Brian Quintenz, an official in the Commodity Futures Trading Commission in the United States has tackled the issue of accountability, especially, in this present age where smart contracts are trending alongside disintermediated finance. He was present at the technology conference week held on in Dubai which is the 38th edition held by GTEX, and he made his remarks there.
He expressed his thoughts on accountability and proposed that with regards to actions of enforcement, both the coders and the users may have to be held accountable. He explained that appropriate questions need to be asked such as if the code developers had the ability to reasonably determine that citizens in the United States would use the code that they created in a way that violated the regulations of the CFTC, at the time when the code was created by them.
Brian Quintenz structured his thoughts by pointing out the complications which come up with the application of conventional legal paradigms in the realm of blockchain which is disintermediated. He also stressed that the sector, which is rapidly emerging, posed some challenges to the role of the CFTC which is basically intermediary-focused and also focuses on overseeing the market to ensure that its integrity is preserved.
When it comes to disintermediated finance, the major actors are not necessarily the developers who design a blockchain network but rather are the miners and users. These miners and users usually operate in a framework that is decentralized and anonymous.
When it comes to disintermediated finance, the major actors are not necessarily the developers who design a blockchain network but rather are the miners and users.
In order to deal with the issues surfaced by this contest, Brian Quintenz pointed to blockchain smart contracts that are programmed to function according to specific rules. He pointed out that these smart contracts enforce themselves and operate independently. He argued that although smart contracts make frameworks complicated and also complicate the issue of being accountable, they still are subject to legal regulations.
He further argued that such contracts basically have the features of traditional derivatives such as facilitating commerce through exchange-like functions. He mentioned an example of persons who create data that predicts future events that have to do with finance, such as stock performance, and then put their data up for sale through smart contracts.
According to Quintenz, trying to sell this data can come under the purview of regulators who could deem it as investment advice or consider it to be a nefarious attempt to enable insider trading. Also, smart contract protocols can give individuals the ability to use crypto to bet on what the outcome of events will be in future (such as in elections or in sports) and Quintenz suggested that this can be likened in some cases to a prediction market as considered by the CFTC.
The CFTC banned prediction markets and only allowed them to operate as small-scale non-profit entities for educational purposes only. The former chairman of the CFTC, by the name Gary Gensler, has stressed the need to classify the majority of the tokens which are sold through ICOs as securities and have them regulated by the SEC.
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