In a recent legal victory, Manatt Phelps & Phillips LLP successfully countered a novel defense strategy in the crypto realm, commonly known as “code as law.” The case involved a crypto trader who exploited a software flaw to mint millions of dollars in new tokens from a blockchain network. The trader attempted to claim ownership over these tokens by arguing that the blockchain’s code—faulty as it was—constituted the ultimate authority.
Manatt’s legal team effectively debunked this defense by illustrating a fundamental legal principle: Code anomalies cannot usurp established laws. This ruling not only allowed them to secure an award worth millions but also set a critical precedent in the intersection of technology and law. The outcome underscores the judiciary’s stance that technological malfunctions do not override traditional legal frameworks, a point of interest for both legal practitioners and entities dealing with blockchain technologies.