How to Choose the Right Crypto Lawyer for Your Business

Selecting the proper crypto lawyer could be the deciding factor of whether or not your company launches without any problems or suffers regulatory setbacks. As opposed to an attorney that specializes in corporate law, the crypto lawyer is familiar with regulations concerning virtual assets, licensing, AML requirements, token structures, and legal risks involved in running a blockchain-based business.

As opposed to any other industry, the digital asset space operates under one of the most dynamic regulatory environments of the planet. If you are setting up a crypto exchange, issuing tokens, developing a DeFi solution, providing custodial solutions, or working on a Web3 application, legal assistance is more than necessary these days.

What makes things worse, not every lawyer that says he or she can help with crypto actually has relevant experience working with virtual asset companies.

Why You Should Hire a Crypto Lawyer and Not a Regular Business Lawyer

A crypto lawyer possesses both the knowledge of the regular laws and an insight into the blockchain, the regulation of virtual assets, licensing, AML, and other legal aspects of doing business. In most cases, regular corporate lawyers will not be dealing with all these things.

Both lawyers can help you with incorporation and commercial agreements; however, the companies operating in the cryptocurrency industry need to deal with such additional legal aspects as:

• Licensing of virtual assets

• Token creation

• Regulation of stablecoins

• Exchanges' compliance

• AML/CFT obligations

• Implementation of Travel Rule

• Wallets custody

• Blockchain governance

• Regulatory compliance

• Risks associated with smart contracts

What is a Crypto Lawyer?

Crypto lawyer is a professional who guides the business during all stages of the development of a virtual asset project from incorporation, fundraising, licensing and compliance up to commercial agreements and investigations.

It can include the following tasks:

• Licensing guidance

• Application preparation for regulators

• Commercial agreements preparation

• Token structure review

• Preparation of AML and compliance policies

• Founders' and investors' advice

• Exchange terms and conditions review

• Technology and custody agreements negotiation

• Response to regulators' questions

• Disputes and investigation management

The specific scope of tasks depends on the particular business.

Checklist: What to Look for in a Crypto Attorney

The best crypto attorneys have the combination of expertise in regulation along with practical experience providing advice to virtual assets businesses. Prior to seeking legal representation, consider the following criteria.

1. Jurisdiction-Specific Expertise

Regulation in the world of crypto varies greatly by jurisdiction.

Consider the lawyer’s experience in providing advice to businesses that operate in relevant jurisdictions, including the following:

• UAE (VARA, ADGM, DIFC)

• European Union (MiCA)

• Singapore

• Hong Kong

• India

• United Kingdom

• United States

A lawyer familiar with your desired license jurisdiction can highlight problems before you encounter them during the licensing process.

2. Licensing Experience

Licensing is one of the most reliable markers of practical expertise.

Consider the lawyer’s experience in providing advice on:

• Crypto exchange licenses

• Broker-dealer licenses

• Custody licenses

• Payment token licenses

• Virtual asset service providers (VASPs) registration

• Money services business registration

• Stablecoins related approvals

3. AML & KYC Expertise

Anti-money laundering compliance will always be essential for a licensed crypto project.

An attorney who knows how to work with a crypto company should at least have knowledge about:

• Customer due diligence

• Risk-based AML programs

• Politically Exposed Persons (PEPs)

• Sanctions screening

• Reporting on suspicious transactions

• FATF Recommendations

• Travel Rule requirements

• Monitoring of transactions

AML compliance is often one of the main concerns of regulators.

4. Business & Tech Expertise

Cryptocurrency projects come with intricate business relationships.

Check the lawyer’s experience in dealing with:

• Custody services

• Agreements with liquidity providers

• White label exchange agreements

• Technology outsourcing

• Wallet technology

• Smart contracts

• Software licensing

• SaaS agreements

5. Experience

Experience counts.

Find out:

• Kinds of clients counselled

• Industry sectors served

• Number of licensing transactions

• Regulatory contact

• Programs for compliance created

Confidentiality will limit what you can learn, but a seasoned professional will know how to talk about their experience without compromising their clients.

6. Clear Fee Structure

Good legal professionals will be able to explain:

• Fees calculation method

• Scope of services offered

• Activities that fall outside the scope

• Timing

• Frequency of billing

Unexpected legal bills usually result from ambiguous terms of engagement and not the law itself.

Questions to Consider Before Employing a Crypto Attorney

Asking the right questions can give insight into whether an attorney has practical experience or just a general knowledge of the market.

Some questions are:

• Which crypto companies have you provided advice to?

• Which jurisdictions do you typically operate in?

• Do you have experience in dealing with licensing procedures for cryptocurrencies?

• What AML systems are you acquainted with?

• Do you have experience in responding to regulators’ requests for information?

• Do you advise exchanges, custodians, token issuers, or DeFi protocols?

• Will you be personally involved in my case?

• How much do you charge for your services?

• What are the legal risks associated with my business model?

• What documentation will I need to prepare before requesting a licence?

• How do you collaborate with compliance specialists and technology experts?

• Have you helped any of your clients during regulatory inquiries or enforcement actions?

Red Flags That Should be Avoided

All lawyers claiming specialized knowledge of cryptocurrency law do not necessarily have experience in the industry. Here are some red flags to be wary of before choosing a lawyer.

Red Flags:

• Promises licence approval.

• Fails to give a breakdown of the regulatory regime in your intended jurisdiction.

• Has no previous experience handling a licence application.

• Is reluctant to discuss AML requirements.

• Gives generic advice which is based on traditional corporate law.

• Fails to explain how regulators evaluate crypto firms.

• Quotes unusually low fixed fees without stating the work involved.

• Promises regulatory outcomes out of their control.

No lawyer can guarantee approval of a license by the regulator.

When to Use the Services of a Cryptocurrency Attorney?

While many companies hire a lawyer once regulatory issues emerge or investors seek legal opinions, at that point, it will be more costly to fix your mistakes than seeking professional legal help from the beginning.

Think about using a crypto attorney in the following situations.

During Incorporation

• Legal assistance might help you to define:

• Jurisdiction

• Business structure

• Regulation

• Founder agreements

• Investor agreements

Before Raising Money

Usually, there is some sort of legal due diligence on behalf of investors.

Lawyers may help with:

• Investments

• Token sales

• Disclosures

• Founder protection

• Governance

Before Submitting an Application for a License

License applications usually need:

• Compliance manuals

• Risk frameworks

• Governance documents

• Client contracts

• Policies

• Regulatory applications

Having your application reviewed legally in advance can save you unnecessary time and additional questions.

When Expanding the Business

As the company expands, the need for legal advice increases regarding:

• Entry into new jurisdictions

• Adding new products

• Building strategic alliances

• Negotiations with vendors

• Data protection compliance

In Case of Investigation or Dispute

It would be advisable to contact a lawyer when:

• A regulator is contacting the company.

• The licensing application is under scrutiny.

• There are customer disputes.

• Company assets are frozen.

• There are enforcement procedures against the company.

What Are the Fees for a Crypto Attorney?

Crypto attorneys tend to bill their clients on an hourly, flat fee, project or retainer basis. It all comes down to the specifics of your engagement.

The fee structure may differ due to:

• Geographical location

• Attorney's expertise

• Project complexity

• Regulations

• Scope of work

• Additional assistance needed

Companies must always ask for an engagement letter prior to starting working together.

Practical Hiring Checklist

Before hiring a crypto lawyer, ensure that he/she:

• Has a clear understanding of your business model

• Has worked with relevant regulators

• Understands the process of obtaining licenses in your jurisdiction of choice

• Is aware of AML/CFT regulations

• Explains the legal risks clearly

• Provides a transparent pricing policy

• Talks about solutions in plain English rather than using legalese

Expert Advice

The mistake founders tend to make is hiring lawyers when all the key decisions, including the business model, target jurisdiction, and technology stack have been made.

Many of those decisions already have legal consequences. For example, a token designed without regard for the regulator can turn out differently than expected. Poorly negotiated custody agreements will cause delays in licensing. Generic compliance programs will not fulfil the regulator's requirements.

Legal counsel is often more helpful when important decisions are still easy to change.

FAQs

How much does a crypto lawyer cost?

The cost varies depending on the country, the experience of the lawyer, the level of difficulty of the matter, and the billing system used. There are lawyers who charge per hour, some provide fixed price projects, and others offer retainers to companies that need constant legal assistance.

Do I need a crypto lawyer for a small crypto startup?

Yes, especially when you are planning to launch your business as a provider of virtual asset services, token issuer, and raising funds or working in a regulated market. It is better to get legal advice at the beginning to understand all the necessary requirements and minimize potential issues.

Can I get help with cryptocurrency regulation from my corporate lawyer?

Yes, he/she can help you with the incorporation of your company and other general matters. But in case of businesses working in the virtual asset market, it would be beneficial to consult a specialist in this field.

When do I need to get myself a crypto lawyer?

If possible, even before incorporation or raising money or introducing your product. Legal assistance from an early stage will enable you to structure your company properly, understand regulatory obligations and draw up key commercial contracts taking into account the peculiarities of the digital asset industry.

Can a crypto lawyer help me with delays in my licence application?

Sure. A professional crypto lawyer can help you review regulatory questions, draft answers, find gaps in your application and resolve questions arising from the licensing authority.

Can a crypto lawyer assist with cross-jurisdictional expansion?

Sure. Most crypto companies work in several jurisdictions. A crypto lawyer will be able to help you evaluate licensing needs, regulatory obligations and contract-specific matters.

The legal environment for cryptocurrency ventures is changing very fast, and the regulatory requirements have become more complex. Finding the right crypto attorney does not involve just legal representation; it involves having an advisor who knows about the technology and the regulatory environment.

If you are looking to start up, obtain virtual assets licences, enter into commercial deals, or expand internationally, getting legal advice from an expert will assist you to spot any potential problems early enough, develop sound compliance frameworks, and promote sustainable development. It will definitely cost you less compared to dealing with issues once they happen.