Advising Clients in the Digital Assets Space
NSB lawyers were among the first in St. Louis to advise clients on issues relating to cryptocurrency and other digital assets. Our focus on tax and white collar matters led us seamlessly into this exciting and still-developing area of the law.
Cryptocurrency and Digital Assets Services
Tax Matters
Our vast experience handling tax controversy matters in general, coupled with our knowledge of digital assets, provide us with the tools needed to advise and represent clients in determining the proper tax treatment of digital assets transactions. We advise taxpayers engaging in digital assets transactions as to the proper reporting of those transactions, and we often work closely with our clients’ accountants to form an efficient and cost-effective team for helping our clients’ meet their tax reporting obligations. For taxpayers who find themselves involved in an audit or other investigation by the IRS or state taxing authority, we provide representation designed to guide the client through the process and achieve the best result available under the facts and the law.
Bank Secrecy Act (BSA) Examinations
Although a BSA exam is not a tax audit, it is conducted by IRS personnel in a similar manner. When the IRS began conducting these exams of money services business (“MSB”) engaged in the digital assets space, our years of experience handling tax audits allowed us to immediately step in and represent MSBs in these exams. We are proud of the guidance and representation we have provided to MSBs in multiple BSA exams.
Responding to Subpoenas and Other Governmental Inquiries
Our white collar criminal defense experience has benefited our digital assets clients well when those clients receive grand jury subpoenas, IRS summonses or other inquiries from law enforcement or regulatory bodies. We help our clients respond to these inquiries in a way that complies with their legal obligations while minimizing cost and disruption to our clients’ business activities while addressing the unique issues of the digital asset industry. Our knowledge of digital assets has allowed us to engage in productive discussions with government officials that resulted in the narrowing of the scope and breadth of the requests for information.
Advice on Compliance with the BSA and Other Regulatory Regimes
Depending upon the nature and scope of their digital assets activities, our clients might be subject to the BSA and other laws and regulations. Sometimes clients don’t even realize that the law might obligate them to create and implement Anti-Money Laundering and Know-Your-Customer (AML/KYC) programs. Sometimes clients find themselves surprised to learn that their digital assets activities subject them to federal and state securities laws and regulations, often as a result of the Howey test, named after a United States Supreme Court opinion that can have serious implications for digital assets participants. We help our clients determine what laws and regulations apply to them and what they must do to be in compliance.
Our Approach to Cryptocurrency and Other Digital Assets
Whether someone has years of experience in the digital assets space, or finds themself dipping their toes in the crypto waters for the first time, we are here to discuss the legal issues they might face when interacting with this still emerging area.
We follow the developments and relevant issues closely and have become adept at identifying pitfalls and opportunities that others might not recognize. Many digital assets matters fit naturally and comfortably within our wheelhouse. For example, we are uniquely positioned to advise clients on all tax-related digital assets matters or to guide them in their interactions with federal and state law enforcement agencies and officials, including FinCEN. For other matters, such as advising clients on the optimal entity structure for digital assets activities, we can help assemble a team of attorneys and other financial professionals to advise clients as to operating in a legally-compliant and optimal manner. And if we’re not the right ones to help a potential client, we’ll tell them that upfront and help get them to the right place.
Our Firm’s Digital Assets Representative Matters
Past results do not guarantee future results.
Many of these representative matters were handled by Neill Schwerin Boxerman, P.C. attorneys prior to the formation of the firm.
- Represented owner of bitcoin mining machine retailer and lessor in an investigation from a secretary of state investigative agency to successfully educate the agency so it could conclude that the owner’s business model did not trigger securities reporting obligations.
- Guided cryptocurrency-owning taxpayers through preparation of tax returns claiming favorable tax treatment for exchange transactions with appropriate disclosures; returns not challenged by IRS.
- Advised trade association on tax matters related to digital assets.