The Crypto Defi Defense Defense Group has urged the United States Ministry of Justice (DOJ) to reconsider its approach to hold the Defi protocol developers responsible for user actions.
In a blog article published on February 4 by Andreessen Horowitz (A16z), the co-authors Miller Whitehouse-Levine and Amanda Tuminelli of the DEFI Education Fund argued that the developers should not be responsible for the way their software is used, by comparing them to car manufacturers which are not responsible for the actions of drivers.
According to them:
“The same intuitive principle that governs our understanding of the car manufacturer and the driver’s responsibility should be the foundation of the development of sensitive policies in the context of decentralized networks and protocols.”
The authors warned that the targeting of developers under laws such as article 1960 could create harmful precedents, possibly expanding legal risks in the cryptographic industry.
They wrote:
“The holding of persons responsible for systems and activities on which they exercise any agency or control lead to perverse results. “”
They also stressed that decision -makers must distinguish between those who create technology and those who actively control it. The fact of misappropriating responsibility, they have argued, could hinder technological progress and discourage innovation in the DEFI sector.
Regulatory clarity
To illustrate their point, the authors have described how the large interpretation of the DoJ of the “money transmission license” has a negative impact on the industry by comparing transactions on centralized exchanges in DEFI protocols.
This law governs money transmission companies and bears severe sanctions, including fines of up to $ 250,000 and five years in prison so as not to register. Currently, the authorities are entangled in a legal confrontation with Tornado cash’s Developer, Roman Storm, for alleged violation of this provision.
According to them, when users negotiate on a centralized exchange, they transfer funds to the platform, which gives it control of their assets. This arrangement makes centralized exchanges subject to financial regulations.
However, in DEFI, users keep the total of their funds, performing transactions directly via blockchain -based protocols. This distinction is crucial for regulatory clarity.
The authors argued that an appropriate interpretation of the laws on the transmission of money should take into account the custody and the control. A centralized exchange advances user funds on behalf of customers, making it a financial intermediary. On the other hand, a DEFI protocol is simply a tool with which users interact in their own terms, without any third -party surveillance.
For this reason, the authors called for clearer legal directives, in particular in the definition of control in financial regulations. They noted that a well -defined legal framework will reduce uncertainty and support responsible innovation.
They concluded:
“Industry and legislators must meet in 2025 to ensure that the law correctly reflects the precise concepts of the custody and the control and the responsibilities which result from it – whether in the context of a law on the structure market, brokers’ declaration obligations or reform of the 1960 section. “
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