Crypto payments will be valid so long as the fee agreement is “fair and reasonable” and the lawyer can safeguard the virtual property, the opinion states, so as to acknowledge the sometimes turbulent nature of cryptocurrencies.
The ethics decision came down because of the increasing prominence of digital currency, with the District of Columbia Bar finding it “cannot hold back the tides of change.”
The opinion also noted that the IRS treats cryptocurrency more as a property than as a currency for tax purposes. Because of that, the Bar finds this kind of agreement more like using property than a fiat currency for payment. However, despite the ethics rules requiring lawyers’ fees to be reasonable, there is nothing preventing “potentially volatile assets” from being used for said payments.
The District of Columbia Bar’s opinion stated that digital currencies are “simply a relatively new means of transferring economic value, and the Rules are flexible enough to provide for the protection of clients’ interests and property without rejecting advances in technologies.”
Terms for cryptocurrency payments to lawyers might include information about how exactly the client will be billed, whether any market increases or decreases will trigger new expectations for any party, and which party will be responsible for transfer fees, the opinion stated.
This decision comes on the heels of other bars, including New York City, Nebraska and North Carolina, also deciding recently to allow virtual currency as payment, according to Bloomberg Law.
The idea of digital currencies has become more acceptable to the mainstream in recent months, with the U.S. Senate hearing arguments for how a hypothetical digital dollar could be brought into the country’s day-to-day workings. There were detractors, though, such as Sen. Sherrod Brown of Ohio, who said allowing Big Tech control over the country’s finances could be a recipe for trouble.
Selected by Fintech Tube