Roman Storm cautions about the DOJ prosecuting developers of DeFi retroactively, which has become a cause of panic in the crypto community regarding the clarity in the law and innovation.
Roman Storm, the creator of the privacy protocol Tornado Cash, has raised a red flag to developers of decentralized finance (DeFi).
A question he posed was the legal risk of developers making non-custodial protocol designs, as he would inquire, How are you certain that the DOJ will not consider your project to be an unlicensed money service business?.
This matter raises the possibility of retroactive prosecution of open source creators by the US Department of Justice (DOJ), which puts the crypto ecosystem on high alert.
The alarm issued to Storm is a result of his own August conviction of conspiring to conduct an unlicensed money transmission business through Tornado Cash.
Although the jury found him guilty on one count, others were tied on matters concerning money laundering and sanctions.
He filed his latest acquittal motion on September 30, emphasizing that Tornado Cash’s decentralized nature, free from any controlling entity, defies traditional legal frameworks.
Uncertainty in Legal Matters Sows Fear in the DeFi Community
The Storm case has caused shock in the open source software world. The builders of decentralized non-custodial systems are in unprecedented legislative darkness regarding the legality of constructing structures that regulators could consider as responsible for money transmission in a custodial relationship.
This insecurity threatens to kill innovation in the US crypto space, leading to the demand for legal clarity and safeguards.
The Ethereum Foundation made an unprecedented step and, together with Keyring Network, has financed the judicial defense of Tornado Cash developers Roman Storm and Alexey Pertsev.
The revenues of the zkVerified vaults of Keyring are used to fund their defense, highlighting the work of the community to protect privacy-tech builders.
Matthew Galeotti, the acting assistant attorney general in the DOJ’s criminal division, addressed these fears.
In an address at the American Innovation Project Summit, Galeotti clarified that the DOJ is not going to consider the simple act of writing code without ill intent a crime.
He stated that the department will not use criminal proceedings to set legal precedents and will instead implement clear legal boundaries for developers.
The DeFi builder and Innovation Stakes
This case of Storm is a precedent. By prosecuting DeFi developers, the DOJ will likely have the effect of discouraging innovation and driving talent out of the US.
Lawmakers and regulators are manoeuvring through this complicated landscape with the crypto industry paying close attention. The warning message of Storm is an eye-opener to the supporters of decentralization and the blockchain community as a whole.
Source: https://www.livebitcoinnews.com/defi-news-storm-raises-alarm-on-doj-targeting-defi-builders/