Smart Contract Devs Liable for How dApps are Used: CFTC’s Quintenz

Smart Contract Devs Liable for How dApps are Used: CFTC’s Quintenz

One of the top markets regulators in the United States said yesterday that he believes smart contract developers should in some instances be held liable when their blockchain applications are used in conjunction with illegal activities.

Brian Quintenz, a commissioner at the Commodity Futures Trading Commission (CFTC), made this statement on Monday at the GITEX Technology Week Conference. In his speech, Quintenz explored how best to fit cryptocurrency and, specifically, smart contracts into the CFTC’s supervisory framework, which was written long before the advent of blockchain technology. Who should be held responsible, he asked, when a smart contract violates CFTC regulations?

He quickly ruled out both the core developers of the underlying blockchain protocol, miners, and the blockchain’s general users, as none of these groups should be held responsible for monitoring the activity of other network users.

However, he argued that the developers of the individual smart contracts should be prosecuted in connection with illegal activity that occurs within their respective decentralized applications (dApps) — so long as the CFTC can demonstrate that the developers could “reasonably foresee, at the time they created the code, that it would likely be used by U.S. persons in a manner violative of CFTC regulations.”

While stressing that his statements represent his personal views and not the formal stance of the CFTC, Quintenz used prediction markets as an example of a smart contract application that could lead to its developers being prosecuted by the agency, as these dApps could be used for activities that are “contrary to the public interest,” such as betting on whether a public figure will be assassinated. Consequently, he argued that the prediction market’s creators could be prosecuted by the CFTC for offering illegal event contracts.

He explained:

Quintenz, a Trump appointee who has said the past that bitcoin and blockchain are “transformative” innovations, compared writing a smart contract that you understand will likely be used for illegal purposes with allowing someone to borrow your vehicle, knowing that they will use it to rob a bank.

“Smart contract applications on blockchain networks hold great promise. They have the potential to open up new markets and create efficiencies in existing ones. At the same time, they also raise novel issues of accountability that users and policy makers alike must consider,” he said in conclusion. “Our rapidly evolving technological landscape poses challenges for all of us. As such, I think it is incumbent upon regulators to continually educate ourselves on new technological developments, so that we can accurately evaluate their benefits and risks and develop appropriate policy responses.”

Featured Image from Chamber of Digital Commerce/YouTube

• Join CCN's crypto community for $9.99 per month, click here.
• Want exclusive analysis and crypto insights from Hacked.com? Click here.
• Open Positions at CCN: Full Time and Part Time Journalists Wanted.
17.10.2018 / 08:20 17
We are Behind the Curve When it Comes to Blockchain Technology, Says CFTC Chairman We are Behind the Curve When it Comes
Image courtesy of Ethereum World News archives.Chairman of the United States Commodity Futures and Trading Commission (CFTC), J. Christopher
US Department of Justice, CFTC Probe Crypto Market Manipulation: Report US Department of Justice, CFTC Probe
The U.S Department of Justice has reportedly launched a criminal investigation into cryptocurrency traders who may have manipulated the market
US Regulator Urges SEC to Clarify If Ethereum Tokens Are Securities US Regulator Urges SEC to Clarify If
Wall Street continues to debate whether cryptocurrencies should be treated as securities or commodities. Ethereum, the world’s second most valuable
CFTC Official Backs Winklevoss Brothers' Crypto Self-Regulation Bid CFTC Official Backs Winklevoss
A proposed cryptocurrency self-regulatory organization (SRO) put forward by Gemini founders Cameron and Tyler Winklevoss has won support from a key
Crypto Industry Should Self Regulate, Says CFTC Commissioner Crypto Industry Should Self Regulate,
Regulations can take years to develop, so why wait when you can self-regulate? That's the message U.S. Commodity Futures Trading Commission (CFTC)
New York Federal Judge Rules That CFTC Can Regulate Cryptocurrencies As Commodities New York Federal Judge Rules That CFTC
A New York federal judge has upheld a fraud case against a crypto investment advice company, maintains that the CFTC can regulate crypto as a
Comments (0)
Add a comment
Comment on