Numerous entities are looking to capitalize on the popularity of virtual currencies, launching blockchain-based startups that offer coins or tokens as initial offerings. The appeal of launching on the crypto space is certainly understandable—as a decentralized, fundamentally anonymous system, the same rules and regulations that would encumber a traditional startup often don’t apply.
This, however, is actually a challenge, since many spaces have their own rules, and having an absence of centralized laws can subject a party to heavy losses or legal entanglements down the road. Just because the current legal and financial connections aren’t quite as solid or obvious as those of traditional corporations doesn’t mean they don’t exist or won’t become more solidified in the future.
Forward-thinking corporate structure is a must when you are making an ICO or startup on the blockchain. Hart David Carson, has decades of experience when it comes to corporate structure and governance, and we can help you anticipate future developments as you structure your startup.
The blockchain provides a unique environment for companies to do business, and this has a significant impact on how the company is structured. Currently, the types of structures we see include:
- LLCs which create a base protocol or technology coupled with a separate business
- Blockchain-based ecosystems coupled with an LLC that create a profitable transactional loop
- Non-registered distributed organizations (rare, but they exist)
This means that you not only need a traditionally structured company, but you will also need to plan for the dynamics of the space in which you propose to launch your ICO. Legal expertise will be key here since we can help you avoid the pitfalls that many startups fall into when working with blockchain technology.
Proper Governance on the Blockchain
The anonymity and decentralized nature of the blockchain heavily impacts how governance is handled. The same regulations that would affect traditional startups and corporations either don’t necessarily apply to the crypto space or are more difficult to enforce. That said, many spaces have their own forms of governance built in, and it’s important to be aware of those when setting up exchanges, startups, and other ventures.
Regulators are constantly striving to adapt existing laws to the sphere of cryptocurrencies, and those adaptations will likely become more prevalent as time goes on. In addition, the rules that each blockchain community devises will come into play as well, so you’ll need to be able to account for both when structuring your entity. Hart David Carson, can assist you in that endeavor.
Regardless of the current regulations you may need to face, there are certain principles of corporate structure that you’ll need to account for. These are vital to sound business operation and will help establish your startup as a trustworthy, fully compliant entity. Our attorneys can help you incorporate the following principles into your blockchain-based corporation:
- Transparency and integrity
- Sustainability of operations
- Ability to fulfill promises and obligations
Our attorneys at Hart David Carson can lend their experience and legal know-how to your virtual currency venture. The services we provide include corporate structuring, governance models, and regulatory compliance.
For more information, contact us today.
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