There is much buzz going around in the market regarding Cryptocurrency and the blockchain., and why shouldn’t? After all, Cryptocurrency and the blockchain are the new technological innovations that hold the key to a brighter future.
Cryptocurrency work on the blockchain technology that used the public ledger principle. With the general ledger network’s help, every information is shared in the system among all the members of the net. However, no one can make any changes to the data.
As the blockchain and the Cryptocurrency are decentralized elements, no government holds authority over it. This has made the Cryptocurrency independent in many ways.
In recent years, we have come across several Cryptocurrency scam. And this kind of event has made it mandatory to have lawyers while handling Cryptocurrencies.
Why do you need lawyers to deal with Cryptocurrencies?
Cryptocurrency is the decentralized digital currency that is used in almost every industrial sector. However, Cryptocurrency is not limited to currency only. Some of the traders are also using it as digital assets. Now that cryptocurrencies are used like digital assets, there are chances that you will need a lawyer at times when a scam happens.
Like you have a family lawyer that advises you with every financial decision. Having a crypto lawyer might help you in the same prospect.
Here’s why you need a Lawyer while handling Cryptocurrencies.
1. Cryptocurrencies are used as properties.
One of the most critical notions of the Cryptocurrencies is that it is being used by traders and investors like their personal assets. Even the central authorities look at the cryptocurrency holding like personal assets.
The US government has accepted the Cryptocurrencies as properties rather than any form of currencies. That means, if anybody is holding Cryptocurrency, they are falling under Capital gain tax law, and they will be tax payable on the profits made from the cryptocurrencies.
This aspect of the Cryptocurrency has added several layers of complexity for the traders to understand the right format of paying tax on the Cryptocurrencies.
Hence, it becomes essential for the taxpayer to take advice from the tax professionals before reporting their tax document file to the government. Because the rules are changing, the things which were legal earlier might not be the same this year. So, it is best to seek help from a lawyer or tax professionals.
2. Decentralized status of Cryptocurrencies
The features of the Cryptocurrency that we take advantage of can also become a potential risk factor. We all know that the Cryptocurrencies are the decentralized digital currency. That means, they do not have any physical for or are not backed up by any governmental institutions.
The decentralized status might feel the investors from the third parties, but it might also result in legal complications. The value of the Cryptocurrency is dependent on the owner itself. That means, whoever holds the highest number of the Cryptocurrencies, holds power to change the course of the Cryptocurrency trade market.
Without the central authority backing up the cryptocurrencies, investors and traders might find it challenging to handle the Cryptocurrency’s complexity.
3. Business registration
A growing business needs to do several financial transactions. Hence, companies are taking advantage of the cryptocurrency transaction. But when it comes down to legal mode of the transaction, Crypto transactions are not the one. If there are businesses who are regularly doing business with the cryptocurrencies, then there is a chance that that business will not be qualified to have a license. On the other hand, the company might need to submit special considerations depending on their jurisdictions.
4. Fraudulent activity
There is a belief system going on among the common masses that the Cryptocurrency provides the means to the underworld organization for money laundering, illicit transactions, and helping them host several other crimes.
This might be only a scenario. However, if you are scammed in the Crypto transaction process, then there is a high probability that the court will not listen to you as you were dealing with a decentralized currency.
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