As reported by Odaily, the Chief Legal Officer of Variant Fund recently shared on X that with the ongoing intensification of U.S. regulatory oversight in the cryptocurrency industry, numerous crypto founders are considering geofencing as a potential compliance strategy. Geofencing entails establishing virtual barriers around products to restrict access for users in certain geographic areas. This approach could act as a backup compliance measure when companies struggle to adhere to regulations, such as implementing necessary disclosures and Know Your Customer (KYC) protocols.

However, Chervinsky cautioned that resorting to geofencing represents a drastic response to regulatory uncertainty, essentially signaling a withdrawal from the U.S. market. He emphasized that while it might be necessary in some situations, geofencing is both an extreme and expensive tactic to achieve compliance with American laws.