Regulating DAOs

In August, the US Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the cryptocurrency platform Tornado Cash, a virtual currency “mixer” designed to make it harder to trace cryptocurrency transactions—and a worldwide favorite money-laundering platform. Americans are now forbidden from using it. According to the US government, Tornado Cash was sanctioned because it allegedly laundered over $7 billion in cryptocurrency, $455 million of which was stolen by a North Korean state-sponsored hacking group.

Tornado Cash is not a traditional company run by human beings, but instead a series of “smart contracts”: self-executing code that exists only as software. Critics argue that prohibiting Americans from using Tornado Cash is a restraint of free speech, pointing to court rulings in the 1990s that established that computer language is a form of language, and that software programs are a form of speech. They also suggest that the Treasury Department has the authority to sanction only humans and not software.

We think that the most useful way to understand the speech issues involved with regulating Tornado Cash and other decentralized autonomous organizations (DAOs) is through an analogy: the golem. There are many versions of the Jewish golem legend, but in most of them, a person-like clay statue comes to life after someone writes the word “truth” in Hebrew on its forehead, and eventually starts doing terrible things. The golem stops only when a rabbi erases one of those letters, turning “truth” into the Hebrew word for “death,” and the golem ceases to function.

The analogy between DAOs and golems is quite precise, and has important consequences for the relationship between free speech and code. Ultimately, just as the golem needed the intervention of a rabbi to stop wreaking havoc on the world, so too do DAOs need to be subject to regulation.

The equivalency of code and free speech was established during the first “crypto wars” of the 1990s, which were about cryptography, not cryptocurrencies. US agencies tried to use export control laws to prevent sophisticated cryptography software from being exported outside the US. Activists and lawyers cleverly showed how code could be transformed into speech and vice versa, turning the source code for a cryptographic product into a printed book and daring US authorities to prevent its export. In 1996, US District Judge Marilyn Hall Patel ruled that computer code is a language, just like German or French, and that coded programs deserve First Amendment protection. That such code is also functional, instructing a computer to do something, was irrelevant to its expressive capabilities, according to Patel’s ruling. However, both a concurring and dissenting opinion argued that computer code also has the “functional purpose of controlling computers and, in that regard, does not command protection under the First Amendment.”

This disagreement highlights the awkward distinction between ordinary language and computer code. Language does not change the world, except insofar as it persuades, informs, or compels other people. Code, however, is a language where words have inherent power. Type the appropriate instructions and the computer will implement them without hesitation, second-guessing, or independence of will. They are like the words inscribed on a golem’s forehead (or the written instructions that, in some versions of the folklore, are placed in its mouth). The golem has no choice, because it is incapable of making choices. The words are code, and the golem is no different from a computer.

Unlike ordinary organizations, DAOs don’t rely on human beings to carry out many of their core functions. Instead, those functions have been translated into a set of instructions that are implemented in software. In the case of Tornado Cash, its code exists as part of Ethereum, a widely used cryptocurrency that can also run arbitrary computer code.

Cryptocurrency zealots thought that DAOs would allow them to place their trust in secure computer code, which would do exactly what they wanted it to do, rather than fallible human beings who might fail or cheat. Humans could still have input, but under rules that were enshrined in self-running software. The past several years of DAO activity has taught these zealots a series of painful and expensive lessons on the limits of both computer security and incomplete contracts: Software has bugs, and contracts may do weird things under unanticipated circumstances. The combination frequently results in multimillion-dollar frauds and thefts.

Further complicating the matter is that individual DAOs can have very different rules. DAOs were supposed to create truly decentralized services that could never turn into a source of state power and coercion. Today, some DAOs talk a big game about decentralization, but provide power to founders and big investors like Andreessen Horowitz. Others are deliberately set up to frustrate outside control. Indeed, the creators of Tornado Cash explicitly wanted to create a golem-like entity that would be immune from law. In doing so, they were following in a long libertarian tradition.

In 2014, Gavin Woods, one of Ethereum’s core developers, gave a talk on what he called “allegality” of decentralized software services. Woods’s argument was very simple. Companies like PayPal employ real people and real lawyers. That meant that “if they provide a service to you that is deemed wrong or illegal … then they get fucked … maybe [go] to prison.” But cryptocurrencies like Bitcoin “had no operator.” By using software running on blockchains rather than people to run your organization, you could do an end-run around normal, human law. You could create services that “cannot be shut down. Not by a court, not by a police force, not by a nation state.” People would be able to set whatever rules they wanted, regardless of what any government prohibited.

Woods’s speech helped inspire the first DAO (The DAO), and his ideas live on in Tornado Cash. Tornado Cash was designed, in its founder’s words, “to be unstoppable.” The way the protocol is “designed, decentralized and autonomous …[,] there’s nobody in charge.” The people who ran Tornado Cash used a decentralized protocol running on the Ethereum computing platform, which is itself radically decentralized. But they used indelible ink. The protocol was deliberately instructed never to accept an update command.

Other elements of Tornado Cash—­its website, and the GitHub repository where its source code was stored—­have been taken down. But the protocol that actually mixes cryptocurrency is still available through the Ethereum network, even if it doesn’t have a user-friendly front end. Like a golem that has been set in motion, it will just keep on going, taking in, processing, and returning cryptocurrency according to its original instructions.

This gets us to the argument that the US government, by sanctioning a software program, is restraining free speech. Not only is it more complicated than that, but it’s complicated in ways that undercut this argument. OFAC’s actions aren’t aimed against free speech and the publication of source code, as its clarifications have made clear. Researchers are not prohibited from copying, posting, “discussing, teaching about, or including open-source code in written publications, such as textbooks.” GitHub could potentially still host the source code and the project. OFAC’s actions are aimed at preventing persons from using software applications that undercut one of the most basic functions of government: regulating activities that it deems endangers national security.

The question is whether the First Amendment covers golems. When your words are used not to persuade or argue, but to animate a mindless entity that will exist as long as the Ethereum blockchain exists and will carry out your final instructions no matter what, should your golem be immune from legal action?

When Patel issued her famous ruling, she caustically dismissed the argument that “even one drop of ‘direct functionality'” overwhelmed people’s expressive rights. Arguably, the question with Tornado Cash is whether a possibly notional droplet of free speech expressivity can overwhelm the direct functionality of running code, especially code designed to refuse any further human intervention. The Tornado Cash protocol will accept and implement the routine commands described by its protocol: It will still launder cryptocurrency. But the protocol itself is frozen.

We certainly don’t think that the US government should ban DAOs or code running on Ethereum or other blockchains, or demand any universal right of access to their workings. That would be just as sweeping—and wrong—as the general claim that encrypted messaging results in a “lawless space,” or the contrary notion that regulating code is always a prior restraint on free speech. There is wide scope for legitimate disagreement about government regulation of code and its legal authorities over distributed systems.

However, it’s hard not to sympathize with OFAC’s desire to push back against a radical effort to undermine the very idea of government authority. What would happen if the Tornado Cash approach to the law prevailed? That is, what would be the outcome if judges and politicians decided that entities like Tornado Cash could not be regulated, on free speech or any other grounds?

Likely, anyone who wanted to facilitate illegal activities would have a strong incentive to turn their operation into a DAO—and then throw away the key. Ethereum’s programming language is Turing-complete. That means, as Woods argued back in 2014, that one could turn all kinds of organizational rules into software, whether or not they were against the law.

In practice, it wouldn’t be so easy. Turning business principles into running code is hard, and doing it without creating bugs or loopholes is much harder still. Ethereum and other blockchains still have hard limits on computing power. But human ingenuity can accomplish many things when there’s a lot of money at stake.

People have legitimate reasons for seeking anonymity in their financial transactions, but these reasons need to be weighed against other harms to society. As privacy advocate Cory Doctorow wrote recently: “When you combine anonymity with finance—­not the right to speak anonymously, but the right to run an investment fund anonymously—you’re rolling out the red carpet for serial scammers, who can run a scam, get caught, change names, and run it again, incorporating the lessons they learned.”

It’s a mistake to defend DAOs on the grounds that code is free speech. Some code is speech, but not all code is speech. And code can also directly affect the world. DAOs, which are in essence autonomous golems, made from code rather than clay, make this distinction especially stark.

This will become even more important as robots become more capable and prevalent. Robots are even more obviously golems than DAOs are, performing actions in the physical world. Should their code enjoy a safe harbor from the law? What if robots, like DAOs, are designed to obey only their initial instructions, however unlawful­—and refuse all further updates or commands? Assuming that code is free speech and only free speech, and ignoring its functional purpose, will at best tangle the law up in knots.

Tying free speech arguments to the cause of DAOs like Tornado Cash imperils some of the important free speech victories that were won in the past. But the risks for everyone might be even greater if that argument wins. A world where democratic governments are unable to enforce their laws is not a world where civic spaces or civil liberties will thrive.

This essay was written with Henry Farrell, and previously appeared on Lawfare.com.

EDITED TO ADD (10/26): Peter Van Valkenburgh wrote a rebuttal to our essay. My co-author responds. And Evan Geer, who started this whole conversation, responds to Henry.

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Posted on October 14, 2022 at 9:08 AM • 51 Comments

Comments

RogerBW • October 14, 2022 9:54 AM

All uses of cryptocurrency developed so far are either (a) scams or (b) woefully inefficient compared with the same thing not using cryptocurrency.

Yes, ban DAOs. Ban code running on Ethereum. Ban the purchase or sale of any cryptocurrency (this will conveniently also destroy the ransomware business). Do something useful instead with all that ingenuity and energy.

tim • October 14, 2022 10:28 AM

this will conveniently also destroy the ransomware business

The ransomeware business existed before blockchain and it will exist afterwards. Its true that cryptocurrency helped elevate it but it will not go away once cryptocurrency finally collapses. Fraud and scams never go away.

And what you are proposing completely misses the point of the very post your are commenting on and besides your proposals are also blatantly unconstitutional

Nate • October 14, 2022 10:43 AM

The arguments for using DAOs contradict the argument that their code constitutes free speech. If the system is run only by code with no humans involved, whose free speech would regulation infringe on? If you think legal restrictions don’t cover DAOs because they only govern people, then you must also admit that legal protections don’t apply to them either.

Like most cryptobro “philosophy”, it’s all self-refuting eat-my-cake-and-still-have-it garbage.

msb • October 14, 2022 10:57 AM

A couple of thought come to mind here.

Firstly, the need to differentiate between code as free speech and the interaction with that code. Like writing on the Golem’s head, someone has to initialize the code. It would seem to me that the action of instantiating or initializing the DAO code represents an act with criminal intent.

Secondly, that even free speech itself has limitations. I think the classic examples here are shouting “Fire!” in a crowded movie theatre, or “You should put a bullet in the president’s head.”

The problem is not so much the DAO’s it is the lack of regulation around cryptocurrency in general. There are very few legal applications for crypto currencies. Most of them are tools for money laundering or just plain pump and dump scams.
It seems to me that a simple solution to most of this problem would be to legislate a requirement to register any crypto transactions greater than $10K with harsh penalties for violations.

Clive Robinson • October 14, 2022 11:00 AM

@ Bruce,

“There are many versions of the Jewish golem legend,”

That’s not quite right it’s a Jewish “religious” story with “golem” meaning,

“my light form”

Implying the essence of life from the god head. Effectively something on the journy to being a human but not yet there, essentially something unfinished.

When you look at the various stories what is essentially missing in the Golem is the sense of “Good or Bad” or societal mores and moarals. It’s “Right or Wrong” determination is based on hard rules not emotions thus uses bivalent not multivalent logic.

That is there is no “Man made God in his likness” just flow charts. There are no human rights, no merciful justice only the rules. If the rules are wrong and they almost always are, then so are the behaviours which in part are what some of the Golem stories are about.

But if you take as an example the stories of one religion then you should give equal weight to another.

The US is not technically a country of religion, there is supposadly clear lines between church and state, and some legislation supporting this.

However if you make the mistake of believing what US politicians publically say about themselves, then the US is run by those who believe in the Judeo christian god of the many Abrahanic religions, primarily Anglo-Saxon derived Protestant Christianity based on one of the more modern bibles with it’s new and old testiments (moral stories).

When you say,

“Language does not change the world, except insofar as it persuades, informs, or compels other people.”

The Bible takes a somewhat different view, most christians can quote some or all of this from Genesis,

“In the beginning, God created the heavens and the earth. The earth was without form and void, and darkness was over the face of the deep. And the Spirit of God was hovering over the face of the waters. And God said, “Let there be light,” and there was light. And God saw that the light was good. And God separated the light from the darkness. God called the light Day, and the darkness he called Night.”

From which many very firmly believe in “The Word of God” and use of “language”.

Many belive from Hebrews that the word of god has very real corporeal power and the ability to control,

“For the word of God is living and powerful, and sharper than any two-edged sword, piercing even to the division of soul and spirit, and of joints and marrow, and is a discerner of the thoughts and intents of the heart.”

And strengthend from Jeremiah,

“’Is not My word like a fire?’ says the Lord, ‘And like a hammer that breaks the rock in pieces?’”

I could go on and delve into hebrew beliefs about the word of god and how it controls.

One of the lessons I learned early on is that religion can be a dangerously powerfull driver of humans to do the worst of bestial behaviour through the command of a deity. These days we wrap it up in words like “cognative bias” but in short religion is a form of brainwashing frequently applied to those to young to have any defense against it, thus it is a form of “child abuse”.

Which is why I avoid using any religious teachings for analogies, and advise most others to do the same, as refrence to “religion” and their deities will always get in the way of the message you are trying to explain.

The issue by the way is not language, that is at the end of the day just a method of communicating information, that is knowledge, methods, feelings, understanding and yes instructions or rules.

The actual issue is what the receiving entity of language be it spoken or written choses to do with it. That is it’s a question of the entity having sentience and free will or not.

As humans we have the notion of “free will” which alows us to treat any communications in what ever way we chose. However it alows others to come up with the notion of “responsability” and as you walk down that path the determination of good or bad under the current social set of mores and morals, which constantly change.

Language be it poetry or codified rules is just information. Entities that are not sentient interpret it via rules that are built in usually by a sentient entity.

Whilst DAO’s are language which both communicates and instructs, they are not intended for sentient entities but the “unquestioning obeyant systems” we call computers or even wider autonomous systems such as industrial control systems. We do not expect nor do we want sentience in such systems, we want every state to be fully defined and progression from one state to another fully defined such that the system behaviour is fully determanistic.

Jeff Valoret • October 14, 2022 11:01 AM

Money laundering is not speech. We effectively have an anonymous server for tech-savvy users. It probably does more harm than good right now and that won’t change without moderation or an overwhelming influx of good tech-savvy users (and a global social movement to keep it good forever). I don’t think the latter is going to happen.

KeithB • October 14, 2022 11:21 AM

I think “Sanction” is too ambiguous to use here, since its two meanings are totally opposite and both fit in context.

mark • October 14, 2022 11:22 AM

The obvious rebuttal to “it’s free speech” is that no, it may be distributed… but humans are running it. It’s not leaping around like a worm and running itself. The individuals running it are liable.

Tatütata • October 14, 2022 12:03 PM

As privacy advocate Cory Doctorow wrote recently: “When you combine anonymity with finance—­not the right to speak anonymously, but the right to run an investment fund anonymously—you’re rolling out the red carpet for serial scammers, who can run a scam, get caught, change names, and run it again, incorporating the lessons they learned.”

Meanwhile in Delaware, and many other black holes, someone is trying to find non-trivial information about a corporation.

But corporations are “people”, and are endowed with “fundamental rights” combined their absolute privileges, such as special investor arbitrage jurisdictions… These shall not be questioned.

pointing to court rulings in the 1990s that established that computer language is a form of language

A friend of mine in those 1990s often lamented about the watering down of admission standards to PhD programs at some Ivy league establishments, with knowledge of “FORTRAN” or “Pascal” considered as mastery of a foreign language.

iAPX • October 14, 2022 12:19 PM

@All

It’s no the code the problem, and I am very at ease to consider it protected under the law as Free Speech.
It is the results of its execution that might be unlawful, and thus this execution is unlawful and should be punished.

Trying to give a real-world example…
Hate Speech is something that is subjective, but actions that might results from some “hate speech” could be objectively unlawful, and these actions should be punished.

We might put limit on Speech, some countries have, and it’s more problematic than the safe harbour with rainbow farting unicorns that was promised.
It’s always political, always serving one side and not the other, and polarizing.

Matthias U • October 14, 2022 12:35 PM

Not all speech is free. Yelling “Fire” in a crowded theater is not something you can allow people to do, 1st Amendment or no 1st Amendment. Neither is stating “I give you $$$$ if you kill $PERSON” (assuming that the person thus stating means it), or writing a letter that instructs your attorney or bank to do whatever illegal activity one fancies.

These are more than speech, they are instructions. The fact that the recipient of the instructions is Tornado Cash instead of a human just means that the recipient of the instructions can’t be prosecuted because they should have known better, but the sender still can and should be.

iAPX • October 14, 2022 12:47 PM

@Matthias U, All

So, essentially if an enemy is using some code for malign purposes, it could or it should be made unlawful?

Any code that could be maliciously used should be unlawful too?

Not sure any computing technology since Abacus will stand this test 😉

Clive Robinson • October 14, 2022 2:04 PM

@ iAPX, ALL,

Re : Dual use.

“Any code that could be maliciously used should be unlawful too?”

All code like all technology is agnostic to use.

Technology is not sentient, it is not social it has no ability to determin the human issue of right from wrong good from bad.

The ability to do that is by a sentient observer who understands the current mores and morals of society and importantly the direction they are currently going in.

They would also understand the notion of a “directing mind” that gives purpose to any action they tell technology to do.

The hard part with code for an observer there are effectively two directing minds,

1, The designer/ developer of the code.
2, The user of the code.

Thus the issue of apportioning blaim.

Corporates work on the notion that nobody in senior positions makes decisions they as a group chose from a selection of decision alternatives presented to them.

That way they are all collectively negligent due to XXX being not being made, explained, or was kept hidden, which is obviously the fault of a junior.

It’s why managers say to underlings the equivalent of,

“Do not bring me problems, tell me of solutions”.

That way they evade making decisions only chosing a solution that is not theirs and not documented, thus they evade responsibility thus liability thus having to suffer consequences.

The most that happens is that authorities see they can not prosecute, so they negotiate a fine or similar instead, so it’s back to business for the executives, with the share holders, ordinary workers, and customers bearing the immediate cost, but in reality the fines get payed by the tax payer…

So the trick to success is,

1, Lots of participants.
2, Lots of scape goats.
3, Lots of lawyers.
4, Skilled negotiators.

Oh and if brighter than the average executive, be in another jurisdiction that either does not have or has weak extradition arrangements with the US.

Have a look back at a certain German Car manufacturer that falsified emmission test results by having engineers way way down the bottom of the organisation write software to falsify the test…

How many of those execs have been brought to the US to face proceadings?

lurker • October 14, 2022 3:37 PM

@Tatütata

Pascal, hmmm, but FORTRAN most definitely is a foreign language the I never gained fluency in.

Attila • October 14, 2022 4:47 PM

I came here to say what @iAPX said, so I’ll just say I agree with him. Speech even containing instructions for doing something is one thing, carrying out those instructions is another thing. Text describing how to poison someone is speech, someone executing the description in order to poison someone is an action (and in most legal systems, criminal.) Same for description on how to, say, cook crystal meth vs. actually cooking crystal meth. Former is protected speech, latter isn’t.

Ted • October 14, 2022 7:56 PM

@SpaceLifeForm had a good post on Tornado Cash with updated guidance from the US Treasury on OFAC sanctions:

https://www.schneier.com/blog/archives/2022/09/fbi-seizes-stolen-cryptocurrencies.html/#comment-409949

Some actions that are NOT prohibited are viewing, discussing, or teaching about the open-source code. See his link to the Treasury’s FAQ.

However, between Golem and Nicholas Weaver’s essay “OFAC Around and Find Out” the warnings are unambiguous. In accordance with national security imperatives, this is some code I would’t “express.”

Winter • October 15, 2022 3:05 AM

@lurker

but FORTRAN most definitely is a foreign language the I never gained fluency in.

Thank $Deity on your bare knees for that omission. Fortran 4 was a product of hell.

Nick Levinson • October 15, 2022 3:35 AM

Rights in the U.S. belong to persons, which include corporations and some other legal entities that are the responsibility of humans, are either formal or implied (the Cosa Nostra or Mafia in the U.S. not being one of them), and generally have the ability to sue or be sued, and to some other life forms, and biologists debate exactly what life is, thus a virus, the biological kind, may or may not be living and only if living could it have rights. Among those who have rights, rights vary. Rocks and tables, if not alive, do not have rights. Dead people do not have rights, even though estates and family survivors do and companies may be in receivership or winding down and have rights during the entities’ existence. Intellectual property does not have rights, even though its owners do for their intellectual property. This status of rights probably applies worldwide with variations.

Software code is someone’s responsibility, both at creation and during execution. So, for example, whoever owns a server where some software is self-executing is responsible for the self-execution, since they could turn the power off and starve the software into ceasing to run. If someone is stopping them from turning the power off, whoever is stopping them is responsible for that and for the consequent self-execution continuation.

The history of the Internet includes numerous claims of immunity from law. Governments (e.g., the Federal) have not agreed and we know who won that tussle. A claim of immunity may be made and tested and the result may be a change in law, but that would be on relatively narrow points not undermining fundamental governmental authority.

Likewise, someone driving a car that is heading toward someone has the duty to use something like reasonable effort to prevent injury. Automation may help but the presence of complete automation and the lack of a warning of a malfunction in that automation (if any) does not immunize the human driver from responsibility. That was true when the first car was rolled out in the 19th century or earlier and it’s true now. It was true when a human sleeping on a treetop branch threw rocks 6-7 million years ago and accidentally hit another human, annoying the latter.

Software being someone’s responsibility, the software can be a repository of speech, and the someone can have freedom of speech included or expressed in or by software. Said someone can be anonymous and still have the protection of law for the right of free speech. While the right exists, even with anonymity it is not independent of the person exercising it.

Someone could raise disease-carrying mosquitoes, release them into another person’s home, and die. If the mosquitoes then infect the latter person, who thereby gets sick and injured, there may be no one to hold responsible. But if the latter person fails to act reasonably to contain the disease or the mosquitoes and a third person therefore dies, the second person may be accountable for having thus failed.

Not every instance of speech is protected as free. A spoken incitement to riot or plan to murder that presents a clear and present danger is not. Even mere slander is unlawful.

Erdem Memisyazici • October 15, 2022 7:01 AM

It really does seem a bit silly to see people use cryptocurrency. I do think it’s nice sometimes that it also has the effect of catching some evil doers but otherwise if not to keep people busy what is the end goal?

Historically it took us a while to come up with currency.

People first traded objects, then decided that it was too hard. It caused disagreements often coupled with buyer’s remorse and people thought, “we should have something of even value so as to not fight.”

They looked for things hard to fake.

People thought, “maybe metal coins are a good way to go, because metal is hard to find” but people started shaving them to make new and fake ones. That lead to too many fights once again.

As a new idea, people then started printing faces of scary people on them to discourage misuse and this worked better so we realized without some sort of central authority this is not going to work in the long run.

We sort of abandoned the value of metal idea since it became easier to get and made it as hard as possible to fake papers instead with scary people on them.

Then we thought it should be really confusing why the people on the papers are scary and abandoned kings mostly.

We went with banks and hiding the influential human element behind the prestige of really tall concrete structures sort of like pyramid building pharaohs but more tangible.

That has been working okay.

Along comes this idea that having a really good computer is rare, because those cost money and that is something distributed unevenly by design so we should make a new system (for some reason call it currency again) and have people with not so good computers participate since they can’t run the same calculations as fast. Oh and we lie to them saying it’s decentralized and untracable ignoring thousands of years of history.

Why would anybody participate?

Some people who want to lie steal and cheat use it, and they get caught so that’s nice. It’s keeping people busy and that’s great.

Is it going to be comparable to real currency? Sure if you think so and for the same token you could trade a car for a tomato if you thought it was worth the same in value but that’s not something that’s going to last for a long time.

Vadim Lebedev • October 15, 2022 8:21 AM

With the advances in NLP shortly the language and code will become indistinguishable.

David Leppik • October 15, 2022 11:42 AM

This is analogous to tricking someone into packing illegal drugs into a suitcase and bringing them across the border. Cryptocurrency miners can—and do—inspect the transactions before adding them to a block. There is no reason why they can’t be held accountable for illicit transactions, if they have reason to suspect that they are illicit.

One complication is that the whole point of this software is to make illegal transactions indistinguishable from legal transactions. It is therefore odd that it’s implemented as an open source, visible source “smart contract.” The existence of such a contract is a red flag that could be evidence that the miner should have known that the transaction was illegal, and therefore the miner could have chosen not to get involved.

David Leppik • October 15, 2022 11:47 AM

@ Vadim Lebedev:

Language is used for speech, but is not speech. Under US law, speech is any form of communication, linguistic or otherwise. In principle, this implies that text generated by an AI is not in itself speech, since it is merely pattern matching based on a prompt, rather than an attempt to communicate. Along with the human-selected prompt, it may arguably be art, but the artist is the person generating the input. Similarly, a “whirl-a-paint” (paperboard on a motor) is not an artist, but the person pouring paint onto it is.

John White • October 15, 2022 7:11 PM

The concept of the DAO is just nonsense, anyway.

A smart kid in Canada made $16 million legitimately because DAO ‘Indexed Finance’ had been created by morons who couldn’t code. Some of the losers who ‘owned’ this DAO, which previously had no corporate structure, formed a company and sued him. Fortunately, he’s escaped the scum so far. I wish him well.

lurker • October 15, 2022 9:11 PM

@SLF

Last I heard Ukraine was foreign to USA so that would spike args. 1 & 4 straight up …

Ted • October 15, 2022 11:26 PM

@SpaceLifeForm, lurker, All

Re: Coin Center boldly takes on the Treasury & OFAC (aka “This is going nowhere”)

Oh goodie. Time for a little arm-chair adjudicating. I thought I would write my initial responses to the four main arguments in the complaint (lines 17, 18, 19, 20).

R17:

What? Seriously? First of all, the Treasury references E.O. 13694 as the basis for the Tornado Cash sanctions.

Did Coin Center not see the sanctions on North Korean state-sponsored malicious cyber groups – some of whom have used Tornado Cash? Is this willful ignorance or worse?

R18:

E.O. 13694 says: “(a) the term “person” means an individual or entity; Then it goes on to define an entity.

Plus, since when did privacy tools become a free pass to do end-runs around AML laws?

R19:

”arbitrary and capricious because it failed to consider important aspects of the problem”

Yeah, Coin Center is the go-to resource for this. Please.

R20:

Lol. Am I crazy? Do we have a constitutional right to private associations with Ethereum?

Clive Robinson • October 16, 2022 2:31 AM

@ SpaceLifeForm, Ted,

Re : The unknown of what is alowed.

One of the problems in the US is the fact that legislation and regulation is oft badly written these days (or well written if you are a prosecutor or censor).

For instance take,

“For example, U.S. persons would not be prohibited by U.S. sanctions regulations from copying the open-source code and making it available online for others to view, as well as discussing, teaching about, or including open-source code in written publications, such as textbooks, absent additional facts.”

Note with care the last three words,

“absent additional facts”

It’s “open ended” and “without limit” thus compleatly negates the rest of the statment…

Thus if Mathew Green is wise he would think a litle more along Nicholas Weavers lines.

As I and others occasionaly note, history has it’s lessons for those who look… So those three words can be looked upon as shorthand for,

“If you give me six lines written by the hand of the most honest of men, I will find something in them which will hang him.”

(Attributed to prominent French Politician and thus Church Statesman, Cardinal Duke Armand Jean Richelieu 1585-1642)

Nick Levinson • October 16, 2022 5:40 AM

@Clive Robinson, @SpaceLifeForm, & @Ted:

The last three words do not negate the rest. Legal English is not identical with any of the three or so U.S. English standards, but is like a dialect. In U.S. law, by the rules of statutory interpretation (which generally apply to other forms of Federal and inferior law), nothing is to be read as meaningless, redundant, or unlawful unless there is no other interpretation. The default is that there is another interpretation, so applying the language requires discovering it. There is one provision of the U.S. Constitution that has been adjudged by the U.S. Supreme Court to be meaningless and therefore unconstitutional, but, to my knowledge, only one provision.

The provision you quote about sanctions does not, in my opinion, read as if it is from legislation or a regulation, unless it was in a purpose statement or some such. It seems to be from an interpretation, perhaps by a promulgating agency, of law. As such, it can be law, but I didn’t see a citation, so I’m not sure if it is.

It may mean, for instance, that if the source code contains military secrets on how to build a nuclear ICBM then those additional facts (the inclusions of secrets, not the secrets themselves) would void the exemption from the export sanctions.

You may have quoted from https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1076 (as accessed today). The Federal agency’s answers to Frequently Asked Questions could be Federal law but usually are not. In this instance, the sentence you quoted states an example of what is stated in the preceding sentence, part of which says “interacting with open-source code itself, in a way that does not involve a prohibited transaction with Tornado Cash, is not prohibited.”

Negation did not occur in this instance.

Petre Peter • October 16, 2022 9:43 AM

In the beginning was the word or the command line. We could argue that our ship is the word and that the engineer abandons an idea at the word “instruction”. Even numbers are ultimately just words. The idea of freedom of speech is useless if you cannot speak against a thought you hate. The word I would like to stop at is “inflation” which will no longer exist when the supply of money is limited like in the case of cryptocurrencies.

Nick • October 16, 2022 9:54 AM

This made me realize that we really are living in a prequel to Snow Crash & Diamond Age. Stephenson was off on timeline, but not on the outcome.

Clive Robinson • October 16, 2022 10:30 AM

@ Nick Levinson, SpaceLifeForm, Ted,

Re : “absent additional facts”

Or the “last three words”, they are not just language, they are precise and have great meaning and it turns on the unstated meaning of “facts”.

The problem is the nature of the “facts” or more likely to be called “evidence” is “unstated” thus “open ended”. Or if you prefere to take a que from Lewis Carol the Victorian Logician,

“It will mean, what I want it to mean, when I want it to.”

Which we have unfortunately seen with other US Legislation and Regulation. In some cases it is used to not state “Secret Legislation” that people did not think was possible till the PATRIOT ACT showed otherwise.

With computer legislation we have seen it used to turn “Comercial Terms of Service” into not just torts but breaches of “public duty” punishable by fines, imprisonment or both at the whim of those driving the legal process.

If you want to think otherwise, then please do as you wish, but also if you do something daft and upset someone with power or influance, don’t say you were not warned.

The US Federal Agencies have so often over stepped their legal boundries because of two basic things,

1, They are never meaningfully sanctioned for doing so.
2, Few if any can aford the resources to fight, so it gets plea-bargained out or the defendent goes babkrupt.

The FBI in particular with the psychopaths at the DoJ do this all the time. As far as I’m aware the only time this century where it has gone wrong for them was when they tried it on with Apple. Apple had the resources to fight back so the FBI-DoJ rather than get the case law they were after, when it was clear it was going bad for then “pulled the ripcord” and went with Plan B which was to drop the case with what looks to some like a reasonable excuse. However we actuallt now know they had that option all along as the technology involved was known and discussed befor the FBI-DoJ started the case against Apple.

There are very good reasons why a non US Citizen should not even fly over US or US influanced territory let alone put a toe down in it.

Think about what happened to the Daughter of a Chinese Telecoms Company in Canada.

But also as a US Citizen think about what happened to Aaron Schwartz (1986-2013).

And the many other individuals that have “spoken truth to power” or tried to “hold power accountable by law”.

It’s an argument that has already been faught and all but power lost, because they very firmly believe that,

“Might is Right, and you have no might”.

For reasons I do not know –as they won’t tell me– I have atleast one strike under the DMCA. From my point of view that means I’m never ever going to put my toe close to the US let alone over the line in say “international waters”. As I said what you chose to do is upto you, just don’t say you were not cautioned.

Ted • October 16, 2022 1:11 PM

@Clive, SpaceLifeForm, Nick Levinson

Does the UK have sanctions on virtual currency mixers like Tornado Cash and Blender.io?

I believe Coinbase is also funding a lawsuit against the US Treasury and OFAC. One of their counts (Count II) pertains to the First Amendment: Freedom of Speech.

By providing a certain degree of privacy, Tornado Cash allows Plaintiffs to engage in important, socially valuable speech. As a result of the designation, Plaintiffs are unable to use Tornado Cash to make donations to support important, and potentially controversial, political and social causes.

https://www.documentcloud.org/documents/22278352-coinbase-ofac

I don’t know how many lawsuits we’ll see. I would enjoy tracking these cases.

Nick Levinson • October 16, 2022 1:47 PM

@Clive Robinson, @SpaceLifeForm, & @Ted:

Where one of us lives is likely more familiar to us and therefore better understood than almost anywhere else. I live in the U.S.; you’re elsewhere. There is unpredictability where I live, but maybe not as much as you perceive; there is unpredictability where you live, but maybe not as much as I might perceive. I disconnected from Google AdSense because it required GDPR compliance, I saw no way to comply without agreeing to comply with all of EU law, which would give me a lot of problems with up to 27 nations, but it wouldn’t give a EU resident as much of a problem. People with multiple passports should try to choose the multiple nations carefully.

Law need not be strictly secret for functional secrecy to obtain, if it is so hard to locate, extensive, and complicated that a person who is obligated to comply probably doesn’t know how. A lawyer cannot know all of what applies to one person.

Almost all systems of logic are limited. One could apply the only unlimited system to any ordinary phenomenon but doing so would usually consume so much in resources, e.g., time, that, if we even knew how, it would be extremely impracticable and when we could obtain an answer most of us would have exhausted most of a lifespan. Few courts would cite Lewis Carroll even for obiter dicta but almost all would cite caselaw in opinions.

I perceive allegations against the daughter and against Aaron as substantially valid, so we may not agree, but I don’t know their defense positions. To my knowledge, Aaron taking his own life was his decision, so if his death means we don’t know his defense that was his decision, too. The daughter’s case may be one of someone familiar with one jurisdiction entering another and seeking to apply a single standard for themselves worldwide, a practice of many multinational institutions. If Google et al. are subjecting themselves to the risks of high fines in Europe that wouldn’t obtain for the same behavior in the U.S., that is their choice, even if I benefit from their globality.

We can approve law violations, but a society cannot approve general lawlessness, because law is instrumental in us getting along. If one of us was the only person in the world, we’d need to get along with tigers and E. coli and law would arise to govern those relationships, such as a right to kill an adversary and a right to hide from an adversary.

We may have to rediscover at times that might making right is usually understood too narrowly. Prehistoric people evidently helped some among them who had lifelong crippling conditions and elephants have helped each other despite a disability. But weak people often make net contributions to society and militaries almost never want all citizens to pick up arms.

The case sounds interesting, but it is not a slam dunk. Much the same could be said for having to report a cash transaction over $10,000 or for banking to not be secret. And the U.S. could respond that donations for which privacy is sought can be made to organizations that lawfully offer that confidentiality. All of these arguments have pitfalls, but it can be interesting.

SpaceLifeForm • October 17, 2022 12:59 AM

Getting cryptocurrency funds unstuck from Tornado Cash.

Those that were trying to launder money will of course not follow this.

‘https://www.axios.com/2022/09/13/us-treasury-department-tornado-cash-guidance

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-09-13

For transactions involving Tornado Cash that were initiated prior to its designation on August 8, 2022 but not completed by the date of designation, U.S. persons or persons conducting transactions within U.S. jurisdiction may request a specific license from OFAC to engage in transactions involving the subject virtual currency. U.S. persons should be prepared to provide, at a minimum, all relevant information regarding these transactions with Tornado Cash, including the wallet addresses for the remitter and beneficiary, transaction hashes, the date and time of the transaction(s), as well as the amount(s) of virtual currency. OFAC would have a favorable licensing policy towards such applications, provided that the transaction did not involve other sanctionable conduct.

SpaceLifeForm • October 17, 2022 3:09 AM

Words said 6 months ago even though they knew they would not stop the Golem from listening.

‘https://dailyhodl.com/2022/04/18/ethereum-based-coin-mixer-tornado-cash-blocks-sanctioned-eth-addresses-founder-says-there-are-limits-to-privacy/

Clive Robinson • October 17, 2022 6:53 AM

@ SpaceLifeForm, ALL,

Re : More words without limit.

From the article,

“Maintaining financial privacy is essential to preserving our freedom, however, it should not come at the cost of non-compliance.“

Not the last words, specifically the open ended “non-compliance”…

Again it makes the preceding part of the sentence meaningless.

Worse it does not state who’s rulrs of compliance are to be used.

So lets say two rules,

1, US “There can be no privacy anywhere in the world”.
2, NK “Stoping the privacy of NK entities is a capitol offence subject to execution in any juresdiction”.

Which rule maker and thus rules will say a Brazilian Crypto-mixer follow?

If people think the two rules I give will “never happen” they provably have already…

ObscureIT • October 17, 2022 8:32 AM

The equivalency of code and free speech was established…
If code is protected as free speech, wouldn’t that mean that writing malware was legal? That would seem like an unwelcome finding.

Clive Robinson • October 17, 2022 9:02 PM

@ ObscureIT,

Re: Develop and deploy difference.

You ask,

“If code is protected as free speech, wouldn’t that mean that writing malware was legal?”

Most places researching and developing malware on your own machines and private network is not illegal.

However, you have to understand the difference between mechanism and action. It’s not illegal for you to be taught existing or to create new sleight of hand tricks they are “mechanism” or “method”. They become unlawful when you use the for pecuniary advantage directly or indirectly, and without the permission of the person you are using them on, that is your “action” has crossed a line the only question then is it a breach of a private duty (tort) or public duty (crime) and what the remediation is (usually damages for a tort or fine and/or imprisonment for a crime).

Obviously in the case of malware that is used unlawfully you have three basic parts of,

1, Find a target system,
2, Gain entry into target system,
3, Deploy some kind of “payload”.

When you design “Proof of Concept”(PoC) code to demonstrate the next “Zero Day” to a software entity you usually don’t need to do part 1, and mostly but not always you don’t have to deploy an “active payload” unless it’s to demonstrate a new method of getting data out of the test system.

So…

Even though it would not be unlawful to develop all three parts, or even to publish them in certain ways, it would be unwise to produce a “compleate package”

Further parts 2 and 3 if “used in the wild” would almost certainly be unlawful if not illegal in quite a number of places in the world.

But you might not get punished. If the place you are located does not have an extradition treaty with the country where the target system is located[1]. Or the nation you are located choses not to abide by any treaty for various reasons[2]. Or the country you are in does not recognize your actions as being unlawful or illegal[3]. However you have to be mindfull of other nations you might wish to travel might well arrest you and rather than jail or deport you back to your home nation, might honour an extradition request. Likewise politics can change faster than the news can report it so you could suddenly find yourself arrested and extradited…

[1] Legally there is still some questions as to where a “non-local action” occurs. For thousands of years crimes required the criminal to be local to the scene of the crime at or before the crime occured. Which is generally the case for “physical crimes”. However the early days of recorgnising both “Persons legal and natural” started to cause problems. Finacial crimes for instance can be carried out in a non-local way, a contract can be signed and sent across one or more international borders by a courier or a postal service, and more recently by non physical electronic communications. The age of the Internet that started back in the late 1960’s but became viable to most some twenty to twenty five years later has not quite entirely removed the need for a physical presence, but come very close. So a problem of “Where the crime was committed” has arisen. That is did the crime occure local to you when you pressed a key on the keyboard or remote to you when it started attacking the target system or at some other node in the communications systems you are using?

At the moment many are saying it is with the “Directing mind” initiating it. But corporations have a way around this liability by spreading the decision makig amoung so many people that none can safely be held to be responsible… So they get away with it over and over againe…

[2] Russia does not act upon extradition requests from the US for a couple of reasons, firstly the US stopped extradition to Russia for various reasons, further that the US has broken the terms of the extradition treaty by asking for fees from other countries to serve legal paperwork).

[3] There is a bit of a storm building over “right to repair”, also “right to modify”, and “right to second sale” along with “Right to privacy” and “Right to be forgotten”. It’s likely to cause major problems for the US driven WTO. Most countries do not recognize a huge swath of US pattents and copyrights for very good reason, and unlike the US they do recognize the right of an individual to ownership of their personal data, including the right to insist that any entity must destroy records of people they hold when requested to do so. The US as usual is trying to claim it’s jurisdictionaly limited legislation applies to the whole world… Other sovereign nations and federations have rather pointedly told the US otherwise by enacting their own counter legislation. The not least of which is the GDPR which works on behalf of those who reside in the European Union (including those who are technically US Citizens).

SpaceLifeForm • October 18, 2022 3:48 AM

Yes, transaction fees are expensive

‘https://www.coindesk.com/business/2022/10/17/bitcoin-fails-to-produce-1-block-for-over-an-hour/

An 85-minute block interval left more than 13,000 transactions stuck in a pending state on Monday.

piglet • October 18, 2022 7:41 AM

“Critics argue that prohibiting Americans from using Tornado Cash is a restraint of free speech, pointing to court rulings in the 1990s that established that computer language is a form of language, and that software programs are a form of speech.”

What a ridiculous claim. If software code could not be regulated because it’s “speech”, ultimately there is nothing that still can be regulated because everything nowadays is coded in software. What is regulated or banned is not the text of the software code but the actions it causes.

The 1990s debate referenced here afaict is to the question of whether the export of programs like PGP can be banned. And it could not because the code could be printed and exported in book form. But this seems entirely unrelated to the case at hand.

piglet • October 18, 2022 7:46 AM

“This disagreement highlights the awkward distinction between ordinary language and computer code. Language does not change the world, except insofar as it persuades, informs, or compels other people.”

Not sure about that distinction. Freedom of speech doesn’t exempt the writer of a threatening or blackmail letter from prosecution, even though the act of threatening consists of nothing other than language.

Clive Robinson • October 18, 2022 7:47 AM

@ SpaceLifeForm, ALL,

Re : It’s on the down slope.

The problem with these crypto coins is two fold,

1, Blockchain with proof of work.
2, Inflation of proof of work.

That is because nearly all the coins are a scam the proof of work is minimal for the early entrant but gets more and more expensive with time on a rising power curve. That is each new action is a small percentage smaller than the previous transaction.

That is not sustainable in any way.

But for early entrant speculators who pick their time to close out with care, what cost then tenths of a cent to make, they cash out at tens if not hundreds of thousands of dollars out of the late speculators “or mugs” pockets (hence “mugs money”).

But that’s the “short con” in effect a “rug pull” but there is a “long con” which is exemplified by “transaction fees”. You take a minimum of say $50 or 10% off the top which ever is greater. It does not take long to find that is not just “on going” but highly profitable…

Some have realized this which is why there are upto 100,000 crypto coin scams all based on the same basic ideas or variations… My favourite scam being “Helium Mining” or,

“The data network that will never work as advertised”.

It uses as it’s “proof of work” the notion of “coverage area” of a radio signal… Which sufferers from the 1/(r^2) problem. But this proof has to happen frequently and continuously which means that very quickly the proof traffic out numbers the very very low speed user data traffic… In short it’s never going to work.

But… It sells less than $50 of hardware for well over 14 times the price… Which is a nice little mark up “long con” going into someones pocket… But though you appear to be “earning currancy” when you look into it you are not in the slightest.

All these digital currency systems have going for them for non crooks and scammers are the “Entertainment Value”…

But don’t take my word for it, I’m sure there will be countless “shills” and “evangalists” and other WanaBe scamers who are in reality just “mug bait” and thus “mugs” themselves.

Look into all these schemes and spot the underlying scams be they short or long cons and you will find the disguised as some form of “must be in there” function…

There is one thing not talked about much about the “block-chain” and that is what the “transaction history” shows. Both short and long con scammers and other scams have “modal behaviour” based on the fact,

“They are on a journy to an end point / destination”.

Which means that the behaviours have a discernable direction or pattern that can be lifted from any cloaking noise…

That is their “walks” are not made by drunkards, but based on “events” so find the correlations and you find the short and long con scammers. In “theory” identifing the “whales” or “pump and dumpers” will enable you to watch them and maybe be able to “bet against” them… I realy would not advise trying to do this, but there will always be those that think they are,

“Cleverer than the average bear.”

Only to find the true reality of their skills or lack there of as,

“They are left with piles of what bulls scat around”

But with a lot less value. Go and see how many “ham sandwiches” a piece of paper with your bank balance written on it will buy you, my guess is not many if any at all.

As others have found in various countries around the world,

“If you are not first in the que to cash out and turn currency into real assets as a bank run or hyper inflation starts…”

Then the only value that piece of paper has is to either “wipe your backside” or “burn for a little heat”…

piglet • October 18, 2022 7:49 AM

Also no sure about ther usefulness of the golem metaphor. How is this different from a machine controlled by a human operator responding to commands however conveyed?

piglet • October 18, 2022 7:59 AM

Also not sure about ther usefulness of the golem metaphor. How is this different from a machine controlled by a human operator responding to commands however conveyed?

Even if the machine is designed to not respond to human operator input after being turned on, under longstanding legal standards it is still clear that whoever set the machine in motion is liable for its actions. Imagine designing a killer robot, programming to to kill person X, and turning it on. Nobody would question for a second that that person is guilty of murder if the robot actually kills somebody.

vector • October 20, 2022 4:46 PM

I think it’s clear that a DAO’s code is free speech.
However, if the DAO executes unlawful actions, then the people willingly running the code are liable.
The result is that everyone validating the blockchain and its smart contracts are liable.
They’re willingly running illegal programs that they don’t know about, assisting fraud without direct knowledge!

Courts should rule that willingly running illegal programs without knowledge of those programs is gross negligence.
Such a ruling would not call freedom of speech into question. GOOD!

Clive Robinson • October 20, 2022 6:43 PM

@ vector,

Re : Who’s responsible.

“However, if the DAO executes unlawful actions, then the people willingly running the code are liable.”

Err no. You’ve fallen into the “You are responsible” trap on the assumption of “free will” which I mentioned in my first comment at the top of the page,

“As humans we have the notion of “free will” which alows us to treat any communications in what ever way we chose. However it alows others to come up with the notion of “responsability” and as you walk down that path the determination of good or bad under the current social set of mores and morals, which constantly change.”

Falling into that trap is an indicator you have not thought the problem through sufficiently…

As I indicated at the end of my first comment DAO code is not intended for sentient use, with the ability to decide right / wrong therefore responsability. And importantly at the start of my second comment,

“All code like all technology is agnostic to use.”

It is written to do a function on a system that is expected to carry out that function regardless of who operates that system.

As I further explained in the second comment,

“The hard part with code for an observer there are effectively two directing minds,

1, The designer/ developer of the code.
2, The user of the code.

Thus the issue of apportioning blaim.”

To be “responsible” requires you to be,

1, Deliberately negligent.
2, Know what the probable outcome of running the code is.

Absent either makes apportioning blaim to “The user of the code” difficult if not impossible in any sensible legal system (otherwise it’s a “might is right” “show trial system” where justice is an irrelevance).

As with most malware that is deliberately designed, the responsability lies with “the designer/developer of the code” and how the code got onto the system of “the user of the code”.

Think of it this way if you drive a car and one day when you are behind the wheel the car hits and kills a pedestrian crossing at a walk-way / crossing. Who is responsible?

Under your argument, you are, irrespective of other facts. What if one of those facts is that due to a design flaw you could go from working brakes to not working brakes[1] in an instant?

Is it your fault? I guess in part that depends on where you live, and how you personally feal about your fellow human beings[2]?

The point is though that few people who run software have any idea what functionality it has (Microsoft having a flight simulator in an office package… And many other “easter eggs” before we talk about the nasties). Further these days it’s almost not possible to know, because documentation is at best scant to not available…

Thus for a user to be responsible you would have to demonstrate quite a high level of evidence that they, should have or did know of the outcome. The simple could have known is in no way sufficient.

[1] This 100% brake failure due to design flaw actually happened with a low cost and popular car in the 1960’s without going into full details the brakes used a wire cable about 1/10th of an inch in diameter. Because the cable clamp could be in the wrong place the flexing at what was actually a fixed point caused each strand in the wire cable to break. The brakes would still appear to work normally on just one strand of wire, untill it too broke and you had 100% brake failure… Not at all fun if you were doing 40mph in a built up area… Which happened to someone I used to know. They ended up mounting the pavement / side walk and ploughing into the walls along peoples front gardens… Not badly hurt with only a broken arm but not an event that did not haunt them. They were a lecturer at an engineering teaching institute and every year they told the story to the incoming trainee engineers to remind them where responsability actuall rested.

[2] Bear in mind in Great Britain / UK there is something called the “Ministry of Transpory”(MOT) test[3] (even though the Ministry nolonger realy exists). That came about because of the “who is responsible?” question. Put simply it was felt that saving thousands of lives a year justified the road worthiness test.

[3] Basically any road vehicle that is three or more years old in mainland UK has an annual “Road Safety Test” known as “An MOT”, where the vehical is inspected by trained mechanics that it is not just safe to be in but also “road worthy” for the safety of others not in the vehical. The test is way more rigourous than many other places in the West but not as stringent as in a few (Germany for instance where apparently the US Presedential limo was at one time not technically road worthy, something that came out when the limo “grounded” leaving the US embassy in Dublin, https://www.bbc.com/news/world-us-canada-13507338 ). The test came about when it was realised that the average driver could not maintain a car in a sufficient “road worthy state” and it has been toughened up / upgraded over the years… Having been to the US and seen so many “clunkers” driving around in certain places that are very obviously from a distance neither “Safe or road worthy” I can not help but feel that the reason for the extrodinarily high US road deaths statistics might have something to do with those obvious clunkers…

Nick Levinson • October 22, 2022 12:02 AM

@Clive Robinson & @vector:

In U.S. law:

On Clive’s example of a car driver applying brakes which surprisingly fail and the car then kills someone in front of the car: The driver is responsible for the killing and the car maker or maintainer or some such party is responsible for the brake failure through a third-party suit filed by the driver after the primary suit is filed against the driver. The defendant in a third-party suit may be able to file a third-party suit against someone else, such as if metal for manufacturing the brakes in question was defective. This is why companies with skin in the game don’t like contracting with companies that don’t also have skin in the game. If one party has deep pockets and the other is virtually bankrupt, guess who pays the damages and who doesn’t, and guess who therefore gets sued and who doesn’t.

The owner of a blockchain ledger storing a smart contract — and it’s impossible that no one owns it and a claim on the Web that no one owns the Internet is nonsense since each piece of it is owned by someone — is responsible for the possibility of smart contracts because knowledge of them is now out. If smart contracts are likely to have unlawful consequences, the owner can be liable for allowing them to execute within what they own or at the interface with what they don’t own and thereby cause some of those consequences.

If a self-executing program runs because someone ran something that ran the self-executing program, or via an even longer chain of liability, That’s why it’s a bad idea to push an On button on an entirely mysterious machine out of mere curiosity. That’s why someone who has a powerful-enough machine generally shouldn’t or won’t let people who don’t know what they’re doing be anywhere near the On button. A five-year-old child is generally not allowed to drive a car.

Maybe decades ago, a magazine ran ads offering murder as a service. The ads were not clear. The magazine publisher doubtless denied condoning murder or knowing that the ads offered it. Someone was murdered by an advertiser who ran one of those ads. The magazine publisher was held civilly liable and ordered to pay damages. That probably would not have happened except that many such ads had been run by numerous advertisers.

The level of evidence required for civil liability is a preponderance of the evidence, sometimes characterized as more than 50 percent. A higher level of evidence is required in criminal cases.

If many older cars are much less safe than modern cars, that politically doesn’t surprise me. We have a car-centric culture, often to our detriment.

The car that was similar to the President’s The Beast seems, as I read the BBC article, to have been faultily driven, not defective as a car. You can’t design a car to clear all possible roadway obstruction heights. I’d want to know if the driver couldn’t have seen “[the] piece of metal sticking up that a gate might lock into” or if the metal piece rose as if to lock into a gate and rose with bad timing because a car, a copy of The Beast, was over it. It is not an issue of car design.

Clive Robinson • October 26, 2022 2:54 AM

@ Nick Levinson,

Re : mores, morals, regulation and legislation.

“On Clive’s example of a car driver applying brakes which surprisingly fail and the car then kills someone in front of the car: The driver is responsible for the killing”

That’s the legal viewpoint if and only if it progresses that far. I was talking about the POV of responsability via societal mores and morals, where “acts of God” and “accidents” are accepted as unavoidable.

I’m known to hold the view that there is no such thing as an accident or act of god, just a lack of knowledge and time.

My viewpoint might appear odd to some but it does alow me to think rationally about events that cause harm. Which is important because many of my jobs have been about preventing harm by engineering, not encoraging dangerous situations to remain by saying X is to blaim thus must make restitution.

Legislative blaim of an individual is not the way to deal with something where there is no moral blaim atributable to them. It only serves those who get fat on other peoples misery and so encorages abuse for gain.

Nick Levinson • October 29, 2022 7:38 PM

@Clive Robinson:

That’s a good engineering strategy, although it can get too expensive unless you set a limit on how far you’ll go to save other people from things going haywire. To limit that, you could use a risk management strategy: Multiply the cost of some particular thing going wrong in a given time frame by the percentage likelihood of that thing going wrong during that time frame and spend no more than that answer.

I generally don’t rely on morality as a guide for other people, because, while a system of morals is often meant as a universal regardless of anyone’s religion, in practice systems of morals are often in conflict from individual to individual. On the other hand, we might distinguish between morals of which we are conscious and those of which we are not because the latter might be more widely uncontroversial.

On accidents, I doubt it’s useful to deny their existence, but if we accept that they occur we can still ask whether someone took reasonable precautions against one that happened. We teach toddlers to learn accident prevention, although only to a degree; and, meanwhile, doubtless the most brilliant and careful people on Earth have accidents no one thinks they could have prevented. I think it’s useful to preserve the concept of “accident” in order better to understand what happened in a situation and apply that understanding to future situations we may influence.

Even when a victim did not contribute to causing an accident, mitigating damages is, for a potential victim, a U.S. legal duty in some situations. Let’s say I come home to my private house and discover that someone, through no fault of mine, crashed their truck into my outside wall and I go inside and discover an interior wall consequently cracked and likely to fall and cause injury to a guest’s head or break my stereo. I could let a guest sit without regard to whether their head would be in harm’s way or leave my stereo in that place if it was already there and I could still sue and collect from the truck driver. But I couldn’t collect as much as if I had mitigated damages. To mitigate, I’d have to do something reasonable that would make damage to my guest or my stereo less damaging. I could tell my guest not to sit there. I could cover the stereo. I could tape the wall crack. I could close my house and call someone who fixes these things. If I mitigated damages and damage occurred anyway, I can collect more from my lawsuit. Thus, someone else, identifiable or not, may be to blame but we should still try to prevent something bad; and legally may have to try to. That’s sort of why we have sidewalks between streets and houses; we’d rather people didn’t walk in front of hurtling cars.

So-called acts of God are another issue. I think “societal mores and morals . . . [“accept[ing]”] ‘acts of God’ . . . as unavoidable” are not reflected in law except for intent (accidental death even with liability being unlike murder) or where explicitly stated (as in contracts). The law in many contracts (since they’re law), terms of use, and some other law in the U.S. provides for them (I prefer to refer to them as acts beyond human agency) as beyond the responsibility of at least one human party. There is natural law, and that is the highest law in the universe and includes physical and metaphysical (I, not theologically oriented, maintain that the content of metaphysical natural law is not above national domestic law but that the concept per se of metaphysical natural law minus the content is superior to all law except natural law, and some might say superior to all law). Physical natural law includes mathematics, physics, and perhaps even scientific psychology; humans mostly cannot promulgate physical natural law but can discover it. Someone said he drove 100mph (161kmph) on a public park’s roads; if he had gotten arrested and tried, he would not have the argument that he had no responsibility for the physics of his car hitting someone just because the physics were not legislated. If there was no speed limit (I’m sure there was), the court would have grounded a conviction on his responsibility to take relevant physics into consideration because of physical natural law.

Since I’m an atheist, I could have a problem if I signed a contract exempting a counterparty from liability for consequences of an act of God. I might argue that since there’s no God the exemption is void. But legal clauses cannot be meaningless unless it’s unavoidable. The problem could build from there. One way out for me may be that the act-of-God clause may be in a contract of adhesion where I’m not the one demanding adhesion and so the court will interpret it liberally in my favor.

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Sidebar photo of Bruce Schneier by Joe MacInnis.