Understanding and anticipating an evolving regulatory landscape to
maximize opportunity around Web 3.0 legal issues.
In the almost 40 years since its founding, the internet has
become a monolith, with governments and giant technology
corporations vying for control of information and users’
personal data. The advent of Web 3.0 (or Web3) represents an
effort to reinvent digital communication, commerce, and more,
all without centralized oversight or interference.
Web3 is an emerging term of art, but it currently includes
legacy and new blockchain technology, cryptocurrency and
decentralized finance (DeFi) generally, decentralized autonomous
organizations (DAOs), the metaverse, and non-fungible tokens
(NFTs).
Blockchain technology – an encrypted, decentralized,
time-stamped, and unalterable database – underpins Web3 and is
already being implemented across a wide range of industries,
including financial services, logistics, energy, healthcare,
insurance, entertainment, and many more.
The connecting thread among all Web3 elements is users’ desire
to be less-surveilled, less-regulated, and able to chart their
own path forward. But as Web3 is evolving, even the staunchest
proponents of decentralization acknowledge that some regulation
of its underlying technologies is necessary in order to build
trust among users and increase its adoption.
Our Web3 lawyers have been involved with companies on the
leading edge of Web3 technologies and concepts in the U.S. and
internationally. We represent and assist international and
domestic DAOs, founders, funds, entertainers, artists, and even
other law firms.
Cryptocurrency entered the mainstream vernacular in 2009 with the
development of Bitcoin, and later, numerous other
cryptocurrencies. In June 2021, El Salvador’s Legislative Assembly
voted to accept Bitcoin as legal tender, and in August 2021, Cuba
followed suit. At the other end of the regulatory spectrum, in
September 2021, China declared all cryptocurrency transactions
illegal while simultaneously launching its native, closed-loop
digital currency.
The evolution of cryptocurrency has been rapid (in mid-2021, the
market for cryptocurrencies was estimated to be worth around $2
trillion). Financial regulators are struggling to fulfill their
mission of ensuring consumer protection and the establishment of
trust in the marketplace.
Without a central regulatory authority, cryptocurrency presents
users with additional transaction risks and exposes institutions
to additional compliance risks. An additional complication is the
difficulty of ascertaining jurisdiction in a financial system that
is globally distributed.
Cryptocurrency is not only fast-growing but also fast-evolving,
and while most stakeholders see a need for increased regulation,
there is little agreement about the extent of that regulation and
which authority should be responsible. The inevitable introduction
of regulatory processes will have implications in the areas of
taxation, compliance, banking, intellectual property rights, and
data privacy.
What is clear is that stakeholders will continue to rely on
traditional transaction support mechanisms such as contracts, due
diligence, and IP protection. Stakeholders will also require legal
counsel that is highly experienced in supporting transactions that
span multiple jurisdictions.
DAOs offer a cohesive group for the people and by the people
without government manipulation or involvement. A DAO is an
online community that uses blockchain technology to function and
transact toward a specific purpose or mission (e.g. an
investment, global community service, or sending one lucky DAO
member to the moon).
In DAOs, there are no hierarchies and no central control. DAOs
also have no corporate form and therefore no bylaws, operating
agreements, contribution agreements, or subscription agreements.
The “rules” of investing and participating, as for
cryptocurrencies, are set out on the blockchain in “smart
contracts,” which contain some key terms but rarely track
existing corporate laws or securities laws and regulations
governing investments.
In optimal cases, DAOs create legal mechanisms that allow the
DAO to interact with existing corporate, financial, and other
structures to ensure continuity of the DAO’s membership and
purpose with its obligations to third parties, including
financial partners. DAOs that fail to implement optimal
structural integrations risk being treated as unintentional
partnerships complete with joint and several liability for all
DAO participants and an inability to enforce any of its
contracts with the outside world.
Like cryptocurrencies and blockchain itself, DAOs are inherently
borderless and involve people and organizations across the
globe, requiring legal expertise that also extends beyond
national borders.
NFTs are digital assets that sometimes intersect with the physical
world. They can be held by collectors, traded, or sold. The NFT
market is nascent but prominent and growing exponentially.
Although NFTs are “non-fungible,” the rights associated with them
most certainly are. At the most basic level, NFTs are intellectual
property rights initially owned by creators. Then those rights are
packaged into an NFT or tokenized as part of an NFT and
transferred to buyers.
NFT studios, intermediary platforms for buying and selling, and
NFT creators, sellers, and buyers are all reliant on intellectual
property rights protection. They need the complete range of legal
work inherent in NFT creation, ownership, and transactions,
including contracts, negotiation, translation, IP registration,
and enforcement.
For nearly two decades, Harris Sliwoski has been a leader in
emerging markets like China, cannabis, and psychedelics law, all
areas in which stakeholders have had to contend with
fast-evolving regulatory environments. Our attorneys have earned
national and international recognition for their work providing
businesses with the legal planning, regulatory support,
corporate guidance, and compliance strategies they need.
Our Web3 team is following the same playbook, collaborating with
their colleagues in other practice areas to leverage our wide
range of legal strengths and our national and international
network of industry-leading professionals to offer our clients
creative, effective, and timely support.
With different jurisdictions come vastly different legal
systems, and it takes a highly experienced legal team to
navigate them. As leaders in some of the most complex areas of
international law, our lawyers in the US, LatAm, Asia, and Europe stand ready to assist you wherever you need us.
Get started by filling out the form, or call
1-888-330-0010 to schedule a
free initial consultation.
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“Harris Sliwoski expertly guided us through the
formation of our company. They continue to assist with
necessary registrations and compliance with numerous
regulations. They were able to promptly answer all our
many questions and provide understandable options,
explanations and practical advice. We expect to
continue to use Harris Sliwoski on a regular basis as
our company expands. They were also able to introduce
us other professional experts. We would not hesitate
to recommend Harris Sliwoski to any companies in need
of legal advice.”
This law firm was a huge help as our company went
through the process of commercial licensing in the
California cannabis industry. They have helped us
with a variety of legal issues in a timely fashion,
while clearly communicating with us throughout the
process. Everyone we’ve worked with at Harris
Sliwoski is an expert in their field and we have
always felt that we were in good hands through our
legal representation.
Web3 technology is changing the digital landscape. Each
benefit it offers comes with a range of unprecedented
capabilities and circumstances with few concrete legal
guidelines to follow. As Web3 grows, numerous legal
challenges will become more apparent and require businesses
to seek protection from agile legal firms. Current and
predicted legal challenges revolve around areas like:
A Web3 asset is any digital good that utilizes blockchain
technology. These assets are decentralized, so regulations
around them are currently nonexistent. As a result, a Web3
asset can take many forms. Common Web3 assets include
cryptocurrencies, music, digital art, non-fungible tokens
and virtual real estate. Businesses can use the creative
flexibility that Web3 offers to create various assets that
open new avenues for customer engagement.
Cryptocurrency is legal in the United States. However, Web3
and blockchain technology are new, and the market needs time
to catch up. Banks currently do not accept cryptocurrency
and likely will not until more regulations emerge. The best
way to trade cryptocurrency today is to register with an
exchange service where you can purchase cryptocurrency in
exchange for standard currency.
Please fill out the form below to submit your case details, or connect your Web3 wallet directly.
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Get started by filling out the form, or call 1-888-330-0010 to schedule a free initial consultation.
"*" indicates required fields
“Harris Sliwoski expertly guided us through the formation of our company. They continue to assist with necessary registrations and compliance with numerous regulations. They were able to promptly answer all our many questions and provide understandable options, explanations and practical advice. We expect to continue to use Harris Sliwoski on a regular basis as our company expands. They were also able to introduce us other professional experts. We would not hesitate to recommend Harris Sliwoski to any companies in need of legal advice.”
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Three Continents Foods LLC
This law firm was a huge help as our company went through the process of commercial licensing in the California cannabis industry. They have helped us with a variety of legal issues in a timely fashion, while clearly communicating with us throughout the process. Everyone we’ve worked with at Harris Sliwoski is an expert in their field and we have always felt that we were in good hands through our legal representation.
Wil Crummer, CEO PRO Farms
Web3 technology is changing the digital landscape. Each benefit it offers comes with a range of unprecedented capabilities and circumstances with few concrete legal guidelines to follow. As Web3 grows, numerous legal challenges will become more apparent and require businesses to seek protection from agile legal firms. Current and predicted legal challenges revolve around areas like:
A Web3 asset is any digital good that utilizes blockchain technology. These assets are decentralized, so regulations around them are currently nonexistent. As a result, a Web3 asset can take many forms. Common Web3 assets include cryptocurrencies, music, digital art, non-fungible tokens and virtual real estate. Businesses can use the creative flexibility that Web3 offers to create various assets that open new avenues for customer engagement.
Cryptocurrency is legal in the United States. However, Web3 and blockchain technology are new, and the market needs time to catch up. Banks currently do not accept cryptocurrency and likely will not until more regulations emerge. The best way to trade cryptocurrency today is to register with an exchange service where you can purchase cryptocurrency in exchange for standard currency.
