What Legal Precedents Exist for Holding Unincorporated Associations or Software Developers Liable for Financial Crimes?
Legal precedents are sparse but growing. In the U.S. regulators have pursued actions against founders and developers of crypto mixers and DeFi protocols, often under the theory that they are operating as unlicensed money transmitters.
For example, the case against the founders of BitMEX and the sanctions against Tornado Cash developers indicate a willingness by authorities to pierce the veil of decentralization. Courts may look to laws governing general partnerships or unincorporated associations, where members can be held personally liable for the organization's activities, especially if they profit from them.
Glossar
Core Developers
Developer ⎊ Core Developers are the highly specialized technical individuals who possess the deep expertise necessary to propose, write, audit, and implement changes to a cryptocurrency or DeFi protocol's foundational smart contracts.
Legal Precedents
Definition ⎊ Legal Precedents are prior judicial decisions or established case law that courts or arbitration panels rely upon when interpreting the validity or intent of novel financial instruments, including those structured as crypto derivatives.
Unincorporated Associations
Structure ⎊ Unincorporated associations, within cryptocurrency, options, and derivatives, represent legal entities formed through agreements between individuals, lacking formal registration as corporations or limited liability companies.
Developers
Architecture ⎊ Developers within cryptocurrency, options trading, and financial derivatives contexts primarily construct and maintain the underlying systems facilitating these markets.