Thread
Founders, what should you do in an uncertain regulatory environment?
Yesterday (at 1am), I had a great chat with a project founder based in the UK, which got me thinking.
Bit of a quick 🧵 on the fly. Naturally, NFA nor legal advice.
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Yesterday (at 1am), I had a great chat with a project founder based in the UK, which got me thinking.
Bit of a quick 🧵 on the fly. Naturally, NFA nor legal advice.
/1
Let’s get one thing clear, the regs in web3/crypto are anything but clear. Founders either have to deal with either non-existing regs or a whole suite of crisscrossing regs.
Not ideal.
So, here I present a few general things for founders to focus one until that changes.
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Not ideal.
So, here I present a few general things for founders to focus one until that changes.
/2
1️⃣ Jurisdiction
Simply, where are you located and where are you building? Answer that question and focus on the regs of that country, region, State, etc.
Don’t focus so heavily on “loud” jurisdictions like the US. Use them as a general guide (at best).
/3
Simply, where are you located and where are you building? Answer that question and focus on the regs of that country, region, State, etc.
Don’t focus so heavily on “loud” jurisdictions like the US. Use them as a general guide (at best).
/3
2️⃣ Liability
Two key questions:
1. Who is the responsible party? E.g. person, team, company
2. What will they be responsible for? E.g. not responsible for any losses or max liability $1k
Give these questions a good hard think and figure them out properly.
/4
Two key questions:
1. Who is the responsible party? E.g. person, team, company
2. What will they be responsible for? E.g. not responsible for any losses or max liability $1k
Give these questions a good hard think and figure them out properly.
/4
Side note: You can’t stop someone from suing you. Someone with enough time/resources can make life miserable.
What you can do is have the best defence ready.
How? Determine who can be sued and the things that they can be sued for. Plus, factor in the remaining two points.
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What you can do is have the best defence ready.
How? Determine who can be sued and the things that they can be sued for. Plus, factor in the remaining two points.
/5
3️⃣ Clear docs
I’ve said this time and time again, prepare docs that clearly set out what you’re doing. Stop with the technical jargon + fluff
Get to the point.
Two advantages:
1. Manage your user’s expectations. See #4
2. Better defence in Court (hopefully never needed)
/6
I’ve said this time and time again, prepare docs that clearly set out what you’re doing. Stop with the technical jargon + fluff
Get to the point.
Two advantages:
1. Manage your user’s expectations. See #4
2. Better defence in Court (hopefully never needed)
/6
4⃣ Consumer protection
Everyone, everywhere is using CP when creating regs. Why not get ahead of the game?
Requires two basic things:
1. Expectation - your users must know what they’re in for. See #3.
2. Execution - deliver what you’re responsible for delivering. See #2.
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Everyone, everywhere is using CP when creating regs. Why not get ahead of the game?
Requires two basic things:
1. Expectation - your users must know what they’re in for. See #3.
2. Execution - deliver what you’re responsible for delivering. See #2.
/7
TL;DR - when building in an uncertain regulatory environment, focus on:
1. the correct jurisdiction;
2. determining extent of liability;
3. creating clear docs; and
4. adequate consumer protections.
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1. the correct jurisdiction;
2. determining extent of liability;
3. creating clear docs; and
4. adequate consumer protections.
/8
Tagging some that might be interested in this (and for that exposure): @AusDeFi @CaptDeFi @N1ckB1shop @NumbersDeFi @BodelDan @Blockstars_Tech @Resin8Digital @shanicucic96 @mitchuski @JoeyNB_COS @recipromancer @willow___willow @SamStratten @web3bandit @Kenso_Kay @Legal_DAO
