An Exclusive Q&A with Grant R Gulovsen, Esq., Crypto and Technology Startup Attorney

In the rapidly evolving world of cryptocurrency and blockchain technology, legal clarity often lags behind innovation. For founders, developers, and stakeholders in the crypto space, understanding the regulatory landscape isn't just advisable—it's essential for survival.

Grant R Gulovsen, Esq., founder of Gulovsen Law Office, has been at the forefront of crypto legal practice since 2017, representing technology startups and crypto projects through some of the industry's most turbulent regulatory periods. With his unique background combining military service, philosophy, computer science, and over a decade of litigation experience, Grant brings both technical understanding and practical legal expertise to complex cryptocurrency matters.

A sought-after voice in crypto legal circles, Grant has been quoted in major publications including CoinDesk and has provided commentary on landmark cases like SEC v. Ripple Labs. His practice focuses on helping crypto projects navigate the intricate web of securities law, regulatory compliance, and the often-misunderstood intersection of utility tokens and SEC oversight.

In this candid Q&A, Grant addresses three critical questions facing today's crypto ecosystem: the securities law pitfalls that can doom token launches, the regulatory implications of AI-driven trading, and the complex legal landscape surrounding Ethereum's proof-of-stake transition and liquid staking derivatives. His responses cut through industry hype to deliver the hard truths that crypto projects need to hear—even when those truths challenge popular assumptions about "utility tokens" and regulatory safe harbors.

1. "What are the biggest mistakes crypto projects make when announcing their token launch, and how can founders avoid accidentally turning their utility token into a security in the eyes of the SEC?"

One thing I often encounter is the mistaken belief that just because a token has “utility,” it isn’t necessary to worry about U.S. securities laws. “Utility token” is a term that has legal significance in some jurisdictions like Switzerland, but it isn’t recognized by the SEC (at least not yet) and although the fact that a token has “utility” is one factor that the SEC considers (see, e.g., the discussion about “[w]hether holders are … able to use the digital asset for its intended functionality, such as to acquire goods and services on or through the network or platform” at https://www.sec.gov/about/divisions-offices/division-corporation-finance/framework-investment-contract-analysis-digital-assets), I don’t believe it is a very important one.

What is much more important in my opinion is how the project team promotes and markets their project. In case after case brought by the SEC between at least 2017 and as recently as 2024, the SEC relied on the fact that the project team created an expectation of profits by focusing on how their token was a good investment and would go up in value over time, as well as promoting the experience of the team behind the project, thereby creating a reliance on the team to make the project successful. I covered many of these cases and provided examples of the biggest mistakes projects made when promoting their projects in a blog post entitled “How NOT to Promote Your Cryptocurrency Project or Token” which you can find at https://gulovsen.io/how-not-to-promote-your-crypto-project/.

2. "As AI agents start autonomously trading crypto and interacting with DeFi protocols, what new legal liability issues are emerging, and how should crypto projects handle AI-driven transactions from a regulatory perspective?"

I don’t see much difference between “AI agents” doing autonomous trading and interacting with DeFi protocols and crypto trading bots which have been doing the exact same thing for years, at least not from any sort of legal or regulatory perspective. Sorry for such a short answer which allows me to not have to talk about AI, but I really don’t see any difference between them.

3. "With Ethereum's move to proof-of-stake and the rise of liquid staking tokens, how should crypto projects and individual users think about the securities law implications of staking rewards and staking derivatives?"

The SEC’s Division of Corporation Finance provided some useful guidance when they published their “Statement on Certain Protocol Staking Activities” available at https://www.sec.gov/newsroom/speeches-statements/statement-certain-protocol-staking-activities-052925. A very over-simplified version of that statement is as follows: “People who: (a) stake crypto assets on Proof of Stake Networks like Ethereum; (b) provide third-party services (like node operators, validators, custodians, delegates and nominators) on Proof of Stake Networks like Ethereum; and (c) provide ancillary services (like slashing coverage, early unbonding and who aggregate crypto assets to meet staking minimums) on Proof of Stake Networks like Ethereum are most likely not violating the federal securities laws when they do those things.”

Although the statement is fairly fact specific (only referring to “Protocol Staking Activities” as defined in that statement), the biggest takeaway for me is that the SEC under the current Administration is trying very hard to signal that they are going to be much more accommodating to crypto assets than the SEC under previous Administrations.

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