US lawyers are suggesting that their DeFi clients consider geofencing out of US users to mitigate legal risks associated with the regulatory landscape surrounding cryptocurrencies and DeFi platforms in the United States. Due to the complexity and ever-changing nature of laws related to digital assets, US regulators have been increasing their scrutiny and enforcement efforts, leading to varying interpretations among different federal and state agencies.
To geofence out of US users, DeFi clients would create a virtual perimeter around a specific geographic location using GPS or other technologies. This would trigger an action or notification when a mobile device or other digital asset enters or exits the designated area, potentially helping clients avoid falling under US jurisdiction and regulatory oversight.
However, it is crucial to note that geofencing alone may not be sufficient to completely avoid legal and regulatory obligations. Transactions involving US residents or US-based entities, regardless of their location or the use of geofencing technology, are subject to the regulatory framework enforced by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). These agencies are taking a more active role in enforcing regulations and cracking down on fraudulent activities within the cryptocurrency industry.
It is essential for DeFi clients to seek legal advice before making any decisions related to the use of cryptocurrencies and DeFi platforms. The regulatory landscape surrounding digital assets is constantly evolving, and compliance requirements can vary depending on the jurisdiction and nature of the transaction.
