If you talk to lawyers in the space who are working on SEC defenses for DeFi projects, one of the biggest issues is that internal chats/communications (discoverable by SEC) lapse into talking about the project as if it were any tech start-up instead of a FOSS project
if you talk like you're running a business, there is a high risk that you will be regulated like you're running a business
people like to poke holes in how XRP has been treated vs. how ETH has been treated, but one of the biggest distinctions between them is that Vitalik and others are very disciplined--communicating that they basically research & develop network clients & designs for network clients
Ethereum teams were also very willing to absorb the costs and inefficiencies of decentralizing work (e.g., funding multiple different clients with different teams) & operating by 'rough social consensus' among developers, vs. having a venture-backed company with a CEO.
You might consider these differences 'window dressing' and argue that they do not matter, but ultimately your case will be decided by a judge who does not need to know or care much about DeFi & will use common sense.
If what that judge sees in evidence is a bunch of chats about "we are hiring this person to do biz dev," "we need to raise our TvL", "[x,y,z] is our competitor and we must counter," etc. then they're likely going to view those people as running a regulatable business.
So, if you are not seeking to run a business, you need to give up some of the benefits of running a business--which means maybe things like not controlling the trademark for the 'brand', allowing many front-ends to flourish, being open to non-exclusive contributors, etc.
In other words, you need to run your project consistently as a sort of open hacker collective, and not as a silicon-valley start-up. This is the #1 reason why Ethereum got better regulatory treatment than Ripple.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
