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Regulatory Environment

The regulatory environment in the blockchain and cryptocurrency sector is loosely defined and open to abuse by unscrupulous actors and even well-intentioned actors that jumped in way over their heads with other people’s money.

Outright scams and project failures occur far too frequently, tarnishing the reputation of the blockchain and crypto sector, and giving regulators more reasons to clamp down hard on the sector.

Most countries require an individual to be an accredited investor to participate in many of the best project presales which is why most people will rarely, if ever have the opportunity to invest using traditional early-stage investment methods. This gives higher net worth individuals a distinct advantage over the individual investor who typically can only participate in the public sale, paying a premium for the token and yet again increasing their odds of losing money.

The regulatory environment is seemingly skewed toward protecting the interests of accredited investors and the centralized legacy financial institutions that may feel threatened and may be seeking to garner more control over the blockchain and cryptocurrency sector than they currently have.

It is worth noting that almost all of the largest crypto project failures have been centralized projects and that there was more than sufficient legislation in place to monitor and prosecute the founders and executive teams however the regulatory agencies didn’t use the tools already at their disposal to protect individual investors.

We therefore posit that the centralization problem is best solved by decentralized projects operating on smart contracts with transparent, trustless and permissionless on-chain execution.