In the real world law is law, but I think it's still not entirely clear whether smart contracts can be considered legal contracts and how to judge if any partic

In the real world law is law, but I think it's still not entirely clear whether smart contracts can be considered legal contracts and how to judge if any particular smart contract is one. If this smart contract is considered a legally binding contract, then, yes, this would likely be illegal despite the proverbial "letter" of the smart contract not being broken. If it isn't, then it may not necessarily be illegal (but possibly still could be).