If you have arrived at this page in a regulatory, supervisory, or enforcement role, this document is written for you. It is offered in good faith, in plain language, with the assumption that an honest record serves us both.
The mandates you operate under — protection of investors, depositors, and the orderly functioning of markets; enforcement of sanctions and anti-money-laundering frameworks; supervision of financial intermediaries — are mandates we recognize as serious public-interest work. We make no argument against the existence of those mandates. We make no argument that your institutions are unnecessary, captured, or illegitimate. We are not anti-regulatory in posture or in conviction.
What we are is the authors of a specific technical construction that, by its mathematical structure, does not contain the dependencies your existing frameworks were principally designed to address. This brief explains what the construction is, what it is not, what we believe about how your frameworks apply to it, and where we may need to develop a shared understanding over time. The brief is offered in the spirit of clarity, not contention.
If, after reading, you have technical questions, we are available to answer them on the public record. If you reach a different conclusion than we do about any specific point, we would rather hear that disagreement directly than discover it later through enforcement correspondence. The bytecode is public. The deployment history is public. There is no informational asymmetry between us that good-faith dialogue cannot reduce.
You have arrived at this page from somewhere. Perhaps a colleague flagged the Deviant project. Perhaps an investigation is preliminary or it is well-developed. Perhaps the relevant statute is securities, banking, commodities, sanctions, anti-money-laundering, or consumer protection. The specifics differ; the underlying inquiry is usually similar. In our experience the inquiry maps to one of the following five frameworks, sometimes more than one in combination.
An investor pays money to an issuer, expecting profit from the efforts of others. The issuer is registered or registration is required. The instrument is regulated as a security.
An operator handles customer funds, transmits value across parties, exchanges currency, or operates a money-transmitter function. Registration and supervisory obligations attach.
A customer entrusts assets to an institution. The institution holds the assets, may use them, and is responsible for returning them. Reserve and disclosure obligations attach.
If the construction or its operators come within sanctions jurisdiction, parties subject to enforcement must be identifiable, and remedy must be technically achievable.
A promise is being made, consideration is being collected, the promise will not or cannot be honored, and harm to consumers is the predictable result.
Most novel constructions in this space have been assessed under more than one framework simultaneously. We anticipate that this construction will be assessed similarly.
We address each framework on its own terms. We will not argue that any framework is inappropriate per se; we will state precisely what the construction does relative to the elements that framework typically requires.
A Howey-style analysis asks whether there is (a) an investment of money, (b) in a common enterprise, (c) with an expectation of profit, (d) derived from the efforts of others. In this construction, three of those four elements warrant specific examination.
On "investment of money": a user obtains a DEA unit by interacting with a deployed contract. The user's BCH is not transferred to an issuer; it is locked inside a UTXO controlled by the contract's verification logic. No party receives the user's funds.
On "expectation of profit": the DEA construction provides a holder with a redemption right at a fixed rate set at the contract's deployment. The redemption value is determined by the bytecode, not by an issuer's performance. A holder seeking profit through DEA holding would have to look outside the construction itself — to potential secondary market trading — but the construction's own terms offer redemption at the fixed backing rate and nothing more.
On "efforts of others": after deployment, no party's effort is required, available, or capable of affecting the redemption value of a held DEA. The contract has no administrator, no upgrade path, no governance function. The construction does not depend on Deviant's continued existence, effort, or competence for its operation.
We do not assert that this analysis is dispositive. We assert that the construction differs from the typical securities-framework target in identifiable structural ways that warrant precise examination rather than analogical reasoning from prior crypto cases.
An MSB framework typically requires an operator who handles customer funds, transmits value between parties, or exchanges currency on behalf of customers. The construction does not perform these functions.
The Deviant project develops and publishes contract code and a non-custodial wallet that interacts with that code. The wallet does not hold customer funds at any time. The contract is deployed permissionlessly on a public network and is not operated by any party after deployment. There is no fund-handling intermediary in the path of any user transaction.
The project earns a small protocol-level fee from claim and swap operations. This fee is enforced by the contract math, routed by the contract, and is mathematically equivalent to a miner's transaction fee — a structural toll for protocol operation, not a service charge against custody.
A custodial-deposit framework typically requires that a customer's assets are held by an institution that takes responsibility for their safekeeping. The construction contains no such institution at any point.
Backing BCH for a DEA unit is held inside the UTXO that represents the unit. That UTXO is on the public BCH network, observable on any block explorer. The user controls the private key that authorizes spending. There is no party between the user and the network at the point of redemption.
An exchange that lists DEA for trading does not custody it in the sense relevant to redemption — the exchange holds whatever assets it holds for trading-platform purposes, but a DEA holder's redemption right is exercised against the contract on chain, not against the exchange. The exchange is not in the redemption path.
Sanctions frameworks contemplate the existence of parties to whom enforcement attaches. We acknowledge frankly that the Deviant project and its founder are such parties for purposes of sanctions law in jurisdictions where they are present. We expect to comply with lawful orders directed at us in those jurisdictions.
The contract itself is a different matter. After deployment, the contract has no administrator, no party empowered to halt its execution, and no party who can be directed to alter its bytecode. We do not assert that this circumstance is convenient for enforcement; we observe that it is the technical reality of autonomous code on a permissionless network. We did not invent the asymmetry; we built one construction subject to it.
The legal status of enforcement directed at autonomous contracts is, as you are likely aware, an actively developing area — including in the Fifth Circuit's 2024 ruling in Van Loon v. Department of the Treasury. We do not take a position on the merits of that or any other pending matter. We simply note that our construction has the same autonomous-code property that the cases address. The autonomy is symmetric: it complicates external alteration in both directions — by adverse actors, and by enforcement.
A consumer-protection framework typically asks whether a promise is being made that will not or cannot be honored, with predictable harm. The DEA construction makes one promise, encoded in bytecode: that a holder may redeem their unit for the backing BCH at the rate set at deployment, by a standard P2PKH spend, at any time.
That promise is enforced by the contract math, not by Deviant. It is verifiable by any party who reads the deployed contract. It is testable by performing a redemption. If the promise can be falsified, the construction has failed; if it cannot be falsified, the construction has done what it claims.
We make no other promises on which a consumer could rely. We make no representation that DEA will appreciate in value. We do not solicit purchases. We do not run promotional campaigns describing returns. The public-facing materials we publish describe the construction's mechanics and its structural properties, not its prospects.
We built an algorithm. The algorithm operates. We earn a small protocol-level fee from its operation, in the same way a miner earns a transaction fee for processing blocks. This is the entire structure of our economic relationship with the construction.
We do not solicit purchases. We do not promise appreciation. We do not maintain customer accounts. We do not custody anyone's assets. We do not have an administrative capacity to alter, halt, or modify the contract. These statements are testable, not rhetorical. They are testable by reading the contract bytecode.
We anticipate that reasonable regulators may reach conclusions about how their frameworks apply to this construction. We do not contest your right to reach those conclusions. We ask only that the conclusions be reached on an accurate technical foundation, which this brief and its supporting documents are intended to provide. Where you reach a conclusion we believe is mistaken on the technical facts, we will say so plainly and provide the evidence. Where you reach a conclusion grounded in policy choices that are within your authority to make, we will engage with the resulting framework in good faith.
What we will not do is pretend the construction is something it is not. The bytecode is what it is. The math is what it is. The autonomy is what it is. We are documenting reality, not negotiating it.
The Deviant project signs this brief through its public conduct — the publication of the contract bytecode, the publication of the validation history, the publication of this document and its companions, and the founder's continuing availability for direct technical dialogue.
If at any time you cannot reach us, or you find that we have evaded a question, or you find that the construction has properties materially different from those described here, the document loses its force. We are aware of the standard the brief sets, and we accept it.