Venturing into the Crypto Realm: Big Legal and Banking Players Eye Lucrative Prospects
Ruholamin Haqshanas
Last updated: July 1, 2024, 02:41 EDT | 2 min read
Big legal firms and financial experts from established banks are boldly stepping into the realm of cryptocurrencies, eager to tap into its promising opportunities.
In accordance with a recent report by Financial News, lawyers are being drawn by the allure of financial gains and the necessity for specialized legal guidance, prompting their exploration into the domain of digital currencies.
The conventional financial sector has progressively welcomed cryptocurrencies, witnessed by major banks setting up internal trading desks and presenting spot bitcoin ETFs.
This validation has lent the crypto industry newfound credibility, thus attracting legal professionals keen on aiding firms through the ever-evolving regulatory landscape.
The Timely Entrance of Lawyers into Cryptocurrency
Marcus Hughes, formerly a legal figure at Morgan Stanley for nearly a decade before transitioning to his role as the global head of regulatory strategy at Kraken in 2018, believes that now is the ideal moment for legal practitioners to venture into what was previously considered the uncharted territories of finance.
“Traditional finance lawyers are eager to join the crypto space. Whenever I meet them, they express their interest,” he conveyed to Financial News. “These legal minds see the crypto sphere as an expansive arena where they can diversify their expertise, transcending the confines of being solely categorized as a cash equities or equities derivatives expert.”
Beyond the allure of acquiring new skill sets, legal professionals are also enticed by the financial incentives that crypto presents. For example, Kirkland & Ellis, the world’s highest-earning law firm, raked in over $120 million for their pivotal role as the lead counsel in the bankruptcy cases of crypto enterprises like BlockFi, Celsius Network, and Voyager Digital—a significant leap from the $42 million earned through handling the bankruptcy cases of WeWork and Rite Aid.
Acknowledging the surging demand for legal acumen within the crypto sphere, prominent law firms such as Latham & Watkins, Baker McKenzie, and Linklaters have introduced specialized units dedicated to blockchain and crypto matters.
Banking Experts Transitioning into the Crypto Space
Apart from legal firms, internal legal experts at banks, asset management firms, and hedge funds are also capitalizing on the burgeoning popularity of digital assets.
The dynamic landscape of cryptocurrencies and the mounting institutional interest have compelled legal practitioners with conventional finance backgrounds to shift focus towards the crypto and digital asset domain.
London-based legal practices, in particular, have redirected their attention towards digital assets, with crypto law emerging as a distinct practice area akin to data protection law.
While the prospects in the crypto domain are promising, inherent risks and challenges persist. The volatility and controversies surrounding cryptocurrencies have seen major players falter, underscoring the potential hazards for legal professionals entering this arena.
Despite these challenges, the global drive to regulate crypto has instilled confidence in legal experts, alleviating certain concerns. Specialist crypto firms often offer elevated salaries and equity growth to offset the additional risks involved.
Nonetheless, legal practitioners must adeptly adjust to the swiftly changing regulatory milieu and amass technical expertise in blockchain and crypto to effectively serve their clientele.
Sailing through the intricate regulatory landscape poses a significant hurdle for legal practitioners venturing into the crypto sphere. The decentralized nature of crypto enterprises and the diverse legal frameworks governing digital assets across jurisdictions necessitate a nuanced navigation through complex regulatory structures.
Understanding and interpreting new laws and requisites for varied types of crypto enterprises can be particularly demanding owing to the absence of established precedents.
