Blockchain

Do you have a crypto-related business?

Cryptocurrency is the way of the future. For years, cryptocurrency and companies within the cryptocurrency space have been operating in a different manner from what we consider a typical corporate structure. Either there is no formal structure or the legal setup does not comply with the activities being done within the company. This is changing very quickly.

Numerous Crypto companies are now looking to capitalize on the popularity of cryptocurrencies, launching blockchain-based legal structures or structures that offer coins or tokens as initial offerings (a so-called token generation event). The appeal of launching in the crypto space is clear – decentralization, anonymity, and freedom of movement of capital are big plus points for cryptocurrencies. However, the same rules and regulations that would encumber a traditional company do still apply.

How does a crypto company formalize its activities when cryptocurrencies are, in essence, meant to be decentralized?

This is actually a challenge. Many spaces have their own rules (think about a DAO). Having an absence of centralized laws within the company’s ecosystem can subject a party to heavy fines or legal liabilities down the road. That’s why Firm EU suggests incorporating a structure that works for the crypto company as soon as possible. Just because the current system and laws aren’t quite as obvious as those of traditional corporations doesn’t mean they don’t exist or won’t become more solidified in the future.

A corporate structure is a must when you are generating a token or creating a startup on the blockchain. Regardless of the current laws and regulations, there are certain principles of corporate law and tax law that all companies must adhere to.