An ethics committee appointed by the state’s highest court says the codes of professionalism do not prohibit the practice
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Lawyers may accept payments in cryptocurrencies like bitcoin, Nebraska’s Lawyer’s Advisory Committee has ruled.
In the opinion, which was published on 11 September, the committee said that lawyers can receive digital currencies as payment for legal services, accept digital currencies from third parties as payment for the benefit of a client’s account, and hold digital currencies in trust or escrow for clients.
It is the first opinion from a state ethics body to address ethical issues of accepting cryptocurrencies as payment, the American Bar Association Journal said. The committee is made up of eight members, representing each judicial district of the state, who are appointed by the Nebraska Supreme Court.
The committee said that attorneys who receive cryptocurrencies as payment for legal services must convert them into US dollars at objective market rates through a payment processor immediately upon receipt and credit a client’s account accordingly at the time of payment.
It warned that lawyers “must be careful to see that this property they accept as payment is not contraband, does not reveal client secrets, and is not used in a money-laundering or tax avoidance scheme; because convertible virtual currencies can be associated with such mischief.”
If lawyers hold cryptocurrencies in trust, the currencies will not be converted to US dollars, but they must be held separate from the lawyer’s property and must be properly safeguarded, since there is no bank or Federal Deposit Insurance Corporation insurance to reimburse clients in the event of a hack, the committee said.
The committee also said that cryptocurrencies cannot be deposited into a client account unless converted to US dollars. If the cryptocurrency payment is meant to be a retainer, the lawyers must convert it to US dollars before depositing the funds into a trust account.
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In the opinion, which was published on 11 September, the committee said that lawyers can receive digital currencies as payment for legal services, accept digital currencies from third parties as payment for the benefit of a client’s account, and hold digital currencies in trust or escrow for clients.
It is the first opinion from a state ethics body to address ethical issues of accepting cryptocurrencies as payment, the American Bar Association Journal said. The committee is made up of eight members, representing each judicial district of the state, who are appointed by the Nebraska Supreme Court.
The committee said that attorneys who receive cryptocurrencies as payment for legal services must convert them into US dollars at objective market rates through a payment processor immediately upon receipt and credit a client’s account accordingly at the time of payment.
It warned that lawyers “must be careful to see that this property they accept as payment is not contraband, does not reveal client secrets, and is not used in a money-laundering or tax avoidance scheme; because convertible virtual currencies can be associated with such mischief.”
If lawyers hold cryptocurrencies in trust, the currencies will not be converted to US dollars, but they must be held separate from the lawyer’s property and must be properly safeguarded, since there is no bank or Federal Deposit Insurance Corporation insurance to reimburse clients in the event of a hack, the committee said.
The committee also said that cryptocurrencies cannot be deposited into a client account unless converted to US dollars. If the cryptocurrency payment is meant to be a retainer, the lawyers must convert it to US dollars before depositing the funds into a trust account.
Related stories:
Global firm explores blockchain’s insurance industry impact
Magic Circle outfit teaches lawyers coding, blockchain basics
