This week, I was joined on a livestream by Andrew Bull, ESQ., to discuss the SEC settlement with the founder of EtherDelta. Andrew is the CEO and Founder of Bull Blockchain Law, Philadelphia’s first crypto centric law firm. We attacked this question from both a technical and regulatory perspective, and I learned a lot.
Here were my top take-aways from the discussion:
The SEC exists for consumer protection and views each case from the perspective of the end user, not the developer or entrepreneur.
How you describe and promote something you create— whether it’s a token, an exchange, or something similar— will have a big impact on how it’s classified and regulated by the SEC.
A developer who created the interface for interacting with a decentralized protocol, even if they didn’t create or own the protocol itself, can still be culpable if they promote that interface to consumers. For example, someone that created and hosted a website for interacting with the EtherDelta smart contracts might still be charged with running an unregistered exchange.
The SEC and other regulatory bodies make themselves available! If you’re building something and there’s regulatory uncertainty, you can get in contact with them.
While code is classified as speech, there are limits even to our First Amendment rights, and these have not yet been tested in the judiciary with regards to decentralized systems. A developer shouldn’t assume that they’re not culpable for code they write, publish, and promote just because they didn’t deploy it or host it themselves.
The conversation is packed with other insights— I highly recommend giving it a full listen. For more from Andrew, follow him on Twitter @andrewbull1988.