ScopeLift CEO says regulatory excuse for value-free governance tokens is fading
ScopeLift CEO Ben DiFrancesco argued on a recent podcast that crypto protocols can no longer rely on securities law concerns to justify governance tokens that return no value to holders.
Securities law is losing its force as a justification for crypto protocols failing to return value to governance token holders, ScopeLift founder and CEO Ben DiFrancesco said on the Uneasy Money podcast recorded Oct. 7. DiFrancesco noted that regulatory fears previously shaped an entire generation of tokens built without dividends or buybacks due to the legal risks involved. However, he stated that "the regulatory excuse is going away" and warned that teams capable of returning value will face heightened scrutiny.[1][2]
DiFrancesco framed token value as a necessity for protocol defense, calling token price a critical component of economic security. He cautioned that a governance token must maintain a value higher than what an attacker could gain by stealing the underlying assets protected by the system. He urged large, revenue-generating protocols to adopt value-accrual plans rooted in real mechanisms, such as programmatic fee distributions or buybacks, highlighting Uniswap's model where searchers burn UNI to claim protocol fees.[1][2]
The comments came during a discussion regarding Safe, following an Oct. 4 open letter from investor Greenfield Capital asking Swiss foundation authorities to examine governance at the Safe Ecosystem Foundation. Greenfield requested independent board members and a strategy review, pointing out that Safe balances dropped from $66 billion in January 2024 to around $30 billion in August 2026. A Safe Ecosystem Foundation spokesperson told Cointelegraph that the foundation had not received a formal regulatory inquiry.[1]
Key facts
- ScopeLift founder and CEO Ben DiFrancesco said on the Uneasy Money podcast that securities regulation is losing its force as an excuse for governance tokens that return nothing to holders.
- DiFrancesco argued that a governance token's price is critical to economic security, as it must stay worth more than what an attacker could steal from the protocol.
- DiFrancesco cited Uniswap's fee-burning model as an example of a protocol returning value programmatically to token holders.
- An SEC staff FAQ updated on Sept. 28 stated that buyback announcements do not alone represent essential managerial efforts if the crypto system is functional and lacks a central party.
- Investor Greenfield Capital asked Swiss regulators on Oct. 4 to examine governance at the Safe Ecosystem Foundation, citing a balance drop from $66 billion in January 2024 to $30 billion in August 2026.
- A Safe Ecosystem Foundation spokesperson stated it had received no formal inquiry from Swiss foundation regulators.
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UnchainedArticle ·
DAO Tooling CEO Says the ‘Regulatory Excuse’ for Tokens That Return No Value Is Going Away Securities law is losing its force as the reason crypto projects give for governance tokens that return nothing to holders, Ben DiFrancesco , founder and CEO of ScopeLift , said on Uneasy Money . He thinks that shift brings “increased scrutiny” for teams that could return value to their tokens but don’t. ScopeLift took over the Tally governance platform in March and renamed it Cactus in June. In the episode, recorded Oct. 7, DiFrancesco said fear of regulators shaped a generation of tokens built with no dividends and no buybacks. Promising either meant “you were at serious risk of violating securities law,” he said. “Now, the good news I think is that that’s changing, right?” Get Unchained’s crypto news in your inbox with the free Unchained Daily newsletter . A Plan ‘Rooted in Something Real’ A large protocol that makes money, or could, and has or plans a token “ought to have a story” for sending value to it that is “actually rooted in something real,” DiFrancesco said on the show. His example was a protocol that charges a fee, then distributes it or uses it to buy back the token “in this, like, programmatic way.” He named Uniswap among big projects doing so. Uniswap’s protocol fees, live on Ethereum mainnet since late December 2025 and later on other chains, are claimed by searchers who burn UNI , according to a September governance proposal . DiFrancesco framed the issue as one of economic security , calling a token’s price “a key component to why the system works” and pointing to the risk of its value falling below “what it would be worth to steal the assets that the protocol protects.” As for teams that say the token doesn’t matter: “I don’t buy that excuse anymore, right? The regulatory excuse is going away,” he said on the podcast. A Sept. 25 SEC staff FAQ said a buyback announcement would not, on its own, be a promise of essential managerial efforts if a crypto system is functional; a Sept. 28 revision added that it must also have no central party, as Unchained reported . The Safe Backdrop The remarks came during a discussion of Safe, the multisig wallet. Greenfield Capital , a Safe investor, said in an Oct. 4 open letter that it has asked Switzerland’s federal supervisor of foundations to examine how the Safe Ecosystem Foundation is governed. Greenfield wants independent board members and a board-led strategy review, and by its count, Safe accounts held about $30 billion in August 2026, down from $66 billion in January 2024. A foundation spokesperson told Cointelegraph it had received no formal inquiry from the regulator and declined to discuss the complaint’s details. DiFrancesco, who praised the Gnosis team where Safe began, said on the show that tokens having to explain how they return value is “a maturation of the ecosystem.” Related Listen: Why the ‘Regulatory Excuse’ for Tokens Is Ending: Uneasy Money The post DAO Tooling CEO Says the ‘Regulatory Excuse’ for Tokens That Return No Value Is Going Away appeared first on Unchained .
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Laura Shin@laurashinPost on X ·
A governance token needs to stay worth more than what an attacker could gain by stealing the assets its protocol protects, ScopeLift CEO Ben DiFrancesco said on Uneasy Money. "The regulatory excuse is going away." https://t.co/UEHLN7act8
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