Introduction to Blockchain: Webinar for Federal Bar Association by Bergstrom Attorneys' Matthew Bergstrom and Michael Zarlenga

The Federal Bar Association has produced a webinar entitled, "Introduction to Blockchain Systems & Challenges for Advising Clients."  The program was presented by Matthew Bergstrom and Michael Zarlenga, both lawyers from Bergstrom Attorneys PLLC. The presentation first aired live on December 15, 2017, and it will be rebroadcast throughout 2018 with live Q&A with Bergstrom and Zarlenga. 

The webinar would be of interest to anyone concerned with the legal issues of blockchain technology from a legal, business, and policy perspective. Lawyers may receive CLE credit by completing the webinar. 

This program is a basic introduction to distributed ledger systems or Blockchain technologies. The most notable application of a blockchain is Bitcoin. But Blockchain systems have the potential to revolutionize the way business is done and lawyers need to be prepared to advise clients. This course will provide attorneys with a basic understanding of the Blockchain, expose attorneys to the basic terminology they should know, discuss smart contracts and the challenges they pose, and address some of the legal and regulatory challenges to early adopters of Blockchain systems. This is a Blockchain 101 course. Some of the topics that will be discussed include:

Key topics to be discussed:

• What is a Distributed Ledger System or Blockchain?

• What is a Token?

• What is a Smart Contract?

• What is a DAO?

• What is an ICO?

• Challenges of Applying Blockchain Systems to a Papered World.

• Challenges of Advising Early Adopters

For more information, visit this link. 

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SEC Issues 3 Important Statements on ICOs and Cryptocurrency Ecosystems


By:  Michael W. Zarlenga*


On December 11, 2017, the Securities and Exchange Commission (SEC) made public three important documents related to ICOs and cryptocurrency ecosystems.  The first was the public release of an order instituting a cease-and-desist proceeding against Munchees, Inc., a restaurant review iPhone application.  Munchees, Inc. engaged in an ICO of MUN, coins which closely resembled utility tokens.  However, using the U.S. Supreme Court’s analysis in SEC v. W.J. Howey Co., the SEC classified the MUN as investment contracts.  As the SEC discussed in The DAO Report, tokens, coins, or other digital assets issued on a Blockchain may be securities under Federal law.  If they are securities, issuers and others who offer or sell them in the United States must register the offering and sale with the SEC or qualify for an exemption from registration.  Quoting two other U.S. Supreme Court Cases, United Housing Found., Inc. v. Forman and Tcherepnin v. Knight, the SEC noted that “In analyzing whether something is a security, form should be disregarded for substance, and the emphasis should be on economic realities underlying a transaction, and not on the name appended thereto.  In other words, calling something a Utility Token does not make it so in the eyes of the SEC or the Federal securities laws.


The second issuance by the SEC was a longer statement on cryptocurrencies and ICOs.  It was a statement from SEC Chairman Jay Clayton.  Chairman Clayton stated:  “A key question for all ICO market participants: ‘Is the coin or token a security?’ As securities law practitioners know well, the answer depends on the facts.”  Chairman Clayton went on to provide an example of the difference:


For example, a token that represents a participation interest in a book-of-the-month club may not implicate our securities laws, and may well be an efficient way for the club’s operators to fund the future acquisition of books and facilitate the distribution of those books to token holders.  In contrast, many token offerings appear to have gone beyond this construct and are more analogous to interests in a yet-to-be-built publishing house with the authors, books and distribution networks all to come.  It is especially troubling when the promoters of these offerings emphasize the secondary market trading potential of these tokens. Prospective purchasers are being sold on the potential for tokens to increase in value – with the ability to lock in those increases by reselling the tokens on a secondary market – or to otherwise profit from the tokens based on the efforts of others.  These are key hallmarks of a security and a securities offering.”


As with the Muchees, Inc. cease-and-desist order, the example points out that the fact that if a token is going to increase in value based on the future efforts of others, it is most likely a security.  This position should not be surprising given the SEC’s position that a SAFT (Simple Agreement for Future Tokens) is an investment contract and therefore, a security.


The final public release by the SEC is a transcript of a speech last week by Dalia Blass, the Director of the SEC’s Division of Investment Management.  While Ms. Blass spent very little of her speech on cryptocurrencies, Ms. Blass did note the following:


We also continue to think about new innovations in asset management.  For example, we have seen several filings for registered funds that would hold cryptocurrency.  As with any new product, there are questions to ask.  For example, would retail investors have sufficient information to consider these products and to understand the risks? . . .  When thinking about cryptocurrencies and other blockchain offerings as fund assets, are differences in their features important?  How would these funds fit into the existing regulatory scheme?  What regulatory structure or structures apply to the market for the underlying instrument?  We will be discussing these questions with you as we work through these filings.


Is this a foreshadowing that the SEC is looking to regulate the secondary markets for utility tokens or coins?


As with other Federal and state agencies, the SEC is very interested in the topics of cryptocurrencies and other Blockchain assets.  The future regulatory landscape is anything but clear.  Bergstrom Attorneys continues to monitor developments and advise clients in the cryptocurrency and distributed ledger network arena.  Let us know if we can help you.


* Michael W. Zarlenga is Of Counsel to Bergstrom Attorneys, PLLC.  Mr. Zarlenga has extensive securities law experience, including both public and private placements of securities totaling in excess of $2 billion.  In addition, Mr. Zarlenga has advised clients ranging in size from start-up companies to Fortune 500 in such diversely regulated fields as biotech, hi-tech, financial services, and insurance.

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A Prenup Can Be the Best Starting Point for a Successful Marriage

If prepared by a skilled practitioner, a prenuptial agreement can open the door to a long-lasting and honest marriage.

Engaged couples seeking to establish and encourage open conversations about finances, income, assets and who’s earning what when children show up, can be benefited by discussing practical issues rather than spending that time discussing tropical locales for the honeymoon. To many, the thought of a prenup conjures up images of doom and gloom that stem from discussing the end of a relationship before it begins, rather than providing validation the love that is shared. After all, love does not care about one’s financial condition.

However, many conditions exist that can make love interfere with better judgment, considerations such as, is it your second marriage? Does one partner bring more assets to the marriage than the other? Do you own a business? Do you expect an inheritance? One can view marriage as a partnership between husband and wife, and a prenuptial agreement is like a business plan, writing up the framework for the financial component of the relationship while deciding on both obligations and goals. One of the most difficult parts of divorce is often the controversial subject of alimony. A prenup can settle that in advance and help guide the marriage and even prevent divorce if the prospects of financial gain are lessened.

Conversations about finances are not on the minds of many during the courtship stage; however, it would be beneficial if more spouses-to-be discussed many things, which might include religious beliefs or how many children they dream of having--things that tend to surprise even the closest companions when intentions differ.

Our legal system has made it easier than ever to obtain a no-fault divorce in most jurisdictions, yet the promise of a happy, healthy marriage should still have great meaning to those seeking to marry. After all, wedding is not just a scene played out in front of family and friends, it is a contract of obligation between two consenting adults. The simple writing of one’s intentions, commitments and concerns in plain language provided in a well-written prenuptial agreement can establish a strong foundation of trust and openness that any properly committed couple can benefit from.

Contact Bergstrom Attorneys to discuss your questions about a prenuptial agreement, estate planning, and any of other many legal services.  Our firm serves clients in Virginia, Maryland, and the District of Columbia.

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Michael Zarlenga of Bergstrom Attorneys Teaches Contract Law Webinar

Attorney Michael W. Zarlenga will teach a webinar for lawyers on behalf of the National Business Institute entitled, "Breach of Contract: Getting the Benefit of the Bargain," on February 2, 2017.  Mr. Zarlenga is the lead counsel of Bergstrom Attorneys for legal services in the areas of corporations, contracts, securities, and other business-related issues.  If you need to start a business, negotiate a contract, settle a business dispute, contact Bergstrom Attorneys to speak with Mr. Zarlenga.

A description of Mr. Zarlenga's webinar follows:

When everything is going as planned, the first page or two of a contract is all that is needed.  When everything goes sideways, that is when the remaining pages of the contract matter.  But what is in those pages that no one reads?  Why are they the most important part of a contract? And how can you make sure your client gets the benefit of the bargain?  This course will look at how the proper drafting of a contract can avoid litigation and actually save a client money when one of the parties is in breach.  It will also examine how improper drafting can actually be a detriment to your client in court.

Course Content will include:

  1. Mutual Expectations and the Theory of Contract
  2. Common Contract Disputes and Drafting to Avoid Them
  3. Boilerplate and Why It Is Important Not to Just Plagiarize
  4. Applicability of the UCC
  5. Available Remedies
  6. Alternative Dispute Resolution vs. Litigation
  7. Pleading Both Breach of Contract/Breach of Quasi Contract

The webinar will be broadcast live from the Condado Vanderbilt Hotel in Puerto Rico.  


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Cutting Edge Startups Flocking to Arlington--Inc. Magazine

Inc. Magazine recently featured Arlington County, Virginia as an increasingly popular location for cutting edge startup ventures.  The feature article identified three reasons for this growth in entrepreneurship:

  1. Arlington offers close proximity to Washington, DC's big-city resources -- without the big-city traffic.
  2. The local population is "a whip-smart talent pool" with "71 percent of Arlington residents age 25 and older having a bachelor's degree or higher."
  3. The region's top companies and government agencies offer crucial support. 

You can find the full article here.

For a more in depth discussion of startups and entrepreneurship in Arlington, see this article at   

Bergstrom Attorneys offers a broad range of legal services for new and existing businesses.  From business formations to securities regulations, we help our clients protect and grow their businesses.  


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Home Businesses May Face Zoning Pitfalls

You have a million dollar idea.  You quit your job, develop a business plan, design your logo and launch your website.  Then, just as you hang your shingle on the door of your home office and welcome your first customers, you get a call from the local zoning board, informing you that operating a business out of your home is prohibited and not only must you close shop, but you also face steep penalties for conducting business without the proper permits.

Unfortunately, zoning laws can upend the plans of the most well-intentioned entrepreneurs.  Further, deciphering what rules apply to your home can be difficult since zoning ordinances vary by state, county and even neighborhood.  The only way to know if your home-business will pass muster is to check with the board well in advance of launch day. 

First, you will need to figure out which zoning board governs your fate and this isn’t always crystal clear.  Both cities and counties have zoning boards and you will need to call the boards for your zip code to figure out which board has the final say.  Some business folks will face additional challenges if they live on federal property, on protected land, or in a development with covenants that prohibit home businesses. 

Second, the type of business you own will play a large part in whether you will be able to obtain a permit.  Zoning laws were enacted to protect residential neighborhoods from the activities inherent in commercial areas such as high traffic, noise, prominent advertising and ongoing construction.  Therefore, a home based consulting firm where all work is web based is viewed vastly different then a business where customers are streaming in and out of the front door at all hours of the day.

A key factor is whether the zoning board will consider your business “retail.”  And, unfortunately, some zoning boards have an expanded definition of “retail” that includes online sales and the presence of an occasional customer.  In some neighborhoods, all “retail” business is strictly prohibited, while other neighborhoods have a more relaxed policy.  The same applies for manufacturing or construction businesses that may cause pollutants or cause a nuisance with an elevated noise level.

Third, and most frustrating, is that fact zoning polices and guidelines can change.  There have been several cases where a business is issued a permit, only to be told a few years later that either the definition of “retail” has changed by the board, rendering their home business impermissible, or the board is banning all commercial activity in a certain neighborhood.

If you are denied a permit, there is always the possibility of an appeal.  Most zoning commissions have in place an appeal process where a business owner, along with his or her attorney, can navigate the system with a well planned argument on why a permit should be issued.

The bottom line is that the zoning board should be your first call after the million-dollar idea pops into your mind.  Be sure to have your permit in hand before you open shop from the comfort of your couch.

Bergstrom Attorneys represents clients in a variety of zoning related matters and in the creation of new businesses.  Contact us to discuss your questions.

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Register This: Know the Legal Issues of Renting your DC Property

Register This: Know the Legal Issues of Renting your DC Property

Are you moving out of your Washington, DC apartment or considering jumping on the profitable Airbnb bandwagon? Given the transient nature of the District of Columbia, a rental property can be a wise investment.  In the last few years, the high annual gross rental yields in the District have encouraged home owners to rent out their apartments once they upgrade to a new home or move out of state. 

Unfortunately, renting a home in DC is not as easy as putting up a quick coat of paint and listing the property online.  Landlords must comply with the regulations set out by DC’s Department of Consumer and Regulatory Affairs (DCRA), and if they rent a property without complying with these complex regulations, they are breaking the law and can face significant fines.

There are several things you must do before you even list your property, even if it’s only a basement or a spare room in your house.  First, you may need to obtain a certificate of occupancy depending on what type of property you own.  Second, you must obtain a housing business license.  Third, you need to have your property inspected to make sure it meets DC’s criteria for a rentable home.   Last, you must file a registration or claim of exemption from the Rent Stabilization Program (rent control).  This requires determining if your property is subject to rent control or if you are exempt.  Those who are not exempt must calculate their prospective rental income.

To make matters more complicated, diligent prospective landlords should perform background checks on potential tenants and have a thorough lease drafted to ensure liability protection and to allow them to legally raise the rent. Additionally, a solid umbrella insurance policy should be purchased to cover the property should there be an accident during the lease period.

Some virtual businesses have offered do-it-yourself kits to landlords; however they can’t perform the job of an attorney.  To safeguard yourself and your property from liability, and to ensure that all of your work is filled our properly, contact an attorney who understands the pitfalls of renting property in the District.

If you are excited about the prospect of rental income, but the thought wading through the red tape of the DC bureaucracy is unsettling, consider calling Bergstrom Attorneys.  From your lease to DC licenses, we will file all the proper paperwork and jump the legal hurdles for you. We can also assist you with any problems you have with your current rental, from eviction to legally raising your rent. 

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Estate Planning for Nontraditional Assets

Today Bergstrom Attorneys's Managing Attorney, Matthew Bergstrom, spoke to the Central Virginia Chapter of the Financial Planners Association in Richmond, Virginia. Mr. Bergstrom addressed the special challenges of handling nontraditional assets in legal matters, particularly in estate planning.

Whether your investment portfolio or personal assets include art, animals, or armaments, you might not think to raise such topics with your attorney. It is the policy of Bergstrom Attorneys to raise these issues in the event you do own something that requires special care and attention. We consider these matters from various standpoints, including: wealth management, asset protection, preservation, risk, and inheritance, among others. We particularly focus on the needs of the parties in the future who might become involved with your nontraditional assets, such as executors, successor trustees, heirs, and beneficiaries. 

Will you or your loved ones understand the care and handling of your assets?  For example, might an antique require periodic restoration?  Will firearms require compliance with complex state and federal laws?  Are funds needed for the maintenance of your pets?  How would passwords to digital media be disclosed?

Contact us to discuss your special concerns regarding nontraditional assets. Bergstrom Attorneys's team of attorneys and our network of subject matter experts are ready to help you and the next generation enjoy your nontraditional assets.

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Entrepreneurs Beware

Type, “starting a new business” into a search engine and hundreds of ads for online services will appear offering you complete startup packages for a new business.  These internet offers can be tempting.  At first glance, they appear affordable and thorough, but it is important to read the small print.  Effectively these web offers turn the entrepreneur into a do-it-yourself lawyer without any support from an actual attorney or any other qualified individual.  Also, many websites lack the information a new businessperson needs when making decisions that can later make or break their venture, particularly when sorting out the differences between a partnership, an LLC, an S-Corp, etc. or when drafting the bylaws in its operating agreement.  So, before you stake your future on a few mouse clicks, consider the following:

Unbiased on-line information is available

A solid self-education on business formation can be achieved online by visiting reliable, noncommercial Internet sources.  For a general overview of entity types, registration requirements, licensing etc. see the U.S. Small Business Administration’s  (SBA) web site, which thoroughly covers a variety of helpful topics.  Also, because regulations vary nationally, you will need to have a decent understanding of the different corporate options in the state in which you are filing.  Similarly states have different names for the agencies that govern business formation, such as “Secretary of State”, “Bureau of Corporations” and “State Corporation Commission”.   Regardless of the name, the websites of these agencies often provide basic but helpful information you will need to make decisions about the legal structure of your new business.

Beware of the standardized form

Online business formation sites try to provide customers with standardized, one-size-fits-all legal documents.  A good example is the operating agreement. State laws and agencies typically do not require submission of an operating agreement, so many entrepreneurs skip this step in the creation of their new business. An operating agreement is a crucial internal document consisting of the bylaws governing the day-to-day operations of a business as well as rules for handling future problems.  Online sites often exclude operating agreements to make their products appear cheaper and simple. The operating agreements they do offer are often short, cookie cutter versions for a relatively high price, often three to four hundred dollars.  These operating agreements can become obsolete from the first day of business because they never considered a business’s individual needs, especially as a company grows. Consequently business owners are left without important safeguards and liability protections.  We recommend investing in a relationship with an attorney who will explore your short plans and long-term goals. Your attorney can then draft sound legal documents that are relevant for the creation of your new business as well as its future growth.

Tracking your ongoing obligations

Once you’ve gotten the incorporation of your business out of the way, you will experience the ‘rush’ that only private enterprise junkies understand. That rush is the desire you’ll feel to work harder than you’ve ever worked before, and almost certainly you will work harder than you ever have. Bear in mind there will be ongoing obligations associated with business ownership.  Many states require yearly fees and updates. Almost all states require companies to maintain a registered agent to receive legal notices on your behalf.  You will also need to update elements of your operating agreement on a regular basis during each year.  And, of course, there are ongoing tax obligations.   A do-it-yourself internet business incorporation could leave you unaware and ill-equipped for these responsibilities. A On the other hand, a lasting relationship with an attorney could provide you the ongoing support to help you avoid future problems.

Understand your taxes

One of the main reasons a small business owner legally incorporates a business is to take advantage of the associated tax benefits.  Its important to identify a knowledgeable accountant who is qualified to meet the needs of you and your business. A qualified team of professionals can help you understand the interplay of the diverse factors affecting your new venture, such as your personal financial situation, the number of partners you have, and the type of business to be formed.  Such tax and accounting matters should be addressed before the launch of any new business. 

Liability is the name of the game

Regardless of profitability, liability can doom a business. Owning a company is an automatic exposure to lawsuits and prudent business owners will ensure all of the necessary safeguards are in place before they open their doors.  To defend a business against liability, entrepreneurs will make sure they select a suitable corporate entity to protect themselves, their partners, and their investors. In this regard, the business owner should exercise care with employment contracts, lease agreements, licenses and waivers. A lawsuit can ruin a new business and rob it of its limited assets.  The situation is more serious when a company is not properly formed and an angry plaintiff is able to seize the personal assets of a business owner.  An attorney can help business owners shield themselves from liability, mitigate risk, and protect assets. 

Contact Us

At Bergstrom Attorneys we help clients throughout the planning, launch, and ongoing protection of their businesses. Contact us to discuss your business needs, and we will be ready to offer you cost-effective solutions and responsive support for your business needs. 

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Stop: What to Know Before you Go to Traffic Court

Eventually it happens to the best of us--a seemingly minor traffic ticket.  Whether it’s speeding, running a stop sign, or the other common infractions,  such a ticket can be an expensive hassle with long-term effects.  Once you have your ticket in hand, the only thing to do is to make sure you handle it properly.  A mishandled ticket can lead to additional fines, heighted insurance costs and even jail.  Here’s what you need to know:

Show up to Court

Most traffic tickets will have a court date stated on the paperwork.  There will often be an option to resolve the matter immediately by paying the fine via mail or Internet.  We strongly recommend you attend your court date.  If you pay the fine without appearing, you sign a statement that you are pleading guilty, and that means there is no hope the charge will be reduced or the fine lessened.  If you do make the effort to show up, the judge may reward you by mitigating the damage to your driving record or pocketbook.  Also, if the officer that ticketed you is not present, your case may even be dismissed.  Bear in mind, you may have to pay court fees if you appear, but this charge may be worth the long term goal of keeping your insurance payments down.

If you don’t appear, it’s imperative you pay your fine by the required date, or send an attorney to represent you in court.  If fines are not paid and there is a no-show at the hearing, the judge may very well issue a bench warrant for your arrest or, at the very least, your fine will increase.  Depending on the jurisdiction, the next time you are pulled over, you could be taken into custody or worse, an officer could find you and arrest you without waiting for another infraction. 

Look and Act the Part

When you go to court, wear a suit or other business attire.  And in this instance, less is more.  The rule of thumb is to wear an outfit that you would wear to your grandmother’s funeral. Court is not the place for flash or glamour. 

Additionally, it’s important to remember that in a courtroom, there are rules that need to be respected and followed.  Don’t bring a cell phone, because if it rings, it could be confiscated.  Some courts may not allow you to carry a cell phone past security, you will either lock it up or have to leave it in you car.  Don’t sleep or talk loudly.  Stand up when being addressed by the court and, if you can remember, refer to the judge as “Your Honor”.  Simple, respectful practices will go a long way with most judges and your attention to detail will work in your favor when it’s your time to appear before the bench.

Have Your Evidence Ready

If you have a valid reason for speeding or committing another traffic offense bring your justification to court.  For example, if you have a faulty odometer, bring proof from your mechanic.  If your wife was in labor, bring proof such as a birth certificate or hospital discharge sheet.  If trees obscured the sign that posted the speed limit, bring proof in the form of pictures. 

Bear in mind a “reason” for speeding is different than an “excuse”.  Being late for meeting or a date isn’t going to persuade the court.  Remember, presiding over traffic court is the judge’s job and most of them have heard every excuse imaginable. If you don’t have a compelling reason, don’t make one up.  Also, while in most criminal cases, its important not to admit fault, in traffic court, it may be prudent to admit fault and apologize. That bit of sincerity may work in your favor. An attorney can help you determine the best approach.

Keep in mind that the officer who ticketed you will also be present.  If you were polite to him, he may say so, and that may help your case.  

Of course, because procedure varies from court to court, knowing what to say and what not to say can be dicey.  One judge may appreciate your sincerity and another may throw the book at you.  To be certain, consider hiring an attorney to help you navigate through the process.

Mitigate the Damages

If this is your second, third or fourth ticket in a short period of time, or even if it’s your first and if you want to be ahead of the game, there are ways to soften the blow of a ticket.

Before court, you can take a live or online driving safety course that should reduce the points on your record.  The court might require you to complete such a course anyway, so it may be smart to do it ahead of time. If you do so, bring your certificate of completion to your court date. Your willingness to make the extra effort will only have a positive effect on the judgment.  Both your state DMV and your insurance company can recommend accredited classes.

When you Need an Attorney

An experienced attorney familiar with the court system can almost always get you a better result than if you go it alone.  In addition to helping you prepare your best case, they can also save you time and hassle by appearing in your place in most instances. This is especially true if you received your ticket when you were far from home and it would be expensive and inconvenient to return for just the day.

An attorney is a necessity if the driving offense is serious, like extreme reckless driving, or if you have multiple offenses on your record, or if there is a chance you could lose your license.  While attorney fees can be an expense on the front end, if you face a serious charge that could leave a long-term mark, it’s better to be safe than sorry. Loss of your driving privileges or an increase in insurance rates can easily exceed the cost or hiring an attorney to mitigate such losses.

Contact Us

Bergstrom Attorneys represent clients in the courts of District of Columbia and throughout Northern Virginia, including Alexandria, Arlington, Fairfax, Falls Church, and Loudoun. Contact us to discuss your case and to learn how we can help you protect your driving record.

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Bergstrom Attorneys Office Locations:


Mailing Address: 
3033 Wilson Boulevard, Suite 700
Arlington, Virginia 22201
(Clarendon Metro)

Additional Locations in Virginia, Maryland, and the District of Columbia:
Alexandria, Bethesda, Fairfax, Tysons, and Washington, DC.



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