Today we @fund_defi are proud to submit an amicus brief in US v. Storm, arguing that the court should not validate the government’s unprecedented and damaging theory of criminal liability for software developers. This case has important implications for developers in every industry, not just digital assets. 🧵 defieducationfund.org/_files/ugd/84b…
2/ High level: the government’s theory underlying each of the three counts in the indictment is that software developers are criminally liable for a third party's later illicit use of their software . . . even when there was no direct or active engagement between the software developer and the third party. That is a massive expansion of the law.
3/ We focused our brief on the charges alleging a conspiracy to launder money and a conspiracy to violate IEEPA (sanctions-related statute). We argue that, on the most basic principles of criminal law, software developers in any industry should not be held criminally liable when a third party spontaneously uses their software to commit a crime.
4/ We point out that IEEPA has simply never been used the way that the government is using it in this indictment. We reviewed over 100 recent IEEPA cases and provided a table of 78 of the most relevant cases to the court, which you can see linked here. In every single one of these cases, the defendant is accused of directly and actively engaging with a sanctioned entity (SDN). In every single one of these cases the defendant knew that they were dealing with a SDN or the ultimate destination/beneficiary of their conduct was an SDN. In every single one of these cases the defendant *had a counterparty.* defieducationfund.org/_files/ugd/84b…
5/ But for developers of open-source, general-use smart contract protocols, there is no counterparty. There is no intended recipient, let alone a recipient that is an SDN. And that is a problem for the government in a case that stays true to IEEPA, which requires that the government prove a defendant acted “willfully” - meaning “acted with knowledge that his conduct was unlawful - by exporting blocked property in their “possession or control” to an SDN.