Venture capital firm a16z has urged prosecutors at the United States Department of Justice (DOJ) to stop targeting decentralized finance (DeFi) protocols for mistakes committed by the users. According to the firm, the protocols do not have control over what users do, hence they should not be liable.
The firm released a blog post, noting that holding people responsible for actions for which they have no jurisdiction leads to obstructive outcomes. “Unfortunately, the Department of Justice (DOJ) has ignored this distinction and is attempting to do just that by holding software developers responsible for the actions of third parties that use neutral tools the developers created but no longer control,” part of the statement reads.
A16z wants Trump’s administration to find a correct means of control
According to its blog post, the firm urged the new administration to “codify the proper and legally correct understanding of ‘control’ in law” to help users, the DOJ, and developers understand control legally. Over the last few years, prosecutors have often targeted protocols for actions committed by users on their platforms, with a16z comparing it to accusing a car manufacturer of a car crash done by a careless driver.
The firm mentioned that the control measures will determine if the crypto firms qualify as money-transmitting entities that should be guided by specific rules and regulations. According to its platform, the firm has a portfolio of over 100 crypto firms, including decentralized exchanges like Uniswap.
Fed’s stance on crypto is subject to change under Trump
During the past administration, federal regulators were very strict with crypto cases, with the Securities and Exchange Commission (SEC), the federal regulator, opening more than 100 cases against crypto firms. The regulators also claimed that the firms and other individuals who have raised money using crypto have broken several rules and regulations.
However, things are expected to change under Donald Trump, with the president already making a crypto-focused promise during his campaign. Trump has made a series of promises, which he intends to keep, including making America the crypto capital of the world. So far, he has made pro-crypto choices in the leadership of agencies related to the industry, with other executive orders towards that effect being made.