Controversial New York Lawyer to Accept Bitcoins
In the 1970s and 1980s, E. F. Hutton was one of the best known brokerage houses in the United States. A Madison Avenue ad-maker came up with the tagline, “When E. F. Hutton talks, people listen.” The same could be said about successful people in general. When a successful man makes a decision, it’s a good idea to listen, if you want to be successful also.
Hairdressers, sandwich shops, spas and even escort services have all jumped on the bandwagon to accept bitcoins. Lawyers have been slow to embrace the digital currency that is sweeping through the marketplace. As Bitcoin has grown in popularity, attorneys from Wall Street to Main Street are starting to take a look at this new digital currency.
One driving force behind the legal profession’s attention is the continual need to maintain client confidentiality. In New York there is a criminal defense lawyer who accepts bitcoins. Checks and credit cards can create an unwelcome paper trail, a problem that is eliminated with Bitcoin.
Noted criminal defense attorney, Arkady Bukh, specializes in cyber criminal cases. Bukh has begun accepting the digital currency as payment helping ensure the privacy his clients expect and demand.
Bukh, attorney for alleged Boston Marathon conspirator, Azamat Tazhayakov, has also represented Russian cyber criminals and international hackers. As Bukh met with his clients, he became aware of the potential for bitcoins in his law firm. Listening to his clients talk about their experiences with the currency, Bukh’s interest was ignited. As an attorney representing high-tech cyberhackers, Bukh was intrigued by the online-based currency. The ability to protect client confidentiality was a side benefit which led to the decision.
Bukh says that using bitcoins doesn’t put him or his firm at any more risk than accepting cash. “In my field, people want to keep things as hush, hush as possible,” Bukh says. “I don’t see a downside, it is traded on public exchanges.”
Bukh, in addition to Tazhayakov, has also represented Russian digital pickpockets and international hackers, like Igor Klopov, Oleg Nikolaenko, Sergey Tsurikov, Dmitry Naskovets, Dmitry Smilyanets, Vlad Horohorin, and a host of others.
A partial reading of his client list, and their accomplishments, is like reading the names of the recent inductees into a Criminal Hall of Fame.
Igor Klopov, targeted Forbes 400 individuals including a close friend of former President George W. Bush; Oleg Nikolaenko, dubbed “King of Spam” by the FBI. Nikolaenko was responsible for one-third of the world’s spam before being arrested in 2009.
Sergey Tsurikov led a ring that hacked into RSB ATM’s and walked away with a cool $9.5 million dollars over a twelve-hour period; Dmitry Naskovets ran a website that was an online garage sale for identity thieves. Designed to bypass the normal security measures that banks and businesses have, Naskovets helped over 2,000 hackers swipe millions of dollars.
Dmitry Smilyanets, most widely known as the founder of a championship electronic gaming team called Moscow 5, traveled the world for competitions. Smilyanets was able to steal over 130 million credit cards.
Finally, Vlad Horohorin, who was described by the US Secret Service as one of its five most wanted cyber criminals globally.
Bukh’s success with these clients? While collectively they were facing hundreds of years in prison, most received sentences of less than ten years. One got probation.
Bitcoin and International Transactions
Bukh says that deciding to accept Bitcoin was a smart decision for dealing with some of his international clients as well. International financial exchanges can be huge headaches. Wire transfers are expensive and time consuming. Bitcoin offers a lower rate than routine wire transfers. With credit card processing, typical processing fees can be as high as 3-5 percent whereas Bitcoin services are usually less than 1 percent.
The Ethical Issues of Accepting Bitcoin
Bukh explained how attorneys can accept Bitcoin from clients and covert them into dollars while still complying with rules on professional responsibility. If an attorney is paid in Bitcoin and its value is $1,000, the lawyer can take the digital legal tender and convert it into $1,000 today. The Bitcoin value may change, but once converted, the $1,000 credited to a bank account remains stable. That factor makes the acceptance of Bitcoin legal and ethical.
Bitcoin can be accepted for legal services just as precious metals or other valuable. The Model Rules note that a fee for legal services must be “reasonable.” When accepting Bitcoin, a practice should be sure to use the current Bitcoin/USD rate exchange as a guide. When it comes time to billing clients most attorneys include a simple line in the contract such as “$1,000 USD or its present Bitcoin equivalent.”
While the Model Rules allow it, the reader may want to double check with specific jurisdictional rules for more information.
Bukh believes that over the next 12 months more security around Bitcoin will be developed. He also sees the possibility of global regulation on the digital currency. While recognizing the current issues surrounding Bitcoins, Bukh feels that the quicker that issues facing Bitcoin are defined, the quicker the digital currency will have a stabilized market and value. Until then, Bukh has no plans to abandon, bitcoin or the privacy, the digital currency offers his clients.
Just how successful is Bukh? On February 27, 2013, Oleg Nikolaenko, the “King of Spam” walked away with a three-year probation. Igor Klopov, who targeted members of the elite Forbes 400 got three-and-a-half years.