Stephen Palley was quoted October 22 in a Coindesk article.
Some $16 million in cryptocurrency was pilfered in an exploit of a decentralized finance (DeFi) protocol last week and the victims believe they know exactly who did it.
Despite threats from the team, however, the alleged attacker – a Canadian teenaged graduate student – is refusing to return the funds, potentially setting the stage for a groundbreaking legal confrontation.
Of the half-dozen lawyers CoinDesk spoke to, all agreed that while the potential case may seem as if it will set a number of precedents at first blush, the reality is that a court will likely evaluate the exploit in simple terms.
Crypto attorney Stephen Palley warned that if the case does make it to court, it could be a moment that definitively ends DeFi’s fanciful notions of self-regulation.
“It’s the height of stupidity to say ‘code is law’ in this situation. It’s a magical incantation that means nothing,” the Anderson Kill lawyer told CoinDesk.
“There’s nothing terribly new here,” he added. “Old wine, new bottles; self-serving human greed. Is robbing a bank an ‘economic exploit?’ Saying that is frigging stupid. There’s nothing about this, if handled properly, that is groundbreaking precedent.”
Despite the seeming inertia tilting towards a legal confrontation, both Gottlieb and Palley noted that if Andy were to return the funds there’s a chance the incident might not have to be litigated.
Palley said that returning the funds “doesn’t undo the crime,” but it could lead a prosecutor to decline to pursue charges.
Read the full article on Coindesk.