Legal & Regulatory
Legal & Regulatory Outlook
Navigating the Regulatory Landscape
Crypto and automated trading exist in evolving regulatory environments. Ascension is committed to operating responsibly — which means understanding where we stand today, what changes as we grow, and what research needs to happen before real money is at play.
This section outlines our current understanding. It is not legal advice. Regulations vary by jurisdiction and change over time. We will engage qualified legal counsel as the project matures.
Current Status: Phase 1
During Phase 1, Ascension operates as a community and educational project.
No tokens are being sold
No real capital is being traded by the system
No fees are being collected
Members observe paper trading and participate in community discussion
At this stage, there are no securities being offered and no regulated trading activity occurring. We're building, testing, and proving the system works.
Phase 2-3: Trading Club Considerations
As Ascension introduces bot rentals and token-based access, regulatory classification becomes relevant.
Based on current SEC guidance, Ascension is likely to be classified as a trading club once members begin paying for bot access and trading with real capital. Trading clubs are legitimate structures, but they come with registration and compliance requirements in the United States.
What this means:
Ascension may need to register as an investment club or similar entity
Membership limits and reporting requirements may apply
We will research and implement appropriate registration before Phase 3 goes live
What this doesn't mean:
We are not offering investment contracts or promising returns
We are not pooling member funds into a single managed account
Members trade their own capital on their own exchange accounts
The key distinction: Ascension provides tools and infrastructure. Members make their own trading decisions (or configure bots to execute their chosen strategies). Your capital stays yours.
Future Considerations: Dividends & Treasury
If the DAO ever chooses to distribute Community Wallet funds as dividends to token holders, additional regulatory implications arise.
Dividend distributions to token holders could trigger securities classification under the Howey Test. This would require:
Securities registration or exemption filings
Compliance with securities laws in relevant jurisdictions
Potentially limiting participation to accredited investors or specific geographies
Our approach:
Dividend distribution is a possible future use of the Community Wallet, not a guarantee
Any such decision would be made by the DAO with full understanding of regulatory requirements
We will not implement dividend features until proper legal structure is in place
Corporate & Tax Considerations
Operating a token-based economy with revenue and treasury management creates corporate and tax obligations.
Areas requiring research and planning:
Entity structure (LLC, DAO LLC, foundation, etc.)
Jurisdiction selection for incorporation
Tax treatment of rental revenue and treasury holdings
Reporting requirements for token issuance
International considerations for a global community
Our commitment: These questions will be researched and addressed during Phases 1-2, while paper trading is still active and no real money flows through the system. We will establish appropriate legal structure before launching the live economy.
Research Roadmap
The following legal and regulatory topics are priorities for early-phase research:
Trading club registration requirements
Phase 1-2
Research
Entity structure and jurisdiction
Phase 1-2
Research
Token classification (Sovereign, Cipher)
Phase 2
Research
Tax obligations (US and international)
Phase 2
Research
Dividend/securities implications
Phase 3+
Future
Data privacy and user information
Phase 2
Research
We will engage legal counsel specializing in crypto, securities, and DAO structures as these questions mature.
The Principle
Ascension is building something meant to last. That means doing the legal work — not cutting corners, not hoping regulators don't notice, not launching first and asking questions later.
The early phases exist partly because we need time to get this right. Paper trading isn't just for testing strategies. It's for building the legal and operational foundation that lets the real economy launch responsibly.
We'd rather move slowly and build something sustainable than move fast and build something that gets shut down.
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