Code Is Law: Documentary Explores Crypto Hacks & Ethics

James Craig’s “Code Is Law” positions itself at the intersection of technology, finance, and ethics, using Lawrence Lessig’s philosophical framework as its intellectual foundation. The documentary opens with Lessig’s provocative statement from “Code: Version 2.0”: “A world where ‘the market’ runs free and the ‘evil’ of government is defeated would be, for them, a world of perfect freedom.” This sets the stage for an investigation into whether code—the immutable rules governing blockchain systems—should function as the ultimate legal authority in decentralized financial ecosystems.

The film’s exploration comes at a critical juncture in cryptocurrency’s evolution, as decentralized systems increasingly handle billions in assets while operating outside traditional regulatory frameworks. By examining the moral reckoning used by hack perpetrators, Craig’s documentary forces viewers to confront uncomfortable questions about whether technological determinism can adequately address complex ethical dilemmas that arise when code-based systems fail or are exploited.

The documentary begins with the 2014 Mt. Gox hack, which serves as the foundational case study in crypto security failures. At its peak, Mt. Gox handled approximately 70% of all Bitcoin transactions worldwide, making its collapse not just a significant financial loss but a crisis of confidence for the entire cryptocurrency ecosystem. The exchange’s failure resulted in the loss of 850,000 Bitcoins—worth approximately $450 million at the time but representing over $50 billion at current valuations.

Craig’s film examines how the Mt. Gox incident exposed fundamental vulnerabilities in centralized cryptocurrency custodianship, despite Bitcoin’s decentralized design. The hack revealed critical gaps between the ideology of “code is law” and the practical reality of human-operated systems interfacing with blockchain technology. This case study demonstrates how even in systems designed to eliminate trust requirements, points of centralization create systemic risks that code alone cannot mitigate.

The documentary’s second major case study focuses on the 2016 DAO hack, which represents a pivotal moment in Ethereum’s history and the broader decentralized finance movement. The DAO—short for Decentralized Autonomous Organization—was the first of its kind to gain significant traction on the young Ethereum network, raising approximately $150 million in Ether through a token sale that represented one of the largest crowdfunding events in history at the time.

When an attacker exploited a vulnerability in The DAO’s smart contract code to drain approximately $60 million in Ether, the Ethereum community faced an existential dilemma: adhere strictly to the “code is law” principle and accept the irreversible loss, or implement a controversial hard fork to reverse the transactions and return the funds. The documentary explores how this event forced the community to confront the limitations of their ideological commitment to immutability when faced with catastrophic financial consequences.

The DAO hack case study particularly illuminates the tension between technological purity and practical governance. The eventual hard fork implementation—which created the Ethereum we know today while a minority continued with the original chain as Ethereum Classic—demonstrated that even in systems designed to be governed by code, human intervention and community consensus ultimately determined the outcome when the stakes were high enough.

Throughout “Code Is Law,” James Craig examines the moral philosophy that perpetrators of crypto hacks employ to justify their actions. The documentary explores how attackers often frame their exploits as legitimate within the context of systems where code supposedly represents the only binding law. This ethical positioning raises profound questions about whether finding and exploiting vulnerabilities constitutes theft or simply represents sophisticated system interaction within the rules as written.

The film’s investigation into perpetrator ethos reveals how the ideology of “code is law” can be weaponized to rationalize actions that would be clearly illegal in traditional financial systems. By presenting these perspectives alongside the devastating consequences for victims, Craig creates a nuanced exploration of how technological systems reshape moral frameworks and challenge conventional understandings of property rights, consent, and justice in financial contexts.

The documentary’s examination of both the Mt. Gox and DAO hacks provides critical insights into the ongoing evolution of cryptocurrency governance models. These case studies demonstrate that while code can establish powerful new forms of trust minimization and automation, it cannot entirely eliminate the need for human judgment, community standards, and crisis response mechanisms. The tension between technological determinism and practical governance continues to shape how blockchain systems develop and respond to challenges.

As “Code Is Law” makes clear through its detailed case studies, the question of whether code should function as law remains unresolved in cryptocurrency ecosystems. The documentary premiering on October 21 across Apple TV+, Amazon Prime Video, and YouTube Movies arrives at a time when these questions have never been more relevant, with decentralized finance protocols handling tens of billions in assets and facing increasingly sophisticated security threats that test the limits of code-based governance.