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Cryptocurrency Exchange Bitstamp Raids Rival for New Legal Chief

Feb. 26, 2020, 10:46 PM

One of the world’s oldest cryptocurrency exchanges has hired a former federal prosecutor as its top in-house lawyer and appointed a veteran cryptocurrency lawyer to the board of directors for its U.S. arm.

Mary Beth Buchanan, a former U.S. Attorney for the Western District of Pennsylvania who went on to become a partner at Bryan Cave Leighton Paisner in New York, is the new chief legal officer at Bitstamp Ltd., which was founded in 2011 and sold seven years later to South Korean conglomerate NXC Corp.

Buchanan recently served as general counsel for Payward Inc., the parent company of San Francisco-based cryptocurrency exchange Kraken. Buchanan joined Kraken in 2018 from Bryan Cave, where she handled white-collar defense, investigations, and securities litigation and enforcement work.

Bitstamp said in a Feb. 26 statement touting Buchanan’s hire that she looked forward to joining the company, which has offices in New York, Luxembourg, London, and Ljubljana, Slovenia. “This is an exciting time to join Bitstamp—the legal landscape around digital assets is progressing, and Bitstamp has proven its commitment to promoting effective regulation that supports further innovation,” she said.

A Bitstamp spokeswoman confirmed that Buchanan will be based in New York and serve as the company’s top in-house lawyer. She will work alongside Caitlin Barnett, a former in-house lawyer at JPMorgan Chase & Co. who joined Bitstamp last year as U.S. chief compliance officer, having previously served as a deputy compliance chief at digital currency exchange Gemini Trust Co. LLC.

Legal Battles

A Kraken spokesman told Bloomberg Law that while Buchanan was hired as general counsel in 2018, last year the company chose to split its top legal position into two separate jobs.

On Nov. 1, Buchanan was named general counsel, head of government relations, and senior vice president of policy and government affairs, said the Kraken spokesman. At the time, the company began a search for another top lawyer to focus on more general operations and legal issues.

Buchanan, who was not immediately available to discuss her decision to join Bitstamp, was named in a 2018 lawsuit filed against her and Bryan Cave by medical testing company LabMD Inc. That litigation in a Manhattan federal court was dismissed in late 2018, although another state court complaint was then filed against both defendants.

The second lawsuit filed by LabMD and its president and CEO Michael Daughtery sought to hold Buchanan and Bryan Cave liable for their alleged actions in a Federal Trade Commission data security dispute that put LabMD out of business. The timing of both lawsuits coupled with Buchanan’s departure from Bryan Cave led the firm to issue a statement asserting that the events were unrelated.

LabMD and Daugherty, who have also sued other large law firms, filed an amended complaint in their second lawsuit against Bryan Cave and Buchanan that was dismissed last year. Daugherty is appealing the dismissal.

Landing Lempres

Joining Buchanan at Bitstamp is Michael Lempres, a former chief legal, risk, and policy officer at another digital currency exchange, San Francisco-based Coinbase Inc., which he left in late 2018 to become an executive in residence at venture capital firm Andreessen Horowitz.

A Bitstamp spokeswoman confirmed that Lempres will serve on the board of Bitstamp USA Inc., the company’s New York-based U.S. unit. Lempres said in a statement he hopes to help the company scale its business “in a rapidly changing U.S. digital asset environment.”

Lempres, a former mayor and current city council member in Atherton, Calif., home to many of Silicon Valley’s elite, has been involved in cryptocurrency-related legal and regulatory issues since 2012 when he was an assistant general counsel at SVB Financial Group, the parent company of Silicon Valley Bank.

Lempres told Bloomberg Law in an email that his Bitstamp board work has nothing to do with his consulting for Andreessen Horowitz. He said the venture capital firm, which in 2018 hired former federal prosecutor Kathryn “Katie” Haun as its first female general partner and head of its $350 million cryptocurrency fund, has no investment in Bitstamp.

In December, Andreessen Horowitz announced the launch of its a16z Crypto Startup School, with Haun and current Coinbase general counsel Brian Brooks serving as instructors. The free program is designed to help technologists discover and develop new crypto-related business models and strategies.

To contact the reporter on this story: Brian Baxter in New York at bbaxter@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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