The Electronic Frontier Foundation is taking the SEC to task for potentially repressive policies related to enforcement actions levied against crypto industry firms.
Free speech online is the EFF’s wheelhouse, but in a recent blog post, they’ve also addressed other matters in the cryptosphere. The criminalization of “providing an algorithm” is too broad a language for the constitutional watchdogs.
The Electronic Frontier Foundation is particularly concerned about the SEC’s prosecution of Ethereum exchange EtherDelta. | Source: Shutterstock
Taking issue with a specific aspect of the case against EtherDelta co-founder Zachary Coburn, the digital rights organization reminds the SEC that Coburn was within his rights to write and publish an algorithm for the decentralized cryptocurrency exchange. The regulator issued a statement on November 16, 2018, saying:
“[A]n entity that provides an algorithm, run on a computer program or on a smart contract using blockchain technology, as a means to bring together or execute orders could be providing a trading facility.”
EFF says that the broadness of this language is an existential threat to the rights of programmers everywhere – not just coders deploying illegal crypto exchanges.
“EFF today sent a public letter reminding the agency that writing and publishing code is a form of protected speech under the First Amendment, and that the courts don’t take kindly to government agencies requiring people to obtain licenses before exercising their free speech rights.”
The SEC charged that EtherDelta founder Zachary Coburn “should have known” his code would contribute to securities violations. They gave him an immediate settlement offer, which he took, that amounted to $375,000 in total.