This is an archive of our post on Aave governance forum. Read the full thread here.

Our examination of Backed’s legal framework, including the issuer’s regulatory posture, tokenization methodology, issuance and redemption procedures, and asset custody mechanisms, does not reveal any concerns or disputes regarding the product’s compliant status. For clarity, it mentions that the issuer maintains a valid COBO consent granted by the Jersey Financial Services Commission, and the product offering has received approval from the Liechtenstein Financial Market Authority. Backed does not engage in direct marketing or solicitation of users outside Jersey or the EU/EEA, and it enforces a strict policy of geographical restrictions, categorizing certain countries as either prohibited or non-serviceable.

By incorporating bCSPX, AAVE neither assumes nor is expected to assume a client-service provider relationship with any Backed-affiliated entity. Given the asset’s confirmed compliance, there appear to be no impediments to its inclusion in the Gnosis instance.

Nevertheless, this perspective is offered with due regard to the current regulatory treatment of DeFi lending as of the date of this report. Should the legal characterization of DeFi protocols undergo substantial changes, it may become necessary to revisit the decision to onboard regulated offerings such as RWAs.

Nothing in this opinion or the preceding risk assessment should be interpreted as constituting legal advice or a definitive legal position on the operations, organizational setup, or regulatory standing of either AAVE or Backed Finance.