Despite Gary Gensler’s departure, the regulatory approach of enforcement in the US crypto industry continues impacting the sector. Decentralized physical infrastructure networks (DePIN) are particularly vulnerable.
DePIN Regulation: The Need for Clarity
DePIN projects, including decentralized cloud services and telecom networks, need clear understanding of their regulatory obligations. The absence of clear rules and categories forces projects to operate at their own risk, which can lead to legal challenges.
Why DePIN Stands Out?
What sets DePIN projects apart is their physical aspect. They combine blockchain technology with real-world devices, creating unique challenges for regulators, which are not yet addressed in the current regulatory frameworks.
Three Key Areas for Clarity
1. Securities versus utility: Clear regulations regarding DePIN token issuance and use are needed for investor protection and stable growth. 2. Data privacy: DePIN platforms process real-world data, and without clear laws, this can negatively impact consumer trust. 3. Global infrastructure deployment: Overlapping legal requirements from different countries complicate the international deployment of DePIN solutions.
To successfully develop decentralized physical infrastructure, clear and transparent rules must be established. This will allow DePIN projects to focus on innovation instead of legal battles, benefiting both the market participants and regulators.
