Home Technology Ohio lawyers can hold crypto in escrow, ethics board says

Ohio lawyers can hold crypto in escrow, ethics board says

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Ohio lawyers can hold crypto in escrow, ethics board says

Ohio attorneys can accept and hold cryptocurrency in escrow for clients and third parties, but must take steps to protect it and avoid becoming involved in money laundering and other fraud, the state ethics board said.

Many international customers prefer to use cryptocurrency for business transactions, according to the Ohio Board of Professional Conduct. But financial institutions do not accept or exchange the currency, which means a lawyer cannot place it in their trust account, the council said.

Since cryptocurrency is treated as property, it can be held by an attorney for clients or third parties in relation to representation or law-related matters, according to the council. The council’s opinion does not apply to attorneys’ fees, he said in a footnote.

Lawyers who accept cryptocurrency should be aware of the risks associated with technology, and they must “execute due diligence to minimize the risk of loss to client or third-party property,” the council said. Lawyers must also inform clients of the risks involved in holding and transferring cryptocurrency, according to the advice.

Suggested methods to protect cryptocurrency held in escrow include cold storage wallets, encryption and backup private keys, the council said.

To avoid participating in illegal activities, attorneys should require a detailed, written escrow agreement that names the parties involved in the transaction and the underlying transaction for the escrow account, according to the board.

Cryptocurrency records must be retained by the attorney for seven years after disposal, the council said.

The notice is Ohio Prof’l Driving Bd., op. 2022-07, 8/5/22.

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