diversification

Osler partners Lori Stein and Elizabeth Sale provide a high level introduction to digital assets, focusing on what General Counsels need to learn and understand to maintain market currency.  In particular, they review key legal and regulatory risks associated with digital assets, such as:

• What is the Blockchain and what do you need to know about the key concepts of digital assets;

• Custody risk: public and private keys, risk of loss due to theft and hacks, and third party custodians;

• AML/ATF risk: why digital assets present unique risk of violating AML/ATF and economic sanctions, and how to mitigate those risks; and

• Securities regulatory risk: why digital assets are sometimes considered securities and the business implications of that characterization.