Having some discussions here with friends I follow, the questions was if it is possible to create a Bitcoin investment fund without lawyers and legal friction. 

After doing my research, the answer is YES, it is possible! However,  it requires careful planning to avoid legal risks. So, I also did a deeper research and here are the results. We can take a decentralized and peer-to-peer approach, making it more of a private BTC club than a formal investment fund. Of course, those interested will come with comments and adjustments for making the best! 

Summary: How to Structure a Private BTC Club Without Lawyers?

Use a Peer-to-Peer BTC Investment Club Model

Instead of a regulated investment fund, we can create a private (invite-only BTC club),  where:

• Members pool BTC together for joint investments;
• No formal entity (reduces legal exposure);
• BTC is managed transparently via multi-sig wallets.

Why this works? It’s a peer-to-peer agreement, not a legally registered fund, so there are no strict regulations.

Avoiding Legal Traps

To stay out of securities laws we, the founders,  MUST:

• Never promise fixed returns (no "guaranteed profits")
• No public fundraising (only invite trusted members)
• No tokenized shares (just BTC contributions)
• Only distribute profits in BTC

If we follow these rules, we avoid being classified as a regulated fund.

Use Multi-Signature BTC Wallets Instead of a Legal Entity

Instead of registering a company, use:

• Multi-sig wallets (BitGo, Casa, or Electrum)
• DAO-style voting for fund decisions
• Smart contracts to automate profit sharing

This removes legal ownership risks because funds are collectively controlled by all members.

How to Onboard Investors Privately?

• We will use word-of-mouth and direct invites only, as we do it here now, for creating the club. The Club will have its own landing page for this reason.
• Only accept direct BTC transfers.
• No advertising (prevents legal issues).
• Also, use private forums or direct messenger groups: Session, Signal, WhatsApp, etc.

This makes it a closed, self-managed BTC pool, not a public fund.

Security & Transparency Without Lawyers

• Create an open-source BTC tracking dashboard;
• Use BTC address monitoring tools (Mempool.space, Blockchain.com Explorer, or others);
• Publicly share all transactions in the group.

This keeps things transparent without legal contracts.

Summary of How to Do It Without Lawyers?

1. 1. Set up a private BTC club (no legal registration);
2. 2. Use a multi-signature BTC wallet (instead of a company);
3. 3. Privately onboard trusted members (no advertising);
4. 4. Follow a DAO-style governance system;
5. 5. Ensure full transparency (BTC blockchain is public anyway).

This method avoids lawyers, compliance costs, and regulations, while still allowing a decentralized Bitcoin investment structure.

Step 1: Setting Up Multi-Signature (Multi-Sig) Wallets

What is Multi-Sig?

A multi-signature wallet requires multiple approvals (private keys) to authorize a BTC transaction. For example, if you set up a 3-of-5 multi-sig wallet, at least 3 out of 5 people must approve a transaction before it can be sent.

Best Multi-Sig Wallets for a Bitcoin Investment Club:

- Electrum – Open-source and private
- Backpack Wallet – Decentralised
- Specter Wallet – Great for Bitcoin security
- Unchained Capital – Business-focused, secure

Step 2: Governance Rules for the BTC Investment Club

Key Principles to Follow

- No single person has full control 
}- All decisions require group approval 
- Clear rules for profit distribution

Governance Model

1. 1. Who Controls the Funds?

• Multi-sig wallet members vote on transactions
• Example: 3-of-5 approvals required for payments

1. 2. Investment Decisions

• Members vote using Signal, Telegram, or a forum
• Example: "Should we invest in XYZ?" → Yes/No voting

1. 3. Profit Distribution Rules

• Profits sent directly to investors’ BTC addresses
• Example: Every 3 months, distribute BTC earnings

1. 4. How Members Join/Leave?

• New members require approval from majority votes
• If a member leaves, their BTC is paid back, and a new keyholder replaces them

1. 5. Security and Transparency

• Use BTC blockchain explorers to track wallet transactions
• Publicly share wallet balances (without private keys!)

We can use Backpack Wallet for creating a Peer-to-Peer BTC Investment Club. It offers multi-signature (multi-sig) functionality, which is key to ensuring security and collaboration between multiple members in managing funds.

However, we must keep in mind that Backpack Wallet is designed for a variety of cryptocurrencies and may not focus exclusively on Bitcoin, so it's essential to ensure that Bitcoin (BTC) is supported in the version we will use.  Here’s how we can use Backpack Wallet for the BTC investment club:

Using Backpack Wallet with Multi-signature Functionality

Step 1: Install Backpack Wallet

1. Download and Install Backpack Wallet:

- Go to the official website: Backpack Wallet.

- Download the wallet for your preferred platform (Android, iOS, or desktop).

- Complete the installation process.

1. Create an Account:

- Open Backpack Wallet and create a new wallet or import an existing one.

- Important: Make sure to write down your 12 or 24-word recovery phrase and store it securely. This is vital for recovery in case you lose access to your wallet.

Step 2: Set Up Multi-Signature (Multi-Sig)

1. Connect Hardware Wallets:

a). To use multi-sig, you'll need to integrate hardware wallets (Ledger, Trezor, or Keystone) into Backpack Wallet.

b). Follow these steps to connect your hardware wallet(s):

• Connect your hardware wallet to your computer or mobile device.
• In Backpack Wallet, go to the settings or wallet options.
• Select Connect Hardware Wallet and follow the instructions to pair your device.

1. Create Multi-Sig Wallet:

• In the Backpack Wallet interface, select "Create New Wallet" or "Set Up Multi-Sig".
• Choose your multi-sig configuration (e.g., 3-of-5, which requires 3 signatures out of 5 keys).
• You can then add the hardware wallet(s) as signatories. Each wallet will represent a keyholder in your investment club.

1. Set Signatures Required for Transactions:

• Once you've selected the number of wallets and signatories, Backpack will configure the multi-sig wallet.
• For instance, if you chose 3-of-5, the wallet will require 3 out of 5 participants to approve a transaction before it can be executed.

1. Backup Your Wallet:

• Make sure all members of your investment club have securely backed up their recovery phrases for the wallets they control.
• This ensures that in case of loss, they can restore access to their keys and sign transactions.

Step 3: Funding the Wallet

1. Share Wallet Address:

- Share the multi-sig wallet address with all members so they can contribute their Bitcoin to the investment pool.

- Ensure that everyone knows how much to contribute and keep track of their contribution percentage.

1. Send Bitcoin to Multi-Sig Wallet:

- Members can send BTC to the shared multi-sig wallet.

- After contributions are sent, you will have your BTC pool ready for the next steps.

Step 4: Set Up Governance Rules

1. Establish Voting System:

a). Create a private group on Signal, Telegram, or a forum for your investment club members.

b). Define a voting system to make decisions about investments, such as:

• For a proposal to go through, a majority vote (e.g., 3 out of 5 members) is required.
• Each member will vote on proposed investments or fund usage.

1. Investment Proposal:

• A member can propose a new investment (e.g., BTC, another cryptocurrency, or a project).
• All members vote on the proposal within the agreed timeframe.

1. Transaction Approval:

• Once a proposal is approved, the members of the club (signatories) will go into the multi-sig wallet and approve the transaction.
• The required number of approvals (signatures) will be met before any BTC is sent out.

Step 5: Profit Distribution

1. Profit Sharing Model:

- Decide how profits (if any) will be distributed among members.

- You can do this at regular intervals (e.g., quarterly) or after successful investments.

- Use the same multi-sig wallet to send profit shares to the appropriate addresses.

1. Automatic Payouts (Optional, to be developed in the next stage):

- If we want to automate profit sharing, we should consider using smart contracts (if the platform allows) or a system for manual payments based on the investment percentage each member holds.

Step 6: Regular Communication & Updates

Weekly / Monthly Updates:

- We must hold regular meetings or discussions about the state of the investment, future opportunities, and any necessary changes to the governance rules. 
- Ensure all members are on the same page and that the investment club remains transparent.

Final Steps: Secure, Backup, Test, Start Investments

1. Security: All members must securely store their recovery phrases.

- Use two-factor authentication (2FA) wherever available, especially for backup systems.

1. Backup Recovery: Regularly back up the multi-sig wallet's recovery information. You don’t want to lose access to the funds due to a lost private key.
2. Test the Multi-Sig Setup: Once everything is set up, perform a test transaction to make sure that the multi-sig function works as expected. All members should approve the transaction to verify the system.
   
   
3. Start Investments: Begin making investment decisions and distributing profits as per your governance rules.

Resources

A list of resources that can help us set up a Peer-to-Peer BTC Investment Club with Backpack Wallet and multi-signature governance:  

Backpack Wallet Official Website: https://backpack.app
Hardware Wallets: https://www.ledger.com/ or https://trezor.io/ or https://www.keyst.one/
Governance Rules: DAO Governance Models 
Peer-to-Peer (P2P) Investment Resources:  https://en.wikipedia.org/wiki/Peer-to-peer_investing

If intereste, comment please. Thank you!