How Bitcoin and Ethereum’s Smart Contracts Work in IT Jurisprudence


The bitcoin ecosystem is becoming the place for many financial startups. Still, finance is highly regulated field, so some legal firms try to catch the zeitgeist of 2016. ForkLog talked with the founder of law firm, Valentin Pivovarov to find out how jurisprudence keeps up with the times and why it’s great. What the company aims for, is to get some distinction by taking cryptocurrencies and advanced business technologies on board.

FL: How did you come up with the idea of establishing a hi-tech law firm?

Valentin Pivovarov: has travelled a long way immediately partaking in developing and running an e-law platform. It became the starting point for our wish to bring legal support to IT companies, as well as to provide them an opportunity to work without wasting their time on petty and often unjustified demands by the government.

FL: Do IT businesses face such demands often? What solutions do you offer?

Valentin Pivovarov: It’s hardly a secret that governments don’t understand IT businesses and their needs. Our position is that government institutions often misinterpret activities of IT developers and other companies engaged in information technologies. What’s the reason? Government institutions find it hard or even unnecessary to go deeper into activities they don’t understand. They prefer linking existing laws and legal positions to what actually shouldn’t be subject to them. So now we’re going to exert our best efforts to minimize misunderstanding and unjustified demands. Legislation in cyberspace is very unstable yet, so we can afford to create legal precedents, making legal arrangements for IT, and providing support thereto. It’s not easy being pioneers, but we’re too interested in IT laws to retreat. Ethereum is very popular now.’s lawyers are engaged in creating concepts of smart contracts enabling the internet community to protect themselves against misconducting counterparties and embody their professional aspirations in IT.

FL: Using Ethereum-based smart contracts may sound like sci-fi to some people. How are you going to help IT businesses with those tools?

Valentin Pivovarov: There’s a trust issue in services provision, especially when it comes to legal services rendered by a lawyer to a customer. Taking money for a piece of advice that may damage the customer means not only discrediting yourself as a law expert but also may possibly destroy someone’s business. So, considering the specificity of our customers, we offer them to arrange our relationship as a smart contract. According to such contract, a person asking for legal services deposits some amount managed by the smart contract. Thus, we have a guarantee our work would be repaid. If the customer is satisfied, he or she uses their private key to grant us access to the payment or freezes the money until the dispute is settled at court, if anything goes wrong. Thus, Ethereum helps us build trusted relations with our clientele while all risks are carried by the blockchain platform.

FL: What is Bitcoin’s place in your practices? Do you accept it as a payment, or use it otherwise?

Valentin Pivovarov: Being a law firm, we know ways to achieve legal acceptance of not just Bitcoin, but also Litecoin, Ethereum, and other cryptocurrencies. We used Bitcoin for our charter capital under the solution developed by our lawyer Nestor Dubnevych. We took part in developing a bitcoin integrator, which enables online cryptocurrency payments. All in all, our statements that we know for sure how to do it are well-justified. Every one of us has a few bitcoins for personal use. We got them from exchange rate differences at BitStamp, OkCoin, and Kraken. However, that’s our personal interest.

FL: You stated you were the first in obtaining the first court ruling directly involving bitcoin. What was that about?

Valentin Pivovarov: We got through a trial court, where the judge refused to consider bitcoin a good subject to legal protection. The decision deprived a website developer from legal repayment of his job by a misbehaving counterparty, and thus created a dangerous precedent. Probably, she had no time to visit, create a wallet and run a few coins through a distributed ledger. Eventually, the ruling turned out to be unjustified and superficial. We hope our petition will bring about more substantial determination of cryptocurrency’s legal nature and protection of related property rights. Practical precedents and related problems have been on the table for a long time, but protecting yourself here is still very difficult. We may endlessly discuss the interaction of new technologies with the seemingly hopeless world of law. The most important here, however, is that similar to bitcoin’s revolution in economics, will build its own yellow brick road in IT jurisprudence.

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