From Sand to Stone: Two GCs on the New Legal Foundation Shaping Crypto’s Future

The transition of the cryptocurrency industry from a largely unregulated frontier (‘sand’) to an increasingly defined and codified legal structure (‘stone’) marks a pivotal moment. The era of regulatory ambiguity is rapidly closing, replaced by comprehensive frameworks intended to facilitate institutional adoption while protecting consumers.

We spoke with two prominent General Counsels (GCs) navigating this shift: Avery Stone, GC of a global regulated exchange, and Marcus Chen, GC of a major venture capital firm specializing in blockchain technology.

**GC 1: Avery Stone on Compliance and Institutionalization**

Stone argues that the new legal foundation is not a burden, but a competitive advantage. “The bedrock of clear regulation—driven by global standards like FATF and regional legislation like MiCA in Europe—is essential for institutional capital,” Stone explains. “We have moved past basic regulatory arbitrage. The focus is now on operationalizing stringent Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols, and ensuring robust consumer protection mechanisms. The shift from sand to stone means the bad actors are driven out, leaving a market where trust can be engineered through compliance.” Stone views the ongoing effort in the U.S. toward clarifying the securities versus commodities status of key assets as crucial for unlocking mainstream financial integration.

**GC 2: Marcus Chen on Innovation and Decentralization**

Chen offers a perspective focused on the challenges faced by decentralized finance (DeFi) and emerging protocols. While welcoming clarity, Chen highlights the risks associated with applying traditional, centralized regulatory models to inherently non-custodial technology. “The stone needs to be flexible enough to accommodate innovation,” Chen notes. “The major hurdle now is jurisdictional fragmentation. While Europe moves forward with MiCA, different approaches in the US and Asia create friction for protocols seeking global scale. We need principles-based regulation that respects the fundamental architecture of decentralization, rather than mandates centralization via the back door.” Chen emphasizes that future regulations must provide clear boundaries for stablecoin issuers and address governance tokens without stifling the development of decentralized autonomous organizations (DAOs).

**Conclusion: A Solidified Future**

Both GCs agree that the hardening of the regulatory landscape is inevitable and ultimately beneficial. Although the path forward requires significant resources for compliance and continued lobbying for sensible rules, the end result is a de-risked asset class capable of supporting global finance. The new legal foundation demands greater rigor, but promises sustainability and legitimacy for the future of crypto.

Source: From Sand to Stone: Two GCs on the New Legal Foundation Shaping Crypto’s Future