Pioneering Legal Frameworks for the Next Generation of Web3

Ishan Pandey: Welcome, Rika Khurdayan, to our 'Behind the Startup' series. It's a pleasure to have you here. Congratulations on your recent appointment as Chief Legal Officer at Space and Time. Can you share your journey from traditional finance to the crypto world, and now to the intersection of AI and blockchain? What motivated you to join Space and Time, and how has the transition been so far?

Rika Khurdayan: Thank you, Ishan. I'm happy to be here! My journey into the crypto world started in 2017, almost by accident, when someone at a conference asked me to explain the Howey test. That moment sparked my interest in blockchain, and I've been deeply involved ever since. With a background in capital markets transactions and cross-border structures, I quickly found myself helping clients figure out the regulatory landscape, set up their operations, and launch projects in a compliant way.

Over the years, I've seen the industry evolve dramatically—from the ICO boom and the early attempts at tokenization, to the explosion of DeFi and the peak of 2021, and now into a more mature and sophisticated phase. And I had the privilege of not just witnessing these shifts, but helping clients navigate them.

I met Nate and Scott a couple years ago, and I am incredibly impressed by what they've accomplished in such a short time - both in terms of technology and building a strong team. I've always been fascinated by the new business models coming out of Web3, and Space and Time is right at the forefront of this, especially with their focus on decentralized data, privacy and trustless applications. Joining them now feels like the natural next step, and I'm excited to be part of this innovative team at the intersection of AI and blockchain.

Ishan Pandey: You've recently transitioned from Bitstamp, one of the world's longest-running cryptocurrency exchanges, to Space and Time. How do you see your experience in crypto and blockchain law contributing to Space and Time's mission, especially given its focus on both AI and blockchain technologies?

Rika Khurdayan: My time at Bitstamp was incredibly formative, giving me a deep understanding of the CeFi side of the market—trading, custody, money transmission, and more. Before Bitstamp, I ran a law firm in New York where I worked with protocol sponsors, digital asset issuers, traditional and crypto investment funds, as well as Web2 businesses transitioning to the blockchain sector. This combined experience has given me a holistic view of the industry.

Now at Space and Time, I'm excited to bring this comprehensive background to one of the most innovative projects in Web3. My goal is to help navigate the complex regulatory landscape while ensuring that our work at the intersection of AI and blockchain is not only compliant and secure but also forward-thinking.

Ishan Pandey: Space and Time's Proof of SQL technology connects analytics directly to smart contracts. What potential legal implications or regulatory considerations do you foresee with this innovative approach?

Rika Khurdayan: Absolutely, our subsecond zk-coprocessor is a game changer. It enables real-time, data-driven decisions within decentralized applications, unlocking enormous potential across various industries. I don't think many people realize what the team has built. The ability to connect analytics directly to smart contracts is a major leap forward and is particularly significant as the world moves towards more complex and integrated AI solutions.

While this technology opens up exciting possibilities, it is also important to ensure that it's implemented thoughtfully. For instance, maintaining the accuracy and integrity of the data feeding into smart contracts is crucial to prevent any unintended consequences. Additionally, the integration of analytics with smart contracts naturally brings up questions about liability and responsibility, particularly as we navigate cross-border data flows and varying regulations. That said, these considerations are not roadblocks but part of the process of pioneering new ground.

Ishan Pandey: As the blockchain and AI industries continue to evolve, what do you see as the most pressing legal and regulatory challenges that companies like Space and Time need to address?

Rika Khurdayan: Managing data privacy and security in line with global regulations like GDPR, while keeping systems decentralized, is crucial. As AI becomes more integral to decision-making, especially when combined with smart contracts, it's vital to have clear guidelines on liability and accountability.

Finally, managing cross-border data flows within differing regulatory environments can complicate global operations. Of course, a major issue continues to be the lack of actionable guidance from regulators, particularly with the SEC's enforcement-driven approach, which creates uncertainty and burdens innovation. Ensuring compliance across multiple jurisdictions while fostering innovation is a delicate balance that requires a proactive and robust legal strategy.

Ishan Pandey: You've led executive-level workshops for organizations like the Thailand Securities and Exchange Commission. How might this experience shape your approach to educating both internal teams and external stakeholders about legal considerations in the blockchain and AI space?

Rika Khurdayan: My work with regulators, including leading workshops for government agencies, reinforced my belief that education is key in this space. Unfortunately, the current regulatory environment, particularly with the SEC, leans almost entirely on enforcement rather than understanding what blockchain and AI can truly achieve. This approach creates fear, uncertainty, and makes any innovation an extremely expensive exercise.

The irony here is that the very principles regulators should aim to uphold—like reducing information asymmetry, ensuring transparency and protecting users—are exactly what blockchain is designed to deliver. Yet, the landscape remains highly adversarial.

My goal is to equip our internal and external stakeholders with the knowledge they need to navigate this constantly evolving legal landscape effectively while also challenging outdated frameworks that hold the industry back.

Ishan Pandey: What role do you think legal expertise plays in fostering trust and adoption of blockchain and AI technologies among traditional businesses and institutions?

Rika Khurdayan: I think legal expertise is critical and has an outsized impact on adoption of evolving technologies like blockchain and AI. These technologies offer incredible opportunities, but they also come with challenges and risks. Legal frameworks provide the structure needed for more mature businesses and institutions to engage with these technologies confidently.

Legal teams play a key role in translating some technical aspects of blockchain and AI into understandable terms that align with existing regulations. This not only reduces perceived risks but also provides a clear path for compliance, making it easier for traditional businesses to integrate these technologies into their operations. Moreover, legal professionals help shape the narrative around these technologies. By addressing concerns around security and compliance, we can pave the way for broader adoption across industries.

Ishan Pandey: Can you elaborate on how your experience with KSTechLaw, specializing in regulatory solutions for token issuers and trading platforms, will inform your approach to legal strategy at Space and Time?

Rika Khurdayan: My experience at KSTechLaw taught me to navigate highly complex and fast-evolving regulatory environments and develop legal strategies that balance compliance with the need for innovation; to anticipate potential risks and craft proactive solutions to mitigate them.

At Space and Time, this experience is going to be invaluable. We're exploring uncharted territory at the intersection of AI and blockchain, so I'm focused on creating a legal strategy that's both flexible and resilient. By staying forward-looking, we can navigate the complexities of this emerging space while driving innovation.

Ishan Pandey: Looking ahead, what are your top priorities as CLO for Space and Time in the next 6-12 months?

Rika Khurdayan: Over the next 6-12 months, my priorities will focus on a few key areas. First, I will be laying the legal groundwork for our upcoming testnet launch, ensuring full regulatory compliance as we prepare for the next phases of development. This includes working closely with our development teams to make sure our legal strategy aligns with our technical goals, particularly as we move toward decentralization. Decentralization is a complex process that requires careful planning, especially in balancing innovation with compliance.

Building a strong legal team to support these efforts is crucial as Space and Time continues to grow. I will also be actively engaging with industry participants to help shape a regulatory environment that truly supports innovation. I believe informed dialogue and strategic advocacy are key to navigating the evolving landscape effectively, ensuring that Space and Time is well-positioned to lead in the AI and blockchain space.

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