Bitcoin Foundation Releases a Primer on Jurisdictions for BTC Businesses

That is the very basic summary of the Bitcoin Foundation’s “A Primer on Bitcoin Jurisdiction”, a document the foundation made freely available online Wednesday to help its members and other cryptocurrency startups tackle their legal obligations.

25 Total views
84 Total shares
Bitcoin Foundation Releases a Primer on Jurisdictions for BTC Businesses

As mentioned in a recent piece regarding Coinbase having to police its users’ gambling activity, having to deal with the various regulations of multiple jurisdictions is a minefield, particularly for Bitcoin businesses, whose models are theoretically border-agnostic.

Still, if a Bitcoin payments processor wants to attract customers in the US, it has to abide by relevant US laws, as court cases have demonstrated.

And if it would rather avoid those headaches, then it has to come up with creative workarounds to disqualify it from US jurisdictions.

That is the very basic summary of the Bitcoin Foundation’s “A Primer on Bitcoin Jurisdiction”, a document the foundation made freely available online Wednesday to help its members and other cryptocurrency startups tackle their legal obligations.

The report was commissioned by Robert A. McFarlane, a partner at Hanson Bridgett LLP’s office in San Francisco, to show companies the steps they could take to avoid subjecting themselves to regulations or lawsuits in states that are not Bitcoin-friendly.

“No Bitcoin business wants to exclude any jurisdiction,” Jim Harper, Global Policy Counsel for the Bitcoin Foundation, said in a statement, “but it is important to have that option. When regulations are unjustified by consumer protection benefits, the better course will be to conduct business in the jurisdictions that embrace innovation, the consumer benefits of Bitcoin, economic growth, and job creation.”

A few avoidance strategies include:

  • Maintaining “passive websites,” or sites that are only informational and not interactive;
  • Including a clause in the business’s terms of service that specifies for which jurisdictions the product or service is intended;
  • Identifying the jurisdictions of each user and denying business to those from unfriendly jurisdictions;
  • Including a step where users must consent to the business’s choice of law and choice of venue in the event of a legal dispute. 

This is important reading for anyone with a Bitcoin startup or a company that otherwise deals in cryptocurrencies or blockchain technologies that are not easily restricted by state boundaries, particularly one with US customers or a US office.

Again, the primer can be found here.


Did you enjoy this article? You may also be interested in reading these ones:

×

Hottest Bitcoin News Daily

For updates and exclusive offers, enter your e-mail below.