BlockyDevs Industry Insights with Meg Królikowska

Our upcoming interview features a conversation with Meg Królikowska. Our guest shares her journey from first investing in cryptocurrencies in 2018 to leading legal strategies at reputable organizations such as Currency.com and KSOX. This interview is packed with expert advice on navigating the complex legal landscape of blockchain technology, making it a must-read for entrepreneurs, lawyers and anyone interested in the future of this innovative industry.

Wiktoria Podlodowska: Hello Meg, thank you again for accepting the invitation to this interview. Let's get started.Could you share some insights from your personal journey in the field of blockchain and web3 law? What inspired you to specialize in this area?

Meg Królikowska: Thank You Wiktoria for your invitation! I've been hooked on blockchain and crypto since I bought my first coins in 2018. This initial spark led my friends and me to launch DeepTechLabs, a Web3 project. We organized some events at the Warsaw Financial Center — check them out on YouTube - Event 1 ‍ ,Event 2

What drove me to specialize in blockchain and Web3 law? The game-changing potential of this tech. Blockchain isn't just about crypto,; it's about revolutionizing industries with transparency, security, and decentralization. From smart contracts to DeFi, the legal landscape is evolving, and I wanted to be at the forefront, helping shape the future.

Plus, the blockchain community is incredible — full of innovators and visionaries. Collaborating with these minds through DeepTechLabs has been inspiring and rewarding. I always strive to be the least knowledgeable person in the room because being surrounded by brilliant people pushes me to grow and improve. The global impact of blockchain, from financial inclusion to supply chain transparency, motivates me every day.

Wiktoria: Can you tell us more about your current roles at Currency.com and KSOX, and how they relate to blockchain and web3 law?

Meg: At Currency.com, I hold the position of Senior Lawyer. My role is pivotal—I strategize and implement legal frameworks that safeguard our company's interests while ensuring compliance in a highly regulated industry. Being a crypto-exchange, Currency.com operates at the cutting edge of technology and law, making my responsibilities both challenging and engaging. I'm also gearing up to specialize in creating offshore companies to support our rapid growth, but that's a story for another time.

If you're asking about my role at KSOX, I was responsible for ensuring the project's legal compliance and spearheading fundraising efforts, particularly targeting venture capitalists. This role was incredibly valuable in sharpening my skills in legal strategy and market engagement. It enhanced my ability to navigate complex legal landscapes and develop effective market strategies, making it an enriching professional journey. This experience has been pivotal in my career development and has prepared me for future challenges in similar capacities.

Currently, KSOX is experiencing a significant resurgence. We have recently established a collaboration with Starknet (although it's still under wraps for now) and are eagerly awaiting developments in this area. Undoubtedly, the project will undergo a major pivot, but it continues to be an intellectually stimulating challenge that allows me to grow continuously. So, keep an eye on KSOX because I hope it will become widely used next year, in one form or another.

Wiktoria: Starting a blockchain or web3-based startup can be challenging, especially from a legal perspective. What are some essential legal considerations that entrepreneurs should keep in mind when launching such ventures?

Meg: I would go with those 5: 1. regulatory compliance;  2. securities laws; 3. IP protection;  4. data privacy and security; 5. jurisdiction strategy; 

First and foremost is regulatory compliance. Blockchain and cryptocurrency regulations can vary significantly from one country to another, and ensuring compliance is essential to avoid potential legal issues. This often involves determining whether your project needs to be registered with financial authorities or adhere to specific financial regulations. For instance, in Estonia, you don’t have to pay the 9% Corporate Income Tax (CIT) until you distribute dividends to shareholders. In Poland, on the other hand, you can avoid paying this 9% CIT only by generating costs. In Gibraltar, obtaining a crypto license is relatively straightforward, while in the British Virgin Islands (BVI), CIT is 0%, and there is no minimum share capital requirement. Crafting a jurisdiction strategy that aligns with your business goals and choosing the right location can provide significant financial benefits and operational flexibility.

Another critical aspect is securities laws. If your startup involves issuing tokens or any form of digital assets, you must determine whether these qualify as securities. This classification can have significant implications for how you structure your offering and the disclosures you must provide to potential investors.

Intellectual property (IP) protection is also vital. Ensuring that your innovative technology, brand, and content are protected from infringement is key to maintaining your competitive edge. This might involve filing patents, trademarks, or copyrights depending on the nature of your technology and business model.

Additionally, data privacy and security are paramount, especially given the decentralized nature of blockchain technology. Ensuring compliance with data protection regulations, such as GDPR in Europe, is essential. Implementing robust security measures to protect user data and prevent breaches is also critical for maintaining trust and credibility.

Finally, having clear and comprehensive terms of service and privacy policies is essential. I know that this sounds highly boring, but especially in the EU market, you need to remember that consumers are doubly protected and have wide possibilities to complain, putting your business at risk. The situation with Swiss franc loans in Poland illustrates this very clearly. Even the Court of Justice of the European Union has ruled that “consumer rights must be protected”, unfortunately for us - no matter what.

Think of these five areas as the fingers of a fist. When correctly applied, they come together to form a powerful and well-trained fist, capable of propelling your business forward. However, if neglected or mishandled, they can quickly turn into a punch in the face of your business, leading to significant setbacks ;)

Wiktoria: As someone involved in the blockchain and crypto community, how do you engage with startups and entrepreneurs to provide legal support and guidance?

Meg:I was part of Demium Venture Capital in Poland and continue to collaborate with some of the projects and people from this amazing startup hub. Additionally, I operate on LinkedIn, where I connect with professionals in the industry. You can also find me on UpWork, where you can easily book a consultancy session with me.

Wiktoria: Can you explain, what are the key differences or challenges in handling legal matters for traditional startups versus those in the blockchain and web3 space?

Meg: I would say that traditional startups operate within well-established regulatory frameworks. The legal requirements are generally clear, and there are many precedents and guidelines to follow. Regulatory bodies are familiar with traditional business models, which simplifies compliance, so there is minimal risk that one day you are taxed at a different rate than before (although, within Polish tax authorities, this kind of risk still exists ;) ).

However, Blockchain and Web3 startups operate in a rapidly evolving and often uncertain regulatory environment. Regulations vary significantly between jurisdictions, and there is often a lack of clear guidance. This creates challenges in ensuring compliance and navigating legal ambiguities, requiring a lot of vigilance and staying up-to-date, as the circumstances can change more often than you might think.

Wiktoria: Startups often face budget constraints. Are there cost-effective legal strategies that early-stage blockchain companies can implement to ensure compliance and protection?

Meg: Absolutely. I would revisit the analogy of the five-part first I mentioned earlier. One key area to focus on is jurisdiction, especially when it comes to VASP (Virtual Asset Service Provider) registration and taxation. It’s crucial to analyze the pros and cons to optimize your budget effectively.

For instance, while low taxation might seem attractive, it’s important to consider the timeline for obtaining a VASP license. If you choose a jurisdiction with low taxes but face a year-long wait for VASP registration, your business could experience significant delays. This highlights the importance of not only evaluating tax benefits but also the certainty of local laws and the timeframe for obtaining necessary financial licenses. Both factors are equally important for ensuring smooth and timely business operations. While tax considerations are vital, the certainty of the regulatory environment and the efficiency of obtaining necessary licenses are equally critical for cost-effective compliance and protection for early-stage blockchain companies.

Wiktoria: What trends do you see in blockchain and web3 law, particularly in terms of evolving regulations or emerging legal challenges?

Meg: As a society, we are moving towards more regulations on crypto. Regulations that were unthinkable a few years ago are now becoming a reality (e.g., MiCA, DORA), indicating a trend towards stricter crypto regulations. Previously, there was no VASP requirement in Georgia, but as of July 1, 2023, VASP is now mandated. This is just one example showing how strongly we are moving towards regulation in the crypto world, and I don't think we can expect any leniency in this regard.

It's no surprise that in industries where money appears, the state soon follows, seeking to claim a portion of the profits. There is no chance that they will allow this to go unchecked.

Wiktoria: Looking ahead, what do you envision for the future of blockchain and web3 law, and how do you see your role evolving in this dynamic space?

Meg: Well, there is no doubt that I will continue providing consultancy for Web3 and crypto companies. I plan to integrate this with my new website as a Polish attorney (I passed the bar exam this year), making it one of my key areas of work in the legal field. I have also considered starting a podcast, but I currently doubt its effectiveness and relevance within the community.

I believe it will be very effective and important for the industry to bridge the gap between the Web3 and Web2 worlds, enabling more people to be actively involved in building it. This integration could foster greater understanding and participation, driving the growth and development of the Web3 ecosystem.

Wiktoria: And these were all the questions I had for you although I could have had many more. Thank you for the conversation.

Meg: Thank you for having me!

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