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Roman Buzko

@buzko

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Roman Buzko pfp
Roman Buzko
@buzko
Thanks, @vinayvasanji.eth! Really appreciate your support. As for /legal, indeed, if you building something in crypto or AI and have legal questions, feel free to post them here and tag /legal.
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Roman Buzko
@buzko
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Roman Buzko
@buzko
Recasting for your followers here: https://warpcast.com/buzko/0xa04b9c7f
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Roman Buzko
@buzko
9. What makes someone a token issuer? Do all tokens have one? This is where can get very tricky. But a simple rule of thumb: the issuer is whoever benefits the most from deploying the token issuing contract.
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Roman Buzko
@buzko
10. What should I do? Keep Calm and Carry On. Check out Skala.io, where we’re building the legal platform for technology startups, including a suite of tools and templates for crypto startups.
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Roman Buzko
@buzko
8. What makes an ERC-20 or ERC-721 a security? Gary Gensler. Kidding. The Howey test (1946) or Reves test (1990). Everyone in crypto hates Howey, but it’s the defining test for “investment contracts” and hence securities. Until we get a safe harbor for tokens [1] or a change in the accredited investor regime, it’s not going anywhere. [1] Hester Peirce proposed one in 2021: https://github.com/CommissionerPeirce/SafeHarbor2.0
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Roman Buzko
@buzko
7. Is a foundation required to launch a governance token? For large, mature projects, yes, it’s market practice. But for anything outside the top-100 on CMC, it’s probably overkill. More on this: https://x.com/wassielawyer/status/1850551931393151123
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Roman Buzko
@buzko
5. Key traits in a legal advisor for crypto? Beyond crypto experience and technical know-how, look for lawyers with non-zero risk tolerance. Everything in crypto is risky. If Ethereum had listened to their lawyers, they would have never issued ETH.
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Roman Buzko
@buzko
6. Beyond securities risk, what legal pitfalls should founders watch? Three major risks: 1/ Sanctions violations — see the 2019 arrest of Virgil Griffith after speaking at a North Korean crypto conference. 2/ AML/KYC compliance — if you run an exchange or money service business, you need to comply. 3/ Class actions & private lawsuits — see the recent Pump[.]fun lawsuit. Don’t be lazy with Terms of Use. https://warpcast.com/buzko/0xb80c9219
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Roman Buzko
@buzko
4. How to minimize legal fees as a pre-revenue startup without cutting the wrong corners? Do not issue tokens or set up foundations until you have clear product-market fit. Unless, of course, the token is the product (e.g., memecoins). Also, geoblock US & EU, see this guide on the topic: https://variant.fund/articles/practical-guide-to-geofencing/
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Roman Buzko
@buzko
2. Best jurisdiction to incorporate a crypto startup? It depends on what your startup actually does. The most common choices: 🇺🇸 US — ideal for startups not engaging in regulated activities (e.g., blockchain scanners like Dune). 🇻🇬 BVI — the go-to jurisdiction for token issuers due to its permissive legal framework. 🇰🇾 Cayman Islands — popular for their flexible Foundation Companies. 🇵🇦 Panama — the Wild West of crypto, with zero regulations. Polymarket and many others are based there. You can set up most of these entities via Skala: 🔗 Skala.io/crypto-startups
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Roman Buzko
@buzko
3. Does D&O insurance cover crypto startups? Other must-have policies? Not my area, but yes, crypto is high-risk for D&O underwriters. That said, the market is evolving, and more insurers now cover crypto risks.
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Roman Buzko
@buzko
First, no legal advice. Second, it depends. Now legalese aside, let’s dive into your questions 👇 1. What defines a centralized vs. decentralized project? No one really knows. An important SEC official dropped the term “sufficiently decentralized” in a 2018 speech, and ever since, law firms have been using it to sell legal opinions to token issuers. I do recommend reading this memo on the YFI token launch by a brilliant US lawyer. It dives deep into the concept of decentralization: https://metalex.substack.com/p/why-yfi-are-not-investment-contracts
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Roman Buzko
@buzko
Solid list, working on it 🫡
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Roman Buzko
@buzko
Pump[.]fun, a popular Solana-based memepad, was hit with a second class action lawsuit yesterday. The lawsuit claims that Pump[.]fun acted as both the issuer and statutory seller of tokens under Section 12(a)(1) of the Securities Act. You can read the full 215-page lawsuit, including all exhibits, here: https://aboutblaw.com/bg4F. It looks like this US class action could have been avoided if the project had proper Terms of Use with an Arbitration Clause and Class Action Waiver. But they didn’t—at least not until the end of 2024, when the lawsuit was already imminent.
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Roman Buzko
@buzko
[1] https://x.com/lindayax/status/1884254005188034772?s=46 [2] https://www.binance.com/en/square/post/18958341001281 [3] https://decrypt.co/302023/telegram-exclusive-ton-barring-other-networks [4] https://www.sec.gov/newsroom/press-releases/2020-146 [5] https://news.bitcoin.com/tether-estimates-net-profits-for-2024-to-exceed-10-billion/
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Roman Buzko
@buzko
Back in 2018, Telegram should have launched its own stablecoin and integrated it into the messenger instead of the whole Gram fiasco. By now, it would have been a billion-dollar business (see USDT [5]), purely thanks to its massive user base. Instead, they picked a fight with the SEC, ran headfirst into disaster, and made Skadden a lot of money.
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Roman Buzko
@buzko
This year, SOL is set to be packaged into an ETF, putting it alongside ETH and BTC in the eyes of traditional investors. For TON, that kind of future looks far less likely due to the SEC v. Telegram precedent [4]. Telegram will remain an amazing messenger with TON attached as a side project they push onto every user. Most of its mini-apps (TMA) are either copied from other ecosystems or primitive games straight out of VK’s golden era.
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Roman Buzko
@buzko
But that edge could easily fade once Twitter (X) [1], Meta, and others start integrating crypto without fear of backlash from Trump’s new administration. TON’s January hire of Stotz to defend its U.S. interests [2] and the ban on other blockchains in Telegram [3] are the first warning signs.
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Roman Buzko
@buzko
An unpopular opinion, but here we go. Telegram’s TON is in a risky spot. It thrived over the past couple of years thanks to regulatory arbitrage, while Ethereum and Solana were under constant fire in the U.S. Now, with the U.S. crypto policy making a complete 180° turn, everyone is in the same boat. TON’s only—but very strong—advantage is its distribution through Telegram. 👇
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