Articles Posted in Blockchain

AdobeStock_497874499-300x169Non-fungible tokens (NFTs) are quickly becoming one of the most popular digital assets online. An NFT is typically a unique piece of digital artwork that belongs exclusively to a single owner, with a blockchain-based digital ledger being used to record ownership. The NFT market surpassed $40 billion in 2021 and continues to grow in 2022. Unfortunately, as with any new technology, there are scammers who try to take advantage of this emerging market. If you are not certain about the legitimacy of a project, you can protect yourself and your business by getting legal advice about any digital asset you’re seeking to purchase.  Below are some examples of common NFT scams common in 2022.

1. Fake Websites and Social Media Accounts

Some scammers are able to replicate the website or social media channel of a legitimate NFT business. Often, these replicas are incredibly convincing, so it is important to use common sense security precautions before sending your crypto to buy an NFT or providing a website with any payment information. Check the website URL and verify it on the NFT marketplace. Confirm that social media channels are verified or are recognized on the company’s legitimate website. Look for security protection through antivirus software and other security protections on your network.

AdobeStock_476679934-300x200NFT’s are a popular new digital asset. Here in Silicon Valley, tech-savvy business owners want to be at the forefront of this cutting-edge technology. Like an asset, however, it is important to understand the product before investing in it or pouring resources into it for technical development of some new business venture. Poor investments can leave business owners to answer to disgruntled shareholders, investors, employees, customers, and even government regulators, including lawsuits, class action suits, and regulatory or administrative investigations and action. Learn more about NFT’S – and what your business needs to do to invest in them safely.

What Are NFT’s?

NFT stands for “non-fungible token.” An NFT is a unique piece of digital artwork that is sold online. As with cryptocurrency, NFT ownership is recorded in a digital ledger on the blockchain of some type. NFT’s can be resold. Because of this, an owner can capture appreciation by reselling the NFT’s. NFT’s can also be used for secondary transactions and capturing royalty related to a piece of art or subscription.

AdobeStock_423401622-300x199Cryptocurrencies are a very rich field for scams nowadays. There are dozens of crypto scams because cryptocurrencies are confusing, yet many people are very curious about virtual currencies.

As the price of cryptocurrencies continues to surge, so does the number of crypto scams. Cryptocurrency scams can take various forms and are constantly evolving, which is why many unsuspecting people and companies fall for them.

The Most Common Crypto Scams to Avoid

AdobeStock_392233450-300x200Cryptocurrency has become a critical issue for many California business owners. These new forms of currency can be convenient, but they can also create legal obligations for the businesses that use them. It is important for all business owners to understand the legal implications of cryptocurrency offerings before engaging in any transactions. Some cryptocurrency transactions can fall under the SEC requirements, and business owners can face liability for failing to register their offerings or meeting other legal requirements.

Security Versus Utility

Cryptocurrency can be either a security or a utility, depending on how it is being used. A security is a fungible and negotiable financial instrument with some type of monetary value. When discussing securities, many investors immediately consider stock certificates. This is a classic example of a traditional security. They are not, however, the only item that can be used as a security. Cryptocurrency can also be used as a fungible, negotiable financial instrument, and often these instruments hold significant monetary value.

AdobeStock_194813254-300x200In forward-thinking Silicon Valley, many individuals and businesses have made profitable investments in Bitcoin and other cryptocurrencies. Employers may want to take advantage of healthy appreciation and pay their employees in this increasingly-valuable currency. But employers must use caution. Employment laws still apply to regulate the manner in which a worker must be paid. Wage and hour disputes are more difficult with cryptocurrency, and there is not yet clear case law to define these issues. Employers should consult with an experienced Silicon Valley employment law attorney before making the decision to switch to crypto.

Call (408) 441-7500 to schedule a consultation with one of our skilled San Jose business lawyers. We help California employers find ways to implement new technologies while meeting their legal obligations.

Wage and Hour Law

Initial Coin Offerings (ICOs) have recently become a popular new source of funding for Silicon Valley businesses. They are new and exciting, but they can also be risky. It is important for business owners considering an ICO to understand both blockchain processes and the securities laws which apply to digital currencies. The experienced corporate attorneys at Structure Law Group can help your business enter this emerging market cautiously in order to explore the many exciting possibilities it holds.

An ICO is a method of funding a new (or even established) company by selling its own form of cryptocurrency. The company may accept traditional payments or even other forms of cryptocurrency. This financing is then used to fund the company’s operations. Its new cryptocurrency gains value, and this allows many of the initial investments to appreciate.

While the goals of an ICO are the same as those of an initial public offering, the process has some critical differences. IPOs are heavily regulated by the Securities and Exchange Commission. Investors are left with stock and voting rights which are clearly defined, and the entire process is underwritten by an investment bank. By contrast: an ICO has no underwriter, no equity or voting rights, and little regulation by the SEC. (The SEC is quickly adapting to this emerging market, and the regulatory landscape is likely to change drastically in the near future.) Interestingly, many ICOs involve new companies with little or no proven track record of financial success. Many do not even have products. All of these factors can make ICOs highly risky for investors.