The Crypto Advocacy Group Defi Education Fund is urging the US Department of Justice (DOJ) to rethink its approach of Defi protocol developers taking responsibility for user behavior.
In a blog post published by Andreessen Horowitz (A16Z) on February 4th, Defi Education Fund co-authors Miller Whitehouse-Levine and Amanda Tuminelli are responsible for how developers use the software and are using the automotive device. Compare with Car I insisted on that. People who are not responsible for the actions of drivers.
According to them:
“The same intuitive principles that understand the responsibility of carmakers and drivers should be the foundation for wise policymaking in the context of distributed networks and protocols.”
The authors warned that targeting developers under laws such as Section 1960 could create harmful precedents and increase legal risks across the crypto industry.
They wrote:
“Keeping people responsible for institutions and systems and activities that do not take control leads to evil consequences.
They further emphasized that policymakers must distinguish between those who create technology and those who actively control it. They allegedly misbehaved, which could hinder technological advancements and discourage innovation in the deficit sector.
Clarity of regulations
To explain their argument, the authors outlined how broad interpretations of DOJs of “remittance licenses” have a negative impact on the industry by comparing centralized exchange transactions with the Defi protocol. .
The law governs companies that transfer money and imposes serious penalties, including fines of up to $250,000 and five years in prison for failing to register. Authorities are currently caught up in a legal showdown Tornado cash Developer Roma Storm for alleged violations of this provision.
According to them, when users trade in central exchanges, they transfer funds to the platform and control assets. This arrangement will result in a central exchange subject to financial regulation.
However, in Defi, users have full control over their funds and execute transactions directly through blockchain-based protocols. This distinction is very important for regulatory clarity.
The authors argued that appropriate interpretation of money transmission laws must take into account detention and management. Intensive exchange moves user funds on behalf of customers and becomes financial intermediaries. In contrast, the Defi protocol is a tool that allows users to interact in their own terms without third-party supervision.
For this reason, the authors sought clearer legal guidelines, particularly when defining controls within financial regulations. They noted that a well-defined legal framework reduces uncertainty and supports responsible innovation.
They concluded:
“Industry and lawmakers must come together in 2025 to ensure that the law properly reflects the exact concept of custody and management and the responsibilities that follow, including market structure bills, broker reporting obligations; Or whether it is in the context of the Reform 1960s or not.”
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