USA Law and Practice Contributed by: Gregory Strong, Sarah W. Chen, Brian Farber and Amil Sumaiya Malik, Cahill Gordon & Reindel LLP
4. Cross-Border Services 4.1 Marketing
sion regimes, or AML and sanctions frameworks, depending on the facts and circumstances. The use of decentralised technology does not, in itself, remove an activity from the scope of applicable laws. In practice, this means that activities conducted through DeFi infrastructure – such as trading, lend- ing or custody – may trigger regulation under US securities laws, commodities laws, money transmis- sion regimes, or AML and sanctions frameworks, depending on the facts and circumstances. The use of decentralised technology does not, in itself, remove an activity from the scope of applicable laws. Simi- larly, traditional firms may utilise DeFi infrastructure, provided they maintain compliance with applicable custody, AML/KYC, sanctions, and conduct require- ments. In fact, on 13 April 2026, SEC staff issued guid- ance stating that certain non-custodial DeFi front-end interfaces may operate without broker-dealer registra- tion where specified conditions are met, reflecting an effort to provide clearer parameters around permis- sible DeFi activity. Regulators have also increasingly focused on the role of identifiable participants in DeFi ecosystems, includ- ing developers, governance participants, and service providers, particularly where those parties exercise control or derive economic benefit from the proto- col. In practice, this results in a “function-over-form” approach, where DeFi activity is assessed based on the underlying economic activity rather than the tech- nological structure through which it is conducted. 5.2 DeFi Structures Consistent with the function-over-form approach described in 5.1 Ability to Use DeFi , DeFi structures are assessed under existing regimes based on their functional characteristics. In practice, setting up a DeFi structure in the United States typically involves forming one or more legal entities (eg, a Delaware corporation or LLC, or a Wyo- ming DAO LLC) and assessing the regulatory implica- tions of the protocol’s activities. Depending on the facts, this may include analysis under US securi- ties laws (eg, whether governance tokens constitute “investment contracts”), commodities and derivatives regulation under the CEA, state-level money trans-
There are no specific marketing requirements in the USA that apply to digital assets or activities in digi- tal assets. The SEC prohibits touting of digital assets that it deems securities by paid promoters unless the compensation arrangements are publicly disclosed. Similarly, state securities regulators impose similar requirements. In addition, the Federal Trade Com- mission has put out guidance regarding the use of endorsements and testimonials in advertising and the disclosures required regarding material connections between endorsers and advertisers. 4.2 White Labelling There is no formal “white-labelling” regime in the United States that permits an unlicensed firm to offer regulated services solely by relying on the licence of another entity. In practice, white-label solutions are commonly used in areas such as payments, custody and trading infra- structure, where a licensed entity (eg, a bank, broker- dealer, or money transmitter) provides the regulated service, and a third-party firm offers the front-end interface or customer-facing experience. However, US regulators focus on the substance of the arrange- ment rather than its form. If the third party is effec- tively performing regulated functions – such as cus- tody, execution or money transmission – it may be required to obtain its own licences or registrations. Licensed entities entering into white-label arrange- ments also remain responsible for compliance with applicable regulatory requirements, including AML, customer identification (KYC), consumer protection, and operational risk management.
5. Decentralised Finance 5.1 Ability to Use DeFi
DeFi activity is not prohibited as such in the United States. However, there is no bespoke regulatory framework for decentralised protocols. Activities con- ducted through DeFi infrastructure – such as trading, lending or custody – may trigger regulation under US securities laws, commodities laws, money transmis-
729 CHAMBERS.COM
Powered by FlippingBook