Given the way it operates and given the way that it pushes into new opportunities, there is no surprise that Wildeboer Dellelce LLP has embraced what is understood to be another breakthrough: it’s set to become the first Canadian law firm to accept digital currency (initially Bitcoin, Ethereum, Ripple and Litecoin) towards payment of its legal fees.
There is one caveat to the decision that comes into effect on Feb 1, a date that coincides with the firm’s 25th anniversary: it’s all subject to “standard commercial practices.” In effect clients can pay 25 per cent of their outstanding legal bills in such currencies up to a maximum of $25,000 per month.
Perry Dellelce, the firm’s managing partner, said the decision sends a message “we believe in the industry, we believe what our clients in the industry are doing, and it’s a sign of our long-term belief that this is a new paradigm in the fintech world.”
To date, the firm’s involvement in the blockchain/cryptocurrency world is largely confined to acting with underwriters on financings. One such company is Vancouver-based HIVE Blockchain Technologies, which has a market cap of more than $800 million. Last month, GMP raised $115 million via a private placement, for the company whose goal is “building a bridge from the blockchain sector to traditional capital markets.” Wildeboer acted for the underwriters.
For the time being, said Geoff Cher, head of the firm’s fintech practice, retail investors have been shut out of the cryptocurrency world given that there’s no public vehicle, in Canada or the U.S. that provides exposure to this asset class.
“No entity has filed and cleared a prospectus for a bitcoin or crytocurrency fund,” he added, noting that while it will eventually happen, it will require the resolution of a number of issues, including money laundering, custody and anti-hacking.
“There are still issues in the underlying safekeeping of this asset that (the regulators) don’t have enough necessary comfort on. But I think it’s a matter of time,” added Cher.
Given the volatility of cryptocurrencies, how is the firm ensuring that it won’t be left with an asset that will erode in value? “The risk is that we can’t trade out of it in Canadian dollars,” said Dellece. In that case, “we make the investment decision at the time,” he said, adding that, “hopefully we would sell out quickly. But we don’t necessarily intend to do that as we are somewhat bullish.” And the buy/hold decision depends on how much cryptocurrency is received and in what forms.
But payments are expected to be straightforward given that those companies, which mine bitcoin for example, have an asset class, held in inventory, on their balance sheet. “They will be issuing a coin from their balance sheet to us as payment for their legal services,” said Cher adding that “a big part” of the push into accepting cryptocurrencies has been working with its clients “who can help us in all aspects.”
In the past the law firm was the first to open an exempt market dealer: in 2009 it set up WD Capital Markets that provides advice on corporate finance, on mergers and acquisitions and on public markets (including capital pool companies and reverse transactions) as well as fund raising. Late last year the partners acquired a 50 per cent stake in Numeric Answers. The firm that provides corporate and bookkeeping services has been around for more than 14 years and employs about 20 people.