The Blockchain Legal Landscape: Why Law Firms Should Partner with Tech Experts

For several years now, the blockchain has been transforming the world as we know it. As this technology is integrated into more sectors, new legal challenges arise. The implementation of these systems is hindered by legal barriers, which prevents or harms the creation of new business models. Law firms are uniquely positioned to address these challenges, but need the technical expertise to do so effectively.

Blockchain, originally conceived as the technology behind Bitcoin, has evolved to offer solutions in areas such as finance, healthcare, real estate and more. These applications range from cryptocurrency creation to document authentication and product traceability. However, with every innovation, legal questions arise that require new ways of thinking.

Precisely due to being on the frontier of innovation, ambiguous legal areas arise that negatively affect the entrepreneurial ecosystem in this field. Since it proposes a radical change, especially in conventional financial systems, we observe resistance that slows the progress and the proper integration of these systems in existing organizations.

Blockages or impediments vary by jurisdiction, but there are certain recurring themes globally. This is due to its ambiguous regulation, where many countries still do not have clear regulation, which creates uncertainty for companies and investors.

The Securities and Exchange Commission (SEC), for example, has filed lawsuits against several companies and projects, including Ethereum, Ripple, Coinbase, Binance, and PayPal.

To address these challenges effectively, law firms must go beyond their traditional legal knowledge. They need a deep understanding of blockchain technology and how it is applied in different contexts. By partnering with technology experts, they can offer more holistic solutions to their clients, combining legal knowledge with technical expertise.

But it is not all bad news, many countries and states have adopted policies and regulations that favor the web3 ecosystem.

El Salvador made history by becoming the first country to adopt Bitcoin as legal tender.

In March 2021, Wyoming became the first state to recognize Decentralized Autonomous Organizations as a legal entity, passing legislation allowing DAOs to officially register with the state. This law allows DAOs to form as limited liability companies (LLCs), thereby offering liability protection to participants, something not typically offered to DAOs outside of this framework.

Japan has also explored the use of blockchain technology in equity markets. For example, the Tokyo Stock Exchange and other financial institutions have investigated the use of blockchain to improve efficiency in transaction processing and securities settlement.

Adding to these developments, on January 10, 2024, the U.S. Securities and Exchange Commission (SEC) approved the first U.S.-listed exchange-traded funds (ETFs) to track Bitcoin, marking a watershed moment for the cryptocurrency. This approval is poised to allow investors to gain exposure to Bitcoin through regulated financial markets, potentially attracting significant institutional investment into the cryptocurrency sector. The SEC's decision underscores the growing recognition and adoption of digital assets within the traditional financial ecosystem.

At JRC Studio, we see an opportunity to serve as that essential bridge between the legal and technological worlds. We have talent specialized in these cutting-edge technologies, offering a unique perspective that combines technical expertise with an understanding of legal challenges. We seek to create solutions that are technically sound and legally robust.

It is a fact that this technological paradigm is here to stay and, with it, a new wave of challenges. Law firms have a unique opportunity to lead in this space, but only if they are willing to adapt and collaborate with experts in this field. We are prepared to be that technological ally, and together, we can explore the future of these innovations.