A few days ago, Gunnercooke, a U.K. law firm, announced that it will accept crypto assets as payment for legal and professional services, becoming, arguably, the first law firm in the U.K. to do that. We spoke to FinTech & Financial Services Partner James Burnie and Finance Director Naseer Patel to learn more about how they navigate business and regulatory risks.
Given the volatility of some cryptocurrencies, the price is probably one of the first challenges the company faces. But the firm has some flexibility to set prices. “We can either charge an amount in crypto assets or agree on a specific fiat amount and get that amount paid in crypto assets within a particular timeframe and at a rate set by Coinpass, as likely to act as a sensible buffer against potential volatility risk within the time period.”
One of the reasons for adopting this new policy is that clients are showing an increasing interest in paying with crypto assets, and some have already done so. The company has been looking at how other major organizations such as Microsoft and PayPal have already received certain cryptocurrencies and, in their view, “the direction of travel into the mainstream appears clear, and it’s highly likely to become even more widely adopted over the coming years.”
Another reason to accept bitcoin (BTC) and ether (ETH), the only cryptocurrencies that the firm is accepting right now, is to educate the industry about the potential advantages of this type of payment. But clients are advised about the risks of paying with crypto assets.
The company is only accepting BTC and ETH, and possibly certain stablecoins in the future, to reduce any conflict of interest that they may have with other clients and other currencies and to minimize other risks related to anti-money laundering rules.
To this end, the firm accepts payments in cryptocurrencies, but it won’t use these payments to pay third parties; this ensures that the company isn’t used to launder money.
About regulatory and compliance risks, the company had to work closely with the crypto asset exchange Coinpass to guarantee that processes were robust and payments were secured. For Gunnercooke, it makes no difference whether the payment is made with traditional currencies or crypto currencies — it needs to comply with the same anti-money laundering and know your customer rules.
In the U.S., a few law firms are accepting payments in crypto assets, but the legal sector has traditionally embraced new technologies in their workplaces at a very slow pace, despite advising some of the most technologically advanced companies in the world. With around $2 trillion in market value, the digital asset industry is booming — and their legal and regulatory needs will increase in the next years, so it is likely that more law firms will accept cryptocurrencies soon as a method of payment.
Crypto Exchanges Step Up Compliance
For crypto exchanges, initiatives like Gunnercooke represent a new business opportunity, adding traditional companies to the new wave of investors that use crypto exchange services.
However, user privacy and security are paramount for all companies, and crypto exchanges are stepping up their efforts to provide a safe experience for consumers and preparing for any potential regulation that may require a high level of compliance.
In an interview with PYMNTS, Michael Carter, chief compliance officer at Bittrex, discussed the TRUST platform created by 18 crypto services providers across the U.S. as a way for crypto exchanges to comply with the Financial Action Task Force travel rule (which requires custodial crypto exchanges to collect and share data about the senders of specific transactions), while at the same time upholding the privacy and security of customers.
This platform could become the industry standard — and while it is only limited to the U.S. for the moment, the group of companies are working on getting ready for an international expansion, which would facilitate other companies to use crypto exchanges to accept payments in crypto assets for their services.
Read More : Bittrex Compliance Chief Sees TRUST as Crypto Industry Standard
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