Grant SFI for Legal and Regulatory Compliance Program and Strategy

Saffron Finance - Legal and Regulatory Compliance Program and Strategy
20 SFI per month from the Treasury, from May – December 2021

Regulatory compliance is critical to the long term success of Saffron Protocol. Compliance failures not only raises risk related to regulation but will inhibit scaling Saffron Protocol and user adoption, particularly if Saffron Protocol is subject to the accreditation and user identification requirements under U.S. laws and regulations.

Saffron Protocol should retain s capital markets executive and corporate lawyer with extensive experience leading early and mid-stage companies through venture financing and initial listings. The individual must be deep in the DeFi industry, and be a strong advocate and value-added advisor to Saffron. The individual must have superb command, knowledge, and advocacy skill with respect to the multiple layers of US financial market regulations.


1. Legal Strategy and Risk Assessment.

  • Assess the applicability of the U.S. Securities laws, Commodity Trading laws, anti-money laundering regulations under the rules and regulations of Financial Crimes Enforcement Network.

  • Assess whether Saffron Protocol meets to criteria of a “broker” or “dealer” under Sections 3(a)(4) or (5) of the Securities Exchange Act of 1934 (the “Exchange Act”), an “exchange” as defined by Section 3(a)(1) of the Exchange Act, a “trading facility” or “designated contract market” as defined by Section 5 of the Commodity Exchange Act, of a “money services business” under 31 CFR 1010.100(t), the FinCEN implementing regulations of the Bank Secrecy Act, or of an investment adviser under the Investment Advisers Act of 1940.

  • Assess whether SFI is a security under Section 1 of the Securities Act of 1933 and the rules and regulations thereunder; or a “commodity interest” under the Commodity Exchange Act.

  • Review and examine technical documentation and repositories (e.g., Github, Discord) and product documentation prepared by the core developer team of Saffron Finance.
    • Provide legal strategy, written memoranda and guidance of the aforementioned

**2. Product Counsel & Business Development Support (e.g., Exchange Listing, Marketing)

  • Serve as product counsel for product proposal and development, considering the regulatory implications of feature enhancements, including registration and licensure requirements, data handling obligations, user-facing disclosures, and decentralization of control of Saffron Protocol.

  • Prepare materials necessary to support exchange listings, succeed in due diligence. Partnership and other agreements for integrations. Engage with exchanges on listing standards and provided any opinions required for listing.

  • Review all marketing arrangements and marketing collateral related to the protocol and the core developer team.

  • Advise in CDO and tranched digital assets product design, including single and multi-tranche products, tenor rolls, grade rating, and other product structure and market structure considerations.

3. Core Compliance, Regulatory Engagements and Government Relations.

  • Capital markets executive and corporate lawyer with extensive experience leading early and mid-stage companies through venture financing and initial listings. Deep experience leading new business initiatives for technology companies and financial institutions.

  • Represent Saffron Protocol in regulatory engagement and enquiries from the SEC, CFTC, FinCEN and state regulators.

  • Develop policies and procedures, including for the core developer team regarding, token policy (trading prohibitions), coding controls and development, information security, etc.


  1. Former SEC, with CFTC experience, derivatives and structured products experience minimum 10 years of experience. Licensed to practice in NY and other key US jurisdictions.
  2. Capital markets executive with deep expertise in the law and also crypto and DeFi advisory practice with 5+ years of FinTech and startup experience.
  3. 25%+ FTE utilization

A few questions for clarification:

To be clear, the proposal is asking for 20 SFI X 8 for a total of 160.

Does this proposal ask the community to budget 160 SFI for the purpose of hiring, yet to be determined, single individual to carry out the items in the section, SCOPE?

And does the community determine who this individual is? How will that work with reviewing qualifications and “hiring” them?

Would this individual receive the whole 160 as compensation or is it meant to be for the individual’s budget to compensate others for various services as directed by the individual?

Thanks for the questions.

The goal of the proposal is to obtain community approval for the max budget and qualifications of the individual who will be directly responsible for the Saffron legal strategy, both in design and execution.

On costing, this is a max budget scoped for the work. Ideally, it would be done under budget but with legal, you either pay now, or you pay later in the midst of a legal controversy which could have been avoided!

The budget would be drawn from to achieve the scope. To control costs, it will be one individual, with minimum delegation (except where necessary if dealing with non-US matters). It is expected there will be one individual lawyer retained to perform the work, and that lawyer must have deep expertise in multiple fields.

As you rightly flag, it will not be practical for the community to interview each vendor. The proposal is approve the qualifications (domain experience, depth/years of expertise, things like SEC experience is a must) and budget.

Payment is monthly, not lump sum, and requires meeting deliverables, which we can add to each month as the communities’ needs change.

60 per quarter would make up approximately 20-25% of the quarterly treasury spending. Seems low for legal, considering how new DeFi is and how likely it is to be controversial especially in these times, but we can ramp it up as our needs increase. Personally I think this is a must and will support a consensus check on a proposal here. Would like to get @rayraspberry 's thoughts on this because I’ve seen him mention this elsewhere (Discord iirc).

I agree that this will be a necessity, and if Psykeeper thinks its on the lower side then we should take that into consideration as well - maybe we could include a stipulation that this proposal may or may not need to be rewritten as the year continues. We could start off with the requested 60 SFI per quarter and then if legal anticipates that this will need to be increased we can call it to another governance vote to increase.

We should consider increasing the budget to 35 SFI per month for the reason being that we want to front load the work as much as possible to de-risk. We are better off ramping legal and compliance quickly and then going into a steady state. That is still reasonable given the amount of work and the going rate for lawyers.

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I’d support bumping to 35 SFI.

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Proposal has successfully moved to Temperature Check. Closing topic - any concerns or suggestions to the proposal should be migrated to the Temperature Check topic.