NEAR Foundation Announces Policy Principles

It’s no surprise that the Web3 industry presents many unique challenges for lawmakers and regulators globally. Decentralised, permissionless technology is, in many ways, at odds with much of current law and regulation that assumes centralised, intermediated and gatekept systems. Adding to this inherent complexity, Web3 technology is borderless by nature, spanning countless jurisdictions and legal/regulatory frameworks.

We believe that fair, proportionate and clear regulation can benefit our industry and is necessary if we want to see genuine global growth and adoption of Web3 technology. We also believe that the policy outcomes advanced by most regulators globally (protecting investors, maintaining market integrity and promoting financial stability) are reasonable and capable of being achieved in the Web3 context with the right approach (i.e. regulatory equivalence is possible).

Indeed, many of Web3’s core features (including decentralisation, disintermediation, transparency and immutability) make it uniquely suited to effectively achieving these policy outcomes. But, to achieve these outcomes, regulation must be fair and proportionate. If regulation isn’t fair and proportionate — if it doesn’t consider the unique features and associated challenges inherent to Web3 technology — then it can stifle innovation and undermine the very policy goals lawmakers and regulators are trying to advance¹.

CURRENT STATE OF PLAY

Currently, there is no common or consistent approach to Web3 regulation. Laws and regulations that do exist vary widely between jurisdictions. In some jurisdictions, including Switzerland, the European Union (EU), the United Kingdom (UK), Japan, Singapore and Hong Kong, we are seeing progress and, critically, a recognition that, at least in some respects, our industry does require a different approach. In the EU, for example, the Markets in Crypto-Assets Regulation (MiCA) (the text of which was agreed upon late last year and is anticipated to come into force in late 2024) aims to create a harmonised, comprehensive legal framework across all EU member states for the regulation of crypto assets and related activities² (although other policy developments are troubling³). Switzerland was one of the first jurisdictions to implement an effective regulatory framework for digital assets back in 2018⁴ and has since been home to a vibrant Web3 ecosystem. The UK has also signaled its intent to embrace our industry, recently launching a significant consultation to seek views on how the UK could best regulate the Web3 industry⁵, which followed an excellent Law Commission of England and Wales (Law Commission) paper on personal property law and digital assets (as well as a consultation on decentralised autonomous organisations (DAOs) which recently closed⁶).

However, in other jurisdictions, most notably the US, there has been an increasing, and in many cases, overt hostility towards our industry. Amongst other things, a recent White House report on crypto is scathing⁷, a Treasury Department analysis of decentralised finance (DeFi) (somewhat more balanced than the White House report) contains some fundamental technical and policy misunderstandings⁸, banking access for Web3 projects has been compromised in a seemingly coordinated and deliberate manner⁹, prominent lawmakers talk of creating an ‘anti-crypto army,’¹⁰ and aggressive legislation proposals are receiving increased support. Regulators continue to rely on outdated laws and regulations that aren’t fit for purpose without providing any clarity or guidance that the industry desperately needs, let alone a viable route to registration¹¹. Amidst this complex and unclear regulatory background, regulators and the industry alike struggle with definitive asset classification and the industry faces a wave of enforcement actions¹².

This approach is unquestionably damaging the Web3 industry in the US (and beyond), driving many projects out of the jurisdiction. It is not a fair or proportionate regulatory approach, it is regulation by enforcement.

WHERE DOES THIS LEAVE THE INDUSTRY?

There is much work to do, particularly in the US. As an industry, we need to recognise that these regulatory challenges and the apparent growing hostility can potentially harm us all. However, what is unfolding now across our industry in the US could become a seminal and net positive moment if we can unite and mobilise effectively.

The NEAR Foundation’s primary focus is to support the ongoing growth and development of the NEAR protocol and its associated ecosystem, but it also has a more general mandate to accelerate the adoption of open technologies at a global scale. The Foundation, therefore, has a responsibility to advocate for reasonable, proportionate and effective approaches to regulating our industry.

Part I of this series sets out the NEAR Foundation’s core policy priorities for the next 12 months and beyond to increase awareness of the key issues, and to show what guides the NEAR Foundation as we advocate on behalf of the NEAR ecosystem and the wider industry. These policy priorities are: (1) protect developers and open source software; (2) protect privacy; (3) promote autonomy; (4) protect validators; (5) promote clarity, collaboration and good faith engagement.

In Part II of this series, to follow shortly, we set out policy initiatives to help drive these priorities forwards.

NEAR FOUNDATION POLICY PRIORITIES

PROTECT DEVELOPERS AND OPEN SOURCE SOFTWARE

Developers are the lifeblood of our industry, responsible for creating, maintaining, and innovating the infrastructure on which Web3 operates. To foster innovation and growth, it is essential to safeguard developers from onerous regulation and ensure that publishing open source code remains free and open. Developers should be able to explore, experiment, and create without unnecessary constraints, burdensome obligations or fear of liability (including, for example, designation as fiduciaries¹³ or ‘Financial Institutions’¹⁴).

Open source code is a powerful tool that enables transparency, collaboration, and rapid innovation, allowing developers to share, modify, and build upon existing work while enhancing the security of the code. By defending the right to publish open source code, we also support the principles of freedom of expression and the free flow of information. This not only benefits the Web3 community but also fosters a culture of open collaboration across the entire technology industry and encourages its continued development.

PROTECT PRIVACY

Privacy is a fundamental human right and a cornerstone of the Web3 vision to create a more secure, user-centric and user-empowered web. However, as a neutral and highly transparent technology, blockchain (and other Web3 technology) is equally capable of being misused for warrantless mass surveillance and censorship if appropriate privacy safeguards aren’t in place. We are already seeing various attempts to erode privacy in Web3 that could have far-reaching consequences well beyond our industry¹⁵.

Web3 technology has demonstrated that maintaining privacy can be compatible with other important policy outcomes including, for example, the prevention of crime. Zero-knowledge proof (and other) innovations are already capable of implementing (for example) KYC/AML and sanctions checks without exposing sensitive personal data¹⁶.

Privacy should be staunchly defended to protect individuals from unwarranted surveillance, invasive data collection, censorship and malicious actors. Policymakers should support these outcomes when it comes to Web3 technology, as they have done in Web2 with data protection legislation such as GDPR and DPA. By championing privacy, we want to ensure that Web3 technology continues to respect users and empower them to own and control their data.

PROMOTE AUTONOMY

Ensuring individuals can use self-hosted products and services free of heavy restrictions or obligations is critical to user empowerment. Through self-hosting, users can fully control their assets and data, enhance their privacy, and reduce censorship risks and reliance on centralised intermediaries and service providers (and it is often within such centralised intermediaries that risk is most highly concentrated¹⁷). Self-hosting is also a foundational component of secure, resilient, diverse and competitive ecosystems since it minimises centralised points of failure and dangerous concentrations of power¹⁸ and supports decentralised infrastructure and governance systems¹⁹. But, we are already seeing proposals that would harm autonomy by significantly constraining the development and use of self-hosted products and services²⁰.

Users should be able to seamlessly embrace self-hosting as a viable and attractive alternative to centralised service offerings and also safely participate in decentralised autonomous governance systems (including DAOs) without fear of liability or being subjected to burdensome obligations. Many in the industry, including those working on NEAR protocol’s transition to the Blockchain Operating System²¹, are pioneering technological innovations to make this possible. Policymakers should also enable these outcomes.

PROTECT VALIDATORS

Validators are the backbone of decentralised networks, ensuring those networks can function effectively by validating transactions, maintaining transaction accuracy and ensuring adherence to consensus rules. In performing this essential function, validators should not be subject to burdensome obligations or significant liability risks²². Accordingly, a balance should be struck between the need for regulatory clarity, network security and ease of validator participation.

A good starting point could be the creation of a light-touch, standardised public disclosure regime whereby validators would be required to disclose relevant information about their operations. This relevant information could include (amongst other things) relevant digital asset holdings, ownership of/the extent of their node operations, fee structure, affiliations with other significant ecosystem participants, hardware and software infrastructure, security measures, and past performance records. De minimis thresholds could be implemented so that the disclosure requirements would apply only to those validators operating at scale and in connection with significant networks. This approach could also provide much-needed clarity by confirming the nature and extent of participating validator obligations and liability in the context of network failures, security breaches or other adverse events, providing an incentive for participation in the regime.

This type of disclosure-based approach would reduce information asymmetry, and therefore promote investor protection and help to maintain market integrity. It also has other advantages, including: (1) focusing on the types of activities that are being undertaken rather than the nature or classification of the underlying asset (the latter approach can create enormous complexity, as evidenced by the current situation in the US); and (b) being relatively flexible and so capable of application to other critical network participants including, for example, core development teams who are building/maintaining certain types of Web3 projects/infrastructure²³.

By establishing clear guidelines and legal safeguards for validators (and other network participants), policymakers can provide a conducive environment for validators to operate without fear of significant legal consequences. This will promote the resilience, security and growth of decentralized networks and help to preserve critical benefits of Web3 – decentralisation and disintermediation.

PROMOTE CLARITY, COLLABORATION AND GOOD FAITH ENGAGEMENT

The industry desperately needs clarity from lawmakers and regulators. Effective policy debate requires willingness from both policymakers, and the industry to discuss issues in good faith²⁴, as well as a recognition that Web3 presents a unique and unprecedented policy challenge and therefore an openness to exploring new approaches.

We should also recognise that as developers, users, and other proponents of Web3 technology, we are each representatives of and advocates for our industry. Our conduct matters, and we should all strive to act with integrity and set a good example to show policymakers what our industry is capable of, and the unique value it can generate²⁵. To do this effectively, collaboration across the industry is essential.

CLOSING THOUGHTS

Productive dialogue between the industry and regulators will hopefully lead towards further legal and regulatory clarity in Web3, which will have a positive effect on: (1) developers, by offering them a framework in which to operate, aware of their obligations and protected from the unreasonable application of unsuitable laws and regulations; and (2) users, by providing a safe environment in which to try new products and services and explore a new technological frontier where autonomy, transparency and privacy are paramount.

We believe that the light-touch disclosure based approaches (like the high-level proposal referenced above), as well as safe harbour implementations²⁶ (which provide projects with viable, conditioned routes to registration/compliance – and which could be integrated into a wider disclosure based regime), sandboxes (to explore specific activities like digital asset issuance, updated AML/KYC processes etc.) and model law proposals²⁷ (amongst other approaches), show significant promise and warrant further work and discussion²⁸.

We will explore some of these potential routes forwards in more detail in Part II of this series.

In the meantime, we believe that regulatory clarity and consensus are essential for the meaningful global adoption of Web3 technology. Policymakers’ approach to Web3 will continue to evolve, and on-going education efforts and good faith discussions will be key to moving the conversation in a positive direction. We welcome the opportunity to engage with other industry participants, as well as lawmakers and regulators globally, to develop a fair and proportionate approach in support of these policy priorities.

Disclaimer: Nothing in this article/post should be construed as legal, tax or investment advice. This post might not reflect all current updates to applicable laws, regulations or guidance. The authors disclaim any obligation to update this post and reserve the right to make any changes to this post without notice. In all cases, persons should conduct their own investigation and analysis of the information in this post. Where this post contains links to other sites and resources provided by third parties, these links are provided for information only and should not be interpreted as approval by us of those linked websites (or any information obtained from them) that the authors of this post do not control.

Footnotes:

_{1. See, e.g., Running on Empty: A Proposal to Fill the Gap Between Regulation and Decentralization, Hester M. Peirce, speech on February 6, 2020 (available here), where Peirce discusses the current challenges in the US with the lack of legal clarity around decentralization and the outdated application of the Howey Test to crypto assets. See also, e.g., The SEC, Digital Assets and Game Theory, Yuliya Guseva, 46 J. Corp.. L. 629-679 (2021)(available here), which suggests that the SEC’s regulation via enforcement actions approach has broken the ‘fabric of cooperation’ between industry participants and the SEC and is therefore leading to bad outcomes for all market participants. See further testimony before the US House Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion, hearing entitled Coincidence or Coordinated? The Administrator’s Attack on the Digital Asset Ecosystem, Dr. Tonya M. Evans, March 9, 2023 (available here), where Evans emphasizes the difficulty in innovating and building in Web3 given the present uncertain regulatory climate in the US.}

_{2. MiCA will primarily regulate centralised intermediaries/crypto-asset service providers in a relatively proportionate manner, enabling so-called ‘passporting’ across all member states and largely carving out decentralised initiatives, demonstrating a clear recognition by EU lawmakers and regulators of the current and future importance of our industry. MiCA isn’t perfect – the provisions governing stablecoins are unwieldy and challenging, the bloc’s intended approach to decentralised initiatives remains largely unknown and some other legislative developments are troubling (see footnote 3) – however, it represents a meaningful launching-off point for engagement and future iteration, and will provide much-needed clarity and consistency across the world’s largest single market.}

_{3. See, e.g., Proposal for a Regulation on Information Accompanying transfers of funds and Certain Crypto-Assets, Piotr Bąkowski, European Parliamentary Research Service, 20 July 2021 (available here), which proposes to expand travel rule obligations to all crypto-asset service providers (CASPS) and require them to collect identifying data in respect of all transactions with no minimum transaction threshold (while the TradFi equivalent rule has a €1k minimum transaction threshold). See also, e.g., Proposal for a Regulation of the European Parliament and of the Council on harmonised rules on fair access to and use of data (Data Act), European Commission, 23 February 2022 (available here), which proposes mandating that certain smart contracts be ‘reversible’ and/or contain a so-called ‘kill switch’ in the ‘Internet of Things’ (IOT) context. See also, e.g., “Decentralised” or “disintermediated” finance: what regulatory response?, April 2023, the Autorité de Contrôle Prudentiel et de Résolution (ACPR) (available here), which proposes, in effect, to ‘re-intermediate’ DeFi (amongst other things) by requiring DeFi projects to incorporate in the EU, and to classify DeFi front-ends as regulated intermediaries with data collection and monitoring obligations.}

_{4. The Swiss Financial Market Supervisory Authority (FINMA) published ‘ICO Guidelines’ in February 2018 (available here), which set out a relatively straightforward digital asset classification framework with the aim of providing clarity to market participants.}

_{5. The consultation indicates an approach inspired partly by MiCA — i.e. regulate centralised intermediaries based on their activities, but recognise that decentralised initiatives will require a different approach — and asks the industry to provide views and feedback to inform the UK Government’s approach. This degree of engagement with industry is extremely encouraging. The NEAR Foundation will be submitting a consultation response and we would encourage all industry stakeholders to do the same. The consultation paper is available here.}

_{6. The Law Commission’s consultation paper dealing with law reform proposals in the context of digital assets and personal property rights is available here, and the Law Commission’s consultation paper on DAOs can be found here.}

_{7. The Annual Report of the Council of Economic Advisors, 20 March 2023 (available here), p. 238. (“[C]rypto assets to date do not appear to offer investments with any fundamental value, nor do they act as an effective alternative to fiat money, improve financial inclusion, or make payments more efficient; instead, their innovation has been mostly about creating artificial scarcity in order to support crypto assets’ prices—and many of them have no fundamental value.”)}

_{8. See, e.g., Coin Centre’s excellent commentary on the Treasury DeFi risk assessment. Peter Van Valkenburgh, Treasury’s new DeFi risk assessment relies on ill-fitting frameworks and makes potentially unconstitutional recommendations, 7 April 2023 (available here).}

_{9. See, e.g., Operation Choke Point 2.0: The Federal Bank Regulators Come for Crypto, Cooper & Kirk LLP (available here).}

_{10. See, e.g., Elizabeth Warren is building an anti-crypto army. Some conservatives are on board, Zachary Warmbrodt, Politico, 14 February 2023 (available here).}

_{11. See, e.g., Due to SEC Inaction, Registration is Not a Viable Path for Crypto Projects, Rodrigo Seira, Justin Slaughter, Katie Biber, Paradigm (available here), which notes that despite SEC Chair Genlser repeatedly telling projects to ‘come in and register’, current US securities laws are incompatible with various features of Web3, making registration a practical impossibility for Web3 projects.}

_{12. Only this week, the SEC commenced an enforcement action against Bittrex, alleging, among other things that the Bittrex Platform “merged three functions that are typically separated in traditional securities markets—those of broker-dealers, exchanges, and clearing agencies—despite the fact that Bittrex has never registered with the SEC as a broker-dealer, national securities exchange, or clearing agency,” and arguing that five tokens, including Algorand and DASH, are securities. Securities and Exchange Commission v Bittrex Inc., (WD Wash) (Complaint), No 2:23 cv 00580. See also e.g., SEC Cryptocurrency Enforcement Update, Cornerstone Research 2022 (available here), according to which, in 2022 alone the SEC brought 30 crypto-related enforcement actions against Web3 projects. In spite of the numerous enforcement actions, the SEC has still not provided any material guidance to the industry to foster regulatory compliance. For a longer list of SEC crypto asset enforcement actions, please refer to the SEC’s summary available here.}

_{13. See, e.g. Tulip Trading Ltd v Van der Laan and Ors [2023] EWCA Civ 83, a case currently in the High Court of England & Wales (following the successful appeal of a High Court order for summary judgment which was overturned by the Court of Appeal) that considers whether certain core developers of various Bitcoin networks owe network users either a fiduciary duty and/or a tortious duty of care, and therefore is one of the most important cases to date in the context of developer duties/liability.}

_{14. See e.g., 31 U.S.C. § 5312(a)(2) (defining a financial institution as an entity encompassing various organizations and businesses, including but not limited to banks, credit unions, investment companies, broker-dealers, insurance companies, currency exchanges, and money transmitters, or deemed to engage in similar activities). Being classified as a ‘Financial Institution’ from a US law perspective subjects a person to (amongst other things) various onerous information collection and reporting duties, including a duty to: (1) identify and record personal information of any person who uses the relevant software/service; (2) develop anti-money laundering (AML) programmes that can block persons from using the relevant software/service where there are suspicions of illegal activity; and (3) file reports about users of the relevant software/service to the government.}

_{15. See, e.g., the Digital Asset Anti-Money Laundering Act proposed in December last year in the US by Senators Warren and Marshall (the “Warren/Marshall Act”), which would significantly erode the privacy of anyone using or supporting public blockchain infrastructure; See also, e.g., Coin Centre’s post here for further analysis. See further, e.g., the US Infrastructure Bill which contains two particularly problematic revisions to the US Tax Code: (1) widening the definition of ‘broker’ so that it captures non-custodial service providers and transfers involving self-hosted wallets; and (2) an adjustment to include digital assets within provision §6050I, with the result that businesses would need to collect information about counterparties whenever they receive digital assets worth more than $10,000 in value. See also footnote 3 re ACPR’s proposals to treat DeFi front-ends as intermediaries which would require information collection and reporting with respect to users.}

_{16. Zero-Knowledge (ZK) proofs are a cryptographic technique that enable one party to prove to another party that they have knowledge of a certain piece of information, without revealing the underlying information itself. ZK proofs can enhance privacy and efficiency in KYC and AML compliance, as they can enable individuals to prove that they have already completed KYC with a trusted provider without disclosing their personal data to other parties. ZK proofs can also allow individuals to prove that they are not on any sanctions or watch lists without revealing their identity or location. ZK proofs can reduce the risk of identity theft, data breaches, and fraud, as well as lower the operational costs and complexity of KYC and AML processes. See, e.g., zkKYC – A solution concept for KYC without knowing your customer, leveraging self-sovereign identity and zero-knowledge proofs, Pieter Pauels, Smart Contract Research Forum, July 2021 (available here).}

_{17. For example, both FTX and Alameda were (extremely) centralised digital asset intermediaries, performing functions and offering services to customers in a bundled manner, and it is critical to recognise that: (1) the market contagion following the collapse of FTX/Alameda was significantly amplified precisely because of the centralised, opaque nature of the institutions (as well as alleged criminal behaviour); and (2) the contagion across decentralised ecosystems, which are open, transparent, and disintermediated by design, was notably less severe precisely because of these unique Web3 features. In relation to (2) see, e.g., Report of the Cotnell SC Johnson College of Business, 2022 Cornell Roundtable Forum on Digital Assets, (available here).}

_{18. From a policy perspective, a key element of promoting autonomy involves the prevention of concentrations of power amongst a small number of centralised service providers/market actors that bundle various services together, something that has been a feature of the industry to date. See, e.g., Policy Paper Series (Part 1): Reframing How We Look at a Crypto Legislative Solution, Delphi Digital & LeXPunK, 17 March 2023 (available here)), which proposes a regulatory framework for public permissionless blockchain networks focussing on the regulation of systemically important vertically-integrated centralised actors.}

_{19. The NEAR Digital Collective (NDC) is a community grassroots initiative in the NEAR ecosystem that is working to support the ongoing development of sustainable governance infrastructure and the ecosystem’s continuing decentralisation. The NEAR Foundation supported the NDC’s recent launch of a decentralised treasury that represents an important step in the NEAR ecosystem’s ongoing decentralisation. See, e.g., NEAR Digital Collective Legal Framework, 21 March 2023 (available here).}

_{20. The Warren/Marshall Act would classify all providers of self-hosted wallets (and effectively anyone else who maintains public blockchain infrastructure) as ‘Financial Institutions’, subjecting them to a host of onerous obligations that are in practice impossible to comply with, and would significantly constrain the development and use of self-hosted products and services. See footnote 14 for more detail on the onerous obligations of ‘Financial Institutions’ from a US perspective. See also footnote 3 re ACPR’s proposals to treat DeFi font-ends as intermediaries which would require information collection and reporting with respect to users.}

_{21. The Blockchain Operating System (BOS) serves as a single platform that developers can build into and users can interact on, including by browsing and discovering Web3 products such as crypto exchanges, non-fungible token (NFT) galleries and social networks. The BOS will be compatible with all blockchains (currently supporting NEAR protocol and Ethereum Virtual Machine chains), with NEAR protocol acting as the common entry point. The BOS offers a decentralized and composable and front end framework for building, launching, and using dApps, while leveraging common user experience frameworks such as profiles, notifications, and searching.For more information on the BOS, see, e.g., Near Protocol Announces the Blockchain Operating System, NEAR Foundation, 2 March 2023 (available here); Near Protocol Starts ‘Blockchain Operating System’ to Focus on User Experience, Lyllah Ledesma, Coindesk, 2 March 2023 (available here).}

_{22. For example, Rule 3b-16(a)(2), Securities Exchange Act of 1934, 15 U.S.C. §§ 78a-78qq (2012). defines an exchange as an organization that (1) brings together the orders for securities of multiple buyers and sellers; and (2) uses established, non-discretionary methods under which such orders interact with each other, and the buyers and sellers entering such orders agree to the terms of the trade. The SEC’s proposed amendment to Rule 3b-16(a)(2) replaces the phrase “uses established, non-discretionary methods,” with “makes available established, non-discretionary methods,” which could inadvertently capture “developers working with all manners or protocols, front end systems, and smart contracts,” along with persons who “operate…’validators’ on the underlying blockchain where the AMM is stored”. See Reg-X-Proposal-An-Expempt-Offering-Framework-for-Token-Issuances, LeXpunK-Army, 7 March 2023 (available here).}

_{23. The “Token Safe Harbor Proposal 2.0” framework proposed by SEC Commissioner Hester Peirce includes measures applying to validators, including “information, detailing…the process for validating transactions.” See Token Safe Harbor Proposal 2.0, Commissioner, Hester M. Peirce, 13 April 2021 (available here); See also, e.g., Safe Harbor X, LeXpunK-Army, 7 March 2023 (available here) (proposing a rule that would provide an exemption for the distribution of autonomous cryptotokens to users and builders of autonomous software systems, based on the Token Safe Harbor Proposal 2.0, but with some modifications and additions, such as requiring semi-annual updates, an exit report, guidance on decentralization criteria, and clarifying the definition and scope of autonomous cryptotokens and autonomous cryptosystems). These safe harbor proposals would operate to effectively provide projects with conditioned routes to compliance, based on each project meeting various requirements (including disclosures, smart contract audits, and degree of decentralisation).}

_{24. In any principles-based regulatory system, regulators are generally afforded wide discretion to interpret and enforce regulations in line with desired policy outcomes. Where that discretion is misused or otherwise not exercised in good faith, those systems break down with the result that innovation is stifled and policy goals are undermined.}

_{25. See, e.g., Community Policy Initiative No. 1, Polygon Labs, 11 April 2023 (available here).}

_{26. See footnote 23 for more information on potential safe harbor implementations in the US.}

_{27. Model law proposals are draft laws or regulations that are proposed by regulators or other authorities to address specific issues or challenges in a given domain. Model law consultations and proposals can serve as guidance or inspiration for other jurisdictions that are considering similar reforms or initiatives. See, e.g., Model Law For Decentralized Autonomous Organizations, Constance Choi, Primavera De Filippi, Rick Dudley, Silke Not Elrifia, Coalition of Automated Legal Applications, 2021 (available here); Proposal for a Regulation on Markets in Crypto-assets, European Commission, September 2020 (available here) (proposing a regulation that would establish a comprehensive framework for crypto-assets in the European Union, which eventually led to MiCA); Future financial services regulatory regime for cryptoassets: Consultation and call for evidence, UK Treasury, February 2023 (available here) (proposing a new regulatory regime for cryptoassets in the UK).}

_{28. See, e.g.,Brief of LexpunK as Amicus Curiae Regarding Plainitff’s Motion for Alternative Service, LeXpunK, CFTC v. Ooki DAO et al., No. 3:22-cv-05416-WHO (N.D. Cal. Oct. 17, 2022) (available here) (challenging the CFTC’s motion for alternative service against token holders of Ooki DAO, a decentralized crypto platform, on the basis that DAOs are not legal entities or persons, but rather collections of smart contracts that run autonomously on a blockchain without any central authority or control). See also, e.g., Brief of Coinbase Global Inc. as Amicus Curiae in Support of Defendants’ Motion to Dismiss, Coinbase Global Inc., SEC v. Ripple Labs Inc. et al., No. 1:20-cv-10832-AT-SN (S.D.N.Y. Oct. 31, 2022) (available here) (arguing that the SEC failed to provide fair notice to market participants that XRP was considered a security); See also, e.g., Brief of Blockchain Association as Amicus Curiae in Support of Defendants’ Motion to Dismiss, Blockchain Association, SEC v. Wahi et al., No. 2:22-cv-02101-RSL (W.D. Wash. Feb. 13, 2023) (available here) (expressing support for the Defendants’ argument for dismissal and claiming that the SEC exceeded its authority by declaring certain tokens to be securities without prior findings and attempting to punish absent third parties who had no meaningful opportunity to defend themselves); See also, e.g.,Brief of Blockchain Association and DeFi Education Fund as Amici Curiae in Support of Plaintiffs’ Motion for Partial Summary Judgment, Blockchain Association & DeFi Education Fund, Van Loon v. Dep’t of the Treasury, No. 1:23-cv-00312-RP (W.D. Tex. April 12, 2023) (available here) (challenging OFAC’s sanctions on Tornado Cash, a privacy-protecting software protocol on Ethereum, as being based on a misunderstanding of blockchain technology and violating the Administrative Procedure Act).}

NEAR Foundation Announces Policy Principles

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