Here's a harsh truth about the legal industry - most lawyers are not competent to help you with your specific issue. Someone may describe themselves as a "corporate attorney," but not have experience in your specific type of merger or investment deal. Another may be a very competent "tax attorney," but have no idea how to repatriate money from a Swedish tax-deferred corporate investment fund to the United States. You as the consumer of legal services have no guidance in selecting attorneys other than the general representations they make to you.
Nowhere is this thornier than in the cryptocurrency space. Attorneys who are otherwise perfectly competent in SEC compliance matters, complex tax issues, or intellectual property matters, may THINK they're the right fit for your ICO, your Coinbase tax returns, or a patent for your blockchain innovation, but generally speaking they have no idea. They only have the general skill set that gets you to find them on Google, and from there you are at the mercy of their incomprehensible CV and their own promises.
I've worked with cryptocurrency issues long enough to know how to smell an attorney who knows what they're talking about, as opposed to one who is trying to graft their generalized expertise which, while impressive, is simply not appropriate for the weird and rapidly-evolving regulatory world of cryptocurrencies. What follows is a questionnaire that you should use liberally when shopping for a lawyer to help you with an issue arising from the natural complexity of cryptocurrencies.
Preliminary matters:
Does the attorney have a fundamental understanding of what blockchain technology is and how it works?
Does the attorney have a fundamental understanding of the differences between different cryptocurrencies?
Does the attorney have a fundamental understanding of how exchanges, mining, and the other major 'institutions' of cryptocurrencies work?
Does the attorney have the basic vocabulary necessary to speak intelligently with a client about how cryptocurrency works?
Regulatory matters:
Securities & Exchange Matters
Can the attorney adequately explain the jurisdiction of the Securities & Exchange Commission over some virtual currencies?
Can the attorney appropriately perform a Howey Test analysis on the client's proposed token?
Can the attorney explain how the marketing of a cryptocurrency might impact the Howey Test?
Can the attorney explain the different kinds of investors who might be marketed to during an ICO, and under what circumstances?
Can the attorney adequately identify which exemptions might apply to any given initial coin offering?
Can the attorney prepare a private placement memorandum?
Can the attorney prepare a 506(d) filing?
Can the attorney prepare an accredited investor questionnaire?
Can the attorney explain the relevance of an initial coin offering that originates overseas, or that is primarily offered to overseas investors?
Can the attorney explain the reasoning behind the SEC's decision regarding the DAO token?
Commodity Futures Trading Commission Matters:
Can the attorney adequately explain the jurisdiction of the Commodity Futures Trading Commission over some virtual currencies?
Can the attorney provide real-world examples of virtual currencies that would or would not fall under the jurisdiction of the CFTC?
Can the attorney adequately explain what features of a virtual currency would place it under the ambit of the CFTC?
Can the attorney adequately explain how an exchange or other regular trader might comply with CFTC regulations in offering, purchasing, or selling virtual currencies? 1
Tax matters:
Personal tax matters
Can the attorney properly characterize the normal tax treatment of gains from cryptocurrencies?
Can the attorney properly explain how basis is calculated for a cryptocurrency either purchased or received as payment for services?
Can the attorney explain the accounting and timing methods that are used to track gains and losses from cryptocurrencies?
Can the attorney explain the proper tax treatment of cryptocurrencies that are paid to an individual in exchange for services?
Can the attorney explain the applicability of §1031 exchanges and other standard tax procedures to cryptocurrencies?
Business tax matters
Can the attorney explain the proper classification of a business purchase of cryptocurrencies (i.e., capital asset, R&D asset, etc.)?
Can the attorney explain the tax implications of using cryptocurrencies to compensate employees and contractors?
Can the attorney explain the tax implications of using cryptocurrencies or securities representing them in retirement plans?
Is the attorney familiar with the ERISA rules regarding property as a retirement asset?
Is the attorney familiar with the preparation of 83(b) elections in regards to capital property held as retirement income?
International tax matters
Can the attorney adequately explain the consequences to a US citizen who invests in cryptocurrencies, or who receives them as payment for work, in a foreign jurisdiction?
Intellectual property matters
Can the attorney explain the viability of patents for new cryptocurrencies, new blockchain technologies, and explain the general state of intellectual property registrations for novel uses of blockchain technology?
Can the attorney prepare an intellectual property registration for the WIPO intellectual property office, instead of just the USPTO office?
The general public has very little reference for how good an attorney is for them until after the work is already done - sometimes poorly. Hopefully this brief questionnaire will give you some helpful guidance on how to find out if your securities attorney is a good crypto-securities attorney, or just another securities attorney who will start furiously Googling Bitcoin the moment you leave her office.