At the 2024 Bitcoin Policy Summit, Coin Center’s Peter Van Valkenburgh emphasized the importance of ensuring that smart contracts backing decentralized applications (DApps) remain immutable. He argued that from a regulatory standpoint, immutability is crucial for developers to avoid legal liabilities related to potential scams occurring on their platforms.
Van Valkenburgh advised Bitcoin developers intending to build DApps on layer 2 networks to prioritize immutability in their smart contracts to prevent legal repercussions. He emphasized that failing to enforce immutability could lead to serious consequences, including legal action.
Developers who allow smart contracts to be manipulated through multisignature mechanisms or governance votes increase their liability if illegal activities take place on their platforms. Van Valkenburgh cautioned against this approach, suggesting that immutable smart contracts offer better protection against regulatory scrutiny.
Van Valkenburgh also discouraged developers from keeping smart contracts closed-source, as transparency and openness are essential for regulatory compliance and community trust.
He highlighted the Ethereum ecosystem as an example of avoiding regulatory obstacles by building platforms that are not controlled by human discretion. The recent dismissal of the Uniswap lawsuit underscored the importance of decentralized control in mitigating legal risks for developers.
Despite the benefits of immutability, cases like Tornado Cash’s indictment demonstrate that developers may still face legal challenges. Alexey Pertsev, one of Tornado Cash’s developers, spent time in custody due to suspicions of involvement in money laundering. Another developer, Roman Storm, faces charges related to money transmission and money laundering.
Van Valkenburgh suggested that clarity on regulatory matters will likely emerge as legal cases like Storm’s are resolved, providing insights into the legal implications for developers in the crypto space.
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up