Coin Center research director Peter Van Valkenburgh emphasized the importance of immutability in smart contracts from a regulatory perspective at the Bitcoin Policy Summit. He stated that immutability is crucial in avoiding legal liability, and any adjustments made to the contract through mechanisms such as multi-signature or governance voting could potentially lead to accountability. Van Valkenburgh highlighted the significance of immutability for developers building DApps on Layer 2, stating that it can protect them from legal repercussions. He stated that if developers ensure that the smart contracts they develop are never altered, they are less likely to be held responsible for fraudulent activities on the platform. Van Valkenburgh also mentioned the Uniswap lawsuit, which was dismissed in August last year, supporting his viewpoint. The court ruled that the developers responsible for designing the code were not liable for any third-party abuses on the platform. However, immutable smart contracts can still pose potential problems, such as lack of scalability and technical integration, as well as the inability to quickly mitigate losses in the event of an attack. The recent prosecution case against Roman Storm, co-founder of Tornado Cash, indicates that open-source and immutable smart contracts do not guarantee immunity from prosecution. Van Valkenburgh has submitted a statement to the court regarding the case and believes that once Storm’s case concludes, regulatory standards will become clearer. Currently, there is a discrepancy in regulatory standards concerning cryptocurrency crimes, where platforms are not held responsible for selling fraudulent tokens to users, but can be held accountable when users are involved in money laundering. The case of Bitcoin Fog, a mixing protocol, serves as a warning for developers.
Coin Center suggests avoiding smart contract adjustments to avoid litigation: Multisig and governance voting may face blame