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Comment by runbathtime | Hacker News Reader

If a code error that was made that was supposedly 'dumb' wasn't caught that tells me the people behind this acted recklessly. This code error being described wasn't just dumb, it was catastrophic- locking up all the collateral. Is this collateral locked up forever, what would make Titan trade above 0? The code wasn't even audited, suggesting no care by the devs before release. Doing money transmission without a license is criminal offense- jail and fines in this case are on the table- all it takes is actual enforcement from regulators.

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> Doing money transmission without a license is criminal offense

Who did the transaction though? These people? The eth network? Was it considered money? And where? Do these people live there who did the transaction? I am not saying you are wrong but this 'war on X' attitude never was a great idea, it also does not work as it is not a singular entity that is to blame. It is a vast network spanning countries.

Ignorance or not understanding the money transmitter rules is not a defense.

Focus directly on the entity doing the money transmission in this case- the smart contract IRON. They take in USDC and give out IRON and TITAN. IRON and TITAN are money substitutes. Money transmission includes anyone by any means conducting exchange of one type of money for another. Functionally that is what this contract is doing. The code didn't write itself, there are people behind it that released it, and they wrote it to conduct money transmission (a specific purpose). You don't even need to bring ethereum into the conversation to prove they are in violation.

I'm not sure I understand your comment about 'war on X' but I think it is a problem when there is an arbitrary application of these laws and unfair dealing that we see by regulators within the crypto industry. Maybe this is natural (self interest), and maybe it isn’t entirely their fault (limited resources).

I saw a twitter thread from a lawyer saying the SEC doesn't determine if something is a security, the courts and congress do. Then why are we obsessed with the SEC’s opinion? I speculate that we just need court cases and we do not need the regulatory authority to bring the court case. Maybe that is the problem to solve.

> Focus directly on the entity doing the money transmission in this case- the smart contract IRON. They take in USDC and give out IRON and TITAN. IRON and TITAN are money substitutes. Money transmission includes anyone by any means conducting exchange of one type of money for another. Functionally that is what this contract is doing. The code didn't write itself, there are people behind it that released it, and they wrote it to conduct money transmission (a specific purpose). You don't even need to bring ethereum into the conversation to prove they are in violation.

If I write a smart contract and publish it to github, but someone else deploys it, is the other person doing the "money transmitting"? What if we don't know who actually published it (which is very possible since all you need is a small pile of ETH to deploy)?

Interestingly, this is actually what happened when curve (decentralized exchange) launched their token [0]. Some "random person" deployed the contract and then a few hours later curve said "yeah, that's our contract code, we'll use it". People hypothesize that someone from curve launched it in an attempt to avoid certain laws.

[0] https://cointelegraph.com/news/anonymous-developer-deploys-c...

If you just write the code that does money transmission and share it on github, not host it, not put it in production, then no you aren't doing money transmission, you just wrote some code and shared it. If someone takes that code and puts it in production, then they are doing money transmission.

I think people are trying to use the idea that ethereum works differently than AWS, but that doesn't matter. The point is the owners or writers of that code wrote it and put it out to the world with intent or purpose to do money transmission. They published that code, paid the gas fees to do so on ethereum. Now anyone can interact with it.

If you want to prove that ethereum is different please state step by step why it is the case.

> I think people are trying to use the idea that ethereum works differently than AWS, but that doesn't matter. The point is the owners or writers of that code wrote it and put it out to the world with intent or purpose to do money transmission. They published that code, paid the gas fees to do so on ethereum. Now anyone can interact with it.

The difference is that you have full control and ability to change the application that is deployed to aws. On Ethereum, you have whatever control you gave yourself, which in most cases is 0, you're not able to modify the application, or even take it down (this is desirable so people don't have to trust you).

To me you're not involved in the process if you have no control over the application that is doing the "money processing".

I have to disagree, but will consider your argument. I just don't think you can write code that does money transmission and publish it and say you are now not doing money transmission because you can't modify it after it is published. Paypal could write some code and publish it on AWS, perhaps they make it so that they can never modify it every again and imagine it functions just fine. Are they now not doing money transmission?

There is another issue though, on AWS, Amazon knows who you are. On Ethereum, unless you openly say you published that code, there is not many recourse to find you.

That is a separate question though- whether someone can be found.

Most large defi projects are not anonymous. Many have VC backing, are on discord, etc.

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