Introduction

From the U.S. SEC to the EU’s MiCA framework, regulatory pressure on Web3 is rising. For founders and operators, that means a new layer of complexity — and potential liability. Legal clarity may still be evolving, but that doesn’t mean you should wait to act.

Insurance can act as a safety net and a strategic advantage, especially when raising capital or entering new markets.

Common Regulatory Risks in Web3

Token classification issues (security vs utility)

• AML/KYC non-compliance in exchanges or DeFi platforms

• Consumer protection violations (misleading claims, fraud)

• Unlicensed financial activity under local laws

• Data protection breaches under GDPR or similar frameworks

Even good-faith projects can be blindsided by changing rules or lawsuits.

How Fraction Brokers Mitigates These Risks

We offer tailored regulatory risk insurance that includes:

• Legal representation and court cost coverage

• Investigation response costs (e.g. subpoenas, audits)

• Fines or penalties up to a defined limit

• Crisis PR and communications support

• D&O coverage for founders and execs

This allows founders to operate with confidence — even in legally gray zones.

Competitive Advantages of Being Insured

Faster due diligence with investors

• Easier onboarding by banks or custodians

• Protection from catastrophic legal costs

• Stronger position in negotiations or disputes

Insurance Isn’t Just Defensive — It’s Strategic

In an ecosystem moving toward compliance, being proactive helps you stand out. Fraction Brokers works with Web3 startups of all sizes to protect what matters — so you can build boldly.