Q&A: Neha Dhir Kaul, Founder, blockchain legal consultancy Block Legal

17^th June 2026

Blockwind News recently spoke to Neha Dhir, a digital assets law expert on blockchain regulatioin and the challenges and promises in the global blockchain regulatory frameworks.

Navigating Classification Uncertainty and the Rise of App Store Law

Q: The regulatory landscape for blockchain and digital assets differs dramatically across jurisdictions. From your perspective, what are the biggest legal uncertainties currently facing blockchain startups, and how are founders adapting to this fragmented global environment?

A: The biggest uncertainty right now is classification. The same token or product can be treated completely differently across jurisdictions. I have seen founders spend months building a non-custodial product only to realize the concern was not the technology itself, but how the product was marketed, who controlled access or how custody was interpreted. That is why even major exchanges and wallets geo-fence products differently across the US, Europe, UAE and Asia.

But today, the challenge is not just regulation, it is platform regulation. App stores are effectively becoming gatekeepers because they themselves are answerable from a compliance and risk perspective. Many founders come to us after Apple or Google rejects a listing and often the issue sits in a grey area between technology and financial regulation. The product may not clearly fall within a licensing regime but the founder still has to satisfy the platform about what exactly the product does and does not do. I have been working extensively on these issues, what I call “App Store Law”because this is becoming a real operational challenge for Web3 businesses globally. We are even running webinars and founder sessions around it now.

What is changing positively is that founders are becoming more legally aware, having clearer disclosures, better structuring, careful token design and involving legal teams at the product stage instead of after a rejection or enforcement or an IP cease and desist notice.

Regulation vs. Innovation: Why Clarity Matters More Than Strictness

Q: Many blockchain entrepreneurs argue that regulation often struggles to keep pace with technological innovation. How can regulators strike a balance between protecting consumers and allowing innovation to flourish?

A: Regulation struggles in blockchain because technology evolves globally and in real time, while laws move jurisdiction by jurisdiction. By the time a framework is drafted, the product itself has often evolved three times.

But from my experience, most founders are not anti-regulation. They are anti-uncertainty. The real issue is not strict regulation, it is unclear regulation. We regularly see founders willing to comply, but unsure whether their product is being viewed as infrastructure, financial services, custody payments, or something else entirely.

I think regulators strike the right balance when they regulate based on risk and activity, not just labels. A non-custodial wallet should not automatically be treated the same way as a centralized exchange simply because both interact with digital assets. That nuance matters.

The jurisdictions moving fastest like UAE are the ones engaging directly with industry participants and understanding how products actually function before reacting to headlines. Because ultimately, over-regulation pushes innovation underground or offshore, while zero regulation damages trust. The balance is somewhere in between with clear rules, proportionate compliance and open dialogue with builders.

At the same time, the industry also has to mature. Decentralization cannot become a blanket excuse to avoid accountability. If you are handling user assets, influencing investments, or operating at scale, some level of responsibility is inevitable. The future will belong to projects that can innovate and build trust at the same time.

Accountability Will Define the Next Phase of Blockchain Adoption

Q3: Stablecoins, tokenized assets, and decentralized finance are increasingly moving into mainstream finance. What legal and compliance challenges do you think will define the next phase of blockchain adoption?

A: The next phase of blockchain adoption will be defined by one word i.e. accountability. Stablecoins, tokenized assets and DeFi are now moving closer to mainstream finance, which means regulators are no longer looking at them as experimental technology. They are looking at them as financial systems.

With stablecoins, the conversation is already shifting toward reserve backing, redemption rights and who carries risk if something fails. Tokenized assets raise another practical issue — tokenizing something technically is easy, but legally enforcing ownership rights across jurisdictions is far more complicated.

DeFi is where things get most interesting. The core regulatory challenge is that traditional finance laws assume there is always a clear intermediary. In decentralized systems, regulators are now trying to identify who actually controls or influences the ecosystem — developers, governance participants, treasury signers, front-end operators. We are already seeing that shift globally.

I also think the next big compliance challenge is not just regulation itself, but infrastructure compliance. Today, a project may be legally sound and still struggle with banking access, payment rails, or app store approvals because platforms and institutions are becoming more risk-sensitive around digital assets. That operational layer is becoming a major part of blockchain law now.

The Jurisdictions Creating the Most Favorable Environments for Blockchain Startups

Q: We are seeing countries compete to become global hubs for digital asset innovation. Which jurisdictions do you think are currently creating the most favorable legal environments for blockchain startups, and why?

A: The jurisdictions doing well right now are the ones giving founders clarity early instead of forcing them to operate in ambiguity. In Web3, predictability is more valuable than permissiveness.

Dubai has moved very aggressively in this space. Creating a dedicated regulator like VARA sent a strong signal that the jurisdiction wants to understand and accommodate digital asset businesses instead of treating them as an extension of traditional finance.

Singapore still remains highly respected, particularly for serious institutional and infrastructure projects, because founders know the regulatory expectations are sophisticated and relatively consistent. Europe is also becoming increasingly important after MiCA because, for the first time, businesses can think about scaling across the EU with a more unified framework.

Then you have jurisdictions like Cayman and BVI, which continue to dominate from a structuring perspective because the global venture ecosystem is already deeply familiar with those entities.

What is interesting is that founders today are no longer choosing jurisdictions only for incorporation convenience or tax efficiency. They are evaluating banking support, licensing pathways, regulator accessibility, app store positioning, and long-term survivability. The market has become far more mature.

DAOs, Smart Contracts, and the Limits of Decentralization as a Legal Defense

Q: Smart contracts and decentralized autonomous organizations (DAOs) raise fascinating questions about liability, governance, and accountability. Do existing legal frameworks adequately address these emerging structures, or do we need entirely new legal approaches?

A: Existing legal frameworks are trying to adapt, but they are still catching up to how decentralized systems actually function in practice. The biggest challenge with DAOs is that decentralization often exists on a spectrum, not as an absolute.

In many projects, there are still identifiable developers, multisig signers, treasury controllers, governance leaders or core contributors influencing decisions. So when disputes arise, regulators and courts naturally start asking, who is actually responsible here?

We are already seeing globally that regulators are becoming less willing to accept “the protocol” or “the DAO” as a complete answer when real financial activity or user harm is involved. The Tornado Cash discussions and increasing scrutiny around DAO governance structures are examples of that shift.

At the same time, I do not think we need an entirely separate legal system for DAOs. What we need are more adaptive frameworks that recognize decentralized governance while still preserving accountability where necessary. That is why many projects today still use legal wrappers like foundations, LLCs, offshore entities — because eventually every decentralized ecosystem still has to interact with banks, courts, employees, investors, or app stores in the real world.

The future will probably be hybrid structures: legally recognized entities combined with decentralized operational governance. That balance is where the industry seems to be moving.

Five-Year Outlook: Blockchain as Infrastructure and the Risks the Industry Underestimates

Q: Looking ahead five years, what opportunities in blockchain law and regulation are you most excited about, and what risks do you think the industry still underestimates?

A: What excites me most is that blockchain is finally moving beyond purely speculative conversations and becoming real infrastructure. Over the next five years, I think we will see blockchain integrate quietly into industries like payments, digital identity, IP ownership, creator economies, AI verification, and global licensing systems — often without users even realizing blockchain is running underneath.

Personally, I am very interested in the intersection of AI and blockchain. As AI-generated content scales, questions around authenticity, ownership, provenance, and licensing are going to become massive. I just did a mock trial on AI last week with a live jury vote wherein we recorded statements from AI engineers who exhibited the training process and even cross examined GPT 4 asking questions about its training datasets. Blockchain can play a meaningful role there, especially in verification and rights management. Also, along with Pivot, a global web 3 accelerator, we have built a platform worldip.ai wherein blockchain time stamping is used to generate proof of copyright.

However, I think the industry still underestimates governance risk. A lot of projects are technologically advanced but operationally immature. They handle significant user funds and communities without strong governance systems, internal accountability, dispute mechanisms, or crisis planning.

The other underestimated risk is reputational and regulatory fatigue. The industry sometimes assumes innovation alone is enough, but long-term adoption depends on trust. The projects that survive the next five years will not just be technically innovative — they will be the ones that can withstand scrutiny from regulators, platforms, institutions, and users alike.