Source: DLNews
By Liam Kelly
Compiled by: BitpushNews Mary Liu
Cryptocurrency developers really need to be careful — they could be held legally liable if their work is used by others.
That, privacy experts say, is the worst possible outcome from France’s indictment this week against billionaire Telegram CEO Pavel Durov .
The case, as regulators seek to hold Durov accountable for illegal activity on the Telegram platform, has once again put a spotlight on developers’ responsibility for how their products are used.
Taylor Monahan , lead security researcher at crypto wallet provider MetaMask, told DL News: “My view is that if you combine what happened with Telegram and what happened with Tornado Cash , it’s a double whammy.”
“It’s scary because it puts a responsibility on developers to anticipate and understand everything that users are going to do and then prevent them from doing it.”
Big stakes
Telegram has denied French authorities' allegations of criminality against Durov and said it complies with EU law.
The stakes in this case are enormous, especially for cryptocurrencies.
Dubai-based Telegram, which has 950 million users worldwide, has become an integral part of the digital asset ecosystem by providing a channel for millions of people and businesses to collaborate and communicate.
Smart contracts can’t save them, and from the outset, the company has touted its “don’t ask, don’t tell” approach to user activity as a key feature of its business model.
For years, the line where technology product development ends and legal liability begins has been blurred.
Earlier in March, a Dutch court convicted Alexey Pertsev , a former developer of cryptocurrency mixer Tornado Cash , of laundering $2.2 billion and subsequently sentenced him to five years in prison.
Even if Pertsev himself did not directly launder money, it does not matter, as long as he managed a website that facilitated such activities.
Now, Durov, 39, who holds dual French and Emirati citizenship, faces a similar situation.
A French court on Wednesday accused Durov of failing to prevent criminals from using the popular social media platform to commit crimes ranging from child sexual abuse to drug trafficking and fraud.
According to a statement from French prosecutors, Telegram has refused to cooperate with French law enforcement investigating these crimes and has refused to provide information.
freedom of speech
Telegram supporters, including Elon Musk, have rushed to frame the case as an undermining of free speech. After all, Telegram’s business model is built on the idea that the platform is an uncensored, open marketplace of ideas, good and bad.
But the idea conflicts with long-standing legal principles that prioritize cooperation with law enforcement over business models, product design or technological features such as smart contracts.
In this regard, Gary Gensler really knows how to irritate the industry.
Furthermore, Tornado Cash may actually be in a better position in terms of business model, as it is decentralized and still operates to this day. In contrast, Telegram is mainly controlled by Durov and is closer to traditional models such as Whatsapp.
“WhatsApp and Telegram are centralized on a set of servers, and the companies responsible have absolute control over those servers,” Harry Halpin, CEO of blockchain privacy company Nym Technologies, told DL News.
This makes it easier for management to review illegal or offensive content, and to shut down or censor accounts.
'Hard to spot'
Halpin said that because WhatsApp and Telegram are not open source, meaning their code is not publicly visible, it is possible for governments to spy on users. “It’s very difficult to detect,” he said.
While fears of state surveillance have long motivated crypto culture, prosecutors appear to have finally drawn a red line.
During Pertsev ’s trial, a Dutch judge reprimanded the developer for not responding to authorities seeking information or action regarding the mixer’s illegal practices.
“This is scary and roughly equivalent to a government requiring every developer to become a highly censorship-resistant Web2 company from day one,” Taylor Monahan, lead security researcher at MetaMask, told DL News.
Encrypted Channel
For an industry that prides itself on decentralization, Telegram’s role is vital. OTC markets, such as Offx and SecondLane, are built directly into Telegram.
The communication and marketing of emerging projects highly rely on TG Groups to reach the audience. The messaging app integrated crypto wallets and in-app crypto payments this year.
“Telegram is no longer just a messaging platform,” Reuben Yap, administrator of Privacy Project Firo, told DL News.
As the case progresses, Telegram’s fortunes and market position could shift.
Monahan said considerable damage had already been done in the case. "This is a very bad thing that will cause immeasurable damage to personal liberty and privacy," she said.
As precious as these crypto ideals may be, law enforcement authorities appear intent on drawing a line where fighting organized crime takes a far higher priority than the so-called ethos of the crypto industry.
For more information, please join:
Twitter: https://twitter.com/BitpushNewsCN
Bitpush Discord Community: https://discord.com/invite/QSvv7MZ2tz
BitPush TG Exchange Group: https://t.me/BitPushCommunity
Bitpush TG subscription: https://t.me/bitpush
