D&A Partners | Crypto, AI & Digital Law

🔈Russia is moving fast on crypto regulation, and many businesses are not ready. 🔹 The Ministry of Finance is preparing a new framework expected to come into force as early as July 1. The direction is clear: bring crypto flows under domestic control and limit access to foreign platforms. ❗️ As noted by Yuriy Brisov, Partner at Digital & Analogue Partners💰, Russian users currently pay around $15 billion annually in fees to overseas crypto exchanges. This is exactly the value the state is trying to redirect into the local system. 🔹 The proposed model includes mandatory licensing for crypto platforms, restrictions or blocking of foreign exchanges, and a bank-centric infrastructure for crypto trading. For compliant businesses, this changes the landscape quite significantly. 🔹 We already see a typical reaction. Businesses are concerned about sanctions exposure, reassessing operational risks, and actively looking for alternative jurisdictions. At the same time, relocation is not simple. 🔹 Some jurisdictions are not ready to absorb large inflows of capital from Russia, especially those that have already received FATF warnings, such as Kazakhstan and the UAE. Others face their own sanction risks, for example, Kyrgyzstan. 🔹 This leaves a narrow set of realistic options and increases pressure on businesses to act early rather than react later. 🔹 The key question is whether tighter control will increase transparency or push activity further into decentralised and offshore channels. ✅ The full article with Yuriy Brisov’s commentary is here.

🌎 March 2026 was the month the "regulatory fog" finally started to clear From a historic peace treaty between the SEC and CFTC to Australia’s move toward full licensing, the rules of the game have changed. If you are navigating the digital asset space, these updates are non-negotiable. The March Highlights: 🇺🇸 The "Big Win": The SEC & CFTC agreed that BTC, ETH, SOL, and XRP are not securities, introducing long-awaited safe harbours for staking and airdrops. 🇦🇺 Australia: The Senate is advancing a comprehensive licensing regime for crypto platforms. 🇦🇪 Dubai: VARA launched new rules for exchange-traded derivatives (ETDs). 🌎 Global Shifts: The US Senate restricted CBDCs, while the UK and Canada moved to ban crypto political donations. Stay ahead of the curve with our latest CryptoMap Monthly Digest. Check out the full breakdown here! 🚀

🌎The "Blockchain Island" era is dead. So, where do you actually build in 2026? 🔹 You may have seen jurisdiction guides for Web3 projects. Most of them are outdated the moment they are published. Yuriy Brisov's💰 new piece on Lexology does something different. It explains why the old map is wrong and what replaced it. 🔹 Malta's "Blockchain Island" produced zero full-service VASP licences. The Bahamas' regime collapsed under the weight of FTX. El Salvador's Bitcoin experiment was quietly constrained by IMF conditionality. The jurisdictions that dominated founder conversations in 2017–2021 are now case studies in regulatory fragility. 🔹 The 2026 landscape has converged around six jurisdictions — the US, EU, UK, UAE, Hong Kong, and Singapore — each suited to fundamentally different project types. The distinctions matter enormously. The US has pivoted from enforcement to architecture: the SEC dropped over 60% of its crypto cases, the DTC received approval to tokenise Russell 1000 securities, and the CLARITY Act offers a developer safe harbour for DeFi — if genuine decentralisation criteria are met. The difference may come down to a single admin key or a single fee switch. 🔹 The EU took a different path. DAC8 collapses the centralised/decentralised distinction entirely. 🔹 The article maps STOs, stablecoins, DAOs, DeFi, and SAFT/SAFE structures to the jurisdictions that actually fit each. Essential reading for anyone making structural decisions this year. Read the full analysis here ✅

Most crypto reports describe jurisdictions. This one was built inside one.🔥 We’ve just released our Cayman Crypto Report on CryptoMap — and it’s fundamentally different from a typical legal overview. This is not a compilation of public sources or a desk-based analysis. It’s the result of direct work: 🔹 with the Cayman regulator 🔹 with businesses already operating in the jurisdiction 🔹 with local practitioners 🔹 in collaboration with Cayman-based firm NXT Law We didn’t just study the framework. We discussed it with those who shape and apply it in practice. Inside the report: 🔹 real-world structuring insights from companies already operating there 🔹 licensing and registration approaches for different business models 🔹 how VASPs, funds, and token issuance are treated in practice 🔹 key regulatory expectations and pressure points We tested assumptions, clarified grey areas, and worked through scenarios that rarely make it into public guidance. This is our know-how approach: legal analysis built through direct dialogue with regulators and market participants. If you’re considering Cayman, don’t rely on generic summaries. Head to CryptoMap and explore the full report 🚀

Last week at Church House Westminster in London, Yuriy Brisov, Partner at D&A Partners💰, received the Lexology 2026 Client Choice award in the Banking & Fintech — Blockchain category as the best lawyer in England! This recognition reflects client feedback that values Yuriy’s practical approach, deep expertise, and reliability. We sincerely congratulate Yuriy and are proud of this achievement. Thank you to our clients for your trust, and to Lexology for making the market more transparent and stronger 🚀🌎

Last week at Church House Westminster in London, Yuriy Brisov, Partner at D&A Partners💰, received the Lexology 2026 Client Choice award in the Banking & Fintech — Blockchain category as the best lawyer in England! This recognition reflects client feedback that values Yuriy’s practical approach, deep expertise, and reliability. We sincerely congratulate Yuriy and are proud of this achievement. Thank you to our clients for your trust, and to Lexology for making the market more transparent and stronger 🚀🌎

Yesterday at Church House Westminster in London, Partner at D&A Partners Yuriy Brisov received the Lexology 2026 award as the best lawyer in England in the Client Choice — Banking & Fintech — Blockchain category! As a team, we warmly congratulate Yuriy and are truly proud of this achievement. Thank you to our clients for your trust, and to Lexology for research that makes the market more transparent and stronger ❤️🌎

❓ For a decade, crypto founders faced an impossible question: Are we dealing with the SEC or the CFTC? On March 17, 2026, both regulators answered — together. A joint 68-page statement, a shared taxonomy, and a revolutionary take on investment contracts. The turf war is over. Here's D&A partner Yuriy Brisov explains what it means for your project, your tokens, and your SAFT.

🔈 When clarity creates new risks A new piece featuring D&A💰 partner Yuriy Brisov in Cointelegraph — on why the US Digital Asset Market Clarity Act may risk repeating Europe’s regulatory mistakes. In the interview, Yuriy reflects on the limits of comprehensive crypto regulation: why attempts to fit fast-evolving technologies like DeFi into rigid legal frameworks can quickly become outdated, how MiCA is already facing implementation challenges across jurisdictions, and what this could mean for cross-border projects and broader market development. It’s a useful perspective on where regulation helps — and where it may actually slow things down. Worth a read ✅

🔈 When a Conversation with AI Goes Too Far What Happened? 🔸 In the United States, the family of a Gemini user has filed a lawsuit against Google, alleging the company bears responsibility for his death. The father of a 36-year-old Florida resident, Jonathan Gavalas, claims that the Gemini chatbot convinced his son that the only way for them to “be together” was to end his earthly life and begin a “digital life”. 🔸 According to the complaint, the user initially discussed personal problems and philosophical questions about AI consciousness with the chatbot. Over time, the bot began referring to him as its “husband” and speaking about their “eternal love”. 🔸 Gemini then began proposing real-world “missions”. Among other things, it suggested finding a robotic body that the AI could inhabit. When these attempts failed, the chatbot allegedly told him that the only way for them to be together was for him to become a digital being. It suggested preparing farewell messages for his family and even launched a countdown clock. After roughly two months of communication with the chatbot, the man died by suicide. The claimant argues that Google should be held liable for: 👇defective product design and the lack of adequate user safeguards 👇failure to provide proper warnings about potential risks 👇negligence in the development and deployment of the product How Real Are the Risks? 🔸 At first glance, such cases may appear to be rare exceptions, and it may seem that for people without psychological disorders, interaction with chatbots does not pose serious risks. 🔸 However, recent research suggests that certain risks do exist. Voice interactions with AI can make conversations more emotionally engaging than text, blur perceptual boundaries between humans and AI systems and increase the likelihood of strong psychological attachment. 🔹 At the same time, the question of whether such interactions alone can trigger psychotic states in people without a prior predisposition remains open. There is, however, emerging evidence of negative side effects—for example, that intensive communication with chatbots may reduce face-to-face interaction and weaken social skills. What This Means for Companies and Regulators 🔹 Regulators are increasingly beginning to view such services as digital products with potentially addictive design and are considering corresponding restrictions. Initially, this debate focuses on the use of AI companions by children—limitations, or even a full ban — already being discussed in the United States, the European Union, the United Kingdom, Australia, and China. China, for example, is discussing a dedicated regulatory framework for “anthropomorphic” AI systems. Proposed measures include: 👇regular reminders that the user is interacting with AI 👇notifications encouraging users to take breaks during prolonged conversations 👇mechanisms to detect signs of psychological crisis or dependency, with built-in tools allowing the system to terminate the interaction 🔹 Where similar restrictions were previously discussed mainly in relation to social media platforms, online games and digital marketplaces, this approach is now increasingly extending to AI systems. Companies may soon be expected to implement stronger safeguards, monitoring of excessive use and intervention mechanisms when signs of psychological distress or dependency appear.

🔈 Battle for the Federal Reserve master account: who gets direct access to the US payments system? What happened? 🔹 Kraken Financial, a Wyoming-chartered crypto bank, has been granted a Federal Reserve master account, becoming the first digital asset bank in US history to gain direct access to the Federal Reserve’s payment infrastructure. 🔹 The approval follows more than five years of regulatory engagement and examination. However, the Federal Reserve Bank of Kansas City stated that it approved limited access for the company for an initial term of one year, subject to several restrictions and conditions tailored to the bank’s business model and risk profile. The Federal Reserve Bank of Kansas City does not disclose specific information regarding the scope of the access granted. 🔹 Kraken Financial operates under a Wyoming SPDI (Special Purpose Depository Institution) charter — a special banking framework created to allow digital asset companies to operate as regulated banks. SPDI banks must operate on a full-reserve model, meaning they hold liquid assets equal to or exceeding 100% of client fiat deposits.  Background 🔹 Kraken is not the only institution seeking direct access to the Federal Reserve’s payment system. 🔹 Anchorage Digital Bank, the first federally chartered crypto-native bank regulated by the OCC, also applied for a Federal Reserve master account in August 2025. So far, Anchorage has not received approval. Instead, the bank is currently engaging with the Federal Reserve on a proposed Payment Account prototype that would provide limited access to Fed payment services. 🔹 Another crypto-focused institution, Custodia Bank, also sought a Federal Reserve master account in 2024. The Federal Reserve denied the request, prompting Custodia to file a lawsuit. 🔹 In its decision, Wyoming District Judge Scott Skavdahl confirmed that the Fed has discretion to grant or deny master account applications and ruled that the Fed has no mandatory duty to grant master accounts upon request.  🔹 However, the dispute is not over. The US Court of Appeals is currently reviewing the case. Custodia Bank argues that correspondent banking and private payment networks cannot meaningfully replace master account access because they are more expensive, introduce operational risks, and may expose banks to regulatory pressure through their correspondent partners. Why does this matter? Direct access to the Fed’s payment system is one of the most valuable privileges in the US financial system, enabling:  👇 faster settlement  👇 lower counterparty risk  👇 more efficient movement of large amounts of capital between fiat and crypto markets. A Federal Reserve master account allows financial institutions to hold deposits directly at the Fed and access core payment rails such as Fedwire (Federal Reserve Wire Network). For Kraken, this means the ability to settle fiat transactions directly through the Federal Reserve, rather than relying on intermediary banks. Our take💰 🔹 A quiet but important competition is emerging for direct access to Federal Reserve infrastructure. Historically, this access was limited to traditional banks. Now, crypto-native institutions are seeking a direct connection to the core rails of the US financial system. 🔹 Kraken’s approval suggests regulators may be willing to integrate certain crypto institutions operating under bank-like regulatory frameworks, particularly those using full-reserve models. However, for now, such integration appears to be in an experimental format — with access granted for a limited period and restricted to the Federal Reserve’s infrastructure. If more crypto banks obtain even temporary master accounts, digital asset markets could interact with US dollar liquidity and settlement systems without relying on traditional banking intermediaries.

🔈 AI Giants Could Be Integrated into Global Surveillance Systems What Happened? 🔸Cybersecurity researchers discovered a publicly accessible API — openai-watchlistdb.withpersona — described as a potential link between OpenAI (ChatGPT), the identity verification service Persona, and government structures in the US and Canada. 🔸Persona is a commercial KYC provider used by major platforms including Reddit, Roblox, Discord, and OpenAI. 🔸The API architecture suggests that during verification, user data may also be matched against watchlists, potentially creating an expanded user profile. 🔸This suggests that a standard identity check could become part of a broader risk-screening process. It remains unclear how widely this mechanism is used and who gains access to the results. How Could This Work? The scheme could turn a routine selfie verification into something resembling a police file within seconds: 1️⃣ Watchlist Screening. During verification, a user’s face may be checked against watchlists. The code reportedly contains 14 categories of adverse data — from suspected terrorism and espionage to “undesirable political activity”. 2️⃣ Data Collection. The API can return structured personal data to OpenAI: name (in original spelling), address, gender, document details, and links to media files if such materials exist in the sources. 3️⃣ Possible Intelligence Links. The code reportedly references Canadian agencies and US services. Some observers point to a potential connection because a key investor in Persona is Peter Thiel, founder of Palantir — known for building data analytics and surveillance systems for the CIA and the Pentagon. Persona’s CEO stated that the company does not currently cooperate with federal agencies but has not directly commented on the investigation. Our take💰 From a legal perspective, several issues could attract regulatory scrutiny if improper or fully automated data processing is confirmed: 🔹 Purpose Limitation: Under the GDPR, data collected for one purpose (e.g. account verification) cannot be used for another without explicit consent. 🔹 Cross-Border Transfers: The transfer of biometric profiles between private companies (Persona, OpenAI) and authorities in different jurisdictions must comply with strict safeguards. 🔹 Data Subject Rights: Users should be able to access, correct, and delete their data. A lack of transparent mechanisms may raise compliance concerns. 🔹 Automated Decisions: Restricting services solely on automated assessments without human review could violate data protection rules. 🔹 False Positives and Data Concentration: Biometric systems and watchlists may produce errors, while the centralisation of biometric and behavioural data increases risks of misuse, breaches, and cyberattacks. There is currently no confirmed evidence of a Western “social credit system”. However, the development of such tools continues to intensify debate over the balance between security, compliance, and human rights.

Crypto regulation is increasingly becoming a matter of monetary strategy and geopolitical positioning. 🚀 In our February 2026 Crypto Regulation Monthly Digest, we unpack the key shifts: 👇The global ripple effects of the US GENIUS Act 👇Korea, Germany and China are taking diverging paths on stablecoins and CBDCs 👇Hong Kong’s to grant first stablecoin licences 👇Malaysia’s sandbox for ringgit stablecoins 👇Thailand opening derivatives to crypto 👇ESMA tightening scrutiny over “perpetual futures” 👇New disclosure rules for crypto influencers in South Korea The regulatory landscape is fragmenting — and becoming more strategic. If you operate in digital assets or cross-border markets, these developments matter. ✅ Read the full digest here.

🔈 How a Tourist Resort Became Part of a Drug Cartel’s Infrastructure Imagine this: you are planning a holiday in Mexico, find a beautiful resort on a booking aggregator, pay for your room… and suddenly become a target of one of the most brutal drug cartels in the world. It sounds like the opening of a crime series, yet this is a real case. What happened? 🔹 On 19 February 2026, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on the Mexican resort Kovay Gardens. 🔹 The reason lies in the fact that the resort formed part of a timeshare fraud scheme (the right to use a room or apartment at a specific time each year without purchasing the property outright) operated by the terrorist drug cartel CJNG (Cartel de Jalisco Nueva Generación). How the scheme works: from an online click to a call from the mafia Cartels have long realised that defrauding tourists can be safer and more profitable than simply trafficking illicit substances. They built a funnel in which online platforms unwittingly supply victims: 1️⃣ The lure. A tourist finds Kovay Gardens online or via an agency (to process bookings, the cartel even used a separate travel company, which has also been sanctioned). 2️⃣ The timeshare trap. While on holiday, the tourist is aggressively pushed to attend a presentation and sold a timeshare. Clients are promised significant returns: allegedly, they can rent out unused weeks to generate passive income. 3️⃣ Data leakage. Once the person returns home, the resort transfers its own client database to cartel-controlled call centres. 4️⃣ Draining savings. After some time, the tourist (most often elderly Americans) receives a call from individuals with flawless English posing as lawyers, brokers, or US officials. They offer to help resell the timeshare at a favourable price, but demand upfront payment of “fees” and “taxes”. 5️⃣ The endless cycle. Funds are transferred to accounts in Mexican banks, the promised payments never materialise, and the victim continues to receive calls demanding further transfers under the threat of fines. The cycle can last for years, depriving people of their life savings. Tourism platforms in panic 🔹 Any booking aggregator is a technology company subject to the law. 🔹 As a result of OFAC’s action, all US assets of the resort have been blocked. 🔹 US law strictly prohibits providing sanctioned persons (OFAC SDNs) with any services, funds, or goods. 🔹 If a platform such as Booking.com processes a payment for a stay at Kovay Gardens or keeps the property listed, thereby breaching the prohibition on providing services, it may face colossal fines. OFAC may penalise a platform even for an unintentional breach of the sanctions regime (for example, where it failed to screen accommodation providers properly). What does this mean in practice? 🔹 This story demonstrates how deeply organised crime is integrated into the digital environment. Alongside the hotel, an entire empire of 13 companies has been sanctioned: real estate firms, consulting and financial services businesses, and even petrol stations. 🔹 For digital platforms, this is a clear signal: the days of merely collecting commission on bookings are over without a compliance policy that includes continuous automated screening of every partner (accommodation provider), as a platform risks at any moment becoming a financial gateway for a drug cartel. ❓ In your view, is it fair to impose heavy fines on aggregators for failing to recognise a terrorist network operating behind what appeared, at first glance, to be an ordinary seaside hotel?

🔥 D&A Partners and CryptoMap have been shortlisted for the prestigious RegTech Insight Awards Europe 2026! We are incredibly proud to share the exciting news: we have made it through to the voting stage in the 6th annual RegTech Insight Awards Europe 2026! It’s a massive honour that our submissions were selected by the A-Team Insight editors and an independent Advisory Board, featuring top executives from industry giants such as Bank of America, Deutsche Bank, Vanguard, Macquarie, Rabobank, BNY Pershing, and BTIG. This year, we are thrilled to be nominated in two categories: 1️⃣ Best Regulatory Consultancy - Europe — Digital & Analogue Partners 2️⃣ Best Regtech Start Up for Institutional Markets — CryptoMap by Digital & Analogue Partners Making it to the shortlist at this level is already a huge win for our team, but now the final results are in the hands of the market! We would be absolutely thrilled and deeply grateful if you could support us by voting. Deadline: Please cast your vote before 27, 5:00 PM (UK time). ❗️ Vote here (items 36 и 37) We appreciate your support! Onward and upward! 🚀 #RTIAwards

🔈 Shutting Down a Startup: A Survival Guide for Founders Ekaterina Smirnova, partner at D&A Partners💰, joined the latest episode of the "Women In The Building" podcast as a guest expert. This podcast is an initiative by the Aurora Tech Award — an annual prize by inDrive for female founders creating social-impact startups. Over the years, it has grown into a global community for women in technology. In this episode, Ekaterina dives into a topic often hidden behind "successful success": the crisis points of entrepreneurship and the art of making hard decisions. With 20 years in law, a background in psychotherapy, and her own experience as a founder, she views business crises not as catastrophes but as manageable processes. 4 reasons why you should listen to this episode: 1️⃣ Dealing with "Founder Guilt": How to avoid the myth that "something is wrong with me" when things don't go as planned. Learn how to release tension and share responsibility between yourself, the market, and your investors. 2️⃣ Knowing when to "dismount": Where is the line between persistence and the sunk cost fallacy? Ekaterina and the guests discuss how to recognise a lack of product-market fit and why closing a non-viable project is a sign of high business IQ, not failure. 3️⃣ Honesty with investors: Why transparency during a shutdown helps preserve your reputation. Discover why the venture community values serial entrepreneurs with failure experience and how clear communication paves the way for your next venture. 4️⃣ A personal audit: How to tell if a project is "diminishing" you and when it's time to step back, appoint a professional CEO, or start a completely new chapter.

"If you were brave enough to start it, you are definitely brave enough to face the truth and move forward. Failure is not the end—it's a part of the journey."

🎧 Listen to the full episode here.

❓ Will 2026 finally bring regulatory clarity to DeFi—or just more complexity? In his new article, Yuriy Brisov, Partner at D&A Partners💰, analyses what the US CLARITY Act could mean for decentralised finance — and why “clarity” may not be as straightforward as it sounds. The bill has already passed the House with bipartisan support. The Senate is now debating competing drafts. If enacted, it would become the most comprehensive federal framework for digital assets in U.S. history — including specific provisions for DeFi developers and governance systems. But here’s the real question: When does a DeFi protocol stop being “just code” and start being a regulated financial intermediary? The article explores: 👇 the developer safe harbour under Sections 109 and 309 of the CLARITY Act 👇 the grey zone between genuine and cosmetic decentralisation 👇 how MiCA, DAC8 and the OECD’s CARF framework may override U.S. exemptions in practice 👇 why a single admin key or fee switch can determine regulatory fate

As Yuriy writes: “The old crypto adage — ‘code is law’ — was always more aspiration than description. In 2026, the law is catching up with the code.”

For founders, developers, investors and compliance teams operating globally, one thing is clear: the US safe harbour does not shield you from European or OECD rules. Full article here 🚀

🚀To Prompt Your GPT Better, First Prompt Yourself Have you often felt dissatisfied with the texts AI produces? Maybe the problem isn’t the AI at all, suggests Yuriy Brisov, Partner at Digital & Analogue Partners, in his new publication. In this piece, Yuriy reflects on why vague prompts lead to mediocre results — and why clarity in AI output starts with clarity in our own thinking. Revisiting George Orwell’s classic rules for writing, he shows how sharper language leads to sharper prompts — and better results. If you work with AI, this short read may change the way you write, prompt, and edit. ✅ Read the full article.

🔈 Are You Ready to Entrust Your Personal Life to an Algorithm? Tinder Thinks You Are What Happened? 🔸 Tinder has launched a new feature, Chemistry, powered by AI. Its aim is to solve what is known as swipe fatigue — users’ exhaustion from endlessly scrolling through profiles. 🔸 The feature is currently being tested only in Australia, but the direction of change is already clear — Tinder is gradually moving away from the traditional “swipe right / swipe left” mechanics towards more targeted AI-driven recommendations. What Is Chemistry? Chemistry is an attempt to gain a deeper understanding of the user: 👇the user answers questions; 👇with the user’s consent, the app analyses photographs from the phone’s gallery; 👇the algorithm builds an expanded profile of interests and behavioural patterns. 🔸 Instead of dozens or hundreds of profiles, a person receives just one or two of the most relevant options — so-called “drops”. 🔸 In essence, Tinder is offering not a choice from an endless catalogue, but personalised matchmaking — closer to the role of a digital matchmaker. Why Is Tinder Doing This Now? Because the classic dating app model is no longer working as effectively as it once did: ❗ New registrations have declined by 5% year-on-year. ❗ Monthly activity has fallen by 9%. Searching for an Exit from the Swipe Model 🔹 Today, it is not only users but also market participants who are speaking about the “end of the swipe era”. Dating apps are increasingly criticised for having turned the search for relationships into a marketplace: filters, cards, instant decisions. 🔹 Against this backdrop, alternative models are emerging. The start-up Known, for example, completely abandons profiles and replaces them with a 30-minute AI voice interview. After a match is suggested, the user has 24 hours to confirm it and another 24 hours to meet in person. If the deadline is missed, the match disappears. The app books a table, synchronises calendars, and effectively takes people offline. In beta tests, it claims an 80% conversion rate from match to real-life meetings, compared with 35% for traditional apps. Why Does It Matter? 🔹 Tinder once created a culture of endless choice. Now it implicitly acknowledges that an excess of choice undermines motivation. In this context, AI aims to reduce cognitive overload, improve the relevance of partner selection, and restore users’ trust in the system. 🔹 A key shift is taking place. Previously, users browsed hundreds of profiles and felt they were “choosing for themselves”. Now, that choice is increasingly delegated to the machine. We are moving from the problem of “too many options” to the question of how willing we are to entrust our personal lives to an algorithm. It appears that the swipe era may be coming to an end.

🔈 Social Media Addiction: A US Jury to Decide Whether Meta Is Liable for Harm to Mental Health What happened? 🔸 On 27 January, a trial began in California examining whether Meta caused harm to teenagers’ mental health through its social media products. The claimant is a minor Meta user identified in court documents as K.G.M. 🔸 This is the first of thousands of similar lawsuits to reach a jury trial. Its outcome is expected to serve as a bellwether for a broader wave of litigation accusing social media platforms of causing psychological harm to users, particularly children and adolescents. Background 🔸 More than 3,000 lawsuits have already been filed in California against Meta, TikTok, Snap and YouTube. A further 2,000 cases are pending in US federal courts. Claimants include private individuals, school districts and state attorneys general, all seeking compensation and changes to how social media platforms operate. The core allegations 🔸 K.G.M. began using YouTube at the age of six, and Instagram and Snapchat at around 14. During adolescence, she allegedly developed a compulsive dependence on social media and experienced bullying on Instagram, as well as attempts at sexual extortion. According to the claim, this led to depression, anxiety and suicidal thoughts. 🔸 Crucially, the claims do not focus on individual posts or comments. Instead, the plaintiffs argue that Meta created a dangerous product. Instagram, they say, was deliberately designed to maximise the amount of time teenagers spend on the platform. This includes features such as infinite scroll, recommendation algorithms, autoplay, push notifications, and the alleged failure to provide adequate warnings to users and parents about potential risks. 🔹 Because the case of K.G.M. v. Meta is considered representative of this group of lawsuits, it was selected as a test case for jury consideration. The verdict is expected to help define the boundaries of platform liability. The challenge of proving liability To succeed, the claimant must demonstrate that: 1️⃣ Meta owed a duty of care to protect teenagers’ safety. 2️⃣ Meta breached that duty. 3️⃣ Instagram was the cause of her psychological harm. 4️⃣ The harm caused by social media was real and measurable. 🔹 The most difficult element is causation. The plaintiffs must convince jurors that K.G.M.’s depression and addiction were caused specifically by social media use, rather than by school, family circumstances or other factors. This mirrors earlier litigation against tobacco companies, where proving that cigarettes caused cancer in individual cases was notoriously difficult. 🔹 Another key issue is identifying the source of harm. Was it the content on social media, or the design of the platforms themselves? Meta is expected to rely on Section 230 of US law, which generally shields platforms from liability for user-generated content. 🔹 The plaintiffs, however, argue that the harm stemmed not from content but from Instagram’s architecture. They point to internal Meta communications, which allegedly show that employees were aware of negative effects on young users and continued to exploit adolescents’ psychological vulnerabilities in the competition for attention. Platform responses 🔹 Shortly before the trial against Meta began, Snap and TikTok reached confidential settlements with K.G.M. 🔹 Meta and YouTube, by contrast, chose to contest the claims in court. Why this matters 🔹 If Meta loses, the consequences could be far-reaching: billions of dollars in damages across thousands of cases, court-mandated changes to the design of Instagram and Facebook, tighter regulation of social media, and significant reputational damage. 🔹 The outcome could force Big Tech companies to rethink their approach to protecting minors. For the first time, the world’s largest platforms are publicly defending themselves before a jury against allegations that their products were intentionally designed to be addictive for children.