New legislation has recently been proposed that will attempt to clarify digital asset regulations in the U.S. If passed, the Cryptocurrency Act would be one of many laws currently being introduced across the globe to regulate the industry. While waiting to assess the impact of these potentially wide-reaching laws, there are other fundamental legal and financial issues that need to be addressed by anyone setting up a new crypto-based business. If you have gained experience working as a cryptocurrency trader, you may now feel you are ready to start up your company. Taking some time to build a good legal and financial base for your business will give it a better start, ensuring it is protected from the outset.
Insurance for the Unexpected
Depending on where you are setting up business, certain types of insurance are legally required. However, wherever you are based, cutting costs on insurance is not advisable. Taking out insurance against interruption, damage and accidents means you can protect your assets and avoid financial consequences which, in the early days of a small business, can be highly injurious. If you have taken on employees, it’s vital that you take responsibility for their safety and wellbeing as well as protecting yourself and your finances. Taking out the relevant business insurance will not only give you peace of mind, but could also save you money in the long run.
Legal Protection for Long-Term Benefits
Typically, day-to-day expenses and overheads of a cryptocurrency business are minimal. Still, this doesn’t mean you should try to cut spending in other areas, too. Even though it may add to your start up costs, finding a lawyer who specializes in securities and ICOs could bring long-term benefits to your company. If you are sharing ownership, have your attorney draw up documentation that sets out the responsibilities and rights of each of the owners as this could avoid animosity in case of any future disputes. Even without legal advice, at the very least, file the business as an LLC, as this can prevent you from being personally liable in the event of someone suing your company.
Building Trust to Increase Value
Having put in place legal structures, focus should then turn to advertising your business and increasing your crytocurrency’s value through marketing. In a competitive market your cryptocurrency will need a unique and effective marketing strategy. As well as building a presence on social media, build up relationships within online cryptocurrency communities. Here, you can network with other traders and businesses, start to discuss the aims of your new company, and then benefit from the subsequent referrals and recommendations.
There are many aspects to consider when setting up a new company, however, ensuring it is established lawfully and insured against the unexpected is vital for long-term prosperity. By focusing on financial and legal protection for your business from the start, it will be in a much stronger position to grow and succeed.
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