The digital asset regulatory landscape is undergoing dramatic transformation following the 2025 administration change. Investment managers now face unprecedented opportunities and challenges in structuring compliant Web3 portfolios. From the explosive growth of Decentralized Physical Infrastructure Networks (DePIN) to the surge of public companies adopting digital asset treasury strategies, the intersection of blockchain innovation and regulatory compliance has become increasingly critical.

In this comprehensive Q&A, Corey Casbarro, General Counsel and Chief Compliance Officer at Borderless Capital, provides authoritative insights from the frontlines of Web3 investment management. He leads legal and compliance operations for an SEC-registered investment firm managing over $400 million across 250+ blockchain investments since 2018. Casbarro brings a rare combination of traditional finance expertise and deep crypto-native experience to navigate today's complex regulatory environment.

His career trajectory spans prestigious law firms Kirkland & Ellis and Willkie Farr & Gallagher, senior compliance roles at BlockTower Capital and Kraken, and real estate investment oversight at Ares Capital. This positions him uniquely to address the convergence of traditional investment frameworks with emerging Web3 structures. At Borderless Capital, he oversees compliance for a global portfolio spanning blockchain infrastructure, business applications, and nascent cryptographic protocols, including the firm's pioneering DePIN fund focused on decentralized physical infrastructure networks.

The timing of this discussion is particularly significant. Recent SEC developments are reshaping how regulators view tokens that incentivize real-world infrastructure deployment. The dismissal of enforcement action against Nova Labs (Helium) and the September 29, 2025 no-action letter issued to Double Zero provide important new guideposts. Meanwhile, the explosive growth of digital asset treasury companies (DATs) throughout 2025 represents a fundamental shift in corporate finance strategy, with public companies across sectors allocating meaningful reserves to Bitcoin, Ethereum, and other Layer 1 protocols.

Key Topics Covered:

• Multi-jurisdictional compliance strategies for global Web3 investment portfolios
• Legal frameworks for DePIN projects post-Nova Labs and Double Zero precedents
• Compliance considerations for investing in digital asset treasury companies
• Risk-based investment frameworks for evaluating novel token mechanisms

1. Regulatory Navigation for Web3 Investment Firms. Given Borderless Capital’s role as a leading Web3 investment management firm with over 250+ investments across blockchain infrastructure, business applications, and nascent cryptographic protocols since 2018, how do you navigate the evolving regulatory landscape when structuring investments in early-stage Web3 projects? What lessons have you learned from your previous experience at firms like Kirkland & Ellis about harmonizing legal and compliance strategies when operating in markets with vastly different crypto regulatory approaches, and how does this inform your current role overseeing the legal and compliance department for a global Web3 investment manager?

The regulatory landscape for Web3 investment management has transformed significantly, particularly following the change in administration.  At Borderless Capital, we've structured over 250 investments since 2018, giving us extensive insight into navigating this evolving terrain.

My approach to regulatory navigation draws from lessons across traditional finance and Web3. At Kirkland & Ellis and later at BlockTower Capital and Kraken, I learned that successful compliance strategies anticipate regulatory evolution rather than merely react to it. This forward-looking posture is especially critical in Web3, where regulatory frameworks often lag technological innovation. When structuring investments in early-stage Web3 projects, we operate with three core principles:

• Jurisdictional Analysis: We conduct thorough analysis for each investment, recognizing that crypto regulatory approaches vary dramatically across markets. We design compliance architectures flexible enough to accommodate divergent approaches rather than assuming regulatory convergence.
• Substance Over Form: We prioritize examining the economic realities of token structures, governance mechanisms, and value flows rather than relying on marketing terminology. Regulators globally have demonstrated increasing sophistication in looking past labels.
• Risk-Based Investment Frameworks: We implement tiered due diligence processes that scale with regulatory complexity. Projects with novel token mechanisms or uncertain regulatory classification receive enhanced scrutiny, while investments in established protocols with regulatory clarity can move more efficiently through our approval process.

At Borderless, our global footprint requires harmonizing compliance across multiple jurisdictions simultaneously. We’ve implemented a tiered framework that establishes baseline global standards while maintaining jurisdiction-specific protocols for markets with unique requirements. The most valuable lesson from traditional finance is that comprehensive compliance infrastructure isn’t a cost center—it’s a competitive advantage that positions firms to capture opportunities others cannot pursue.

2. DePIN and Physical Infrastructure Compliance Challenges. Borderless launched a DePIN (Decentralized Physical Infrastructure Networks) fund, representing your third fund in this space. How do you approach the unique compliance challenges that arise when blockchain protocols incentivize real-world physical infrastructure deployment? What legal considerations are most critical when evaluating projects that blur the lines between traditional infrastructure investment and tokenized network participation rewards?

Borderless’ approach to DePIN compliance remains focused on mitigating risks at the intersection of blockchain incentives and physical infrastructure.  

The legal and compliance considerations for DePIN projects have evolved significantly, particularly following recent SEC developments. The SEC’s dismissal of its enforcement action against Nova Labs (Helium) in early 2024 and the subsequent no-action letter issued to Double Zero on September 29, 2025 provide important guideposts for how we evaluate these networks. These outcomes suggest the SEC recognizes meaningful distinctions between tokens that primarily facilitate decentralized infrastructure coordination versus traditional investment contracts.

When assessing DePIN projects, we focus on several critical legal considerations:

• Functional Utility vs. Investment Intent. We examine whether tokens serve genuine operational purposes within the network—such as compensating node operators for providing bandwidth, storage, or compute resources—rather than functioning primarily as passive investment vehicles. The Double Zero no-action letter specifically addressed tokens used to incentivize real-world wireless infrastructure deployment, reinforcing that consumption-oriented tokens with demonstrated utility may fall outside securities regulation.
• Decentralization and Network Maturity. Projects with sufficiently decentralized networks, where no single entity controls infrastructure deployment or token economics, present lower regulatory risk. We evaluate governance structures, token distribution, and whether the network can operate independently of the founding team.
• Secondary Market Considerations. Even where tokens have utility, we assess how they trade and whether marketing emphasizes speculative appreciation over functional use. Regulatory risk increases when projects emphasize token price performance rather than network adoption metrics.

The Nova Labs and Double Zero precedents don't provide blanket immunity for DePIN tokens, but they do validate our thesis that thoughtfully structured networks with genuine decentralization and utility can navigate the regulatory framework

3. Legal and Compliance Issues Given the Rise of Digital Asset Treasury Companies.  Borderless has publicly participated in a number of the digital asset treasury company deals (“DATs”) that have been on the rise in 2025.  Why do you think so many public companies are deploying this strategy and what sorts of legal and compliance risks do you have to handle when investing in a DAT.

The surge in digital asset treasury companies (DATs) throughout 2025 represents one of the most significant developments in corporate finance strategy. Public companies across sectors have begun allocating meaningful treasury reserves to digital assets, initially focused on Bitcoin and Ethereum, with more recent strategies expanding to include SOL, AVAX, and other Layer 1 protocols.

Several factors drive this shift: corporations increasingly view certain digital assets as legitimate treasury reserve assets; institutional infrastructure has matured considerably; and shareholders have grown more sophisticated in their understanding of digital assets as an asset class.

From a legal and compliance perspective, investing in DATs presents distinct challenges:

• Securities Law Considerations: We evaluate whether digital assets held constitute securities under applicable frameworks. While Bitcoin and Ethereum generally aren't treated as securities by U.S. regulators, companies with diverse portfolios require deeper analysis, including compliance considerations under the Securities Act of 1933 and potential implications under the Investment Company Act of 1940, particularly when digital asset holdings become a substantial portion of company assets.
• Corporate Governance and Disclosure: We examine whether companies have appropriate board oversight, internal controls, and transparency around custody arrangements, valuation methodologies, and risk parameters.
• Operational Integration and Treasury Strategy: We assess how well companies integrate digital asset holdings into their broader treasury and capital allocation strategies. This includes evaluating whether digital asset positions serve clear strategic objectives, how companies balance liquidity needs against long-term holdings, and whether treasury management has appropriate board-level oversight and risk controls.
• Management Team and Execution Capability: As the DAT strategy becomes increasingly saturated, we prioritize management teams with proven execution capabilities. The ability to effectively implement and manage digital asset treasury operations—including navigating custody relationships, optimizing treasury deployment, and adapting to market dynamics—has become a critical differentiator as more companies adopt this approach.

When Borderless participates in DAT investments, we look for companies with sophisticated governance frameworks, conservative custody approaches, and transparent disclosure practices. Companies treating digital asset treasury management as a strategic initiative rather than opportunistic speculation typically present more compelling investment opportunities.

Want to contribute to our Q&A series? If you're a legal expert in the web3/AI space and would like to share your expertise by joining our Q&A series, please reach out to hi@databirdjournal.com