- Date
- 27 November 2023
Full Disclosure:
Lawyers Make Money From Crypto
By Jaysen Sutton |
Hi Reader 👋🏽,
Binance, the world’s largest cryptocurrency exchange, paid $4.3 billion in one of the largest fines in the crypto industry.
It never fails to surprise me how some of the biggest companies in the world do dodgy things hoping they won’t be caught. It happened to Enron (the book I’m reading), Theranos, FTX, WeWork, and so many more.
In this case, Binance pled guilty for breaching anti-money laundering regulations and US sanctions after failing to prevent and report suspicious transactions with terrorist groups. The CEO faces up to 18 months in prison.
Impact on Law Firms
Money laundering is where you make money illegally, but you invest in things (like a business) to make it seem that you made the money legally. Law firms must have anti-money laundering policies, verify their clients are who they say they are, and provide staff training on what to look out for. By law, you can’t just act oblivious like Binance did.
This is the domain of a practice area called white collar crime, which is particularly lucrative in the US, where the largest companies want to hire the best lawyers to defend themselves against regulators like the SEC. In this case, Latham & Watkins is defending Binance’s CEO, while Binance is represented by Gibson Dunn.
Meanwhile, the collapse of cryptocurrency firms has generated a lot of fees for bankruptcy lawyers; Sullivan & Cromwell billed $80m for representing FTX in its US collapse, while Kirkland & Ellis billed $60m representing Voyager, Celsius Network and BlockFi.
Finally, we’ve seen an increase in crypto disputes, driven by securities and tort claims according to this breakdown from Farshad Ghodoosi.
Have any thoughts? I'd love to hear your perspective below!
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