From Defense to Offense: What Crypto Legal Teams Should Be Doing Now

Over the past year, crypto legal strategy has shifted from defensive positioning to proactive engagement with regulators, product teams, and market structure policy. In a recent episode of Block & Order, Kraken Chief Legal Officer Ben Gray described how legal departments that once focused primarily on surviving enforcement risk are now being asked to help companies grow responsibly in an environment that is beginning to offer clearer regulatory pathways. 

For founders, executives, and in-house counsel, the takeaway is recognizing that legal priorities have changed, and how those changes should inform compliance strategy, litigation posture, and business planning today.

Moving Beyond Survival Mode

For much of the past cycle, many crypto companies operated under what Gray described as a “turtle” posture: limit exposure, reduce public engagement, and wait for regulatory clarity to emerge. That strategy shaped how legal teams allocated resources, often prioritizing defensive reviews and enforcement preparedness over product innovation. “There was no engagement. That was not enforcement, the door was just closed,” he explained. 

According to Gray, the shift in the regulatory environment has fundamentally altered that calculus. Agencies are now reopening lines of communication, and companies are increasingly being invited to participate in shaping emerging frameworks rather than reacting to them after the fact.

For businesses, this change carries practical implications. Legal teams can no longer assume that silence is the safest approach. Engagement with regulators, industry groups, and policymakers is becoming a core compliance function which may determine whether a company can scale new products or access institutional partnerships.

Litigation Strategy as a Growth Tool

Another major takeaway from Gray’s comments is that litigation posture is evolving. In the defensive era, lawsuits were primarily viewed as risks to be contained. Today, resolving legacy enforcement actions can be a prerequisite for unlocking growth initiatives. 

Gray explained that companies are increasingly focused on clearing unresolved disputes so that product development and market expansion are not constrained by ongoing legal uncertainty. “It was a combination of clearing the decks on that history and also accelerating quickly into the future and figuring out, ‘okay, where are the areas where we’re competitive? Where are the areas that we have strength? And how do we capitalize on those things in this new world?’” he said.

For crypto businesses, this means legal strategy should be integrated into long-term planning rather than treated as an isolated function. Decisions about settlement, appeals, or regulatory negotiations may affect access to capital markets, institutional counterparties, or new jurisdictions. Companies that treat litigation solely as a defensive exercise risk missing opportunities to reposition themselves for the next phase of the market.

Regulatory Engagement Is Now an Operational Requirement

Gray’s discussion also highlighted a broader shift in how crypto companies interact with regulators. Where enforcement once dominated the relationship, agencies are increasingly inviting industry participants to discuss rulemaking, market structure, and operational concerns. This transition places new demands on legal teams: they must not only interpret regulations but also help shape them through responses to requests for comment and roundtable discussions. “The [SEC’s] Crypto Task Force was actively inviting people to come in to talk through issues with them, and talk about how we can get clarity for the industry,” Gray said

For companies operating globally, the challenge is compounded by jurisdictional complexity. Regulatory clarity in one region may attract talent and investment away from another, making cross-border strategy a central legal consideration. Businesses that fail to track international developments risk building products that are compliant in one market but unsustainable in another. Gray’s comments suggest that proactive engagement, rather than reactive compliance, is becoming a competitive advantage.

Kraken’s Infrastructure Approach Offers a Playbook

Gray framed Kraken’s strategy as an example of how legal teams can move from defense to offense. Rather than waiting for perfect legislative clarity, the company has invested in building a regulatory stack capable of supporting multiple products and jurisdictions. According to Gray, Kraken has “built this huge regulatory stack,” he said. “We believe that there is sufficient clarity today to operate that business around the world.” 

That infrastructure-first mindset reflects a broader industry trend: exchanges and fintech platforms are positioning themselves as service layers that enable tokenization, custody, and liquidity across markets. 

For other crypto businesses, the lesson is practical. Legal teams should evaluate whether they are in a “turtle” state, and how to evolve to a more proactive legal stance, including whether their current compliance frameworks can scale alongside product expansion. Today’s environment rewards companies that are proactive and forward facing, yet still cognizant of risks on the horizon.

Market Structure Work Is the Next Legal Battleground

Gray also emphasized that legislative debates around market structure are not abstract policy discussions, but rather something that directly influences how companies build and deploy products. He noted that large legislative proposals inevitably create disagreement within the industry, as different business models have different priorities. Yet disengaging from the process carries its own risks.

For crypto businesses, market structure policy is no longer a distant concern. Decisions about token classification, exchange oversight, and custody requirements will shape everything from listing strategies to capital formation. Legal teams should be monitoring legislative developments closely and preparing internal frameworks that can adapt as rules evolve.

What Companies Should Be Doing Now

Taken together, Gray’s analysis suggests that the most successful crypto legal teams are those that treat compliance as an enabler of growth rather than a constraint. That means engaging with regulators early, aligning litigation strategy with product roadmaps, and building infrastructure that anticipates cross-jurisdictional requirements. Companies that remain in a defensive posture risk falling behind as competitors move forward under emerging frameworks.

The shift from defense to offense does not eliminate risk, but it does change how risk should be managed. Instead of waiting for perfect clarity, businesses should focus on building adaptable compliance programs and maintaining active dialogue with policymakers and industry stakeholders.

Ready to Move From Defense to Offense?

If your company is navigating regulatory engagement, market structure questions, or litigation strategy in today’s evolving crypto environment, the digital asset team at Falcon Rappaport & Berkman can help. Kyle Lawrence and Moish Peltz, work with founders, exchanges, and fintech platforms to develop forward-looking legal strategies that support growth while managing risk, and can also assist with engaging directly in the regulatory process via comment letters and agency engagement. Reach out to FRB to discuss how your business can transition from defensive positioning to a proactive, scalable legal framework.