Bitcoin is evolving rapidly, and so are the regulations. Regulators are still far behind in the race to understand and govern the use of Bitcoin and Bitcoin related businesses, however their wrath can and will have a profound effect on those who are not ready for it.
Most entrepreneurs in the Bitcoin community are individuals with a strong background in programming and web development. They have the knowledge and skills at their disposal to create revolutionary new services and systems, but lack the legal-know-how to protect themselves and maintain compliance with regulators.
Others, simply live under the false pretense that the laws do not apply to them or just don’t care.
A prime example of why maintaining compliance with regulators is so important cannot be seen clearer than the case of my friend Charlie Shrem, former CEO of BitInstant and founding member of the Bitcoin Foundation.
Charlie, a young and wildly successful Bitcoin Entreprenuer is facing possible jail time and is poised to give up 950,000 USD in a plea bargain with the US Government for which he plead guilty to aiding and abetting an unlicensed money-transmitting business on 4th Sept via Coindesk.
Charlie’s story proves that regulators taking Bitcoin seriously and are cracking down on Bitcoin businesses.
So what can you do to manage regulatory risk? My suggestion is to contact a professional consulting company, well known in the Bitcoin community. Personally, I have worked with several companies who offer services to protect Bitcoin businesses and protect them in this rapidly changing regulatory environment. Of all the companies I’ve worked with, my friends over at Aspen Assurance have proven to be reliable, knowledgeable and effective. They have worked with some of the biggest names in the industry, but also don’t shy away from smaller start-ups who are serious about staying ahead of the game.
All-in-all, managing your risk is a tough and swiftly evolving mission, but one that should be taken seriously by all those involved in Bitcoin related businesses.