CFTC official warns smart contract designers over predictive code

posted about 2 months ago
Smart contract coders could be held liable if they knowingly use blockchain technology to create functions that are deemed as predictive "event contracts," according to a US regulator. Brian Quintenz, a commissioner at the US Commodity and Futures Trading Commission, explained that blockchain protocols allow "individuals to create their own smart contracts predicting future events more broadly... Essentially, these contracts would allow individuals to bet on the outcome of future events, like sporting events or elections, using digital currency. If your prediction is right, the contract automatically pays you the winnings," he said.

Quintenz went on to add that in hypothetical events of violations, he believes that smart contract coders who build such functionality on top of a blockchain network could potentially be held responsible and be prosecuted. "I think the appropriate question is whether these code developers could reasonably foresee, at the time they created the code, that it would likely be used by US persons in a manner violative of CFTC regulations," he said. Hypothetically, he said, the code would have to be "specifically designed to enable the precise type of activity regulated by the CFTC, and no effort was made to preclude its availability to US persons."
Tags: blockchain, news