Is DeFi Illegal Now? Tornado Cash Case Update | Jake Chervinsky

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Oct 8, 2024

Jake Chervinsky, Chief Legal Officer at Variant Fund and a crypto law expert, joins to dissect the legal storm surrounding Tornado Cash developer Roman Storm. He explores whether DeFi could face criminalization in the U.S. and the chilling effect on developers if criminals misuse their code. The discussion dives into the implications of government oversight on financial privacy, potential legal repercussions for DeFi, and the precarious balancing act between innovation and compliance in this rapidly evolving landscape.

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INSIGHT

Developer Liability Precedent

Judge Fala's ruling against Roman Storm sets a dangerous precedent for software developers.
It asserts developers can be criminally liable for how others misuse their open-source code.

INSIGHT

DeFi Under Threat

The ruling's implications extend beyond Tornado Cash to all DeFi protocols.
It challenges the core principle of decentralization by suggesting developers are responsible for immutable smart contracts.

INSIGHT

DOJ vs. FinCEN

FinCEN's 2019 guidance clarified that immutable smart contract protocols aren't money transmitters.
The DOJ contradicts this by arguing developers can be criminally liable even if they follow FinCEN guidance.

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