Geofencing technology has become an essential tool in the regulatory compliance strategies of many cryptocurrency companies.
As regulatory scrutiny increases in the United States, crypto firms are using geofencing as a last resort to avoid fines, legal battles, or potential shutdowns.
Jake Chervinsky, chief legal officer at the Variant Fund, points out that geofencing is rising in popularity among crypto founders when “all else fails.”
The Variant Fund, a venture capital firm focused on investing in an internet that “turns users into owners,” recently released a comprehensive report titled “A Practical Guide to Geofencing.”
The report was authored by Daniel Barabander and Chervinsky, and it highlights the importance of geofencing technology in navigating regulatory challenges.
Chervinsky noted that crypto companies are “completely abandoning the U.S. market” to avoid restrictive regulatory scrutiny. Agencies like the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and the Department of Justice (DOJ) have increased their enforcement actions against cryptocurrency platforms, leaving many crypto businesses no choice but to turn to geofencing.
Geofencing Technology in Crypto
Geofencing technology uses GPS, RFID, Wi-Fi, or cellular data to create virtual boundaries around a specific geographic area.
