The electronic frontier Foundation (Electronic Frontier Foundation, EFF) has criticized the recent statements of the Commission, US securities and exchange Commission (SEC) that those who writes and publishes code of computer programs should be confident in complying with securities legislation.
We are talking about the statement of the SEC concerning decentralized cryptocurrency exchange EtherDelta, which States that the person giving publicity to a software algorithm can be seen as a person operating in the securities market.
The EFF sent an open letter to the SEC in which the Fund reminds the public of the Commission that the activities of publishers and writers included in the scope of protection of the First amendment to the U.S. Constitution about freedom of speech and that there is a bias of public bodies, requiring licensing of people who only directly exercise their right to freedom of speech.
A decentralized market EtherDelta founded by entrepreneur Zachary Coburn. The SEC accused him in the management of unregistered securities stock exchange, Coburn agreed with the claim and agreed to pay more than $300,000 fine. EFF does not have its own position on EtherDelta violates the laws of the United States or not, however, the Fund appealed to the SEC with an urgent request to clarify wording regarding what a person is responsible for what it just wrote and published a code of a computer application.
If you do not take into account the current problems, which SEC as the state Commission may have a c EtherDelta, it becomes obvious that the decentralized exchange (DEX) have certain advantages for consumers. That is why it is so important that administrative obstacles are not strangled at the root of innovative technology DEX only based on the fact that someone allowed themselves to write and distribute computer code.
Centralized exchanges impose itself as the sole mediator who has the ability to freeze the funds of clients and block or random trades without any obligation to provide the injured party’s rights to appeal. Centralized exchanges are also often subject to technical interruptions in their work, which prevents customers to have seamless access to their digital assets. In addition, these exchanges are not only a target for criminals aimed at stealing users ‘ funds, but they can be under the control of unscrupulous individuals who abuse their access to funds and customer data.
In contrast to centralized exchanges DEX allow for the exchange of digital currencies with the use of smart contracts. Requests to buy and sell cryptocurrencies can be represented in the form of a smart contract, which itself checks the conditions of the transaction and commits the transaction. Decentralized exchanges, as a rule, is not required to hold clients ‘ funds, on the contrary, customers retain possession of private keys, that does not prevent DEX automatically to exchange, not owning assets. This is why decentralized exchanges are not attracted to third-party intruders and not tempt owners of the exchanges to the theft of customer funds. Moreover, the decentralized transaction can be revised at the initiative of the intermediaries, because they are not approved by any individual or company.
Decentralized exchanges are now in the early stages of its development. At the moment they are not widely used, however, are the focus of ongoing research and innovation. Many cryptographers and programmers are experimenting with systems of smart contracts to develop new systems to help users to get rid of the risk of using online transactions in the centralized markets.
“Protection of freedom of speech enshrined in the First amendment and confirmed cases for decades, includes the right of individuals to publish their ideas without prior obtaining the license,” — emphasizes the electronic frontier Foundation.
Perhaps in the specific case EtherDelta had a lot of facts which attracted the attention of the SEC, but the mere act of publishing code used in the software decentralized exchange may not be cause for administrative or criminal prosecution, as it is a direct violation of the First amendment to the U.S. Constitution.