Ongoing Compliance Requirements
Maintaining compliance after launch
After launch, maintaining compliance is critical. This includes:
- Know Your Customer (KYC) procedures
- Anti-Money Laundering (AML) protocols
- Data privacy compliance (GDPR, CCPA, etc.)
- Tax compliance for crypto transactions
Why Legal Structures Matter for Web3 Startups
Proper legal structuring is not just about compliance—it's about creating a foundation for sustainable growth. Common mistakes that can lead to serious legal issues include:
- Misclassifying tokens: Incorrectly labeling a security as a utility token can trigger SEC enforcement actions.
- Operating without a legal entity: This exposes founders to personal liability and complicates banking, taxes, and property management.
- Neglecting compliance requirements: Failing to implement KYC/AML procedures can result in regulatory penalties.
- Making investment-style promises: Even with a utility token, marketing language suggesting investment returns can trigger securities regulations.
- Inadequate IP protection: Without proper agreements, especially when working with contractors or anonymous developers, you risk losing ownership of your product.
Is this guide helpful?
