US prosecutors should reconsider holding decentralized finance (DeFi) protocols accountable for actions they do not instigate, according to venture capital firm a16z. In a blog post dated February 4, the firm highlighted that assigning blame to developers for third-party actions undermines accountability principles. They emphasized the need to clearly define 'control' in legal terms to distinguish between decentralized applications, like decentralized exchanges (DEXs) such as Uniswap, and traditional centralized exchanges. a16z proposed that regulatory clarity is essential for the crypto sector, particularly in determining the status of crypto companies as 'money transmitting businesses.' The blog likened the prosecution of crypto developers to blaming car manufacturers for drivers' negligence, a view that reflects ongoing concerns over regulatory overreach. With a diverse portfolio of over 100 crypto companies, a16z called for a more nuanced understanding of responsibility within the evolving cryptocurrency landscape, particularly under the incoming presidential administration which aims to reshape the regulatory environment.

Source 🔗