This week NgsCrypto.com spoke with an anonymous individual from Australia who has been in contact with the Australian Securities and Investments Commission concerning Ethereum’s (ETH) possible violation of financial laws that originated from the DAO hack and the ETH hard fork last year.
Ethereum’s Conflict of Interest
The rise of Ethereum and Initial Coin Investments (ICO), or token sales stemming from the network, has been discussed heavily in recent months due to the vast amount of funds raised by ICOs. Some people are excited for the future of crowd sales while others believe this type of funding is raising a lot of red flags . NgsCrypto.com’s anonymous contact who goes by the name ‘Murdock’ believes Ethereum developers are already in trouble due to violating “conflict of interest” laws during last years DAO hack and the network’s subsequent hard fork.
Violating Existing Financial Laws and Breaking the Trustless Machine
NgsCrypto.com was shown an email from the Australian Securities and Investments Commission (ASIC) who says they have assigned a specialist to Murdock’s complaint. The native Australian has also told us that he has also contacted other financial authorities from Germany, France, and other EU-based financial officials. Because the Ethereum Foundation is registered in Zug, Switzerland, Murdock has also contacted the Swiss government. Murdock explains why he was prompted to reach out to his country’s financial regulators with concerns about the recent Ethereum/DAO debacle.
“What prompted me to do this was my understanding of financial laws, business laws, and my background in the crypto-space since 2011,” explains Murdock. “The whole project violates financial laws like ‘conflict of interest.’ This comes from developers protecting their investments after they were warned that the network should have just let the theft play out.”
The trustless machine was broken with the hard fork of Ethereum.
Ethereum Creates a Bad Precedent
Murdock believes Ethereum developers have broken many traditional finance laws and they should be held accountable. If the Ethereum team is not held responsible for breaking these laws Murdock thinks the organization will set a dangerous precedent for blockchain technology and cryptocurrency solutions in general. He also believes that beyond the DAO situation , developers will have other conflicts of interest in the near future.
“I want better laws for blockchains and cryptocurrencies that provide a better code of ethics,” Murdock details. “Governments should intervene and regulate these companies using Ethereum. It’s also about trust, blockchain contracts are supposed to be ‘code is law.’ But Ethereum can just keep doing more hard forks? For their own benefit? Bitcoin forks in the past were to improve the code and not for personal gain.”
Below is a copy of the email sent to Murdock from the ASIC agency and the country’s Minister of Finance. Murdock explains he will be keeping us informed of any more developments with his complaints.
What do you think about Murdock’s complaint? Do you think he has a valid case against Ethereum? Let us know in the comments below.