The Brooklyn Project and TruSet are leading an initiative to simplify crypto compliance along with support from crypto companies including AirSwap, Gnosis, and Kyber Network. The two-week initiative ends on January 24th and will evaluate making crypto-compliance easier and better. This is an open initiative that leverages the expertise and passion of open communities to source and validate important information related to regulatory compliance about token projects.
The community-supported compliance initiative is a recognition that almost everyone is struggling with the same problem — so much of the promise of Web 3.0 is the ability of projects to build on top of and interoperate with each other. But when it comes to incorporating other cryptoassets into a software product, projects want to take compliance seriously so they do not inadvertently trigger burdensome regulations like securities laws.
“Today, this is a difficult balancing act. It generally involves having to do a lot of burdensome and costly fact-gathering about specific projects. Everyone tries to gather the same facts as everyone else, but with no coordination or collaboration and lots of duplication of effort and expense.”
The goal of this initiative is to test making the process more collaborative, efficient, and reliable through community-validated data. The Brooklyn Project and initiative partners have identified some facts that can help projects conduct regulatory compliance analyses.
TruSet beta launched its crowdsourced and crowd-validated token reference data platform in December. The TruSet community publishes and collectively validates the accuracy of business-critical reference data on tokens and token projects, thus creating an accurate, trusted fact base on tokens in a machine-readable data set. TruSet’s community has already validated data for more than 100 token projects across a wide array of data points, but this special compliance-focused initiative is focused on the following three topics of interest:
- Are the token’s intrinsic characteristics a general payment or consumer utility token? Or does the token embeds characteristics of a traditional financial instrument e.g., debenture, shares, units of a collective investment scheme, etc?
- Is the token currently usable software, or is it still in development?
- Which of the large, reputable exchanges, and their jurisdiction of incorporation has vetted and listed the token?
By no means are these topics exhaustive or determinative of any particular legal issues, but they are informative and a great place to start testing community-supported compliance efforts.
The initiative includes extra incentives for the community: Gnosis has contributed a reward bounty of 20 ETH on top of the ETH rewards that TruSet is already offering its contributors, and TruSet has further increased the rewards for validating the three topics of interest to this initiative.
Here’s how TruSet distributes these rewards:
- Users earn TRU tokens for publishing accurate token data records to the TruSet platform;
- Users earn TRU tokens for correctly validating the accuracy of proposed token data records;
- At the end of each TruSet Beta competition, participants earn a share of the ETH rewards based on their successful publishing and validating activity, as measured by TRU tokens.