One of the leaders of the firm’s FinTech & Blockchain Practice, Daniel Payne, a shareholder at Murphy & McGonigle, sat down for a Q&A with Fintech Law Report to discuss the current state of cryptocurrency regulation and litigation.
Mr. Payne and his colleagues at Murphy & McGonigle originally jumped into the crypto space in 2016-2017, when clients wanted to issue tokens and sought their expertise on the potential application of the securities laws to the distributions. Since then, Murphy & McGonigle’s Blockchain Practice Group has grown, adding attorneys from various government regulatory bodies, including the SEC and CFTC, with their own unique perspectives on crypto issues.
One of the highest profile crypto lawsuits, between the SEC and Ripple Labs, was discussed at length in the Q&A. Mr. Payne believes that this case could have lasting implications that further showcase the SEC’s desire to enforce securities regulations in the cryptocurrency space. Mr. Payne discussed that the SEC’s case against Ripple Labs is important for its breadth; the case is not solely focused on the initial offering of XRP, Ripple Labs’ cryptocurrency, which took place in 2013, but also on current sales happening on secondary markets.
The amount of time that has passed since the initial offering is much longer than previous cases brought by the SEC, leading to a legal battle over the statute of limitations on token sales. Mr. Payne also described how the court may analyze whether XRP can be treated similarly to Bitcoin and Ether, the two largest cryptocurrencies, which are not presently viewed by the SEC as securities.
Fintech Law Report asked Mr. Payne what regulatory advice he tells his crypto clients is most important. Mr. Payne responded, "Litigation risks are manageable if you can spot the most likely places where you might get sued. Regulatory risk planning and risk management needs to be part of business planning from day one."
To read the full article in Volume 24 Issue 3 of Fintech Law Report, subscribe by visiting https://store.legal.thomsonreuters.com/law-products/Newsletter/FinTech-Law-Report-E-Banking-Payments-and-Commerce-in-the-Mobile-World/p/100001728.
More information about Mr. Payne’s practice can be found at https://www.mmlawus.com/attorney/daniel-m-payne/.