Paradigm Policy Anchors

Good crypto policy…

Supports crypto’s core value proposition of openness and neutrality.

• Crypto’s fundamental value proposition is its universal accessibility and censorship resistance.
• Crypto policy should recognize and enable these features, including by allowing for the validation process and operation of protocols on public blockchains to remain neutral and unencumbered.

Does not preclude crypto applications that have not yet been invented.

• Crypto is an ever-evolving space where most of the “killer” applications haven't yet been invented.
• To avoid stifling future innovation, we should always ask how a given policy will impact crypto beyond its advertised or intended target and avoid policies that are prematurely specific.

Focuses on prosecuting illegal activities and mitigating systemic risk, not restricting general purpose technology.

• Actors responsible for fraud, scams, and other illegal activities should be punished following due process of law.
• However, regulation should not prohibit general-purpose technology that has many lawful uses.
• Instead of relying on registration or other ex ante tools, regulation should rely on ex post enforcement of fraudulent activity.

Recognizes there are different layers of the crypto stack — and different segments within each layer.

• It is imperative that crypto’s base layer remains credibly neutral, even if some crypto apps and services (particularly centralized, custodial ones) have more onerous regulatory obligations.
• Within a given layer, one-size-fits-all approaches are often a nonstarter. For example, how policies treat wallets should differ depending on whether the wallets are self-hosted or custodial.

Focuses on the specific activities in question.

• Crypto policy should not be over-indexed to one specific use case or type of service.

Carefully consider regulatory tradeoffs.

• Pulling crypto into the regulatory perimeter could increase mainstream adoption by providing regulatory/legal clarity for builders and entrepreneurs.
• However, regulation can also hamper innovation by creating additional costs for businesses and by arbitrarily limiting the scope of “approved” activities.
• The timing and substance of regulation should be weighed against its impact on crypto adoption, and ensure it does not hinder crypto’s core value proposition.

Allows entrants to compete with incumbents on a level playing field.

• Policies should be fair and should not be overly accommodating to incumbent companies (crypto or “traditional”) at the expense of new entrants.
• Competition and evolution are virtues, and we should be wary of anything that further entrenches the status quo.

Does not disadvantage any crypto ecosystem relative to others.

• Whether Bitcoin, Ethereum, or Solana, crypto innovation is not limited to any one ecosystem, and any regulatory framework must ensure maximum developer creative freedom across networks.

Liability and responsibility

Developing neutral technology should not be a crime, even if neutral technology is later used for illicit purposes.

• Developers of general-purpose technology should not be liable for specific illegal uses or implementations of that technology by third parties.

Crypto provides for trustless structures that can obviate some traditional notions of liability and responsibility, but create others.

• Traditional notions of liability such as fiduciary duties that arise in the context of agency and custodial relationships are obviated by decentralized systems.
• However, crypto can create other areas of risk and liability, including smart contract risk, governance / collusion attacks, etc.

Crypto policy should respect privacy rights by default.

• Privacy is a fundamental human right that should be protected by crypto policy and technology.
• Privacy protections can coexist with national security goals.

How Paradigm Policy operates

We focus solely on what is best for crypto; we do not compromise, pick favorites or have a partisan agenda.

• We are guided by our dedication to doing what is best for crypto: we support policies that fully align with our principles and do not compromise.
• We believe we can be more impactful if we use our influence sparingly on only the most important policy battles.
• We believe that anyone can be a champion of crypto, regardless of political party or affiliation.

We help achieve better policy outcomes by leveraging our deep crypto nativity.

• Good crypto policy will require a technical understanding of the technology, a firm grasp of the sociocultural dynamics of the crypto ecosystem, and deep integration in the crypto community.

We don’t support legislation that represents any compromise of first principles.

• We only support crypto legislation in the event that doing so is widely viewed, internally and externally, as necessary to maintain or accelerate open crypto’s progress. We will not, however, compromise on crypto’s core ethos in doing this. Legislation that compromises open crypto we will oppose.

We are committed to collaboration and community engagement.

• There are numerous stakeholders in crypto that have a variety of worldviews and perspectives. We will do our best to incorporate the community’s views in trying to understand what will best support crypto in the long term.
• In engaging with other stakeholders, we will assume good faith as a default and always punch up.