December 2018 LACBA MCLE Test and Answer Sheet

 

Test No. 283: Getting Paid in Bitcoin

To access the article related to this test, please click here. The article will open in a separate window.
  
Instructions for Obtaining MCLE Credit

The Los Angeles County Bar Association certifies that this activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 1 hour. To apply for credit, please follow the instructions.

1. Study the CLE article.

2. Answer the test questions by marking the appropriate boxes. Each question has only one answer.

3. Photocopies of this answer sheet may be submitted; however, this form should not be enlarged or reduced. Mail the answer sheet and the $25 testing fee ($35 for non-LACBA members) to:

Los Angeles County Bar Association
Attn: Los Angeles Lawyer MCLE Test
P.O. Box 55020
Los Angeles, CA 90055

Make checks payable to Los Angeles County Bar Association.

4. You can also fill in the test form and submit it directly to LACBA by clicking "Submit." To submit your test answers online you will need to pay by credit card. After submitting your answers you will be presented with a screen requesting payment information. This information will be submitted in a secure mode which will allow you to safely transmit your credit card number over the Internet. If you prefer not to pay by credit card, please print this answer sheet and submit your responses by regular mail.

5. Within six weeks, Los Angeles Lawyer will return your test with the correct answers, a rationale for the correct answers, and a certificate verifying the CLE credit you earned through this self-study activity.

6. For future reference, please retain the CLE test materials returned to you.


 

Test Sheet
 



  
Mark your answers to the test by clicking next to your choice.  All questions must be answered.  Each question has only one answer. This test is worth 1 hour of credit.*

1. Accepting cryptocurrency for legal services is per se unethical because cryptocurrency is not embodied in tangible tokens.


2. Attorneys cannot ethically accept cryptocurrency because commercial transactions involving compensation for legal services must always be completed using currency backed by a government.


3. Cryptocurrency has value only because financial regulators all agree that it does.


4. Cryptocurrency transactions recorded on the block - chain do not implicate counsel’s ethical duty to maintain client confidences because transactions on the blockchain are private and confidential.


5. “Private keys,” the mechanism by which cryptocurrency transactions are “signed” and completed, necessarily prevent counsel from accidentally revealing client confidences.


6. Cryptocurrency users, including lawyers and their clients, should assume that cryptocurrency transactions are publicly viewable, potentially implicating protecting client confidences.


7. Financial information is exposed on the blockchain, which can implicate counsel’s ethical obligation to protect client confidences.


8. It is unethical for counsel’s retainer agreement to include clauses addressing issues raised by counsel’s acceptance of cryptocurrency as compensation for legal services.


9. Counsel is not ethically prohibited from accepting payment in cryptocurrency for legal services.


10. If counsel and client need to distribute a single bitcoin to get counsel compensated for legal services, client and counsel could, for ethics rules purposes, become co-owners of a valuable asset.


11. Barter as payment for legal services requires that a client use a currency recognized by the U.S. government.


12. Counsel who accept cryptocurrency as compensation for legal services must be able to process refunds for clients.


13.When the cryptocurrency that counsel has accepted as compensation for legal services becomes worthless during the course of the representation, counsel could be in a posture of conflict with the client.


14. Cryptocurrency is easily deposited into traditional client trust accounts.


15. Attorneys who accept property as compensation for legal services must clearly label that client property and maintain it in a “place of safekeeping.”


16. If counsel holds client property in trust as compensation for legal services, counsel must keep complete records of each item of property held, including the person on whose behalf the property is held, the date counsel received the property, the date of distribution, and the person to whom distributed.


17. Because cryptocurrency is not recognized as currency by the Internal Revenue Service, it is not taxable.


18. Cryptocurrency markets are subject to such significant regulatory uncertainty that attorneys cannot ethically use it in their practices.


19. Law enforcement sometimes monitors cryptocurrency transactions for illegal activity.


20. The regulatory landscape for digital assets, including guidelines on how lawyers can ethically manage commercial transactions using cryptocurrency, is likely to change in the near future.

 


Before clicking the Submit button, please verify that all questions have been answered. An error message will appear if not all questions are answered.

* The Los Angeles County Bar Association has been approved as a continuing legal education provider of Minimum Continuing Legal Education credit by the State Bar of California. This self-assessment activity will qualify for Minimum Continuing Legal Education credit by the State Bar of California in the amount of one hour.