French authorities draw a clear line between free speech and corporate responsibility. Crypto experts say the case signals massive changes in the culture and practices of the industry. Devs are under more pressure to be accountable for their craft.
Crypto devs better watch out – they can be legally responsible for how their handiwork is used by others.
Privacy experts say the indictment of Telegram's billionaire CEO Pavel Durov in France this week paid off.
By trying to hold Durov responsible for alleged illegal activities at Telegram, the case has put developers' responsibility in how their products are used back into the spotlight.
“I think the Telegram situation is a one-two punch when combined with the Tornado Cash situation,” said Taylor Monahan, principal security researcher at crypto wallet provider Metamask. News.
“It's scary because it puts the onus on builders to anticipate and know everything their users are doing and stop them from doing it.”
Huge stakes
There is a telegram Denied French authorities accused Durov and said it was subject to European Union laws.
The stakes in this case are huge, especially for crypto.
There is Dubai based Telegram 950 million users Worldwide, and it has become a fixture in the digital assets ecosystem by providing channels that enable millions of individuals and ventures to collaborate and communicate.
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From the beginning, the company has declared that user activities, don't ask, don't tell, are a hallmark of its business model.
And over the years, the line where technological product development ends and legal liability begins has blurred.
In March, a Dutch court convicted one-time developer of crypto mixer Tornado Cash Alexei Pertsev in a $2.2 billion money laundering case and later sentenced him to five years in prison.
It doesn't matter if Pertsave isn't directly laundering any illegal proceeds – it's enough to operate a site that facilitates the activity.
'It's scary because the state government has mandated that every builder be the most vulnerable Web2 company.'
– Taylor Monahan, Metamask
Durov, now 39, a dual citizen of France and the UAE, is facing a similar case.
A French court charged Durov on Wednesday with failing to prevent criminals from using the popular social media platform to commit crimes ranging from child sexual abuse to drug sales to fraud.
Instead of cooperating with French law enforcement authorities in investigating these crimes, Telegram refused to provide information. French prosecutors.
Freedom of speech
Telegram supporters, incl Elon MuskThe case was hyped to portray it as an attack on freedom of speech. Telegram's business model, after all, is predicated on the idea that the platform is a wide open marketplace of ideas free of censorship, for better or worse.
But that idea conflicts with long-standing legal doctrine that prioritizes cooperation with law enforcement over business models, product design or technological features like smart contracts.
Moreover, as far as business models go, Tornado Cash may actually be in a stronger position because it is decentralized and still works today. Telegram, by contrast, is largely controlled by Durov and is much closer to a traditional model like Whatsapp.
“Both WhatsApp and Telegram are centralized on a set of servers where the company in charge has absolute control over those servers,” said Harry Halpin, CEO of blockchain-based privacy firm Nym Technologies. News.
This makes it easier for management to moderate illegal or objectionable content and close or censor accounts.
'Hard to recognize'
Because WhatsApp and Telegram aren't open source — meaning their code isn't publicly viewable — governments can spy on users, Halpin said.
“It's hard to figure out,” he said.
While the fear of state surveillance has long animated crypto culture, it appears that advocates are finally drawing a red line.
At the Pertsev trial, a Dutch judge Denied dev for not responding to authorities seeking information or action regarding illegal activities on Mixer.
“This is almost equivalent to mandating the state that every builder be a highly invasive Web2 company by design from day one,” Monahan said. News.
Crypto Channels
Telegram is key to an industry that prides itself on decentralization.
Over-the-counter markets such as OFX and SecondLane are built directly into Telegram.
Communication campaigns of budding projects rely heavily on thousands of crypto channels to reach their audience. The messaging app this year integrated a crypto wallet and in-app crypto payments.
“Telegram is no longer just a messaging platform,” says Ruben Yap, steward for privacy project Firo News.
As the case moves forward, Telegram's fortunes and position in the market will likely change.
Monahan said the case has already caused significant damage.
“It's a very bad way, it does immeasurable harm in terms of personal freedom and privacy,” she said.
As much as those ideals are cherished, law enforcement officials seem intent on identifying the boundary where combating organized crime crosses the line of virtue of the crypto industry.
Liam Kelly is a Berlin-based reporter covering DeFi News. Got a tip? Email him [email protected].
Related Topics Tornado Cash
