In general, the application of blockchain technology is in an early stage of development in Norway. Although several sectors have put blockchain technology to use, such as finance, food and supply chain, the technology has yet to find widespread adoption in the Norwegian market.

The market for crypto-assets is expected to grow in the future, especially among younger demographics. Related services, such as exchanges and wallets, are drawing the attention of investors, and there are several crypto-exchanges registered in Norway. It is quite common in Norway to hold crypto-assets, and professional investors are increasingly seeking exposure to crypto-assets. There are a couple of providers of crypto-asset funds, and fundraising is being seen through the tokenisation of projects, evidencing a certain environment for investing in crypto-assets in Norway. Moreover, financial institutions have started to facilitate payments in crypto-assets, although the scope of this is currently limited.

In the wake of the bankruptcy of cryptocurrency exchange FTX, Norwegian exchanges reported a notable surge in deposits from foreign exchanges. This could indicate that Norwegians who had previously stored their funds on foreign exchanges now prefer to transfer their funds to Norwegian exchanges for greater reassurance.

Several sectors have put blockchain technology to use, such as the supply chain, food and waste management sectors. However, blockchain technology is most prevalent in the Norwegian financial services sector.

Payment Services

Mastercard and Visa both enable crypto-based payment services, where users may utilise their crypto-assets to make payments in local fiat currency. However, it should be mentioned that the role of crypto-based payment services remains limited.

In this regard, the Norwegian Central Bank's ongoing research project on a central bank digital currency also deserves a mention. The research is in its fourth phase and seeks to uncover the viability of e-money as a central bank currency for the public.

Supply Chain and Sustainability

Equinor is utilising blockchain technology to streamline the process of handling claims with subcontractors in their supply chains. This initiative aims to improve market access and enhance transparency regarding carbon emissions. Similarly, the Norwegian Seafood Trust AS has partnered with Atea and IBM to implement blockchain technology in the seafood sector, with the objective of enhancing traceability and ensuring transparency throughout the seafood supply chain. In addition, the Norwegian Food Research Institute (Nofima) has established a blockchain network to promote the adoption of blockchain technology in the food industry.

Norwegian company Empower has utilised blockchain technology to address plastic recycling. Its innovative approach involves tracking and monetising plastic bottles, aiming to incentivise recycling efforts and contribute to a more sustainable environment; it is also currently working on facilitating the trading and reuse of plastic waste. Empower's initiatives have garnered international attention, and the company operates globally.

Unisot is a Norwegian supply chain company that provides blockchain-based solutions to track products throughout the entire supply chain, from raw material producers to logistics, production and distribution, and ultimately reaching the end consumer. Its goal is to prevent waste and unethical practices along the supply chain.

Other Uses

DLTx is a prominent filecoin company listed on the Norwegian Stock Exchange. Filecoin is a decentralised file storage network.

Several emerging start-ups are exploring the utilisation of blockchain technology as the foundation for their business models. One such example is Mintix, which aims to tackle challenges in the conventional ticketing industry, including fraud, inflated secondary market prices and poor user experiences. Mintix's platform, built on non-fungible tokens (NFTs), hopes to offer event organisers, artists and attendees a secure and transparent ticketing process.

These examples highlight the growing interest in leveraging blockchain technology to enhance trust and transparency in various sectors.

Norway's ecosystem for decentralised finance (DeFi) is not yet fully established. While the market shows promise, DeFi remains unregulated, leading to concerns about consumer and investor protection raised by the Norwegian Financial Supervisory Authority (NFSA). Without appropriate regulations to address these concerns, the legal uncertainty surrounding the DeFi sector may impede its development into a sustainable ecosystem.

As regards government initiatives, the Norwegian Tax Authorities and public business register Brønnøysundregisterne have recently established a virtual office in Decentraland. This collaboration aims to engage younger audiences and provide them with information about the tax implications associated with DeFi.

The overall environment for NFTs in Norway is still at an early stage, but there is a growing interest in the NFT space. Most Norwegian NFT holders view their NFT balance as an investment, but they also use NFTs for displaying and collecting art, as well as participating in Web3 games. Norway is home to 'verse gallery, a physical gallery displaying NFT art founded by Sophia Adampour, a leading entrepreneur and speaker on Metaverse and Web3.

Currently, Norway does not have specific laws or regulations for cryptocurrency and blockchain technologies in general. There are existing sector-specific laws that may apply to activities and services related to these technologies. For instance, virtual currency exchange services and wallets, payment services, investment services and tokens are primarily regulated by the Securities Trading Act, the Anti-Money Laundering Act (AML Act), the Financial Contracts Act and the Financial Undertakings Act.

Norwegian law is technology neutral, so there is no legal obstacle to the application of blockchain technology. A regulated finance entity applying blockchain technology must comply with the requirements set out in the Information Communication and Technology Regulation, including conducting risk assessments and taking measures to mitigate risks and uphold contingency and emergency plans for its IT operations. It must also comply with the requirements set out by the EU General Data Protection Regulation (GDPR). Providers of exchange service platforms and custodian wallet providers for virtual currencies must comply with the requirements of the AML Act and the Anti-Money Laundering Regulations, which implement the Fifth Anti-Money Laundering Directive. These services can only operate after being registered with the NFSA.

Although Norway is not a member of the European Union (EU), it is part of the European Economic Area (EEA) through the EEA Agreement, which connects Norway to the EU's internal market and guides Norway's European policies. The regulation of cryptocurrencies in the EU and other European countries will therefore likely have a significant impact from a Norwegian perspective.

For instance, the EU Regulation on Markets in Crypto-assets (MiCA) will likely be adopted in some form in Norway. This proposal focuses on entities that issue unbacked crypto-assets and stablecoins, as well as the platforms and digital wallets used to store crypto-assets. The goal of this regulation is to oversee instruments that are currently not covered by other EU regulations like MiFID II or the e-Money Directive. MiCA broadens the definition of virtual currency service providers beyond the current standards set by the AML Regulations in Norway and the EU, as well as the Financial Action Task Force (FATF) guidelines. The implementation of MiCA is still in the early days in Norway.

Please see 3.2 Categorisation regarding the demarcation between crypto-assets, e-money and financial instruments.

Activities related to blockchain and crypto-assets may also be subject to general Norwegian law. Most significantly, the private law aspects of crypto services are regulated by the Financial Contracts Act; the Information Communication and Technology Regulation and the GDPR, together with other consumer protection regulations, will also apply.

Norway has implemented the Fifth Anti-Money Laundering Directive in the Norwegian AML Act. Norway revised the regulation to the AML Act to reflect the new recommendations of the FATF to include several new legal entities within the scope of the Directive. Consequently, the Act now applies to undertakings providing crypto wallet and exchange services, as described in 2.1 Regulatory Overview and 4.3 KYC/AML/Sanctions.

Moreover, the NFSA has followed up the joint warning from the European Supervisory Authorities on the risk that crypto-assets pose for consumers.

The regulatory body most relevant to businesses or individuals using blockchain in Norway is the NFSA, which regulates entities that offer financial services and products in the retail and wholesale markets. The NFSA oversees all regulated sectors in Norway, including ICT and anti-money laundering compliance. It deals with application processes and provides regulatory guidance to supervised entities, in addition to conducting inspections and thematic supervision. If the NFSA discovers a breach of the finance legislation, it will instruct the relevant entity to change its practices accordingly. Depending on the type of breach and the circumstances, the NFSA can issue an administrative order or a fine. It can also report criminal charges to the police, but it is up to the prosecuting authority to take further action.

The Norwegian Data Protection Authority (NDPA) is responsible for enforcing the applicable laws and regulations in relation to the processing of personal data. The NDPA has investigative and corrective powers, including the power to undertake on-site audits and to issue public warnings, reprimands and orders to carry out specific remedy activities. Under Article 83 of the GDPR, the NDPA may issue administrative fines of the higher of up to EUR20 million or, in the case of an undertaking, up to 4% of its total worldwide turnover in the preceding year, depending on the nature of the infringement. Fines can be imposed in combination with other sanctions. Breach of the GDPR is not subject to criminal sanctions in Norway.

All tax-related issues lie under the jurisdiction of the Norwegian Tax Administration (Skatteetaten).

These regulatory bodies have not significantly changed their approach following the notable bankruptcies in the blockchain sector in 2022.

Sector-specific groups such as the Norwegian Crowdfunding Association and the Oslo Blockchain Cluster are relevant for entities that apply blockchain technology. There is also the Bergen-based non-profit fintech cluster NCE Finance Innovation, which is focused on enabling infrastructure and facilitating collaboration. ICT Norway and Finance Norway are also working to improve the overall framework for the finance sector, including the fintech regulatory sandbox, as well as creating networking opportunities for industry players through events and other forums.

There have not been any judicial decisions of note providing guidance on the interpretation of the legal regime applicable to the use of blockchain in Norway. There have been a couple of cases relating to banks' termination of account holders trading in cryptocurrencies under the AML Act.

The NFSA has yet to provide any enforcement actions that would help market participants better understand the regulatory perimeter on utilising blockchain technology. However, on several occasions it has issued public warnings on the risk associated with investing in cryptocurrencies, highlighting the volatile nature of such investments and the risk of losing any investments entirely.

The NFSA has initiated a regulatory sandbox for fintech start-ups, which allows companies to test new, innovative products, technologies or services under the supervision of the NFSA, and helps participants determine which, if any, licences or permits are required for them to conduct their business. The aim is to foster innovation and help new market players navigate the regulatory regime. Although the sandbox is not geared directly towards blockchain projects, it remains open for these as long as the blockchain activity is associated with regulated financial services under the responsibility of the NFSA.

The Norwegian tax regime has not been updated to specifically consider the use of blockchain or cryptocurrencies. However, the Norwegian Tax Administration has provided guidance on several issues related to reporting taxes on virtual assets.

Virtual assets fall under the general Norwegian tax regulations for assets, according to which capital gains are subject to taxation, and losses can be deducted. The profit or loss is calculated based on the difference between the initial value and the final value of the virtual currency. In the case of mining, the income is recognised and taxed at the market value at the time of extraction.

The most significant tax uncertainty has been in relation to DeFi and the use of liquidity pools for exchanges between cryptocurrencies. This issue has recently been resolved by the Tax Administration, whereby it has stated that a deposit into a liquidity pool in exchange for a liquidity pool token or similar is regarded as a realisation and is therefore taxable.

The Norwegian Central Bank has established a working group exploring whether it should issue a Central Bank Digital Currency (CBDC). In 2021, the working group published a report outlining the required attributes for a CBDC, how technical solutions can support these attributes, and the potential consequences for banks if a CBDC is introduced. The Norwegian Central Bank has decided to proceed with the project, with experimental testing of technical solutions.

The Norwegian Register of Business Enterprises has teamed with Norwegian company Symfoni to build a solution for digital share ledgers, and has explored the possibility of enabling the sale and purchase of shares using CBDC. This project is still under development.

Norway currently lacks any specific regulations or guidance regarding the ownership of digital assets, making it an unregulated area.

Norway has not yet introduced any regulations or guidelines regarding the categorisation of crypto-assets, but it is likely that they will adopt the categorisation outlined in the MiCA regulation when it is incorporated into Norwegian law. Determining whether virtual assets should be classified as financial instruments or electronic money is crucial to determine the applicability of sector-specific legislation.

Classification of Virtual Assets as Financial Instruments

In the existing securities trading regulatory framework, which aligns with the EU MiFID rules, there is a possibility that security tokens could be considered as financial instruments, hereunder if they fall within the definition of transferable securities or a derivative. Regulatory bodies have not provided any guidance on how to classify tokens. As a result, the classification process would need to be conducted on a case-by-case basis, considering the unique characteristics of the specific token in question. This evaluation aims to determine whether the token falls within the scope of any of the instruments listed under the financial instrument definition in the Norwegian Securities Trading Act.

Classification of Virtual Assets as Electronic Money

E-money serves as a digital alternative to physical cash, allowing users to make electronic payments using funds stored on a card, phone or online platform. The classification of virtual or digital currencies as e-money depends on their specific characteristics. E-money represents a claim on the issuer which is issued on the receipt of funds for the purpose of making payment transaction. To determine if a token falls within the regulatory framework for e-money, an assessment of the associated rights and obligations is necessary. This assessment is conducted on a case-by-case basis to determine if the token meets the criteria for classification as e-money.

Digital assets (stablecoins) whose value is intended to be pegged to a second asset are not directly regulated under Norwegian law. There is therefore no distinction between stablecoins backed by deposits of fiat currency and algorithmic stablecoins.

As of today, the crucial aspect is determining the classification of stablecoins under Norwegian law – specifically whether they should be considered as financial instruments or e-money, as explained in 3.2 Categorisation. To evaluate stablecoins, it is necessary to apply the criteria outlined in the Financial Undertakings Act or the Securities Trading Act.

Under Norwegian law, there is no explicit prohibition on making payments with cryptocurrency. However, it is important to note that Norwegian currency is the only officially recognised legal tender in Norway, which means that businesses and individuals have the right to reject cryptocurrency as a form of payment.

In response to these challenges, Visa and Mastercard have developed cards that allow users to make payments using cryptocurrency. These cards facilitate the conversion of cryptocurrency into fiat currency at the time of payment, enabling greater acceptance and usability of cryptocurrencies for transactions.

Norway has not introduced specific regulation related to NFTs or activities associated with such tokens. The marketing or sale of NFTs could therefore be subject to general rules on consumer protection, marketing, the protection of intellectual property rights and so on. The extent to which NFTs are covered by such legislation would have to be assessed on a case-by-case basis.

The creation of an NFT (minting) does not trigger taxation. However, the realisation (sale) of any cryptocurrency used as payment during the creation process is subject to taxation. In addition, if the NFT is later sold, the costs associated with its creation will be factored into the input value. All income generated from NFTs is generally subject to taxation, and individuals are required to report their income or gains in their tax returns. If expenses have been incurred in relation to the income from NFTs, there may be the possibility to claim deductions for such expenses.

From a tax perspective, the sale of an NFT is considered a realisation event, making it necessary to calculate the resulting gains or losses from the transaction.

The most widely used cryptocurrency exchanges operating in Norway include Norwegian-based exchanges Firi and NBX, and international exchanges like Binance, Kraken and Coinbase. Firi and NBX are both custodial exchanges. See 1.3 Decentralised Finance Environment and 1.4 Non-fungible Tokens for more information.

There are currently no decentralised exchanges operating in Norway.

There are several exchanges and platforms operating in Norway that allow users to exchange fiat currency for cryptocurrencies. These include Norwegian-based exchanges Firi and NBX, as well as Bitgate Services and NGU, in addition to international exchanges like Binance, Kraken and Coinbase.

To the extent that an entity holds customers’ funds as part of the payment chain, the NFSA will most likely consider that it is conducting a payment service, which is subject to the licensing requirement, unless exempt. In this context, funds refer to bank notes and coins, scriptural money or e-money. Crypto-assets would not generally constitute “funds” in this sense, although this may change in the future.

Fiat-to-crypto exchanges facilitating the transfer of fiat currencies on behalf of the users of the platform may constitute a money transmission service. This would require obtaining a permit from the NFSA as stipulated in the Financial Undertakings Act.

To obtain a permit, the applicant must meet certain criteria relating to its:

• business plan;
• capital;
• processes and procedures for safeguarding client funds;
• procedures for the handling of sensitive data;
• IT security measures;
• compliance with anti-money laundering legislation; and
• suitability assessments of owners, board and management.

According to the Norwegian AML Act and regulation, providers of exchange and custody services for virtual currencies are obliged to register with the NFSA if they:

• are registered as a business in Norway;
• operate from Norway; or
• target the Norwegian market.

No harmonised single licence and passporting regime applicable for exchange service platforms is available within the EEA.

The registration requirement applies to services such as:

• the ability to trade or exchange one type of virtual currency for an official currency, such as Norwegian Kroner, or vice versa;
• the ability to exchange between different types of virtual currencies, such as Bitcoin and Ethereum;
• facilitating trading and exchanges by connecting buyers and sellers, for example, through a platform; and
• storing private cryptographic keys on behalf of others for the purpose of transferring, storing or trading virtual currency.

All exchanges between different virtual currencies are covered, as are exchanges between virtual and fiat currencies. Storage solutions that do not store private cryptographic keys (often referred to as “non-custodial wallets”) are not subject to the regulations.

The nature of the activity itself is the crucial factor that determines the need for registration. This means that service providers are subject to the registration requirement, regardless of how their services are organised. This means that even if a service provider is operating without being registered in the business register, conducting business through personal accounts, using platforms like LocalBitcoins.com, or targeting the Norwegian market, it is still obliged to meet the registration requirement.

Appropriate anti-money laundering routines must be established, and owners and management will be subject to a suitability assessment. The NFSA requires all transactions to be subject to ongoing customer due diligence and sanction controls, under a risk-based approach. Providers of exchange services between virtual currencies must also register with the NFSA.

According to the Norwegian AML Act, the NFSA has the power to stop any illegal activities and impose fines until the activities are stopped. It can also forbid someone from holding a managerial position if they have violated the AML Act and are considered unfit for the role. The regulator can also impose fines as a punishment. If an entity is fined, the board members or CEO may also be fined if they were aware of or acted negligently regarding the violation. In some cases, fines or imprisonment can be imposed. In serious cases, a person can be imprisoned for up to one year.

The primary regulatory authority overseeing crypto-assets in Norway is the NFSA, which also serves as the relevant regulator under the Norwegian AML Act, which applies to specific crypto-asset service providers.

Norway currently lacks a comprehensive regulatory framework for handling crypto-assets. Since crypto-assets are generally not classified as financial instruments or electronic money, the scope of regulation pertaining to related activities is limited according to Norwegian law. Consequently, Norway has not witnessed any significant enforcement actions in this regard. The NFSA has requested trading platforms to stop operating in Norway, unless they seek a proper registration.

When offering services in the Norwegian market, crypto-asset service providers must adhere to other applicable legislation, including the Norwegian marketing regulations, contractual law, data protection laws and consumer protection rules. Consequently, multiple regulatory bodies may be involved in overseeing services associated with crypto-assets.

Securities financing transactions and the reuse of collateral (re-hypothecation) is currently not fully regulated under Norwegian law, and there are no specific rules covering the re-hypothecation of digital assets.

Businesses that provide online (“hot”) or offline (“cold”) storage solutions for private cryptographic keys that control the ability to give instructions with respect to digital assets (ie, wallet providers) are subject to the Norwegian AML Act, as set out in 4.3 KYC/AML/Sanctions. Such providers can only operate after having been registered with the NFSA.

ICOs may fall outside the scope of existing securities trading regulations, depending on their classification of tokens. However, if an ICO is considered a financial instrument, the regulatory regime related to securities trading will apply. Assessment must be made on a case-by-case basis. There have not been many cases of ICOs in the Norwegian market.

As far as is known, the NFSA has not yet reclassified a token to be a financial instrument. The NFSA will most likely follow EU practice in this regard. The future incorporation of MiCA into Norwegian law will provide a framework for ICOs.

Under Norwegian law, there is no specific regulation governing fundraising through the sale of coins or tokens using a crypto-asset exchange as an intermediary, also known as an initial exchange offering (IEO). However, if the coin being offered is classified as a financial instrument, it may be subject to securities trading regulations in Norway.

There are currently no regulations in Norway applicable to distributions of tokens via an airdrop or similar mechanism that does not necessarily involve a purchase of the token.

Under Norwegian law, no specific regulations are currently imposed on investment funds or collective investment schemes regarding investments in crypto-assets. According to the Norwegian rules governing undertakings for collective investments in transferable securities (UCITS), a Norwegian UCITS is only allowed to invest in financial instruments. Since crypto-assets are generally not considered financial instruments, Norwegian law prohibits UCITS from investing in crypto-assets.

If a crypto-asset is classified as a financial instrument, the UCITS may invest in it, but it must comply with Norwegian UCITS regulations, which include requirements for risk diversification, the appointment of a depositary, valuation, risk rating, and more.

Under Norwegian financial regulation, there are no specific rules that prevent alternative investment funds from investing in crypto-assets. Crypto-exchange and wallet platform NBX has partnered with eGroup to provide a crypto-based index fund in the Nordics, for which eGroup recently attained approval. The fund is the first of its kind and enables institutional investors to invest in cryptocurrencies through regulated funds.

Under Norwegian law, there are no specific regulations specifically governing broker-dealers or other financial intermediaries involved in crypto-assets.

However, certain financial intermediaries, such as exchanges, are subject to the Norwegian AML Act, as described in 4.3 KYC/AML/Sanctions.

In addition, if a financial intermediary engages in activities with crypto-assets that are classified as financial instruments, it may be subject to the regulations outlined in the Norwegian Securities Trading Act. In such cases, the intermediary may need to obtain a licence from the NFSA and must adhere to various organisational, capital and fit and proper requirements related to its management.

Under Norwegian law, there are no specific rules or definitive legal decisions addressing the enforceability of smart contracts. In general, Norwegian law does not impose requirements regarding the form of a contract. This means that a self-executing contract, known as a “smart contract,” may be recognised as valid if it involves an offer and the acceptance of that offer. Like any other contract, smart contracts could be considered legally binding and enforceable under Norwegian law, although the language of the contract being computer code would likely pose an obstacle to its interpretation.

Norwegian law does not specifically address the question of whether developers of blockchain-based networks or the code that runs on these networks can be held responsible for losses that arise from the use of the software. To determine liability in such cases, the general Norwegian rules on liability would have to be applied. However, these rules do not fit very well with the decentralised nature of blockchain.

Provided that the activities do not fall within the scope of MIFID, DeFi platforms are not regulated or expressly prohibited from operating in Norway. As far as is known, there are currently no such platforms operating in Norway. A previously mentioned, there are no specific rules applicable to cryptocurrencies, as long as they are not classified as financial instruments.

Lending (both retail and corporate) is generally deemed to be a regulated activity in Norway. An entity that offers lending products on a digital platform directed at the Norwegian market must be authorised to conduct such business. As far as is known, there is no public case practice whereby the rules governing financing activities have been applied to the lending of digital assets.

The regulatory landscape surrounding peer-to-peer lending (crowdlending) of traditional assets in Norway is still being developed, and the specific issue of DeFi platforms facilitating lending of digital assets has not been debated in the context of crowdlending.

Under Norwegian law, the method for establishing an effective security interest depends on how the underlying assets are categorised – in essence, whether they are considered movables (løsøre), claims (fordringer) or real estate (fast eiendom). The procedures for establishing effective pledges or security interests in digital assets are currently unclear. The specific actions required to create a reliable pledge or security interest in these assets therefore remain uncertain.

If the digital assets are being held in a wallet, the jurisdiction in which the wallet provider operates can pose challenges when establishing a pledge based on asset possession.

The custodian wallet providers must comply with anti-money laundering rules, as discussed in 4.3KYC/AML/Sanctions. There are no specific rules for operating as a custodian of digital assets, as long as the asset is not classified as a financial instrument. Therefore, under Norwegian law, professional investors are not required to transfer their digital assets to a custodian, unless the asset is a financial instrument and custody is mandatory.

The Norwegian Personal Data Act, which implements the GDPR, will apply to blockchains that process and store personal data. Companies using such blockchain technology must take steps to comply with the obligations set out in said regulation, including blockchains that record transactions, which may conflict with the GDPR's “right to be forgotten” (Article 17). If an individual withdraws their consent or objects to the processing, they have the right to request the deletion of their personal data. However, the “right to be forgotten” can be overridden if the controller has legal or legitimate reasons to retain the data.

See 8.1 Data Privacy.

The “mining” of cryptocurrencies using a “Proof of Work” consensus protocol in exchange for tokens native to the blockchain is not regulated under Norwegian law.

Any profits derived from mining are taxable under Norwegian law; see 2.8 Tax Regime.

Staking tokens to secure a blockchain-based network using a “Proof of Stake” consensus protocol is allowed under Norwegian law, but there are no specific regulations governing this activity as yet.

Norwegian-based digital asset exchange NBX recently started offering staking as a service for partners that want dedicated and specialised staking services. It operates a staking pool on behalf of Iagon, a decentralised storage and compute marketplace project running on the Cardano blockchain.

Any profits derived from staking are taxable under Norwegian law; see 2.8 Tax Regime.

See 10.2 DAO Governance and 10.3 Legal Entity Options.

Norway has not yet implemented specific regulations for DAOs. Therefore, DAOs operating in Norway must adhere to general Norwegian laws and assess whether the governance token they issue can be classified as a financial instrument. Since DAO activity in Norway is limited, it is difficult to identify any typical patterns concerning governance, token allocation, voting thresholds and other aspects.

There is currently no clear information on the legal entity structures most commonly utilised by DAOs in Norway. It is likely that a DAO would be formed as, or considered to be, a partnership with joint and several liability. Using a legal entity structure would allow the DAO to acquire rights and assume obligations under Norwegian law.

If DAOs are to be held accountable in this way, there will need to be clarification on how the organisation (the legal person) should be represented externally (eg, in legal and regulatory contexts) and the allocation of capital to cover financial obligations. Business interests have proposed rules that would enable these organisations, like companies, to enjoy limited liability and simultaneously exempt members from liability, either fully or partially. These rules could facilitate innovation but also create challenges for responsible innovation by encouraging risk-taking.