The crypto industry is suffering its biggest setback to date, with token values down substantially and decentralized finance (DeFi) companies imploding. Yet attorneys expect legal work in the crypto space to increase in the coming years, according to a recent Bloomberg Law survey.
The results from Bloomberg Law’s second State of Practice survey also suggest that crypto legal work is beginning to move into the mainstream.
What Crypto Attorneys Told Us About Their Practices
The survey was conducted between June 29 and July 22, with responses from 382 lawyers who had a mean of 18.6 years’ experience practicing law.
Of those surveyed, 27 respondents (7.1%) currently practice in the cryptocurrency space. Looking forward, 46 attorneys (12.1%) said they were considering expanding into cryptocurrency and 30 attorneys (7.9%) indicated they were contemplating expanding their practice to include the metaverse. As might be expected for a developing industry, crypto makes up a small part of lawyers’ current practices with a mean percentage of 9.2%.
Which areas of the digital assets/decentralized finance and internet space are likely to grow for lawyers? Of those attorneys expecting crypto work over the next two years, the most common area was cryptocurrency (44%), followed by blockchain (38%), decentralized finance (30%), and Web 3.0 (20%).
Survey Shows Crypto Industry Is Maturing
Although crypto is still an emerging industry with regulation lagging behind innovation, the types of clients that lawyers are representing—and the crypto legal advice that they are providing—point to a maturing sector. Startups constitute only a plurality of survey lawyers’ clients, balanced by traditional businesses, individual and institutional investors, and others.
The types of crypto legal matters that respondents have been handling bolster the conclusion that the industry has reached a new stage in its evolution. Early days in hot new industries are typically focused on growing the business, with legal niceties often delayed until a future date.
That’s not what our survey found, however. Regulatory enforcement led the way in the legal advice provided category, with other areas of legal compliance, such as tax and anti-money laundering compliance, also near the top.
Considered together, the mix of clients and advice provided paint a picture of an industry beginning to seriously address its regulatory obligations.
—With assistance from Princess Onyiri.
Bloomberg Law subscribers can find information on U.S. federal and state regulatory actions toward cryptocurrencies and other digital assets on our Fintech Compliance resource, including the new Financial Technology Developments Tracker.
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