Yea but on boarding from fiat is the roadblock in all areas not just Nostr. How can we transfer fiat into BTC without ending up in a Federal Prison? More accurately the company/people that enable it to do so.

Now there are games with points in them, I have always wondered if there would be a way to make that work? Not sure but this is the big weakness of BTC the on and off ramps.

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Just to be clear i really don't understand the legal aspects, with that said.

If you don't give the option to off ramp it's just a purchase, right? Make a disclaimer of it and when trey discover the real beauty and opt to the real deal, they'll have a secured generated nsec, with a beautiful profile page, reasonable relay options and the connections made in the period.

Depends where you are, parting with it in any fashion here is considered subject to capital gains.

Unless it is just between your exchange & one of your wallets that is.

Between your wallets whether self custody or your wallet (like wallet of Satoshi) on an exchange I mean.