[HN Gopher] Investors sue Treasury Department for blacklisting c...
___________________________________________________________________
Investors sue Treasury Department for blacklisting crypto platform
Tornado Cash
Author : CapitalistCartr
Score : 200 points
Date : 2022-09-12 14:00 UTC (9 hours ago)
(HTM) web link (www.nytimes.com)
(TXT) w3m dump (www.nytimes.com)
| mikece wrote:
| Banning a service because it "might be used for illegal purposes"
| is insufficient. This is a problem with law enforcement in
| general: they are lazy and seek to have automated solutions to so
| much of what used to be called police work. This applies to
| warrant-less wiretaps, pulling information on people from 3rd
| party data brokers to side-step warrant and FOIA requirements,
| and more. I would rather money-launderers get away with things
| and for freedom to prosper than to have an all-encompassing
| surveillance state.
| croes wrote:
| Are you sure they are lazy or are they just underfunded and
| with to few personnel?
| A4ET8a8uTh0 wrote:
| It probably depends. I live in Chicagoland. Cops here are a
| lot of things, but I can't honestly say they are underfunded.
| The pension alone is likely worth the risk ( source: couple
| cops in my extended family ) even if money is not staggering
| ( and it still not on the low end by any means ).
|
| But to go back to the original query. It is just so much more
| easier to click couple of buttons than go somewhere and ask
| questions. It is cheaper too. The convenience trumps most of
| the other reasons. The same goes for privacy. The convenience
| killed it.
| Sir_Liigmaz wrote:
| The USA PATRIOT Act requires every financial institution and
| money service business have an AML department. There are
| thousands of people in the US that are paid to look at your
| bank account and decide if you've been naughty or not and narc
| to the feds if you have. This is happening everyday. We are
| already living the surveillance state.
| JustLurking2022 wrote:
| It's a service specifically designed to facilitate money
| laundering. It's a bit like running a business that produces
| paperwork to make stolen cars indistinguishable from legal ones
| - there's no reason such a service should be allowed to exist.
| redox99 wrote:
| That's like saying knives are designed to facilitate murder.
|
| TC is made for privacy, which either is or should be a basic
| right.
|
| Without tools such as TC if I send you money, show you some
| POAPs[1] I own, or otherwise interact in any way with my
| crypto, it is fairly simple to deduce or make educated
| guesses of how much crypto I own, who I send it to or from,
| and more. This has serious implications not only for privacy,
| but for safety reasons too.
|
| TC makes it so you can transfer from your cold wallet to your
| hot wallet, without trivially revealing what your cold wallet
| is (and thus your funds).
|
| Furthermore TC also allows you to keep a receipt of these
| anonymous transfers, so you can in the future prove the
| origin of your funds or reveal such transactions.
|
| [1] https://poap.xyz/
| mattficke wrote:
| Financial privacy is a limited right in the US (and in most
| other countries), you're not allowed to hide financial
| assets or transactions from the government. You can think
| that's bad, but it's unambiguously the law (the Supreme
| Court ruled on the constitutionality of the Bank Secrecy
| Act back in the 70's.) The sanctions were entirely
| predictable, no one should be surprised.
| mr_spothawk wrote:
| https://www.investopedia.com/terms/b/bank_secrecy_act.asp
|
| > KEY TAKEAWAYS
|
| > The Bank Secrecy Act (BSA) is U.S. legislation aimed at
| preventing criminals from using financial institutions to
| hide or launder money.
|
| > The law requires financial institutions to provide
| documentation to regulators whenever their clients deal
| with suspicious cash transactions involving sums over
| $10,000.
|
| > The law does not require documentation for every
| transaction over $10,000, but businesses must file
| Internal Revenue Service (IRS) Form 8300 if they receive
| more than $10,000 in cash from one buyer.
| phantomathkg wrote:
| In the life without crypto. The only way to achieve this is
| like movies in the 80s, you hand over a suitcase of cash
| and get whatever you need.
|
| With the invention of paperless transaction, Government
| steps in and ensure every transaction record is there to
| show the party of the transaction. This happened, before
| the invention of the internet.
|
| If you wanna fight, then you will have to undo all the
| legal changes.
|
| Compare of the little loss of the privacy, and the
| possibility of funding the evil state like North Korea and
| its infamous neighbour. I would choose get rid of the evil
| country.
| concordDance wrote:
| > Compare of the little loss of the privacy, and the
| possibility of funding the evil state like North Korea
| and its infamous neighbour. I would choose get rid of the
| evil country.
|
| Damn, those goalposts moved like lightning. From "making
| it a bit harder for North Korea to get a bit of extra
| cash" to "abolishing the North Korean government" in a
| single sentence.
| [deleted]
| lesuorac wrote:
| > That's like saying knives are designed to facilitate
| murder.
|
| There are a lot of laws banning knives of various sizes and
| constructions. I'm not sure you picked the example you
| want.
| davidguetta wrote:
| But the entire spirit of financial laws is that privacy is
| bad, because privacy usually can help people avoid taxes..
|
| People going all pikachu face on this story is really weird
| as fuck. It was obvious this was going to happen.
| woodruffw wrote:
| > That's like saying knives are designed to facilitate
| murder.
|
| There are plenty of knives that _are_ designed to
| facilitate murder, and they _are_ correspondingly
| regulated.
|
| We don't regulate kitchen knives in that way, because they
| don't represent the same intent.
|
| If your financial instrument leaks all of your transactions
| and makes you a target of criminal scrutiny, you should
| consider using a different instrument. Society is not going
| to throw the baby out with the bathwater to accomodate your
| public immutable ledger.
| theplumber wrote:
| >> There are plenty of knives that are designed to
| facilitate murder, and they are correspondingly
| regulated. We don't regulate kitchen knives in that way,
| because they don't represent the same intent.
|
| I'm pretty sure the majority of knives used for criminal
| activities are rather kitchen knifes.
|
| Compare Tornado Cash with cash money and tell me how they
| are different. Being untraceable does not make it a
| criminal instrument or does it? Is it criminal to conceal
| your financial transactions from the government?
| woodruffw wrote:
| > I'm pretty sure the majority of knifes used for
| criminal activities are rather kitchen knifes.
|
| Regardless of whether this is true (which it probably
| isn't, at least in the US), it doesn't change the intent.
| We regulate different things differently based on their
| _intended_ use.
|
| This should cover your second question as well. Intent is
| what the government cares about in this instance. And
| yes, it is indeed illegal to conceal your transactions
| from the government, at least insofar as they concern
| money that the government is entitled to tax or review.
| mattficke wrote:
| Yes, it is a crime to conceal your financial transactions
| from the government.
| chrischattin wrote:
| Do you report every cash transaction?
| A4ET8a8uTh0 wrote:
| It is not that straightforward, but as general statements
| go, you are not wrong. The issue seems to be that the
| government lately ( via various distributed actors ) has
| recently deemed some entirely legal transactions
| unsavory, which then banks/processors and so on deemed as
| risky and then those unsavory yet not illegal
| transactions become defacto verbotten. I hate to say it,
| but it really is one of those 'the tighter you grip'
| situations. Case in point, one few years ago, most people
| did not know what SDN list or OFAC is. But now more and
| more customers, and not just business customers seem to
| be aware of how expansive BSA really can be.
| concordDance wrote:
| I, for one, am unconvinced that is a particularly
| valuable baby and its demise is worth getting rid of that
| bathwater.
| SkipperCat wrote:
| Case in point. Ginsu knife - not regulated. Switchblade -
| regulated. One is intended to slice a tomato, the other
| is intended for concealed carry and stabbing people (who
| are not a tomato).
| samatman wrote:
| Odd that you would bring up a tool banned in a wave of
| media-provoked hysteria, one so useful to the disabled
| that the ban has been overturned, which was never in fact
| intended as a weapon, isn't a very good one, and just
| looks cool.
|
| Probably because banning knives is ludicrous behavior, so
| there aren't better examples.
|
| So you can see for yourself:
| https://en.wikipedia.org/wiki/Switchblade
| SkipperCat wrote:
| You're right - the switchblade is an odd example. I've
| now learned a good bit about it from that link!
|
| But the core point is that societies will ban things that
| generate more harm than benefit, be it real or perceived.
| This is the crux of the gun debate in America right now.
| sixstringtheory wrote:
| It also depends on context. You can't bring a kitchen
| knife on an airplane. You will get funny looks from most
| if you walk around outside with one, even if that isn't
| specifically banned, but laws evolve out of social
| convention, so if enough people did it, you could
| plausibly see it legislated. I'd bet that if you
| committed some other offense like public intoxication or
| indecent exposure, and then resisted arrest, you'd have a
| couple knock on charges regarding said knife.
|
| So here's the context for TD AFAICT: crypto is a
| competitor to fiat currency and all the hegemony that
| comes with it. It is a power play, and power doesn't come
| for free, and often is ultimately paid for with blood.
| Governments aren't just going to let a new wild west open
| up on that without any say-so. I think crypto enthusiasts
| either don't understand the implications of the tech or
| reject them on philosophical grounds, which I sympathize
| with but understand that doesn't change the reality as
| far as every stakeholder is involved.
| SkipperCat wrote:
| True, walk around with a Ginsu knife outside and you
| better have a chef's hat on...
|
| I'm not sure I 100% agree with the statement "crypto is a
| competitor". Sometimes it's a currency, sometimes it's a
| commodity but at the end of the day, it's a store of
| value that humans own.
|
| US dollars deposited in a bank and crypto in a wallet are
| owned by the same people, so it cannot be a competitor.
| It's just another asset class. The fact that Coinbase is
| a publicly traded company shows that the US government
| 100% accepts crypto as what I've described.
|
| What they do care about are items and processes who's
| main purpose is for illegal activities. Guns are a
| perfect example. You want to buy and register a gun from
| a licensed dealer, no problem. You want to buy one from a
| guy in a van and scratch off the serial number, that's a
| problem. In the eyes of the government, Tornado Cash is
| too much like the guy in the van.
| andrewaylett wrote:
| Come to Scotland, we _do_ regulate kitchen knives in the
| same way as we regulate knives designed as weapons.
|
| It's actually quite challenging to find a decent pocket
| knife that's legal to carry here: if the blade locks in
| place, it's not legal. So pretty much any Leatherman or
| Gerber that's not one of the mini ones is out, and all
| the cheaper brands are the same. I've taken to carrying a
| Geekey[1] and a knock-off Raptor[2].
|
| [1]: https://geekey.com/ -- although the feature being
| headlined is the one I'm _least_ likely to use.
|
| [2]: https://www.leatherman.co.uk/collections/raptor-
| rescue/produ..., literally a quarter of the price without
| the branding:
| https://smile.amazon.co.uk/gp/product/B08ZSV5644
| TremendousJudge wrote:
| What's wrong with Victorinox?
| devoutsalsa wrote:
| So are casinos, banks, money exchanges, and hot dog stands.
| There are tons of reasons for wanting privacy that have
| nothing to do with money laundering. Avoiding kidnapping &
| ransom because someone can't see the size of your crypto
| wallet for example.
| res0nat0r wrote:
| The primary reason casinos, banks, money exchanges and hot
| dog stands exist aren't to facilitate money laundering,
| unlike Tornado, according to the government.
| zeusk wrote:
| You're really saying; banks, money exchanges and hot dog
| stands have no other utility other than to "wash" money?
| bitxbitxbitcoin wrote:
| It's reductionist but yes - "washing" money is a core
| part of their function. Note OP didn't say laundering.
| woodruffw wrote:
| No, it isn't. Banks exist to induce stability and
| liquidity (i.e., the efficient flow of capital) within
| the economy. Hot dog stands exist to sell hot dogs. Money
| exchanges exist to transfer currencies to (you guessed
| it) facilitate commerce in different regions.
|
| The hair you're attempting to split between "laundering"
| and "washing" does not exist in the financial world, and
| would not impress financial regulators.
| bitxbitxbitcoin wrote:
| The difference between laundering and washing doesn't
| exist in current financial regulation.
|
| It does to those who believe in financial privacy.
| eropple wrote:
| There's no such thing as financial privacy when you, by
| virtue of being a citizen of a country, consent to be
| taxed on income and investment. Your financial actions
| may not be necessarily public to your fellow citizens but
| they absolutely and without possible argument must be to
| your tax assessor, and this exists to hide transactions
| from them. Of course it's illegal.
|
| You can revoke that consent, as it is possible to become
| a citizen of no country, but I wouldn't recommend it.
| mr_spothawk wrote:
| There's no such thing as consent when you're coerced.
| eropple wrote:
| My poor, so-very-put-upon friend: _you can choose to
| leave_.
|
| But there is a collectively hashed-out social contract
| you accept by staying, and it should be of no surprise
| that the law takes that contract as table stakes and acts
| according to it.
| mr_spothawk wrote:
| Tell it to Rosa Parks.
| woodruffw wrote:
| At which point did Rosa Parks transfer her money using an
| immutable public ledger?
|
| Comparing your financial scheme to Jim Crow isn't the
| most distasteful thing I've seen on HN, but it's up
| there!
| mr_spothawk wrote:
| > your financial scheme
|
| It's not my financial scheme, it's the social contract.
| eropple wrote:
| Rosa Parks _publicly_ broke the law and was _publicly_
| punished for it, because that 's how civil disobedience
| works. In doing so, she engendered significant _public_
| sympathy and acted as a spur to change minds and,
| eventually, laws.
|
| Comparing that to hiding your financial transactions so
| you avoid KYC is genuinely embarrassing.
| orangepurple wrote:
| US Citizens can't leave. They must pay tribute to the
| United States globally and beyond until they die. Income
| earned in outer space is taxed as income earned in
| country.
| eropple wrote:
| Yeah, that's the price of _retaining_ your American
| citizenship, which is among the most valuable in the
| world to have if you ever have a "I need to call my
| consulate" problem. But you don't have to retain your
| American citizenship--there are a lot of countries out
| there!
|
| Granted, that's assuming you're a valuable enough
| contributor _to society_ that you 'll find another
| country interested in taking you, one that won't
| similarly have expectations around "people in a society
| should pay taxes", but that's a you problem.
| ashwagary wrote:
| >>this exists to hide transactions from them (tax
| assessor)
|
| Not true, this tool exists to provide privacy on an
| otherwise public ledger. Your tax assessor has no right
| to know about a transaction as soon as it occurs. A crime
| is only committed if you don't voluntarily declare it at
| a certain point in the future.
|
| LE laziness and citizens conceding territory
| unnecessarily is creating a nanny state.
| zeusk wrote:
| Enlighten us with how washing differs from laundering
| then; because I haven't had the crypto koolaid yet.
| pigtailgirl wrote:
| -- as it was explained to me (I don't crypto) - because
| everything is public - you might want to disassociate
| (wash) transactions from yourself for perfectly
| legitimate reasons - not really needed in traditional
| finance as people typically don't have access to your
| bank account - however - this is not necessarily the same
| as wanting to take money you gained illegitimately and
| make it legitimate (launder) --
| woodruffw wrote:
| This is the hair splitting I mentioned: no government in
| the world cares that you're doing money laundering
| because you're opted into a public-by-default money
| transfer system. The answer is to simply _not_ use an
| immutable public ledger for your finances, since you 're
| not required to.
|
| The government will not carve out a subset of crimes
| because of an unnecessary self-imposed restriction on
| financial privacy.
| pigtailgirl wrote:
| -- by the same token - it's a bit uncouth to support and
| provide frameworks of legitimacy for "future focused
| technology projects" - however not enable services that
| account for edge cases in said new systems - I generally
| agree with you - but playing the devils advocate a bit -
| the crypto folks should probably be able to wash their
| "cash" if the reporting parameters are implemented
| correctly - no? --
| woodruffw wrote:
| Sure: if they comply with KYC and AML, they are welcome
| to use whatever fakakta financial system they please.
| [deleted]
| woodruffw wrote:
| None of these things has an _efficient end_ in laundering
| money. That 's in contrast to Tornado Cash, which was
| designed to launder money.
|
| In other words: you can use a hot dog stand to launder
| money. But if you were to _intentionally_ establish a hot
| dog stand for the _purpose_ of laundering money, the
| government would be absolutely correct in seizing your
| stand.
| capableweb wrote:
| You're almost getting it. We still allow hot dog stands
| to exists, even though you could launder money via them.
| Instead, we let police investigate cases where money
| laundering is happening, and if it happens to be via one
| hot dog stand, take down that specific one. Rather than
| banning hot dog stands in general.
|
| Same goes for Tornado Cash. It was not designed for money
| laundering, although you could use it for that. If the US
| government finds cases of money laundering happening,
| take down the entities doing the money laundering instead
| of attacking a tool.
|
| If you think Tornado Cash was _designed_ for money
| laundering, please point us to the documents where this
| is mentioned. I 've personally followed the development
| of the project, but never saw any mentions of money
| laundering at all, anywhere.
| JumpCrisscross wrote:
| > _take down the entities doing the money laundering
| instead of attacking a tool_
|
| This is what they're doing. North Korea laundered money
| via Tornado Cash [1]. Authorities announced it and
| watched Tornado Cash do nothing. So it got sanctioned.
| Every other mixer is untouched.
|
| [1] https://www.cnbc.com/2022/06/30/north-korea-likely-
| behind-10....
| capableweb wrote:
| No, Tornado Cash is code, not a service operated by any
| entity.
|
| North Korea also used HTTP for navigating websites which
| helped them hack targets and also launder more money.
| Banning Tornado Cash is like banning the HTTP
| specification/IETF for that, instead of going after the
| group in North Korea doing the money laundering/hacking.
| the_snooze wrote:
| >No, Tornado Cash is code, not a service operated by any
| entity.
|
| This is the kind of sociopathic irresponsibility that's
| too common in tech. "Oh, it's not my fault my lab-grown
| monster decided to terrorize the countryside!"
| notch656a wrote:
| OFAC's attacks on privacy are sociopathically
| irresponsible, and unlike Tornado Cash the federal
| government has actual monsters with weapons terrorizing
| the countryside.
| TremendousJudge wrote:
| Good thing we have the North Korean government and CP
| traders on our side, defending our rights.
| jim_kreggis wrote:
| Same old pro-mass surveillance arguments, we need it
| because there are terrorists and pedos
| JumpCrisscross wrote:
| > _Tornado Cash is code, not a service operated by any
| entity_
|
| There was a team of developers earning compensation,
| hiring and firing. That's more than just code.
| capableweb wrote:
| The sanctions are literally added to the OFAC's SDN list,
| and consists of addresses and contracts. Neither of those
| things are services or operations, they are quite
| literally just executable code. See for yourself:
| https://home.treasury.gov/policy-issues/financial-
| sanctions/...
| JumpCrisscross wrote:
| > _consists of addresses and contracts. Neither of those
| things are services or operations, they are quite
| literally just executable code_
|
| Guns are quite literally just atoms. The context matters.
| Not all guns are illegal. But ones used to commit crimes
| will get lawfully seized. The code exists in context, and
| the developers' actions and intentions are relevant. None
| of this is novel.
| danaris wrote:
| ...Because money laundering is _illegal_.
|
| No one's going to advertise openly to the public
| "Assassination services here! Just call 1-800-KIL-THEM!"
|
| And no one's going to put in public documents "we set up
| this company in order to facilitate money laundering."
| capableweb wrote:
| Alright, so there is no proof that Tornado Cash was setup
| to facilitate money laundering, yet so many here on HN
| keeps saying "was designed to launder money". What does
| "designed to X" mean if not that the tool itself was
| intentionally, purposefully and explicitly made to do X?
| And if that's true, why isn't there any public evidence
| of that being true?
| neuronexmachina wrote:
| I think the confusion is one of definitions. Basically,
| the whole point of cryptocurrency tumblers like TC is to
| obscure the original source of funds. That can be used
| for both legal and illegal funding sources. I think some
| folks in this thread are using the term "money
| laundering" to refer to both legal and illegal fund-
| source-obscuring, while others are using it to refer
| purely to illicit sources.
| 8note wrote:
| They did not include an automated KYC process for when
| the transactions are larger than 10k USD.
|
| Therefore, they intended it to be used to hide
| transactions from the US government. They could have also
| limited the service to not run on amounts larger than
| 10k?
| JustLurking2022 wrote:
| I think danaris's point stands - if you design an iron
| maiden style murder chamber but simply alter the name to
| "one time use changing room", you're not fooling anyone,
| the purpose is still clear, and illegal.
| dlubarov wrote:
| Its purpose is clear because there is no plausible
| alternative reason for designing a murder chamber.
|
| Are you suggesting that there is no plausible reason to
| want financial privacy, outside money laundering?
| devoutsalsa wrote:
| If I were a Russian (I'm not), I wouldn't want the
| Russian government finding out that I donated crypto to
| Ukraine defense efforts.
| JustLurking2022 wrote:
| You're almost clever... Tornado is accused of being
| designed to facilitate money laundering and,
| realistically, has very little other purpose.
|
| By contrast, a hotdog stand is typically designed to cook
| and sell hotdogs and, in the rare instances where money
| laundering occurs, it's not a primary service the hotdog
| stand offers to clients, and will still get the owner
| arrested.
| capableweb wrote:
| > You're almost clever... Tornado is accused of being
| designed to facilitate money laundering and,
| realistically, has very little other purpose.
|
| It does have other purposes, hiding transactions from the
| public, which I have used Tornado Cash for many times in
| the past.
|
| > I used Tornado Cash (non-US citizen here) for hiding
| transactions from the public (not hiding from the
| government), and when I filed my taxes, I still accounted
| for everything that is stored there + transacted via
| Tornado Cash, just like I do for my bank account.
| Appendix contained instructions for how they could access
| the proof of my transactions and accounts to verify
| themselves.
|
| Not sure why people think what I did should be illegal,
| I'm paying my taxes and declare everything just like
| everyone else, but somehow I shouldn't be allowed to hide
| my transactions from randoms on the internet?
| JumpCrisscross wrote:
| > _somehow I shouldn 't be allowed to hide my
| transactions from randoms on the internet_
|
| You can do this. But it doesn't come without risk.
|
| If you kept using Tornado even after it was found
| Pyongyang used it to launder money, yes, you lose your
| money. It's analogous to local law enforcement announcing
| a laundromat has been laundering money for the mafia, and
| then--months later-someone getting upset the clothes they
| dropped off have been seized. They may eventually get
| them back. But there is reasonable suspicion in the
| meantime.
| devoutsalsa wrote:
| People still use JPMorgan Chase and HSBC, both of which
| have been involved in money laundering.
|
| https://www.icij.org/investigations/fincen-files/global-
| bank...
| danaris wrote:
| 1) Those are major banks. Many thousands of people have
| accounts with them _for 100% legitimate purposes_ , and
| most of them have likely not heard that they were
| involved in money laundering (which, see also #2)
|
| 2) _Because_ those are major, highly entrenched banks,
| they not only have the resources to ensure that stories
| about them engaging in bad behavior get swept under the
| rug (which doesn 't mean "no coverage", but does mean
| they don't get covered as much as they might perhaps
| deserve), they also have the connections to make it very
| unlikely that they will face any kind of meaningful
| repercussions for this.
|
| This is quite unfortunate, and a decidedly negative
| aspect of our current system. But the answer to it is
| _not_ "so other companies like TornadoCash should be
| allowed to break the law with impunity, too!" It's "so we
| need to find ways to change our system so that we can
| genuinely hold accountable big banks and others who
| currently break the law with impunity."
| angrycontrarian wrote:
| People should have a right to privacy. That includes
| financial privacy.
| [deleted]
| zionic wrote:
| >It's a service specifically designed to facilitate money
| laundering.
|
| That's like saying TLS was designed to protect CP.
|
| Privacy =/= laundering
| realce wrote:
| Then produce distinct legislation that bans the specific
| practices used, otherwise it's just giving preference to
| currently entrenched forms of money laundering.
|
| It's not illegal _whatsoever_ to mix up my dollar bills with
| a group of other people and get the same amount out that I
| put in. Such a statement is ridiculous.
| polygamous_bat wrote:
| If you ran an establishment where people would come in with
| big bags of cash with dubious source, swirl them around in
| a big vat, and someone else would come in with a chit to
| take out some cash from your vat, I am sure your
| establishment will get investigated and shut down. In this
| way it's no different from the real world. Just because
| it's online doesn't make it ok.
| realce wrote:
| Can you show me any statement in US law where such a
| practice is illegal? What you're describing sounds
| exactly like a casino.
| ouid wrote:
| it does doesnt it. Casinos certainly were money
| laundering establishments for the mob since their
| inception. The mobsters became politicians and stupid
| people argued that casinos provide public benefit on
| their behalf. The government decided that the only way to
| launder money through a casino was if the casino itself
| was in on it, and opted for heavy regulation on who can
| run casinos and how. People have still gotten away with
| money laundering through casinos but the regulations are
| onerous enough, and casinos profitable enough on their
| own, that the risk of getting completely shut down isnt
| worth it.
|
| Furthermore, actions are not usually the things that are
| illegal. Usually the law prohibits actions which cause a
| specific effect. Like murder or pollution. You dont get
| one free murder every time you figure out a new way to
| kill people.
| thefreeman wrote:
| Do you think you can just anonymously cash out a million
| dollars in casino chips with no identification or KYC
| happening?
| realce wrote:
| Do you think the statements "sounds like" and "is
| exactly" are the same thing? Almost like your point is
| that there's distinct legislation targeting a distinct
| pathway of money laundering, just like my original point
| was?
| polygamous_bat wrote:
| U.S. Code SS 1955 - Prohibition of illegal gambling
| businesses [1] stops you from starting a gambling parlor
| or casino on your basement without a government license.
|
| [1] https://www.law.cornell.edu/uscode/text/18/1955
| realce wrote:
| Oh so these folks were impacted by casino laws? That's
| what the Treasury said?
| salawat wrote:
| https://bsaaml.ffiec.gov/references/regulations
|
| Here ya go.
|
| By the by, all of this is to be known or planned out
| _before becoming a money transmitter_.
|
| I.e., _if you cannot do this, you are not legally allowed
| to serve as a money transmitter_.
| realce wrote:
| But - here ya go - crypto is not money, it's real
| property. Tornado cash is not a bank, it allows you to
| swap random Pokemon cards between its' users.
| polygamous_bat wrote:
| Great news, helping people get rid of their stolen goods,
| aka "fencing" is also illegal.
|
| [1] https://www.justice.gov/archives/jm/criminal-
| resource-manual...
| notch656a wrote:
| Prosecute the road crews building the interstate. They
| know building the road helps people sell and transport
| stolen goods, yet the road crew does nothing to stop
| them.
| realce wrote:
| I'm sure that's why eBay, Craigslist, and every other
| marketplace are blocked by the US Treasury? "Great news"
| pfft come on.
| salawat wrote:
| https://www.fincen.gov/sites/default/files/2019-05/FinCEN
| %20...
|
| Here ya go.
|
| If you use Pokemon cards in such a way as there is a
| reasonable expectation they may get converted back to
| dollary-dos, you are required to track that too. Sorry
| mate. Nice try. But no.
|
| Thank you, come again.
|
| I get it. It's frustrating. If only the means of exchange
| wasn't such a pivotal part of criminal enterprise, or
| people would just not do illegal things, we could have
| nice things. Alas, tis not the case.
| erk__ wrote:
| That depends entirely on what the intent is. If the intent
| is to launder money then yes it is probably illegal. If the
| intent is to swap notes with your favourite serial numbers
| then yes it is probably legal. Intent is a important part
| of most legislations.
| salawat wrote:
| Correct assuming you maintain documentation that keeps the
| evidence chain intact and produceable on request.
|
| If you don't, you're laundering. It's like a bunch of tech
| people waltzed into finance, ignored the entire history of
| the institution, and lessons paid for in blood, and expect
| everyone else to bend over backwards for them.
| striking wrote:
| Folks like to hate on lobbyists (including myself! very
| much so) but this is exactly the function they serve. They
| inform the legislators on what legislation would help their
| industries succeed, and encourage it across the line.
|
| I don't think the crypto industry is lacking in funding
| enough to be able to hire lobbyists, so I'm not sure why we
| might blame a legislature that can't be experts in
| literally everything (setting aside the fact that they tend
| to be fuddy-duddies for other reasons, it's not even
| theoretically practical that they could be perfectly
| informed on everything) for not having made perfect laws
| around a new industry.
| houstonn wrote:
| It's a service specifically designed for privacy. A human
| right.
| nh23423fefe wrote:
| Oh its a human right. you've won the argument then
| miguelmota wrote:
| Why do you use a pseudonym on here instead of your real name?
| Oh right because you care about privacy. Same reason tornado
| cash exists. Playing the ML card is like saying Tim Berners-
| Lee invented the internet to facilitate digital crime.
| peyton wrote:
| Can't law enforcement use search warrants in their own
| jurisdiction?
| immigrantheart wrote:
| Properties in the USA, laundry, deli, dry cleaners, often use
| for money laundering.
| JustLurking2022 wrote:
| This is an argument largely championed by the richest of
| the rich as a way for them to commit financial crimes
| without getting caught - think old time Swiss bank privacy.
| When they finally got leveraged by the U.S. government to
| turn over records, people were cutting deals by the
| thousand to avoid doing time for tax fraud they knowingly
| committed.
| cguess wrote:
| It _was_ used for tumbling, to the tune of $450m by the North
| Koreans. It 's not a theoretical situation.
| mikece wrote:
| And yet, somehow, we knew exactly who was doing it. Why the
| urgency to shut it down?
| belval wrote:
| Impressive how fast you moved the goalpost on that one.
| nh23423fefe wrote:
| You could just read what treasury wrote and argue with
| facts instead of vague rhetoric about lazy law enforcement
|
| > "Today, Treasury is sanctioning Tornado Cash, a virtual
| currency mixer that launders the proceeds of cybercrimes,
| including those committed against victims in the United
| States," said Under Secretary of the Treasury for Terrorism
| and Financial Intelligence Brian E. Nelson. "Despite public
| assurances otherwise, Tornado Cash has repeatedly failed to
| impose effective controls designed to stop it from
| laundering funds for malicious cyber actors on a regular
| basis and without basic measures to address its risks.
| Treasury will continue to aggressively pursue actions
| against mixers that launder virtual currency for criminals
| and those who assist them."
|
| https://home.treasury.gov/news/press-releases/jy0916
| DennisP wrote:
| There are two Tornado Cash entities: one is made of
| people, and the other is autonomous code running on
| chain. The OFAC action confuses those two, and it's not
| clear they have the authority to sanction code.
|
| For much more on this, see the legal analysis by
| Coincenter: https://www.coincenter.org/analysis-what-is-
| and-what-is-not-...
|
| Note that FinCEN does pay attention to this sort of
| distinction, and says that software providers are not
| subject to money laundering regulation.
| wil421 wrote:
| Why should North Korea be allowed to steal and hack from
| other country's people and organizations? It should be shut
| down immediately.
|
| I feel like your trying to say NK and Tornado should be
| able to do illegal activities that harm people. Just
| because you don't like the police or something.
| TEP_Kim_Il_Sung wrote:
| By all means, shutting down North Korea is the real issue
| here; Don't ruin the internet on your way.
| mikece wrote:
| The very fact (or assumed fact) that we know North Korea
| is using this undercuts the argument that we need to shut
| this down because it allows for anonymous money
| laundering. (By definition: the only way money laundering
| can be "dangerous" is if it cannot be detected or the
| players identified.)
| [deleted]
| thefreeman wrote:
| Just because they know they sent money in doesn't mean
| they know where and how the money was distributed on the
| way out. Which is literally the whole point of
| sanctioning it.
| yunohn wrote:
| No, in this, the authorities had the time/money to track
| down the hackers. The vast majority of tornado
| transactions are mostly illegal, but nobody cares enough
| to spend their efforts on them.
| x86x87 wrote:
| What a world we are living in. Mostly illegal. Huh.
|
| Do you have any data to back this claim? Also, should
| banks be banned if their customers are doind shady things
| outside of using their services?
| polygamous_bat wrote:
| If it's a mafioso bank used mostly by the mafia, then
| yes, absolutely, they should be investigated and shut
| down.
|
| As for data, just as a first-order estimate, check out
| the rekt leaderboard [1] and see how many of the stories
| end with "and the stolen funds were routed through
| tornado, fin." If all crypto-adjacent crimes are reported
| to FBI at some point I am sure they have a much clearer
| statistics, but even as a civilian you can see that it's
| not small.
|
| [1] https://rekt.news/leaderboard/
| x86x87 wrote:
| Yes. Anecdotal evidence. The best kind!
|
| Who decides who the mafia is?
| polygamous_bat wrote:
| As I said, this is only a first order estimate, but even
| that is over hundreds of millions. I am sure the FBI has
| a much more detailed forensic account of tornado that
| they will bring up in the courts, which will then rule
| according to the law based on the evidence.
|
| On the other hand, if you don't trust FBI, the law, or
| the courts to do the right thing, you have a different
| problem entirely, at which point none of what I say
| should matter to you.
| x86x87 wrote:
| There are at least 2 things here: 1) the laws and how
| they are applied and 2) what is in the interest of the
| people and what should the laws be?
|
| I can trust law enforcement to do its job. Heck I might
| even trust it to do the right thing when it comes to gray
| areas / methods they use. But... I can definitely
| disagree with some laws. In fact, people doing something
| because it's law without critically thinking about it has
| worse consequences than disagreeing with the law.
| sam0x17 wrote:
| Your argument is akin to saying people shouldn't be
| allowed to drive cars because a car was used one time in
| a heist.
| polygamous_bat wrote:
| Driving a car requires a license and registration of the
| vehicle. You can go to jail for driving a car without a
| registration or license.
|
| In very much the same way, if you are running a money
| transmitting business, you need to register with the
| government and follow the government laws. Otherwise, you
| risk going to jail. It's not rocket science. Just because
| it is on the internet doesn't make it a whole new thing.
| mr_spothawk wrote:
| > You can go to jail for driving a car without a
| registration or license.
|
| Since when is driving a car without registration or
| license a felony?
| polygamous_bat wrote:
| Here is an example: in Texas, unauthorized use of a
| vehicle, which would include driving a car that you can't
| prove is yours, can be punishable by two years in jail.
| [1] From what I understand getting caught driving without
| a license the first time is generally a misdemeanor, but
| for repeated offence in for example CA can land you in
| jail.
|
| Running a whole operation around driving without a
| license is what tornado cash is more similar to, not
| accidentally forgetting your license once, which is what
| the misdemeanor is for.
|
| [1] https://casetext.com/statute/texas-codes/penal-
| code/title-7-...
| notch656a wrote:
| You can actually operate and drive a car on private
| property without a license in Texas. In fact in Texas you
| can even drive a car drunk if it's on private property
| not open to the public, like a fenced off private parking
| lot.
|
| Using your analogy, an instance of TC on private property
| would not be licensed.
| polygamous_bat wrote:
| Tornado cash would not be sanctioned if it were not
| public and therefore not used by North Korea, yes. What
| is your point here?
| notch656a wrote:
| Then using your analogy it should not be sanctioned.
| There is nothing illegal about a North Korean coming to
| your property and driving a car without a license. Your
| logic that _because North Korean, therefore public
| property_ is nonsensical.
|
| And as an aside:
|
| >Driving a car requires a license and registration of the
| vehicle.
|
| Patently false.
| dpkirchner wrote:
| It's more akin to saying people shouldn't be able to
| provide banking services if they don't have sufficient
| KYC practices.
| 8note wrote:
| Is that a controversial statement? That tends to be a law
| on the books
| dpkirchner wrote:
| It's weird that they're calling the feds lazy at the same
| time as they argue against the feds having data they need
| to enforce laws.
|
| It's also weird that the Treasury Department has such
| influence over crypto when it is supposed to be
| decentralized. The anger is clearly misplaced.
| TEP_Kim_Il_Sung wrote:
| What part of "trustless peer-to-peer electronic CASH", in
| Satoshi's Bitcoin whitepaper, did you not understand?
| There is no banking going on.
| amalcon wrote:
| Wait, what? The inventor of Bitcoin _said_ that it was
| cash? Well, that settles it then: nobody is allowed to
| disagree with an inventor about what their invention is
| or does.
|
| Sarcasm aside, I think Bitcoin functionally bears much
| more resemblance to a distributed bank than to
| distributed cash. It's not perfect resemblance, and there
| are people who disagree with me. Just saying that it's
| cash isn't sufficient evidence to convince me, even if
| the speaker happens to be the inventor.
| mr_spothawk wrote:
| > I think Bitcoin functionally bears much more
| resemblance to a distributed bank than to distributed
| cash.
|
| This is likely because you don't understand what a bank
| is, or that you don't understand what bitcoin is, or a
| combination.
|
| If you're interested in bank-like things that use
| bitcoin, you could learn more about fedimint.
|
| If you're interested in what bitcoin is, you could just
| read the white paper[0].
|
| 0 - https://bitcoin.org/en/bitcoin-paper
| amalcon wrote:
| Interesting how you think I don't know what a bank is, or
| what Bitcoin is. I know what Bitcoin is; I have read both
| the whitepaper and (more importantly) most of the code
| (at the time). I do concede that I have an incomplete
| understanding of what a bank is, since banks do a lot of
| different things. Adjusting the money supply and
| intermediating/securing transactions are both among the
| things that banks do. Those are the only things Bitcoin
| does, which is why I think Bitcoin more resembles a bank.
| Bitcoin can't facilitate offline transactions, which is
| the main thing cash does that banks don't.
|
| I've tried to look into Fedimint, just because I thought
| it would help me understand _your_ misconceptions about
| banks. I will admit to not fully understanding what they
| are up to, but assuming my scam radar had a false
| positive it seems to be a privacy-oriented sidechain
| service. That... doesn 't seem particularly relevant
| here?
| mr_spothawk wrote:
| Banks store money, right? Does bitcoin store money?
|
| Banks have accounts, right? Does bitcoin have accounts?
| amalcon wrote:
| _> Banks store money, right? Does bitcoin store money?_
|
| You mean physically? Plenty of banks (especially online
| banks and investment banks) don't physically store any
| more cash than something like a jewelry store. Physical
| storage is hardly a core characteristic of banking; I've
| never been to a branch of any of my current banks. If you
| don't mean physically, I can't see how this is different
| than "have accounts"...
|
| _> Banks have accounts, right? Does bitcoin have
| accounts?_
|
| An account is just a ledger of credits and debits coupled
| with some form of access control. How is a bitcoin
| address meaningfully different from an account? Keep in
| mind that not all accounts are interest bearing, and it's
| very possible (even common) for one individual to have
| multiple accounts.
| mr_spothawk wrote:
| > Does bitcoin store money?
|
| still waiting.
|
| > How is a bitcoin address meaningfully different from an
| account?
|
| Well, for one, it's only an address. Not a ledger.
|
| Bitcoin transactions point money at one or more address.
| Transactions, you might argue, are one-off ledgers. But
| then bitcoin is just a collection of those transactions &
| relevant/necessary data to support them them, compiled &
| validated using a variety of mathematic calculations.
| amalcon wrote:
| _> still waiting._
|
| My answer is still "no (but many banks don't either)", as
| I said in my previous reply. Unless you mean digitally,
| but that's just "having accounts". If you mean digitally,
| then my answer is "obviously yes".
|
| _> Well, for one, it 's only an address. Not a ledger._
|
| What? The entire mechanical basis of Bitcoin (the
| blockchain) is a ledger (big database of timestamped
| transactions) with a somewhat unusual timestamping and
| tamper proofing mechanism. Each transaction has a set of
| associated addresses. I was going to say that this is not
| meaningfully different from individual account ledgers,
| but actually, this is literally how transaction history
| would be stored in an RDBMS. It's not different _at all_.
|
| The existence of this (public) ledger is what creates the
| demand for things like Tornado Cash in the first place.
|
| _> Bitcoin transactions point money at one or more
| address._
|
| Banks can facilitate transactions between arbitrary whole
| numbers of accounts also (off the top of my head: 1-
| paying interest; 2- payment; 3+- escrow)
|
| _> bitcoin is just a collection of those transactions &
| relevant/necessary data to support them them, compiled &
| validated using a variety of mathematic calculations._
|
| Yes. Functionally, that results in a (limited) bank. Or
| at least, it's closer to that than it is to cash.
| mr_spothawk wrote:
| > Unless you mean digitally, but that's just "having
| accounts".
|
| But you must open an account with a bank, and deposit
| money before they can process transactions for you.
|
| There's no way to deposit money *into* bitcoin. Bitcoin
| is money.
|
| > Each transaction has a set of associated addresses.
|
| Yes, and you suggested addresses are the equivalent of
| accounts. They are not.
|
| > Banks can facilitate transactions between arbitrary
| whole numbers of accounts also (off the top of my head:
| 1- paying interest; 2- payment; 3+- escrow)
|
| Accounts, which hold money, are a tool of banks[0].
| Bitcoin doesn't have accounts. Bitcoin is not a (limited)
| bank. It is a distributed digital cash system.
|
| "Bitcoin uses peer-to-peer technology to operate with no
| central authority or banks; managing transactions and the
| issuing of bitcoins is carried out collectively by the
| network."[1]
|
| 0 - https://www.fdic.gov/about/learn/learning/banks.html
| 1 - https://bitcoin.org/en/
| amalcon wrote:
| _> There 's no way to deposit money *into* bitcoin._
|
| I have not deposited money into my bank account in many
| years. I have, instead, had money transferred to my
| account from other accounts. This is not only possible in
| Bitcoin; without it, Bitcoin would be useless. It's quite
| possible to open an account at a traditional bank with a
| transfer from another account; for online and investment
| banks, this is usually the only way to do it.
|
| _> Yes, and you suggested addresses are the equivalent
| of accounts. They are not._
|
| Still waiting for you to tell me how they are not. It
| seems obvious to me that they are functionally
| equivalent, and I have made a case for why. An address is
| an identifier associated with a transaction history and
| access control. An account number is an identifier
| associated with a transaction history and access control.
|
| You have made no corresponding case for why they are not,
| apart from citing your belief and citing PR from
| bitcoin.org. The former is convincing of what you
| believe, but it is not convincing with respect to the
| functioning of Bitcoin or banks. The latter is convincing
| of what bitcoin.org wants me to believe, but it is not
| convincing with respect to the functioning of Bitcoin or
| banks.
| salawat wrote:
| Bitcoin is a Convertible Virtual Currency. It is money.
| End of story. FINCEN has spoken.
| dpkirchner wrote:
| I'll make no apologies for imperfect analogies.
| sam0x17 wrote:
| Right. Fuck KYC. Just let people use money and actually
| solve crimes instead of just blocking transactions and
| infringing on people's privacy like crazy. Digital cash
| is still a pipe-dream because of this censorship/no-
| privacy/gov owns your money you don't mentality.
| giaour wrote:
| I don't follow your logic. Isn't the whole point of mixers
| that everyone can see dirty money go in, then the forensic
| trail stops?
| amalcon wrote:
| Let's suppose you have Bob's Traditional Bank. They keep
| meticulous records, and comply with US government requests
| for them (regardless of what you think of such practices,
| let's just say that this particular bank happens to do
| those things). They also facilitate transactions on behalf
| of North Korea.
|
| Bob's Traditional Bank would be sanctioned here, because
| transacting with North Korea in that way _is_ what triggers
| these sanctions. This is why Tornado is being sanctioned.
| The privacy thing may or may not be illegal, despite its
| ineffectiveness, but the transacting with North Korea thing
| _definitely is_.
| whatisweb3 wrote:
| 450m is a whopping 6% of all deposits on Tornado Cash[1]. The
| total percentage of illicit activity on the protocol is
| reported to be in the 10-30% range[2].
|
| What percentage of activity in an E2EE chat application like
| Matrix is illicit? If a significant but minority percentage
| of its use is facilitating criminal discussion, should those
| open protocols also be sanctioned?
|
| [1] https://dune.com/poma/tornado-cash_1
|
| [2] https://www.eff.org/deeplinks/2022/08/code-speech-and-
| tornad...
| sjsdaiuasgdia wrote:
| It's worth noting your second reference only mentions
| illicit activity volume in passing, linking to this study
| as a source: https://blog.chainalysis.com/reports/crypto-
| mixer-criminal-v...
|
| It's also worth noting the headline of that link: "Crypto
| Mixer Usage Reaches All-time Highs in 2022, With Nation
| State Actors and Cybercriminals Contributing Significant
| Volume"
|
| Quoting from later in that study, "Overall, if we label
| cybercriminal organizations with known nation state
| affiliations, we can see that these groups make up a
| significant and growing share of all illicit cryptocurrency
| sent to mixers."
|
| It's not 10-30% as you summarized. It's 12% last year
| increasing to 23% this year, or nearly doubling from a 1/8
| to 1/4 share.
|
| This source does not support the position that illicit
| traffic is an insignificant share of mixer traffic.
| whatisweb3 wrote:
| There is no doubt known cyber criminals and enemies of
| the US are using this tool. The question I raised is:
| what percentage of illicit activity is acceptable? If the
| E2EE chat app Matrix facilitates 10-30%, should it also
| be considered a primarily criminal tool worthy of a
| sanction?
| pclmulqdq wrote:
| This isn't about the fraction of illicit use. A large
| fraction of Americans with numbered/anonymous Swiss bank
| accounts did nothing wrong with them - a much larger
| fraction than tornado cash users. However, they were still
| banned for US citizens due to US KYC rules.
|
| The land of free speech is obsessed with being able to
| trace money as it travels. No surprise they would go after
| a service whose explicit purpose is to break the chain of
| custody on money.
| bitxbitxbitcoin wrote:
| Banning the use of Tornado Cash is one thing - I didn't
| see any Swiss bankers arrested or prosecuted for money
| laundering during that move.
| pclmulqdq wrote:
| You mean like these Swiss bankers?
|
| https://www.reuters.com/article/us-usa-switzerland-
| tax/ex-sw...
|
| https://www.justice.gov/usao-sdny/pr/manhattan-us-
| attorney-c...
|
| https://www.justice.gov/opa/pr/former-ubs-banker-charged-
| hel...
|
| This wasn't mainstream news, but neither was the
| sanctioning of Tornado cash. You just happened to hear
| about one but not the other.
| whatisweb3 wrote:
| Sure. Then it is irrelevant how much money was funding
| whom, only that a non-zero amount of value was not
| strictly traceable through typical financial surveillance
| systems, and so the US automatically deems this activity
| illegal regardless of how the funds were used.
|
| This is where the "privacy on the blockchain should be a
| basic right" argument comes in, and what the plaintiff
| appears to be arguing.
| pclmulqdq wrote:
| When you want to make legal arguments, you do it when you
| have good facts, and this is not that time.
|
| The facts about Tornado cash are terrible: pretty much
| everyone using it is either doing something provably
| illegal or trying to avoid being found, you have to go
| out of your way to use it (and pay an extra fee), and
| it's been part of a large number of bad news stories
| about crypto theft. A minimum of 10% of its throughput is
| provably due to frauds and thefts, and probably a lot
| more. It is not an exaggeration to say that many people's
| life savings have been funneled through Tornado cash into
| the wallets of criminals. In comparison, numbered Swiss
| bank accounts likely had more legitimate use than Tornado
| cash.
|
| In comparison, the facts about Monero, Zcash, and the
| Wasabi BTC wallet (another mixer, but attached to a
| wallet) are a lot better. Privacy is free and/or the
| default option with those services, and they are a little
| more like cash: lots of victimless crimes (darknet sales,
| etc.), some use by ransomware attacks, but also a lot of
| legitimate use.
|
| This lawsuit has a nonzero chance of throwing out the
| baby (privacy on blockchains) with the bathwater (tornado
| cash).
| whatisweb3 wrote:
| 25% of funds being illicit does not mean "pretty much
| everybody" is using it for illicit reasons. Your argument
| really falls apart here, but the sweeping generalizations
| don't help.
|
| Monero and TC are equal parts useful for non-criminals
| who are seeking privacy.
| pclmulqdq wrote:
| The 23% from the article is one estimate that counts only
| transactions from publicly known illicit wallets. It is a
| lower bound.
| ballenf wrote:
| And what's the value of drugs trafficked over public
| highways? Or illegal activity coordinated over SMS?
|
| Using volume of illegal activity cannot be the primary factor
| in categorizing a platform.
| yunohn wrote:
| You're right, a crypto mixer primarily used to launder
| money or evade taxes is *exactly the same* as highways and
| SMS.
| lampshades wrote:
| You can't even show that it's primarily used to launder
| money or evade taxes. You're just pulling shit out of
| your ass.
| polygamous_bat wrote:
| You can literally go through the rekt leaderboard [1] and
| count how many of the stories end with "and then the
| funds were routed to tornado cash, fin." It's not exactly
| a secret, and it doesn't require any specuation.
|
| [1] https://rekt.news/leaderboard/
| res0nat0r wrote:
| ?
|
| https://home.treasury.gov/news/press-releases/jy0916
| Closi wrote:
| Let's imagine for a second that I owned a physical
| bricks-and-mortar business with a shopfront that took
| physical cash (USD banknotes), then mixed it up in a big
| laundry machine with banknotes from other customers, and
| then I give you back some other banknotes which are
| totally random (less a fee).
|
| Let's also say I don't do any Know Your Customer checks
| (KYC).
|
| Do you think that should be legal (like highways and SMS)
| or illegal (like money laundering)?
| sam0x17 wrote:
| If that's the cost of a freer internet that's fine with me. I
| don't care if it's $10t.
| x86x87 wrote:
| That's a very limited way of looking at things. You're fine
| with banning X and Y because you don't see them impacting
| you. When Z is banned and you care about Z you'll have a
| rude awakening.
| npc54321 wrote:
| It's obvious sam0x17 is against blocking anything.
| nibbleshifter wrote:
| I think the poster was saying they are fine with that
| amount if laundry, because its more important for a free
| internet to exist.
| x86x87 wrote:
| After rereading I agree with you. It wasn't clear to me
| whem first reading it.
| [deleted]
| speedylight wrote:
| You could also say that Silk Road was an E-commerce business
| that might've been used to sell drugs, who knows!
| x86x87 wrote:
| Not one to defend Silk Road, but pause and think about it for
| a second: it enabled you to buy something deemed illegal by
| the authorities (drugs) in a safe manner and the products
| bought were higher quality than what you could buy on the
| street. Why was it a problem to begin with and why where
| significant resources used to shut it down? (Again, not
| defending it, and the founder was probably a scumbag, I am
| just asking the question)
|
| People were breaking stupid laws from the 70s established
| after mass hysteria around drugs by one of the scummies US
| president ever. More than that, the tax man was not getting
| its cut.
|
| Now to put things in perspective let's compare to some things
| US agencies have done in the past: https://en.m.wikipedia.org
| /wiki/Allegations_of_CIA_drug_traf...
| FireBeyond wrote:
| > it enabled you to buy something deemed illegal by the
| authorities (drugs) in a safe manner and the products
| bought were higher quality than what you could buy on the
| street. Why was it a problem to begin with and why where
| significant resources used to shut it down? (Again, not
| defending it, and the founder was probably a scumbag, I am
| just asking the question)
|
| Because there was all sorts of white washing like this.
| "It's drugs, but safer, and without the violence and
| crime!"
|
| If you think that violence, crime are magically gone
| because of Silk Road, you'd be considered ignorant or
| naive. Production still happens in the same places, the
| poverty, corruption and violence-stricken areas.
|
| It's just invisible to you now, because you don't have to
| worry about your dealer stealing from you, getting mugged,
| or buying from an unknown source, or being arrested.
|
| All those people in Mexican and Colombian villages subject
| to the tyranny of the cartels... oh well.
|
| All good then, I suppose.
| x86x87 wrote:
| my claim was that buying the drugs was safer (my words:
| in a safe manner). Everything else in the "pipeline"
| being equal if one part of it becomes safer the whole
| thing is safer.
|
| Want to eliminate production that happens in places with
| poverty/corruption/violence? Just make them legal.
| Seriously. Offer rehabilitation instead of jail. Other
| countries have done this and it work.
|
| People talk a big game when it comes to "our freedoms"
| but real freedom is to be able to do whatever you want as
| long as you don't impact your neighbor/other.
| FireBeyond wrote:
| I tend to agree on legalization and rehabilitation, more
| than you know.
|
| I just don't think Silk Road (and its brethren) were a
| means to that end. It just hides a lot of the issue.
| npc54321 wrote:
| > All those people in Mexican and Colombian villages
| subject
|
| Just go into the frigging villages and arrest the cartel
| leaders oh wait they are in cohort with the governments
| of those countries...
| FireBeyond wrote:
| Sure. I absolutely agree.
|
| But let's not pretend that Silk Road is some panacea
| saying "Hey, violence-free drugs!"
|
| I tend to be on the legalization side of the spectrum but
| the notion of Silk Road as some humanity-improving place,
| versus a method of making Ross rich is definitely in need
| of citation.
| jmyeet wrote:
| You have to remember that access to the US financial system is
| a privilege not a right. To be granted that privilege, a
| financial institution has a number of obligations. Thesee
| include various KYC/AML obligations.
|
| So this isn't Tornado Cash "might be used for illegal purposes"
| so much as it's clear evidence they're failing to meet their
| legal obligations.
|
| There's a larger point here too: as much as proponents tour
| crypto's extragovernmental status, it would take very little
| effort by governments to completely cripple any crypto assset
| in practical terms.
| houstonn wrote:
| A question for those in this thread who want to ban a privacy
| service because it's utilized for unlawful activity:
|
| What's your opinion of The Pirate Bay?
| Forrest7778 wrote:
| It's not a black and white issue; things aren't getting banned
| because they _might_ be used for illegal purposes, that is even
| explicitly stated in the article.
| Fnoord wrote:
| If its used for a high percentage of criminal purposes (for
| example 90%) banning is legitimate.
|
| Also, who are these "investors"? They're speculators. When you
| speculate, there's risk involved. This is one of them. This
| case is an unnecessary burden on our legal systems, I hope it
| gets thrown out of court ASAP.
| jfim wrote:
| How much of it is used for legitimate reasons versus illicit
| ones? If the overwhelming majority of the transactions are
| illicit, it makes sense to ban it.
| dsr_ wrote:
| It makes even more sense to allow it, and regulate it.
|
| The regulation should be the existing Know Your Customer
| requirements plus a 100% traceable log subject to inspection,
| auditing and subpoena.
| asoneth wrote:
| If Tornado Cash implemented KYC requirements and a 100%
| traceable log, what fraction of their existing users would
| continue to use them?
| dsr_ wrote:
| All the legitimate ones.
| toolz wrote:
| if central powers stop being lazy then nothing was illicit.
| No violence can be inflicted from trading digital currencies.
| It's lazy policing to try and control resources rather than
| stop the actual violence.
|
| If someone owns a resource, no matter who they are, why
| shouldn't they be able to utilize it? If that resource was
| acquired with violent means such as human trafficking - then
| maybe our policing efforts should be to catch the perps
| trafficking humans, then they'll have everything they need to
| confiscate any and all resources those perps have.
|
| This roundabout, lazy method of hurting innocent people in
| hopes that you only mostly hurt guilty people doesn't sit
| well with me and I don't think it's good for society to allow
| this kind of behavior.
| jfim wrote:
| That may be true if law enforcement authorities have
| unlimited resources, but in practice they don't.
|
| Imagine that a hypothetical service is used at 99% for
| illicit transactions and 1% for legitimate ones. Is the
| best outcome for society to spend say 5 million dollars to
| shut down that service, or 500 million to figure out who is
| using that service maliciously and sue only the people who
| are using it maliciously?
| TEP_Kim_Il_Sung wrote:
| Sure they do: Where does the Fed get their money?
| Infinite promissory notes from the government, to pay the
| debt plus interest, in perpetuity, Amen.
| toolz wrote:
| impossible to answer that question - what if the 1% of
| activity continues to grow and encourages billions more
| dollars of pro-social economic activity in the future?
|
| All we can know for sure is that shutting down a white-
| market financial service or worse, blacklisting its
| users, has the guarantee that innocent people will be
| harmed.
|
| Further: disrupting a single avenue of finances for the
| funding of illicit activity at best slows down the
| criminals. The overwhelming majority of crime is financed
| in fiat and the overwhelming majority of laundering
| happens in fiat, which can't be "shutdown".
|
| It's simply ineffective and hurts innocent people. I'm
| not in favor of hurting innocent people even with modest
| efficacy and I don't believe that's what we're seeing
| here. I believe we're hurting innocent people with little
| to no efficacy.
| jfim wrote:
| What's the legitimate use case for using cryptocurrency
| mixers? What would be this kind of activity that would
| grow and encourage "pro-social economic activity?" What
| harm is encountered by these innocent people?
|
| From my perspective, an economically rational actor would
| want to minimize overall money transmission costs, so
| they'd avoid cryptocurrency mixers unless they had a
| particular reason to.
| toolz wrote:
| with open ledgers everyone can see your revenue. This
| isn't something businesses want to show competitors.
| Anything that can obscure your wallet (which gives away
| how much you own as well as shows income) can help
| obscure this data, which is extremely valuable to some
| types of businesses.
|
| I'm sure there are other examples, but this is a good one
| off the top of my head and I personally have used mixers
| for this very purpose - to allow someone to pay me for a
| white-market trade without exposing how much crypto I
| owned in my wallet.
| jfim wrote:
| Hadn't considered the fact that wallet balances are
| public, but it seems like a rather niche need as opposed
| to having the ability to launder funds and irrevocably
| transfer them. The latter I believe is very appealing to
| people who are transferring proceeds from criminal
| activities.
|
| Thanks for sharing though, I hadn't thought of wanting to
| hide one's wallet balance from other people as a need.
| toolz wrote:
| Yeah, no doubt it's attractive for money laundering, but
| the thing is that it's impossible to stop at this point.
| There are entire digital currencies built on top of zero-
| knowledge transactions at this point and they aren't hard
| to get your hands on those coins in my experience.
|
| With that in mind, if in fact it's impossible to stop, it
| seems rather arbitrary to pick and choose which products
| get targeted and serves no real purpose to even slow down
| the undesired behavior.
| jfim wrote:
| That's a fair point. Not knowing much about the space, I
| assume that they picked an important mixer. If that's not
| the case, then maybe it's just for show and it won't have
| a meaningful impact, just like the war on drugs hasn't
| really stopped drugs from being consumed.
| smoovb wrote:
| How much of $100 bill use is for legitimate reasons versus
| illicit ones? If the overwhelming majority of the
| transactions are illicit, it makes sense to ban the $100
| bill.
| iLoveOncall wrote:
| Well, yeah, it would make sense.
|
| That's the reason checks or 200EUR+ bills are very rarely
| accepted anymore in businesses (in Europe at least),
| because they were very often fraudulent.
| Wowfunhappy wrote:
| I agree with you, but I'd like to point out that the same
| logic could be applied to e.g. game console emulators.
|
| ...and as much as I hate to say it, I do think the logic
| might be correct in both situations. (I say this as a heavy
| user of console emulators--albeit also as someone who _does_
| go through the trouble to legally dump his own games.)
| criddell wrote:
| I don't know that it's really an apples-to-apples
| comparison. Console emulators are a copyright issue and
| those are generally (but not always) civil matters.
| jfim wrote:
| It depends on how you see it.
|
| One way to look at it is to say "I derived this rule based
| on what the ratio of licit to illicit usage is, thus it
| should apply everywhere." From that perspective, then yes,
| your observation that it would apply to both situations is
| correct.
|
| Another way to look at it is "for this particular scenario,
| what is the optimal outcome?" If you're running a game
| console emulator for a system that's not being sold
| anymore, with games that are not being sold anymore, one
| could argue that that scenario would be net positive
| considering the lack of harm; in other words, you get to
| enjoy the game, while nobody gets hurt, so it's positive
| overall.
|
| The first perspective is called "rule utilitarianism,"
| while the latter is called "act utilitarianism," in case
| you want to learn more about those.
| [deleted]
| 0x_rs wrote:
| Criminals are most certainly going to get away with it
| regardless of how many restrictions and surveillance you apply
| to the little people, as they have the means (capital) to do
| so. I don't want to stretch it too far, but the current rules
| seem nearly purposefully pointed towards the least effort
| category. There's quite a lot of coverage on this matter, some
| (and a lot in the cryptocurrency scene) like to cite works from
| Ronald F Pol who has done a lot of heavy handed criticism on
| AML et cetera (as far as claiming less than one percent of
| real-world regulations effectiveness), these claims can be
| disputed, but it's apparent even to mainstream publications
| most unlawful flows are uninhibited and the approach is
| ineffective, expensive and dangerous.
|
| https://www.economist.com/finance-and-economics/2021/04/12/t...
|
| https://en.wikipedia.org/wiki/Danske_Bank_money_laundering_s...
| ouid wrote:
| You seem to think that freedom means a world in which you are
| allowed to hide your assets from the government. You have never
| been allowed to do that. You're going to have to change the
| law, and because you live in more or less a democracy, you're
| going to have to convince people that its good to change the
| law.
| TEP_Kim_Il_Sung wrote:
| For the time being the government has yet to decide wether
| crypto is money, a currency, an asset, or a security. Instead
| it has been going after people for all of them.
| qeternity wrote:
| Because crypto claims to be all 3 and has created various
| forms that behave like all 3.
| TEP_Kim_Il_Sung wrote:
| This would hold up if government treated individual forms
| individually, yet they mix&match arbitrarily.
| woodruffw wrote:
| "Might be used for illegal purposes" is a significant
| understatement. The chief selling point of Tornado Cash is
| money laundering, which is _in and of itself_ a crime in both
| the US and Netherlands.
|
| Normally, there'd be an aspect of plausible deniability:
| torrent index operators can, for example, rightfully claim that
| they're facilitating legal filesharing, or that they're
| entirely agnostic to the content being shared (if all they're
| doing is sharing URLs). What's key in this case is that law
| enforcement _claims_ that Pertsev was aware of the crimes his
| service was being used for. Whether or not that 's actually
| true is up to a court to decide.
| unboxingelf wrote:
| The chief selling point of Tornado Cash is money laundering
|
| Firmly disagree. The chief selling point of Tornado Cash is a
| mixer. Please see my reply to essentially this same
| misconception a month ago, which includes concrete, legal use
| cases:
|
| https://news.ycombinator.com/item?id=32443738
| hef19898 wrote:
| Everytime a major bank is caught doing something like that,
| UBS and Deutsche Bank come to mind, there is huge outcry
| about the lack of consequences. If a crypto exchange get's
| caught doing it, and there are consequences, there is huge
| outcry (among certain people) because _there are_
| consequences. Added severity, in the case of tornado cash,
| was helping North Korea. So not just money laundering but
| also circumventing sanctions that are taken very seriously by
| every political power that actually matters. Heck, even the
| Chinese at least try make it look like they adhere to the
| North Korea sanctions.
| ChrisLomont wrote:
| Deutsch Bank has been hit with $600M for laundering, $7.2B
| over mortgage assets, $2.5B for interest rate manipulation,
| among a lot of other fines.
|
| These are some pretty astounding sums.
| phatfish wrote:
| It's plain old double standards, Tornado Cash is the
| "peoples" money laundering service, anyone can use it, so
| it could be of benefit to them at some point.
|
| Global banks that could facilitate the same thing would
| only consider doing it for the super-rich to hedge against
| the possibility of getting caught and fined. So are not
| open to the average person, hence people have no problem
| calling for them to be held to account.
|
| Both should get the same treatment. That goes doubly for
| the global banks that have historically caused far greater
| problems than TC.
| everfree wrote:
| Banks are organizations made out of people who can be
| held responsible. Tornado Cash is a piece of software
| that is not run by any person.
|
| Banks can be fined and people can be imprisoned, but you
| can't fine or imprison software. The Treasury ban is a
| direct ban on software, which is a departure from
| precedent.
|
| That's what makes this legal case unique, and why it's
| not simply a double standard.
| TEP_Kim_Il_Sung wrote:
| The chief selling point of Tornado Cash is that it's
| distributed open-source software, with no man in the middle,
| no single point of failure.
|
| That's right: Government sanctioned open-source SOFTWARE. Are
| you sure you want this precedent set?
| woodruffw wrote:
| I have no problem with Tornado Cash being openly available
| software under a permissive license. I have a problem with
| people running a Tornado Cash-based service that is really
| just a money laundering service.
|
| You should take a step back: "open source" does not rinse
| away the underlying properties of a service. I can't write
| and deploy a web application that contracts hitmen and use
| the MIT license as a defense; the latter simply isn't being
| litigated.
| sam0x17 wrote:
| Money crimes should be prosecuted and solved at their
| start points and endpoints, not within the financial
| system. Failure to adhere to this standard is why we no
| longer really control the money in our bank accounts
| anymore. Want to send a wire to your friend living in the
| middle east with a sketchy name? Might get flagged. Want
| to purchase something out of the ordinary for you online?
| Your debit card will probably block it at least at first.
| Law enforcement has become lazy and we have as well.
| Instead of solving actual crimes, we just use ML
| algorithms to find sketchy-looking transactions and then
| block them and investigate later maybe. This has
| significantly reduced our privacy and freedom at a much
| higher cost than the purported gains. This is the whole
| motivation behind the original push into crypto in the
| early 00s. We need something not beholding to any
| government that is as good as cash but digital, and the
| US gov sanctioning a mixer is just proof of this dire
| need.
| sofixa wrote:
| > Money crimes should be prosecuted and solved at their
| start points and endpoints, not within the financial
| system. Failure to adhere to this standard is why we no
| longer really control the money in our bank accounts
| anymore
|
| That's easier said than done. It's drastically easier to
| catch crime by it's results (money) than in the act.
| Famously that's how Capone was caught. And what would be
| the advantage of that, to anyone? I doubt that
| erroneously flagged transactions are a real problem. Do
| you have any numbers on the matter?
| A4ET8a8uTh0 wrote:
| And this is where it gets fun. Banks will absolutely not
| tell the customer that their transaction is flagged for
| one reason or another partly so that they do not lose
| their 'safe harbor' status under BSA. Any numbers you
| will see might be from the government, but FinCEN is
| relatively tight lipped about those for a variety of
| reasons. The discussion is taking place now, because it
| has become fairly onerous on an average person, who sends
| anything to MOHAMMED HASSAN. Instead of data, I can only
| offer anecdata. Long long time ( or not long ago
| depending on your perception of time ), we had a person,
| whose transaction matched some OFAC info, which resulted
| in bank holding the transaction. I cannot go into details
| beyond saying that eventually even OFAC representative
| seemed to admit to that it does not seem to apply to him.
| To the best of my knowledge, a year after that person
| still did not get his funds.
|
| It may have not happened to you, but I do not think it is
| as uncommon as you think. Parent is right. We are doing
| this backwards.
| landemva wrote:
| > not tell the customer that their transaction is flagged
|
| The teller is not allowed to disclose this to customer.
|
| > Any numbers you will see might be from the government
|
| In my experience, the board of directors of the bank get
| a monthly roll-up of the numbers.
| A4ET8a8uTh0 wrote:
| Yeah, but those numbers are not reported beyond those
| parties and for a good reason. That is why I listed
| FinCEN as a source, because they typically put some data
| out.. just nothing that could be useful for this
| discussion.
| whatisweb3 wrote:
| You actually could publish "illegal code" because code is
| protected under 1st amendment, as free speech. Legal
| precedent has been set by Bernstein v US DoJ.
|
| There is an open question about whether publishing non
| custodial contract code on Ethereum counts as providing a
| service. If you post 10 lines of immutable code onto
| Ethereum, and some years later a user chooses to run this
| code on their machines for criminal behavior, should you
| be prosecuted?
| theplumber wrote:
| What's the difference between money launderying features
| and privacy features?
|
| Tornado Cash in itself does is not launderying money
| because you still have to prove to the IRS how you got
| the money or the asset(i.e bills, invoice etc) and you
| still have to obey KYC rules. You can't just say the
| money is from Tornado Cash and be done with it.
|
| Is the U.S Mint a money launderying service because it
| provides an untraceable method (cash) to conduct
| transactions?
| marcus_holmes wrote:
| > What's the difference between money launderying
| features and privacy features?
|
| Really good question.
|
| I'd say "if your privacy feature allows you to trade
| above the trigger limit (usually 10K USD/EUR/GBP) without
| having to state the source of your funds, then it's
| actually a money laundering feature"
| ashwagary wrote:
| If the funds aren't procured through criminal activity,
| then it can't be considered money laundering. Only if the
| individual doesn't declare a taxable event to a tax
| authority has a crime been committed.
| marcus_holmes wrote:
| no, it's money laundering even if the funds haven't been
| procured from criminal activity. The regulations don't
| care where the money comes from, they're just specifying
| what reporting needs to happen around the movement of
| money. Not being able to properly describe where the
| money comes from is a crime.
|
| I've worked in the finance industry, and I've worked with
| people who've seen bad guys turn up with suitcases full
| of other people's money. I'm totally happy that these
| regulations are in place.
| ashwagary wrote:
| >>no, it's money laundering even if the funds haven't
| been procured from criminal activity.
|
| You are wrong.
|
| FINCEN "Money laundering involves disguising financial
| assets so they can be used without detection of the
| illegal activity that produced them."
|
| WIKIPEDIA "Money laundering is the process of concealing
| the origin of money obtained from illicit activities such
| as drug trafficking, corruption, embezzlement or
| gambling, by converting it into a legitimate source."
|
| https://www.fincen.gov/what-money-laundering
|
| https://en.wikipedia.org/wiki/Money_laundering
| woodruffw wrote:
| The features don't matter. What matters is _intent_ and
| demonstrating that intent.
|
| Both the Treasury and Dutch authorities have reason to
| believe that Tornado Cash was operated _with the intent_
| of facilitating money laundering. It 's up to a court to
| determine the veracity of that accusation.
| npc54321 wrote:
| Guilty until proven innocent (they are
| blacklisted/sanctioned) I see.
| woodruffw wrote:
| Not only am I not a court of law, but I _specifically_
| said that it 's up to a court to make a decision of legal
| guilt here.
|
| In the mean time, yes: the government is allowed to halt
| activities that it believes are part of an _active_
| criminal scheme. Every country with a functioning legal
| system proscribes this, and establishes a broad swath of
| controls to ensure that the government can 't
| indefinitely tie up resources.
| A4ET8a8uTh0 wrote:
| FWIW, the money sanctioned under OFAC is still that of
| the owner so there is a process in place that has a
| semblance of the rules of law. However, getting that
| money released by the bank is nothing short of a
| herculean effort based on cases I have seen over the
| years.
| mattficke wrote:
| To your last question, this is why financial institutions
| are required to report cash transactions over $10,000.
| There are a number of constraints on how untraceable cash
| is.
| TEP_Kim_Il_Sung wrote:
| Has this amount ever been adjusted for inflation?
|
| It is my understanding, that $10,000 at the time this law
| was set, was about 1/4 the price of a small home.
| A4ET8a8uTh0 wrote:
| No. Also, there were several recent articles/speeches
| from various AML/BSA/Fraud folks to lower that amount
| even further for several purposes including CTR. For
| better or worse, BSA has become its own industry with a
| lot of money riding on keeping things annoying to regular
| people ( and barely doing anything to stop actual
| criminals, who have skills, patience and resources to
| bypass all the safeguards ).
| pigtailgirl wrote:
| -- if I move $10k - my institution automatically tells
| the government I moved $10k - if in the US - the
| receiving institution also tells the government - I don't
| have an expectation of privacy - is this also true with
| Tornado Cash? --
| chrischattin wrote:
| If you use cash, it's a private transaction (no
| notification).
| salawat wrote:
| KYC applies to money transmitters directly. End consumers
| only indirectly by virtue of any financial institution
| ending up in hot water for non-compliance.
|
| You don't get to shift regulatory burden to the consumer.
| everfree wrote:
| > I have a problem with people running a Tornado Cash-
| based service that is really just a money laundering
| service.
|
| The treasury ban is on the contract itself, not TC-based
| services that people might run.
| duped wrote:
| > The chief selling point of Tornado Cash is that it's
| distributed open-source software, with no man in the
| middle, no single point of failure
|
| for laundering money. You can't remove the key feature from
| metaproperties of the software and call the latter the
| "chief selling point."
| TEP_Kim_Il_Sung wrote:
| So say you, and yet my claim is self-evident, while yours
| needs hordes of robe&badge clad bureaucrats, and the
| promise of violence, to enforce.
| JumpCrisscross wrote:
| > _yet my claim is self-evident, while yours needs hordes
| of robe &badge clad bureaucrats_
|
| You're describing due process. That's a feature. An AK-47
| being metallic may be self evident. That doesn't make it
| relevant to a murder investigation.
| TEP_Kim_Il_Sung wrote:
| An AK-47 is not relevent to a murder investigation.
|
| There are thousands of them in the U.S. and owned by
| innocents. It would be unreasonable to come after all
| AK-47 owners because one was used in a crime. Rather, it
| would be up to the cops to find other facts about the
| weapon, perhaps how much more metallic it looked than
| your standard AK, and in which spots. Wear marks can be
| just as revealing as serial numbers.
| JumpCrisscross wrote:
| > _would be unreasonable to come after all AK-47 owners
| because one was used in a crime_
|
| Every mixer isn't sanctioned. Just the one used to
| launder money by Pyongyang. None of this is novel.
| kevin_thibedeau wrote:
| PGP set that precedent decades ago. They just need to
| publish the source as a book.
| ok123456 wrote:
| > The chief selling point of Tornado Cash is money laundering
|
| The same thing could be said about paper money.
| woodruffw wrote:
| No, it can't. The chief selling point of fiat is being an
| efficient medium of exchange. This is a very nice property
| to have!
| [deleted]
| adastra22 wrote:
| The chief purpose of a mixer is financial privacy. It's just
| that on a public blockchain privacy from snoops and privacy
| from law enforcement can't be differentiated.
| woodruffw wrote:
| If the Treasury or Dutch authorities are to be believed,
| the chief purpose of _this_ mixer was to facilitate money
| laundering. That is key to this entire discussion: they
| have reason to believe that Pertsev _knowingly_ ran a money
| laundering service, rather than running a service that
| criminals can _abuse_ to launder money.
| TechBro8615 wrote:
| phatfish wrote:
| No, that would be the chief purpose of reddit.com. Try
| posting CP to r/furries and see how long that sub, (or
| reddit itself if they ignore it) stays online.
|
| Tornado Cash ignored the warnings. Enabling money
| laundering and providing a means to avoid economic
| sanctions will get you in serious trouble.
| abigail95 wrote:
| When we say he _ran_ it, did he actually deploy resources
| that laundered money or just publish a spec that others
| used to do the laundering?
|
| Like how far am I allowed to go to describe how you might
| launder money on a blockchain before I get arrested?
| TremendousJudge wrote:
| That probably depends on your lawyer. If he's bad enough
| I'd guess you can get a penalty even if you didn't see
| any financial gain from the scheme.
| everfree wrote:
| There's nothing inherent to Tornado Cash that makes it
| better for money laundering than for privacy.
|
| It's very basic software from a functionality
| perspective. You put coins into a pool, then at a later
| date, you take coins back out of the pool. That's all.
|
| It's hard to ascribe specific intent to a system like
| that, beyond the intent to give people a tool to transact
| without the entire history of their account being
| broadcast publicly and permanently on the blockchain.
| dannyw wrote:
| That's interesting. As a Tornado Cash user, I have never
| associated this with an intentional money laundering
| service, but rather a bunch of developers advancing zk-
| SNARKs and other cryptographic primitives.
|
| As someone who was excited by the original Bitcoin
| whitepaper back in 2011, zk-SNARKS was what excited me
| about cryptocurrency again in 2021.
| JumpCrisscross wrote:
| > _have never associated this with an intentional money
| laundering service_
|
| Most customers of a canonical money launderer, a
| laundromat, don't realise it's a front. That doesn't
| matter if the owner is laundering money.
|
| Tornado laundered money for North Korea [1]. (It
| announced this months before the sanctions, a period in
| which the developers could have reacted but didn't [EDIT:
| in any meaningful way].) That it was also obfuscating
| legitimate flows is frankly irrelevant.
|
| [1] https://www.bloomberg.com/news/articles/2022-08-08/cr
| ypto-mi...
| ikeboy wrote:
| This is incorrect. Tornado devs blocked all OFAC
| addresses from accessing the frontend, which is the only
| power they had, since the contracts themselves are
| immutable. See
| https://www.coindesk.com/tech/2022/04/15/tornado-cash-
| adds-c...
| JumpCrisscross wrote:
| > _Tornado devs blocked all OFAC addresses from accessing
| the frontend, which is the only power they had, since the
| contracts themselves are immutable_
|
| Which does nothing in practice. Any AML lawyer would have
| advised them so. The fact that the service was designed
| to be incompatible with the law isn't a get-out-of-jail
| card.
| dannyw wrote:
| What would you say about Signal, designed to be
| incompatible with the law around lawful subpoenas?
| JumpCrisscross wrote:
| > _What would you say about Signal, designed to be
| incompatible with the law around lawful subpoenas?_
|
| It's not. Subpoenas require handing over what you have.
| If you don't have it there is no obligation to disclose.
| Signal may run afoul of data-retention laws. But there
| are no such requirements in America.
| ikeboy wrote:
| I read the lawsuit in question. None of the plaintiffs
| were arrested. Their issue is that OFAC overstepped the
| bounds of their statutory authority, which none of your
| arguments address.
|
| I'm also not aware of what US law would have been
| violated by either
|
| 1. Coding and publishing the tornado source code
|
| 2. Deploying several instances to the blockchain in 2019.
|
| There's no US prosecutions based on creating or operating
| tornado. The Dutch one has not charged the person they
| arrested yet, according to
| https://www.coindesk.com/policy/2022/08/24/alleged-
| tornado-d..., so I don't know what unlawful actions they
| think he's responsible for.
| JumpCrisscross wrote:
| > _issue is that OFAC overstepped the bounds of their
| statutory authority, which none of your arguments
| address_
|
| Plaintiffs' argument relies on Tornado Cash not being "a
| person, entity, or organization" [1]. The complaint
| declares OFAC exceeded its statutory authority, but
| provides no specifics. (The code cited in P 9 [2] gives
| courts the authority to tell agencies not to do bad
| things. That isn't an argument for or against OFAC's
| specific actions in this case.)
|
| In summary, it's a hope-and-a-prayer complaint. _Maybe_
| someone at OFAC fucked up the paperwork, thereby giving
| rise to some modicum of relief.
|
| [1] https://storage.courtlistener.com/recap/gov.uscourts.
| txwd.11... _P 4_
|
| [2] https://www.law.cornell.edu/uscode/text/5/706
| adastra22 wrote:
| What could the developers have done?
| JumpCrisscross wrote:
| > _What could the developers have done?_
|
| Not sure. Their problem. If the only option was shutting
| it down, that. It would have looked better, which could
| have prompted sympathetic legislation. At the very least,
| it would have likely avoided sanctions.
| adastra22 wrote:
| You can't just say "they had months to react but didn't"
| if you don't have any idea of what they could have done
| differently. React how?
| bee_rider wrote:
| You can't reasonably expect a random commenter to have
| full insight into their legal situation. They should have
| talked to their lawyers and found options. There is a
| chance that their financial service is incompatible with
| the laws in some jurisdictions, and so they might not be
| able to do business in those jurisdictions. Financial
| services are heavily regulated...
| adastra22 wrote:
| I think you're confused about the facts of the situation
| here. There was no financial service being operated.
| There was no ongoing business. There was open source code
| that was thrown over the wall and was locked on the
| blockchain and immutable.
| hef19898 wrote:
| Close down until you figured out a way to react. Money
| laundering is serious crime, helping North Korea is as
| well. Tornado cash did apparently both, and authorities
| gave them a heads up. If it was me, I would close my shop
| down.
| douglaswlance wrote:
| It cannot be shut down. The contract is immutable. It's
| still live, and it will still be live for decades to
| come, with new duplicates of the contract being published
| every day.
| JumpCrisscross wrote:
| > _It cannot be shut down. The contract is immutable._
|
| If that's truly the case, shut down as in stop developing
| it and advise users to stop using it. Then the addresses
| get sanctioned and nobody is surprised.
| rglullis wrote:
| chollida1 wrote:
| https://medium.com/@blockchain101/the-basics-of-
| upgradable-p...
|
| You put in a proxy contract that just sends the money
| back to the user who sent it to you.
|
| Problem solved for sanctions.
| rglullis wrote:
| To put a proxy contract means that there will be an admin
| able to make contract upgrades. IOW, you need to have
| offchain trust in the contract deployer. This is widely
| regarded as a measure that defeats the purpose of
| decentralization.
|
| So, yes, you could have an upgraded version of TC, but if
| you want to go that route you might simply use a
| centralized exchange as a mixer.
| twblalock wrote:
| Contract law is not going to change just because someone
| tries to write an immutable contract in a computer
| program.
| 8note wrote:
| They could if they really wanted to. The ethereum block
| chain has rolled back to protect rich people's money
| rglullis wrote:
| Ok, seems like it is time to debunk the usual shitstorm
| of "arguments"...
|
| There was no "rollback". The DAO hack was reverted
| through a state change that only happened because there
| was a consensus on the miners to do it.
| hef19898 wrote:
| The part where Tornado Cash as an exchange couldn't shut
| down for a while. And the fact that those, well,
| "contracts" cannot be nullified like literally _any other
| contract_ signed in any jurisdiction is troublesome in
| itself.
|
| Lucky for Elon that he didn't use one of those contracts
| to buy Twitter.
| rglullis wrote:
| Don't get confused by the terminology and don't get into
| word-thinking. A "contract" on the blockchain is nothing
| like a "contract" in the legal sense. Even if I get your
| signature on a blockchain saying that you are
| transferring your assets to me, there won't be any court
| willing to uphold this. In the same vein, it's not
| because that people talk about TC as a smart contract
| that gives it legal backing or makes it subject to the
| legalities of a "real world" contract.
|
| You could call it "stored procedures" if you prefer, but
| at the end of the day outlawing tornado cash based on its
| code is as ridiculous as outlawing RSA.
| hef19898 wrote:
| What you describe, person A agreeing to sell over
| something to person B, even if just verbally, is a legal
| contract. Verbal contracts are perfectly legally binding,
| if somewhat hard to enforce for lack of proof. The lack
| of proof part is not a problem when it comes to
| blockchains, is it?
|
| Just because it is virtual doesn't mean real world laws
| don't apply. What gave you that idea?
| woodruffw wrote:
| Your association isn't what regulators are concerned
| with. They're concerned with the intent of the creator
| and operator of the service, which is why he's the one
| who's been arrested.
| pcthrowaway wrote:
| And you're buying into propaganda suggesting someone
| pushing the envelope in cryptography is creating tooling
| specifically for money laundering. 30 years ago, the NSA
| toed a similar line in their war on PGP, saying it was
| used in practice for "money laundering, child
| pornography, and terrorism" -
| https://reason.com/video/2020/10/21/cryptowars-gilmore-
| zimme...
| woodruffw wrote:
| For the umpteenth time in this thread: intent matters.
| Regardless of what the NSA said 30 years ago, it is
| manifestly apparent to _every single person_ in this
| conversation that neither HTTPS nor PGP nor any other
| cryptographic scheme designed for _individual privacy_
| was designed with money laundering in mind.
|
| At the _absolute worst_ , they were agnostic to the
| presence of criminal activity. This is in contrast to
| Tornado Cash, which was _repeatedly told_ that their
| service was being used to launder money.
| throwaway742 wrote:
| So if the developers of PGP were told that ISIL was using
| their service to facilitate terrorism should they shut
| down the project?
| woodruffw wrote:
| What project? PGP was bundled up and thrown onto the
| Internet; there was no development or services community
| established around it. The US Government threw a hissy
| fit over that and they ended up distributing it as a
| "book" instead, converting it into a question of free
| expression.
|
| There is no meaningful sense in which PGP could ever be
| said to "facilitate" terrorism in the same way that
| Tornado Cash is rightfully characterized as facilitating
| money laundering. PGP is a program that runs on your
| host, encrypting your email. Tornado Cash is a _service_
| , run by an individual who was warned to cease serving
| sanctioned entities, and failed to do so.
| [deleted]
| pcthrowaway wrote:
| Ignoring the front-end (which is unnecessary to use it),
| Tornado Cash is a protocol, run by a decentralized
| network of computers. The code for the protocol is shared
| by a network of computers execute this code according to
| specific rules and validate transactions. A specific
| deployment of the code was sanctioned, but this means
| anyone else using the code (which has to be deployed to
| this network to be used trustlessly) is risky to use now
| str4d wrote:
| > Tornado Cash is a service, _run by an individual_ who
| was warned to cease serving sanctioned entities, and
| failed to do so.
|
| This is false. The (vast majority of the) Tornado Cash
| contracts were either deployed to Ethereum as immutable
| contracts, or updated in 2020 to revoke mutability (once
| the final zkSNARK parameters were included) [0], meaning
| that they could not later be updated by the user(s) that
| deployed them. Arguing that Tornado Cash is run by an
| individual means arguing that the entire Ethereum network
| is run by an individual. There was no way for a warned
| individual to comply with that warning.
|
| [0] https://www.coincenter.org/education/advanced-
| topics/how-doe... - Section titled "Can Tornado Cash be
| removed or updated? If so, by whom?"
| ChrisLomont wrote:
| >The (vast majority of the) Tornado Cash contracts
|
| Thousands of little contracts doesn't absolve a financial
| institution from a few many-billion dollar illegal
| transfers, especially after they've been warned
| repeatedly.
| pcthrowaway wrote:
| What do you mean by "thousands of little contracts"? I
| haven't looked at Tornado's source code too much, it's
| entirely _possible_ there are additional contracts
| created by their contracts as part of the protocol, but
| this would be pretty unusual.
|
| Usually a smart contract protocol is a set of contracts
| working together, deployed to the blockchain, which
| provide application logic that executes regardless of who
| is interacting with it (via "transactions")
| plonk wrote:
| Well it probably was, among other things. But we're
| censoring a network here, not just a tool. Nobody is
| making the cryptography behind Tornado illegal.
| whatisweb3 wrote:
| The open source software and cryptographic protocol is
| implicitly targeted with this order. You can see it in
| how private companies are now handling the Tornado Cash
| code and contributor accounts. If you create a similar
| privacy tool with zk-SNARKs do you really think it won't
| also become a target for sanctions in time?
|
| This is known as "chilling effect" in a legal context.
| pcthrowaway wrote:
| To expand on this, the chilling effect here is that even
| if the code behind tornado cash isn't explicitly illegal,
| using it on a blockchain in practice _is_ incredibly
| risky.
|
| People who might otherwise want to use this for financial
| privacy would be wary, since if they deposit funds to the
| contract, they don't have any way to know if they'll be
| able to use the unlinked funds later if withdrawn.
| salawat wrote:
| Most ledgers are not public, or based on any methodology
| requiring public view, because the only way to both
| transact, keeping intact a tightly coherent paper trail as
| required by law is, and ensure privacy is to not make the
| ledger available in all it's glory to everyone.
|
| Doing what Tornado.cash does, is by definition, laundering,
| and if you didn't want your financial matters known to the
| world, mayhaps you should not have used a technology based
| on public ledger?
| adastra22 wrote:
| Tornado cash does something different from money
| laundering. If you use TC you can actually provably undo
| the mixing and reveal your financial history to a third
| party. If the government came and asked "what's the
| source of these funds?" You could open the commitment and
| show which input is yours.
|
| It just breaks the last model law enforcement is used to
| where they just siphon up all private financial data for
| their own uses.
| mikece wrote:
| You hit it on the head: this is a War on Privacy being
| presented as a war on money-laundering. The biggest money
| laundering schemes involve commercial banks and real estate
| (*ahem* TRUMP! *ahem*....) and not online cryptocurrency
| schemes. It's not like the North Koreans have no other way
| to mask the trail on what they steal, and I suspect those
| saying they are certain the North Koreans are bad guys here
| will insist they cannot divulge how they know this (under
| the aegis of National Security or some other excuse).
| PuppyTailWags wrote:
| > I suspect those saying they are certain the North
| Koreans are bad guys here will insist they cannot divulge
| how they know this (under the aegis of National Security
| or some other excuse).
|
| My understanding is that the aegis of National Security
| isn't unwarranted sometimes. For example, if they know NK
| are bad guys here because one of their spies literally
| witnessed the laundering (as a secretary, paper-pusher,
| programmer, or similar) then there is no way to disclose
| the source. Even a "we have an eyewitness" will tip NK
| off to look into the people in the process (NK will be
| able to definitively rule out their technology being
| hacked, or a bug planted somewhere).
| ashwagary wrote:
| Too bad for national security that people have rights.
|
| I saw a post recently about the fact that nobody could
| easily identify the users of pay phones in the past and
| how modern day lawmakers would probably ban them out of
| fear of anonimity. It showed just how much privacy the
| average person has lost over the years...there has to be
| pushback.
| Bombthecat wrote:
| Sooo buying and using monero is automatically money
| laundering?
| logicalmonster wrote:
| > Normally, there'd be an aspect of plausible deniability
|
| If it was publicly known that you had exactly 1 ton of
| legally acquired gold in your house, would you feel perfectly
| safe sleeping at night? Is there not 1 sicko out there that
| would be willing to torture your family to find the
| combination to your vault?
|
| Plausible deniability exists here. It's called wanting
| privacy, and there's perfectly valid and non-criminal reasons
| to want privacy, despite repeated false claims.
|
| Here is the problem. Many cryptos are not actually anonymous.
| If somebody has somebody's wallet address, they can look into
| tracing information about them like their net worth and their
| purchasing history. Even if you were smart enough to use a
| different wallet address for each transaction, you inevitably
| have to spend money to live or send money to others and then
| you can be traced. As tools grow more sophisticated and more
| data about wallet address ownership gets out there, the more
| at risk people will be. And once your identity gets out
| there, there's no shaking the ability to track it short of
| some form of mixing or obfuscation. In an of itself, mixing
| or trading to obfuscate your identity shouldn't be considered
| a crime or unreasonable in the slightest.
| vkou wrote:
| If I had 45 million dollars in my house, I'd look into
| whatever the hell individuals of that net worth are doing
| to protect themselves.
|
| Which, as I understand it, mostly consists of not keeping
| it as a gold brick in their basement, and not living in a
| shitty neighbourhood. It's harder to rubber hose attack
| someone who isn't keeping all their wealth in a crypto
| wallet.
| eropple wrote:
| _> In an of itself, mixing or trading to obfuscate your
| identity shouldn 't be considered a crime or unreasonable
| in the slightest._
|
| "Financial privacy" isn't a real thing, because you owe
| taxes on income and investments. Can you explain to me how
| your tax assessor is able, then, to properly identify your
| income and tax you on it as appropriate?
|
| (Money laundering and tax evasion do not always go hand-in-
| hand. Many launderers pay taxes as a cost of doing
| business. Cryptocurrency mixers seem to treat tax evasion
| as a feature.)
| hef19898 wrote:
| >> Cryptocurrency mixers seem to treat tax evasion as a
| feature
|
| Historically there is huge market for that.
| bruiseralmighty wrote:
| Privacy exists even if the government violates it due to
| their tax schemes. A _right_ to privacy may even exist as
| a natural human right. If a country decides collectively
| that this is the case, then what ought to change is the
| tax policy, not every user service.
|
| We can argue over how easy it would be, but I would
| presume its possible for a government to switch over to
| taxing hard assets like land, machines, and shipments at
| ports rather than income and investment products if we
| decide those should be shielded by a right to privacy.
| Most of human history existed without a tax on income or
| loans (investments), an argument that a right cannot
| exists because of the present tax structure is like the
| ultimate status quo warrior-ing.
| eropple wrote:
| _> If a country decides collectively that this is the
| case, then what ought to change is the tax policy,_
|
| Your post is largely meaningless because, while this line
| is inarguably true, _this also hasn 't happened_ and so
| AML and KYC are still a thing--and there's precious
| little to indicate that anyone really cares about it
| aside from starve-the-beast conservatives and
| cryptocurrency enthusiasts, and that's not a majority.
|
| If a country does decide so collectively, great! We
| haven't. So yeah, it's illegal, and the currently-fictive
| right to financial privacy remains so.
| landemva wrote:
| USA had been like this: import duties, use taxes, no
| income tax.
|
| Now with USA fiat money there is no financial need to
| have personal income tax.
| jim_kreggis wrote:
| Your employer has your salary on record, so having
| financial privacy in no way prevents taxes being
| collected. Likewise you trade stocks through a broker,
| who knows how much you have in your brokerage account.
| sofixa wrote:
| Why don't you use the traditional banking system, which
| doesn't result in publicly listed transactions?
|
| I struggle to find a legitimate use case for hiding
| transactions from your bank and thus tax authority
| (assuming a developed country).
| chrischattin wrote:
| Have you ever tried to make a wire transfer on a weekend?
|
| Having access to your money outside of banking hours is
| just one of many use cases I can think of off the top of
| my head.
| sofixa wrote:
| SEPA Instant works in seconds regardless of time of day.
| Next question?
| erispoe wrote:
| I live in Europe and routinely do bank transfers in
| seconds on weekends.
| orangepurple wrote:
| iDEAL? or something else?
| colejohnson66 wrote:
| The vast majority of the time, you don't need a wire
| transfer. And if your debit/credit card doesn't work on
| the weekend, you need a new bank; That's not the fault of
| banking as a whole.
| ls15 wrote:
| > I struggle to find a legitimate use case for hiding
| transactions from your bank and thus tax authority
| (assuming a developed country).
|
| Roe v. Wade
| BobbyJo wrote:
| Do abortion clinics accept crypto now?
| wizofaus wrote:
| I assume you mean the overturning of and the lengths to
| which certain states appear to be going in order to
| determine whether women have attempted to have now-
| illegal abortions? I'd agree that's a pretty reasonable
| example of why we still need the ability to pay for
| things in an untraceable manner and why to object to any
| attempt to phase out cash as a legitimate method of
| payment. But I'd also much rather have constitutional
| protections that don't allow governments to declare
| consensual surgical procedures on your own body to be
| illegal.
| logicalmonster wrote:
| > But I'd also much rather have constitutional
| protections that don't allow governments to declare
| consensual surgical procedures on your own body to be
| illegal.
|
| Interesting concept, but a few quick thoughts on this.
|
| 1) I'd only point out that there exists a point of view
| that that says that a baby's body is a separate life from
| a woman's body.
|
| 2) Such a constitutional protection would open up some
| very complicated issues when it comes to children,
| particularly with regards to sexuality.
|
| 3) Many of the same people who very eloquently speak out
| on personal choice in some medical matters "lost the
| plot" during Covid. Who can credibly make this argument
| and advocate for such a policy credibly?
| wizofaus wrote:
| Well I have no desire to turn this into an abortion
| debate, but it certainly concerns me how easy it is in a
| country like the US for governments to criminalise
| women's personal health decisions. But mainly it is a
| reminder that there likely will always be legitimate
| reasons to hide your activities from authorities in
| certain cases.
| welshwelsh wrote:
| >assuming a developed country
|
| Bad assumption
|
| Anonymous fundraising for political dissidents is the
| biggest use case I can think of.
| barnabee wrote:
| And I struggle to find a legitimate use case for being
| required to share anything whatsoever with any authority
| without a court order.
|
| There is a huge difference between sharing the details of
| your finances with a tax or other authority _by default_
| and them being able to compel you to provide such
| information if they have good cause to believe (and
| convince a court) that you are evading taxes.
|
| The fact the government required six illegitimate things
| of me before breakfast does not make them legitimate, it
| just means the abuse has become normalised to the point
| that people start believing this shit is reasonable.
| logicalmonster wrote:
| > Why don't you use the traditional banking system, which
| doesn't result in publicly listed transactions?
|
| You mean the banking system that freezes protesters'
| accounts when they do something doubleplusungood?
|
| Personal choices that don't violate the rights of others
| shouldn't require any explanation to retain your rights.
| But it's not hard to think of a lot of reasons for
| somebody to use crypto over banks besides the state not
| being able to trivially shut you out of your life.
| There's other good reasons to choose crypto over banks,
| but that's a good one in my book.
| downandout wrote:
| _" The chief selling point of Tornado Cash is money
| laundering, which is in and of itself a crime in both the US
| and Netherlands."_
|
| You have a fundamental misunderstanding of US law with regard
| to money laundering. Obfuscating the source of funds, by
| itself, is _not_ money laundering. Money laundering requires
| a "predicate offense" - the money that is being laundered
| must be _proven_ to have had an illicit source. Further, the
| entity accused of doing the "laundering" also must _know_
| that the source of funds is illicit _before_ doing it.
| _Intent_ to promote the carrying on of "specified unlawful
| activity" must also be proven in order for a money laundering
| conviction to occur. You can read the entire statute here
| [1].
|
| Therefore, the "chief selling point" cannot be money
| laundering, at least under US law, because the contracts were
| deployed with no prior knowledge of how or by whom they would
| be used. One cannot form intent without prior knowledge. The
| chief selling point was anonymity, not money laundering,
| which has a highly specific legal meaning.
|
| [1] https://www.law.cornell.edu/uscode/text/18/1956
| woodruffw wrote:
| You're addressing 18 USC 1956 (a)(1)(A)(i) and
| (a)(1)(B)(i).
|
| I'm concerned with (a)(1)(B)(ii), which concerns reporting
| requirements. The kind of financial transactions that
| Tornado Cash enables are fundamentally incompatible with
| the US's Federal reporting requirements.
|
| My understanding of the Dutch criminal code (which is not
| great!) is that their standard is even weaker: it is
| sufficient to demonstrate mere concealment, not a failure
| to meet particular reporting requirements.
| downandout wrote:
| At least under US law, intent is still required. Meaning
| that while some _users_ of TC may have violated this law,
| the devs did not, nor did they _knowingly_ aid in it or
| have any provable _intent_ to do so.
|
| I don't know what Dutch law says with regard to
| intent/knowing participation, but I suspect that any
| system of laws in a civilized country would generally
| require it for criminal convictions.
| woodruffw wrote:
| (B)(ii) does not require specific intent. It requires
| _knowledge_ that the transaction fails to meet reporting
| requirements.
|
| The intent in question is manifested in Tornado Cash's
| design, which doesn't pass the malfeasance smell test:
| you can't absolve yourself of illegality by automating
| the illegality.
| downandout wrote:
| _The intent in question is manifested in Tornado Cash 's
| design, which doesn't pass the malfeasance smell test:
| you can't absolve yourself of illegality by automating
| the illegality._
|
| Given that it also has legitimate uses, I think that's a
| very difficult case to make. Also, with very limited
| exceptions, nearly _all_ crimes in the US require intent
| and /or knowing participation. It's a fundamental tenet
| of our system. There is a reason that they aren't being
| prosecuted in the US, and those reasons are outlined
| above. Perhaps Dutch law is different enough to allow a
| conviction; time will tell.
|
| I'd also point out that Apple's device encryption scheme
| was specifically designed so that Apple itself cannot
| unlock devices, which thwarts law enforcement subpoenas
| for assistance. They can legitimately throw their hands
| up in the air and say "we have no ability to help you" -
| and that's by design. It is not illegal to design systems
| in this way. It just shifts the legal liability for
| misuse onto the users, where it should be.
| ChrisLomont wrote:
| >Given that it also has legitimate uses,
|
| You're not addressing the point about "(a)(1)(B)(ii),
| which concerns reporting requirements".
|
| If they cannot meet US law for reporting requirements,
| then they are breaking the law, right?
| downandout wrote:
| No, they are not. They aren't actively participating in
| the transactions, and thus have no reporting requirement.
| _Users_ are not allowed to structure transactions, as it
| is illegal for them to do so.
| xeromal wrote:
| For someone who isn't in the know of this case, can you
| share some legitimate uses for Tornado Cash?
| jimcsharp wrote:
| Privacy - just the general desire to participate in
| crypto as if it were cash, like originally intended.
| Right now if you aren't running a miner, you've lost that
| ability without tumblers.
| downandout wrote:
| Sure, I used to use it. I won't explain the strategy, but
| I have a crypto trading bot that sometimes profits at the
| expense of other bots. The owners of these bots got so
| annoyed at this that they would blacklist the address at
| which my bot was, and would then track any addresses that
| I sent funds to from there and blacklist those in
| advance. TC broke this ownership chain, so they could no
| longer preemptively blacklist the addresses my bot
| operated from.
| Pils wrote:
| Couldn't you just deposit ETH in an exchange and then
| send it to a fresh address? Seems like a hassle to use TC
| for that specific use case.
| downandout wrote:
| Technically? Yes. But you run the risk of getting your
| account closed for this kind of thing.
| psychlops wrote:
| You should read about high frequency trading sometime.
| woodruffw wrote:
| I know a little bit about HFT, and I don't have anything
| particularly nice to say about it. But it's more or less
| unrelated to the particular crime of money laundering.
| 300bps wrote:
| _Money laundering requires a "predicate offense"_
|
| Structuring is one of the most common methods of
| facilitating money laundering.
|
| No predicate offense required. It's illegal all on its own.
|
| https://bsaaml.ffiec.gov/manual/Appendices/08
| TacticalCoder wrote:
| Structuring though is one of the dumbest, laziest and
| most arbitrary law ever. If you say that the limit is,
| say, max 100 K USD for something but plan to attack for
| structuring the person who did 5 times 100 K USD, then
| simply make the law clearer: make the law say 100 K USD
| max and, say, max 200 K USD over five years. But don't
| come after people who did respect the numbers written in
| the law for "structuring".
|
| It's another crazy concept of overreaching states and
| IRSes enjoying _way_ too much power. They can arbitrarily
| decided what 's structuring and what is not. Arbitrary
| decisions aren't how a democracy should work.
|
| You want to prevent people doing these kind of transfers?
| Make it clear what the limits are. Don't come after
| people doing precisely what the limit allows several
| times: precise it can only be done once or _x_ times over
| a certain time period.
|
| That's by the way, how some laws do work. For example in
| France you're allowed to give your kids up to 150 K EUR
| of real estate (or something), tax and inheritance tax
| free, once every 15 years. After 15 years you're free to
| do it once again.
|
| But putting limits and then attacking people respecting
| the limits? To me it's the sign of something deeply
| rotten in the state and that such laws exists isn't
| something that should be cheered.
| jdmichal wrote:
| Your real estate example is not a great fit, because real
| estate transfers are not common. That particular tax-free
| status on the transfers would probably be best
| interpreted as a carve out or loophole, with the normal
| status being that the transactions should be taxed.
|
| On the other hand, depositing money is the normal status.
| Depositing what amounts to large sums over arbitrary
| periods of time is also normal. Directly to the point,
| the limit in place is not a restriction, but merely one
| that triggers mandatory reporting. The limit is very
| clear and absolute -- though at their discretion banks
| may report smaller transactions. Structuring is
| specifically about avoiding that limit and the
| accompanying questions and reporting.
|
| So how would you rewrite this law to require mandatory
| reporting, but also not allow structuring? Because it's
| not apparently trivial how to achieve that goal any
| better than they did.
| downandout wrote:
| Yes, but the same intent provisions still apply to the
| entity that enabled the structuring. Tornado Cash has
| legitimate use cases - I had one prior to the OFAC issue
| (hiding the source of funds to an address in order to
| prevent certain bots from reacting to it). So the devs
| cannot have formed intent to aid in any of the crimes
| that TC may have unwittingly enabled.
|
| Casinos are used as vehicles for structuring and money
| laundering every minute of every day - on a much larger
| scale than anything Tornado Cash could ever have
| achieved. They don't have the _intent_ to aid in these
| activities though, which is why they are allowed to
| operate.
| 300bps wrote:
| _[Casinos] don 't have the intent to aid in these
| activities though, which is why they are allowed to
| operate._
|
| Casinos are allowed to operate because not only do they
| not have the intent to aid these activities, they happily
| track and report everything they're required which is
| just as much as a bank is required. They aren't the
| hotbed of money laundering you seem to think they are.
|
| https://www.fincen.gov/resources/statutes-
| regulations/guidan...
|
| https://casinogrounds.com/blog/know-your-customer-
| gambling/
| downandout wrote:
| _They aren 't the hotbed of money laundering you seem to
| think they are._
|
| I spent a fair amount of time in the gaming business, and
| I can tell you that this statement is patently false.
| Very little of it gets caught, because the people
| involved in such schemes know what the rules are and
| simply work around them. Casinos themselves also
| sometimes turn a blind eye to such activity when it is
| especially profitable for them. Example [1]. That
| occurred even with the reporting requirements.
|
| [1] https://www.justice.gov/usao-cdca/pr/operator-
| venetian-resor...
| 300bps wrote:
| There really seems to be a lot of mental gymnastics going
| on here.
|
| Your original point was that casinos are allowed to
| operate because of their "lack of intent". I respond that
| it's actually because they're as heavily regulated as
| banks are. Your response is, "But sometimes they break
| the law!"
|
| Who cares? Casinos are heavily regulated and most of the
| time they follow their regulations. Or they would be shut
| down.
|
| And here we go back to the real original point... what
| regulations were Tornado Cash following? Were they _ever_
| following AML /BSA regulations? Did they do _anything
| significant_ to attempt to comply with regulations that
| all money exchange companies have to comply with?
|
| Seriously, take 2 minutes and read this:
|
| https://home.treasury.gov/news/press-releases/jy0916
|
| Your little example of Casino money laundering was $47
| million and was touted as "the largest all-cash, up-front
| gambler the Venetian-Palazzo had ever had to that
| point,".
|
| Now read that link from treasury.gov:
|
| _Tornado Cash, which has been used to launder more than
| $7 billion worth of virtual currency since its creation
| in 2019. This includes over $455 million stolen by the
| Lazarus Group, a Democratic People's Republic of Korea
| (DPRK) state-sponsored hacking group_
|
| It's not even comparable. $47 million is 0.6% of $7
| billion. Tornado Cash's raison d'etre was money
| laundering and it was right to shut them down.
| zionic wrote:
| >The chief selling point of Tornado Cash is money laundering
|
| Privacy =/= laundering.
|
| Tornado is/should be perfectly legal to use to pay IRL
| vendors without revealing the entire contents of your
| hot/cold wallets.
|
| It's also useful to move money between hot/cold wallets
| safely.
| JumpCrisscross wrote:
| > _chief selling point of Tornado Cash is money laundering,
| which is in and of itself a crime in both the US and
| Netherland_
|
| Also, law enforcement publicly announced Tornado was used to
| launder billions by North Korea [1]. Months ago [2]. Everyone
| continued as if nothing happened. This wasn't based on
| hypotheticals.
|
| [1] https://hub.elliptic.co/analysis/the-100-million-horizon-
| hac...
|
| [2] https://www.cnbc.com/2022/06/30/north-korea-likely-
| behind-10....
| josh2600 wrote:
| Just going to point out that Tornado cash did invoke
| chainalysis oracles for all of their interface tools. The
| problem is that on ethereum it's not possible to censor a
| deployed contract.
|
| There is a possibility that miners could collude not to
| authenticate blocks with tornado cash transactions in them,
| but that gets into some interesting game theory in a
| globally distributed system. Not every miner is subject to
| US law.
|
| It's a very fascinating story.
|
| https://www.coindesk.com/tech/2022/04/15/tornado-cash-
| adds-c...
| hef19898 wrote:
| Sanctions against North Korea are not just US law, in
| fact they apply in basically every jurisdiction that
| actually worth operating in.
| bornfreddy wrote:
| Also, with PoS coming in a few days, the game changes.
| IIUC, stakers will be obligated to validate all (valid)
| transactions unless they are willing to forfeit their
| staked ETH... No preferential treatment anymore.
|
| (This is still new to me, please correct me if I'm wrong)
| intrasight wrote:
| If the vast majority of stakers agree to OFAC regulations
| (which appears to be the case) then the end result is
| censorship.
| everfree wrote:
| What gives the appearance that this is the case?
|
| Even if the "vast majority" of stakers agree with the
| regulation, the regulation is ambiguous as to whether
| stakers are expected to refrain from including TC
| transactions in their own blocks, or actively orphan all
| blocks that include TC transactions. The latter hurts
| their staking revenue and effectuates a soft fork.
| (Staking revenue is hurt due to the inactivity
| correlation factor that the network uses to calculate
| rewards.)
|
| If the regulation only demands the former, then the
| network will continue status-quo, except that TC
| transactions may take a couple minutes to be included
| instead of 12 seconds.
| intrasight wrote:
| It'll all become clear soon enough.
| joyfylbanana wrote:
| > The problem is that on ethereum it's not possible to
| censor a deployed contract.
|
| It is possible, via a hard work. Similarly as it was
| possible to transition from PoW to PoS. The question is,
| if there is political will for that. Clearly changing the
| protocol rules is possible has it has been done with
| ethereum in the past, including for censorship reasons
| (in the earlier hard fork the reason was to cancel a
| hack).
| bombcar wrote:
| At some point the law can say "you must do this" and
| ethereum can either go underground or comply. The
| countries can higher blockchain experts as well as anyone
| else can, and word the laws as needed.
| Daishiman wrote:
| It is ridiculous how most crypto people fail to
| understand that the government can compel you to do a
| bunch of things and if the blockchain doesn't allow they
| don't just shrug their shoulders and move on with their
| lives.
| toomuchtodo wrote:
| It is delightfully ironic to see code as law slowly
| chipped away by Law until law is code and you're back to
| finance business logic on a slow distributed computer
| fabric.
| everfree wrote:
| It's too early to say that definitively, imo.
|
| As a counterexample to the DAO hack, the parity multi-sig
| hack of 2017 resulted in over $160M worth of ether being
| frozen on-chain. There were calls to hard fork Ethereum
| to return it, but the hard fork was never tenable. That
| was barely a year after the DAO hack and fork.
|
| Personally, I believe there is a zero chance that a hard
| fork based on Tornado Cash becomes viable. It's not
| nearly a big enough issue for enough users to care (and
| exchanges, and wallet software companies, and stakers).
| Why would the 90% of users who don't use Tornado Cash
| risk helping the other 10% perform some fork, knowing
| that the fork would add fuel to the mutability argument
| and set more precedent for mutability?
| josh2600 wrote:
| A hard fork based on tornado cash isn't likely, but what
| if miners refuse to process blocks that have tornado
| transactions in them? What happens then?
| everfree wrote:
| Not much.
|
| https://news.ycombinator.com/item?id=32814082
| qeternity wrote:
| The onus is for technology to comply with laws, not the
| other way around.
| dontknowwhyihn wrote:
| Tell that to Uber.
| everfree wrote:
| Laws bind people, and people should comply with laws.
| Technology is not a person.
|
| People who make technology should not be expected to add
| measures to it to make sure that nobody is ever able to
| use it to commit a crime. This kind of thinking would
| have resulted in guns being banned until technology
| exists for the gun itself to detect who was firing it and
| what it was being fired at, to prevent any crimes from
| occurring.
| aaaaaaaaata wrote:
| Karunamon wrote:
| Note that "money-laundering" is only a thing you have
| committed if you are dealing in funds that are the proceeds
| of another crime. If you are not committing another crime,
| you are more than welcome to conceal the source and
| destination of your financial transactions.
|
| The chief selling point of Tornado Cash was addressing the
| significant privacy problems inherent in a currency based on
| a public ledger. The idea that we should destroy privacy
| tools because criminals use them is ridiculous.
| intrasight wrote:
| Such tools are fine as long as they adhere to KYC
| regulations.
| Karunamon wrote:
| KYC regulations apply to corporations and businesses, not
| code.
| intrasight wrote:
| They apply to what the president can apply them to. So if
| he's able to apply them to code, then they do apply.
| jnovek wrote:
| GP isn't wrong, though. Even if the primary value of Tornado
| Cash is dubious, I'm still uncomfortable with the
| contemporary attitude of "block first, ask questions later
| (maybe)".
| JumpCrisscross wrote:
| > _the contemporary attitude of "block first, ask questions
| later (maybe)"_
|
| The sanctions followed Tornado being fingered as the
| laundering service used by Norrh Korea [1][2].
|
| [1] https://hub.elliptic.co/analysis/the-100-million-
| horizon-hac...
|
| [2] https://www.cnbc.com/2022/06/30/north-korea-likely-
| behind-10....
| chrischattin wrote:
| DPRK uses SSL and PGP. Should we sanction those code
| bases as well?
| ok123456 wrote:
| They tried that in the past with export restrictions.
| Fnoord wrote:
| It can be proven they're not agnostic by doing the bad data
| test (malware, supposed (not real) child porn). If it gets
| removed, that's a sign of moderation. And all big, previously
| known torrent or DHT hosters remove such. Combine it with the
| fact an %x is illegal content (e.g. copyright infringement)
| which does not get removed and you have a case.
| davidguetta wrote:
| wait what ? literally the entire point of financial regulations
| is to avoid it to "possibly be used for illegal purposes".
| Starting with the very basic KYC regulation, or the fact that
| in many countries cash transaction above a limit are forbidden.
|
| I'm all about privacy and anonymity of transactions personally,
| but tornado investors going all "surprised pikachu" right now
| after a more-than-previsible ban is a bit laughable...
| marginalia_nu wrote:
| > This is a problem with law enforcement in general: they are
| lazy and seek to have automated solutions to so much of what
| used to be called police work. This applies to warrant-less
| wiretaps, pulling information on people from 3rd party data
| brokers to side-step warrant and FOIA requirements, and more.
|
| The flaw with this line of reasoning is that behaviors have
| changed. In the past, when the police did "police work", people
| had no choice but to meet in person to discuss their criminal
| enterprises. You could follow them, and listen in. Many illicit
| schemes also left a trail of paper that needed to be stored in
| physical space.
|
| It's not that the police have gotten lazy, it's that if you
| expect criminals to hang out in a shady dockside speakeasy like
| they did when Al Capone ran the town, you're simply not going
| to find anything.
|
| This is a real tricky problem to which I'm not sure there are
| good solutions. There's a mounting conflict of interest
| upholding the law on the one hand, and the interests of law-
| abiding citizens on the other.
| jjtheblunt wrote:
| > they are lazy
|
| ?
| barelysapient wrote:
| At this point, failure to comply with the statute means a
| violation of law; regardless if any criminal laws were
| observably broken or not.
| ESTheComposer wrote:
| Love that a large chunk of negative sentiment comments here are
| from one private equities trader. Pretty telling imo.
|
| Anonymity is not a crime
| secondcoming wrote:
| Why can the NYT still use the term 'blacklist', when it has been
| purged from Software?
| anotherrandom wrote:
| It hasn't been, it is still widely used. The fact that people
| outside of the software world are unaware of that even
| happening shows how few people actually hopped on board that
| train
| intrasight wrote:
| The "we are not a person or organization" argument sort of breaks
| down once you file a lawsuit.
| chizhik-pyzhik wrote:
| The argument made by the plantiffs is that they were harmed by
| the Treasury Dept's action. One of the plantiffs deposited
| funds into Tornado for personal privacy, and now cannot legally
| access these funds.
|
| https://storage.courtlistener.com/recap/gov.uscourts.txwd.11...
| null0pointer wrote:
| Is it possible the court will just say "Plaintiffs get a one-
| time opportunity to declare the source of and withdraw their
| funds from the contract"?
|
| I don't know if this is the sort of thing a court can do but
| it seems like the obvious solution to eliminate the damages
| to the plaintiffs while keeping the sanction in place.
| intrasight wrote:
| That would be a good outcome
| programmarchy wrote:
| If Tornado Cash could be banned, couldn't the same logic be used
| to ban Tor?
|
| The former obscures financial transactions, and the latter
| obscures communications, but there's a similar principle in play.
| kibwen wrote:
| The US military itself uses Tor. They don't want to ban it,
| because even if the traffic on Tor is illicit, it still serves
| to mask the military's own traffic. Don't forget that Tor was
| originally developed by the US Navy.
| realce wrote:
| I hear NK uses it too, it should probably be made
| devastatingly illegal therefore.
| staringback wrote:
| Most of HN actually thinks like this unfortunately
| bitxbitxbitcoin wrote:
| I'd be willing to bet there is US government black budget
| money that moved over Tornado Cash, too. The issue then
| becomes that Tornado Cash wasn't originally developed by the
| govt and whatever further implications that has.
| iotku wrote:
| >The US military itself uses Tor. They don't want to ban it
|
| That's not really any reassurance in the long term, if they
| find a better/different solution that goes out the window.
| netheril96 wrote:
| That is the point of your parent comment: defeating their
| argument by their logic. To be logically consistent, the US
| should either ban both Tornado Cash and Tor or allow both.
| JumpCrisscross wrote:
| > _couldn 't the same logic be used to ban Tor?_
|
| No. Despite attempts to conflate code on a blockchain with code
| as a concept, the code comprising Tornado Cash hasn't been
| banned. You can publish it. Hell, you can re-deploy it, though
| that would be stupid.
| cdiddy2 wrote:
| Tornado Cash has a great feature that you can use to prove the
| source of funds that were withdrawn from it as needed. This would
| allow exchanges to implement something where funds from Tornado
| could have to provide this proof before depositing. It could be
| fully compliant with both privacy and what exchanges/governments
| want. Coin Center does a great write up of it here, under
| "Compliance Tool"
|
| https://www.coincenter.org/education/advanced-topics/how-doe...
| [deleted]
| intrasight wrote:
| > "Tornado Cash is not "property," a "foreign country or a
| national thereof," or a "person" of any kind under IEEPA."
|
| The president has much discretion here. That was the whole idea
| of IEEPA. I think the best case outcome of this lawsuit to crypto
| is that courts just toss it. Worse case is that IEEPA is
| effectively amended to say that a DAO is a person.
| SpicyLemonZest wrote:
| I think the crypto framing obscures the story here. If the
| government issued sanctions against a traditional financial
| organization engaged in money laundering, and then Goldman Sachs
| bankrolled a lawsuit arguing that the organization is allowed to
| engage in money laundering due to some quirk of the
| organizational structure, everyone would understand what's going
| on and nobody outside of the finance industry would be on the
| pro-lawsuit side.
| dannyw wrote:
| The sanctioned entity here is a piece of code that uses zk-
| SNARK cryptography, in a permissionless and immutable way.
| There are no admin keys, there is no ownership, it is code.
|
| It's not an organization. This is more like the FBI banning GPG
| because terrorists use it.
|
| FTA:
|
| > They contend that the Treasury Department lacks the authority
| to restrict access to a software program.
|
| This is the point. No one would have batted an eye if OFAC
| sanctioned addresses that used TC to launder money. Nobody
| would have batted an eye if the FBI prosecuted criminals for
| using GPG to plot a crime.
|
| But what happened here is akin to the FBI, using powers that it
| hasn't been granted in law, to ban GPG.
| verdverm wrote:
| They sanctioned wallet addresses which are not the same as
| the code
| intrasight wrote:
| Code has been, can be, and will be sanctioned. Will they be
| successful is a different question.
|
| The SEC is well-funded, has a strongly supported mandate, and
| has a long arm. They are playing a long war of attrition.
| dannyw wrote:
| the SEC isnt involved here .
| intrasight wrote:
| Of course they are ;)
| x86x87 wrote:
| Hahaha... you cannot make this thing up:
|
| https://en.wikipedia.org/wiki/Pretty_Good_Privacy#Criminal_i.
| ..
| SpicyLemonZest wrote:
| Tornado Cash is obviously an organization. This was clear
| from their website before it was taken down, and you can
| still see from their Medium blog history (https://tornado-
| cash.medium.com/) that they consider themselves to be a "we"
| who can take reports, make governance proposals, etc. The
| people who've told you otherwise are playing shell games (and
| sometimes outright lying) to advance their financial
| interests.
| colinsane wrote:
| cryptocurrency is a challenge to the state. Bitcoin's first block
| quotes a news headline "Chancellor on brink of second bailout for
| banks" in order to establish the chain's age. that message isn't
| a mistake: Bitcoin emerged to challenge the state's control over
| the monetary system.
|
| 13 years later we're all caught up in surface-level details like
| "is this cryptocurrency thing a security" and "is this
| cryptocurrency mixer money laundering" meanwhile the basic
| premise/existence of cryptocurrency has been accepted de-facto.
|
| surface-level regulations just kick the can down the road.
| beneath that surface is still a massive challenge to the state,
| only more diffuse, and that interior shapes the surface much more
| than the other way around. governments need to make up their
| mind: are they OK with yielding control over the money system, or
| not?
|
| right now the answer looks like "yes, but we're going to drag the
| process out", which is sort of the worst thing for everyone.
| drawn-out wars hurt everyone. US ought to either ban
| cryptocurrency (private currencies) altogether, or step aside and
| let it happen.
| NelsonMinar wrote:
| Mixers never fail to astonish me. They are explicitly a product
| to facilitate money laundering. They are marketed as a way to
| wash illicit funds. And then the folks who run them get mad when
| law enforcement tries to shut them down?
| georgyo wrote:
| I think it is more crazy that that are so openly breaking the
| law.
|
| The same is true with all the loto and gambling crypto sites.
| They run without any oversight and are blatantly breaking the
| law.
| x86x87 wrote:
| which law are they breaking? in which jurisdiction?
| JumpCrisscross wrote:
| > _which law are they breaking? in which jurisdiction?_
|
| North Korean sanctions [1]. As well as virtually every
| jurisdiction's AML laws. (Specifically, American and
| Dutch.)
|
| [1] https://en.m.wikipedia.org/wiki/Sanctions_against_North
| _Kore...
| zionic wrote:
| >They are explicitly a product to facilitate money laundering
|
| How is HN so _consistently_ cryptophobic?
|
| Imagine the reaction you'd get here suggesting say, E2EE is
| "explicitly a product for {crime}". You'd be rightly mocked,
| but throw in crypto and it's like 75% of the people here lose
| basic reasoning skills. I'd be less frustrated if it wasn't so
| common.
| qeternity wrote:
| No, it's like saying E2EE encryption is designed to secure
| private communications between two parties, which is what
| it's designed to do.
|
| Mixers are designed to facilitate money laundering. You can
| claim it's for legitimate privacy, etc but it doesn't change
| the fact that it's money laundering.
| zionic wrote:
| Money laundering means concealing dirty cash, clean money
| doesn't need to be laundered by definition.
|
| A mixer concealing the public address of clean money is not
| nefarious in any way and should be perfectly legal.
| Infinitesimus wrote:
| I have no horse in this race and pardon my nitpicking but
| those two phrases are not equivalent.
|
| For E2EE,you describe the base level capability: Secure
| message between two parties.
|
| For Mixers, you describe an act that the capability of
| making money hard to trace enables: Money laundering. If
| you applied a similar argument to E2EE (as many have and
| will keep doing), encrypted communications are a way for
| people to do illegal things away from the eyes of the law.
| Trade illegal items, send banned/illegal/questionable
| content, etc.
|
| From a pure capability standpoint, mixers, like E2EE, are a
| way to secure XYZ activity (Which happens to be money
| transfer) from prying eyes.
| chrischattin wrote:
| Cash is a private form of transaction. You aren't
| inherently money laundering when you use cash.
| Consultant32452 wrote:
| Who do you believe launders more money: all crypto mixers
| combined or the US intelligence community?
| null0pointer wrote:
| Has anyone done research on whether more financial crime
| happens in crypto or traditional finance? I'd be interested
| to see the result, adjusted for market cap or daily
| transaction volume or whatever makes the most sense.
| cdiddy2 wrote:
| They are explicitly a product for user privacy. Given that the
| depositor can prove the source of funds put into tornado cash
| via a zk-proof there is no reason that this should be shut
| down.
| ASalazarMX wrote:
| > They are explicitly a product for user privacy
|
| That's the facade. In my experience, Bitcoin is still the
| main ecoin demanded in phishing/ransomware incidents, even
| when more privacy-friendly ecoins exist. A tumbler's purpose
| is distorting Bitcoin's public blockchain (one of its core
| tenets), and that's very attractive to criminals.
| cdiddy2 wrote:
| Of course its attractive to criminals. Same reason they
| love cash. Doesn't mean that we should ban cash
| JumpCrisscross wrote:
| > _Doesn 't mean that we should ban cash_
|
| Mixers aren't banned. A mixer that was used to launder
| money by North Korea was.
| Laaas wrote:
| All decentralised (non-custodial) mixers could be used by
| North Korea. Should they all be banned?
| cdiddy2 wrote:
| And yet US banks aren't banned
| https://www.nbcnews.com/news/world/secret-documents-show-
| how...
| JumpCrisscross wrote:
| > _yet US banks aren 't banned_
|
| Banks which collect KYC and respond to criminal probes.
| Those that don't absolutely get sanctioned.
| wcfields wrote:
| > ban cash
|
| Well, it's not banned, but over $10k USD in cash you need
| to fill out an IRS form 8300 [1] precisely to curb
| criminal use of cash. (Although I'd argue it should be
| upped and pegged to inflation as 10k isn't what 10k used
| to be.)
|
| [1] https://www.irs.gov/businesses/small-businesses-self-
| employe...
| notch656a wrote:
| Wouldn't filing a form 8300 be unconstitutional violation
| of the 5th amendment if the cash is an element of the
| crime of both parties? As an example, felons can't be
| charged with NFA violations for owning a short barrel
| rifle for example because registering their firearm would
| be self-incrimination. I believe Timothy Leary also got
| out of being charged with Marijuana reporting [tax]
| requirement because filing for the tax would self-
| incriminate his possession.
|
| Edit: See
| https://en.wikipedia.org/wiki/Haynes_v._United_States for
| NFA. Thanks below for Leary.
| ccooffee wrote:
| I have NEVER heard of any of this. Can you provide any
| sources?
|
| I think the 5th has been restricted enough by the courts
| that it literally only matters if you EXPLICITLY invoke
| it. (At least this is my understanding of Berghuis v.
| Thompkins.)
| vageli wrote:
| Leary v United States
| https://supreme.justia.com/cases/federal/us/395/6/
| giantg2 wrote:
| Criminals are still required to pay taxes, they just
| aren't required to list its source (misc entry on income
| form). Leary's case was won on the basis that the
| registering provision violated the right to not self-
| incriminate (and that you couldn't pay _that_ tax without
| registering).
|
| Similar for the NFA case - they can't get then for the
| failure to register, but they can still get them for
| manufacturing/possessing it (especially since it was
| amended after the ruling).
| notch656a wrote:
| >they can't get then for the failure to register
|
| A criminal filing an 8300 would be effectively
| "registering" their illegally owned money, including the
| source from who the money is received.
| giantg2 wrote:
| Please read prior comment
|
| "and that you couldn't pay _that_ tax without registering
| "
| seibelj wrote:
| VPNs are "data mixers" - by combining all your traffic with
| others, it becomes harder to determine who sent which packets.
|
| Honestly, why can't we just have the government know every
| single website we visit immediately? We all have nothing to
| hide
| saghm wrote:
| "Data laundering" is not against the law though; money
| laundering is
| abigail95 wrote:
| Yes, _money laundering_ is illegal because money laundering
| is defined by the criminal code.
|
| Obscuring the source of a transaction is not always money
| laundering.
|
| My credit card would suck if everyone I did business with
| knew about all my present and future transactions too.
| JumpCrisscross wrote:
| > _VPNs are "data mixers" - by combining all your traffic
| with others_
|
| If a VPN is used to help North Korea, and the developers
| won't or can't shut it down, yes, it will be sanctioned. More
| broadly, speech is generally protected under U.S. law in a
| way financial transactions are not.
| yieldcrv wrote:
| People aren't surprised that they're trying to shut them down,
| the concept gets more and more resilient with
| every.single.enforcement.action and so the enforcement actions
| have to follow the law, that's what we're talking about here,
| in court.
| max_ wrote:
| The internet never fails to astonish me. Its explicitly a
| product to facilitate child porn.
|
| It should be shut down.
| jbverschoor wrote:
| Would you like it if you pay for a burger somewhere and this
| person can see EVERYTHING you've ever did financially?
|
| Or if your employer pays you, and decides to kick you out
| because he doesn't agree with some transactions you made?
| efdee wrote:
| Then maybe don't pay using a payment system that was designed
| in a way that makes this one of its most prominent features?
| throw101010 wrote:
| The system they are trying to ban solves this.
|
| It is always the same charade in which a government tells
| you that by banning x they will solve y. Or that by
| removing any form of privacy to everyone (but themselves)
| they will solve y.
|
| In the end they never solve it, even worse the people in
| charge of the surveillance (banks in this instance for
| money laundering) are repeatedly caught actively taking
| part in the laundering and they occasionally get punished
| by "fines" that are rarely enough to discourage them from
| continuing.
|
| So people want to take their privacy back now and tear down
| means ridiculous theatricals we call AML/KYC/KYB
| procedures. Obviously governments aren't happy, they are
| welcome to try to stop us.
| helen___keller wrote:
| I kind of agree that Treasury should not have exactly this power
| to ban Tornado protocol. However, I believe Treasury certainly
| has the power to ban all transactions with networks hosting money
| laundering protocols.
|
| It would certainly be worse for crypto if it were illegal to buy
| sell ETH and friends because their networks host Tornado
| protocol. I see this attempt to moderate the network itself as
| "going easy" on crypto investors.
|
| The crux of the issue comes down to moderation. In a sufficiently
| large and complex network, moderation becomes a necessity not an
| option. This won't be the last case.
|
| Regulators generally strike when sufficiently popular technology
| makes it sufficiently easy to perform sufficiently damaging
| illegal activity.
| dcolkitt wrote:
| The reality is Treasury does not have the political capital to
| outlaw Ethereum. It's a $200 billion asset that one in ten
| Americans and many of the largest pensions, hedge funds, and
| Biden's largest donors are invested in.
| helen___keller wrote:
| Yes. That's why they would rather try and moderate crypto
| networks rather than ban.
|
| If they don't succeed, I'd expect more heavy handed attempts
| by other branches of government.
|
| I don't think the government will ever give up, in large part
| because I think there is political capital and mandate to
| regulate crypto (just not ban it). If crypto crashes even
| further, a full ban might be possible some day.
| dannyw wrote:
| Moderation is generally not required under US law.
|
| For example, Section 230 of the Communications Decency Act
| provide safe harbor provisions: 'No provider or user of an
| interactive computer service shall be treated as the publisher
| or speaker of any information provided by another information
| content provider'.
|
| It doesn't matter if I run a site with 10 users or 100 million
| users: the law's provisions and protections are the same.
|
| You are right that regulators generally strike when there is a
| critical mass. However, my 2c is that this is not backed by
| statue, and US Treasury does not have the right to sanction
| software code. They can certainly sanction users who use TC for
| money laundering, but code itself?
|
| That's like sanctioning PGP or end-to-end encryption...
| helen___keller wrote:
| Sorry to be clear, I'm not claiming moderation is legally
| required, I'm claiming it effectively becomes necessary for a
| network to avoid stepping on landmines.
|
| For example, it's impossible to run a social network website
| of 100 million users without users uploading illegal content.
| Moderation is a necessity to avoid being taken down by the
| feds for hosting illegal content.
|
| I agree that treasury doesn't have the right to sanction
| code. They do have the right to ban exchanges from exchanging
| ETH. However, nobody wants that, so they'd rather try and
| extend their powers to effectively become ETH moderators.
| Animats wrote:
| Does TornadoCash still need people to run it? Or is it just
| contracts in the Etherium blockchain?
| verdverm wrote:
| It is autonomous but relies on people to create liquidity
| HereIGoAgain wrote:
| More power to them. The idea that you shouldn't be able to use
| something because it CAN be used for crimes is repugnant and
| dangerous to a free and open democratic society. Plus this is all
| pretty much settled law is it not?
| bruiseralmighty wrote:
| Hasn't precedent already been set for privacy protocols? I know
| the government tried to stop encryption by listing it as a
| munition, but they eventually lost that fight on first amendment
| grounds. It is hard to argue that code is not a kind of speech or
| expression and thus it gets some of the highest legal protection
| possible under U.S. law.
|
| Tornado Cash is just a coin mixer implemented through smart
| contracts yes? The 'coins' themselves already enjoy some first
| amendment protection by being built on top of the protected
| encryption protocols. The smart contract itself is just another
| communication protocol defined in code. So it seems patently
| obvious that TC is allowed to exist under U.S. law.
|
| The only remaining question is whether anyone can be allowed to
| use it. We actually have to get deep into first amendment
| jurisprudence to answer that question. Generally speaking all
| speech is permitted but, when it is paired with conduct, the
| conduct can be regulated by time, place, and manner. This at
| first appears a simple distinction for us. Users of TC or any
| e-coin standard are _conducting_ transactions. But this is
| thorny.
|
| Commerce used to be conducted entirely physically with an
| exchange of cash. Then it was done with an exchange of electronic
| funds on a banks balance sheet; essentially a change on two
| different excel spreadsheets. But the btc-protocol and its
| derivatives don't function like this. They use a ledger. When we
| transact in e-coins we don't exchange anything. No digital coins
| fly from my computer to yours or vice versa. Rather all that
| happens is a message is sent to a public server which contains
| enough information to allow that server to determine that we both
| agreed to send that specific message. The server then updates the
| ledger and publishes this change to other servers hosting the
| ledger so there is agreement that we exchanged value.
|
| It's not actually 100% clear that when communicating this way we
| have conducted anything. Sending encrypted messages like this has
| been determined to be first amendment protected activity as pure
| speech. Indeed we wouldn't have an internet today if it weren't.
| Having a message be encrypted inherently provides privacy and
| precludes restrictions on a message's content. Even when that
| message's content includes information to exchange value.
| Citizen's United also has some precedent over whether speech +
| conduct regarding money transactions are permitted speech when
| that speech is political in nature.
|
| This leaves us only with the few recognized non-speech categories
| with which to regulate pure speech:
|
| > lewd, obscene, or pornographic content; defamatory content;
| insulting or "fighting words"; expressive content that tends to
| inflict injury; speech that incites an immediate illegal conduct
| such as riot or violence; speech that poses an imminent threat to
| public safety or national security; false or misleading
| commercial advertising; and perjury.
|
| There are a few categories here that may help us. Inciting
| immediate illegal conduct and imminent threat to public or
| national security. To qualify as incitement to illegal or a
| threat to public safety the speech has to pass the 'clear and
| present danger' test. This test has two parts:
|
| * first, the speech must impose a threat that a substantive evil
| might follow
|
| * second, the threat is a real, imminent threat.
|
| This test is extremely hard to meet and just because the TC
| protocol is may be or even if it is likely to be used for money
| laundering it will likely never rise to the threshold of this
| test in a U.S. court. Cases where speech does meet this threat
| are specific threats or instructions. If TC included specific
| instructions on how to evade law enforcement then that may
| qualify.
|
| This leaves only threats to national security as a legal basis.
| We have to begin by saying that many of the use of national
| security as a means to restrict the rights of Americans has an
| extremely checkered past. These were the arguments that bullied
| journalists under the red scare, interned the Japanese in WWII,
| attempted to stifle the pentagon papers after the Vietnam War,
| maintained the patriot act of 2001, lead to secret courts with
| secret evidence, torture, suspension of habeas corpus, etc.
| However, the standards for what constitutes a threat to national
| security have been much degraded in the past two decades. You
| could probably convince a judge or even SCOTUS that the use of TC
| by foreign hostile powers like North Korea and its potential to
| be used as a tool of terrorism from the likes of Iran and ISIS
| constitute a threat to national security. But arguing this not
| only degrades your moral character, it is also unlikely to be
| effective in the long term. We did reinstate habeas corpus, we
| un-interned the Japanese, and we did publish the Pentagon papers.
| Hopefully we will also get rid of the Patriot Act in the coming
| decades. And even if TC was determined to be a threat to national
| security, that determination would likely one day be reversed as
| an understanding of the technology and its necessity aged into
| the judicial system.
| gerikson wrote:
| Does anyone have a link to the suit itself ?
| haasted wrote:
| I believe it's this :
| https://storage.courtlistener.com/recap/gov.uscourts.txwd.11...
|
| Courtesy of https://web3isgoinggreat.com/?id=coinbase-funds-
| lawsuit-agai...
| gerikson wrote:
| Thank you!
| mzs wrote:
| The complaint is linked here _, you can make a free trial
| account:https://www.law360.com/articles/1528566/attachments/0
|
| _ https://www.law360.com/articles/1528566/coinbase-backs-
| suit-...
| tmpz22 wrote:
| Can anyone defending Tornado Cash provide a concrete example of
| mixing crypto revenues in a way that is not clearly illegal? I've
| scrolled this whole thread, and there are a lot of people
| defending it, but none of them provided a full e2e example of
|
| "I sell x to y, y can only use crypto, y will be persecuted if I
| don't obscure my transactions from z, so therefore this is a good
| thing"
|
| Yes we can all do the hypothetical "dissident in
| AUTHORITARIAN_COUNTRY needs to buy x and will totally be
| persecuted otherwise" but I want an actual production example not
| a moral whataboutism.
| yieldcrv wrote:
| Oh this NYTimes article doesn't go into detail but Coinbase's
| blog entry about them spearheading the lawsuit does have
| specific use cases, and the associated court filing has even
| more use cases, that are not theoretical at all.
|
| They all do it for privacy. Someone with a publicly labelled
| address doesn't want people watching them to know they're
| making a large purchase, so funds go in through tornado cash,
| and out to a new address nobody is looking at.
|
| If you are not aware, Tornado Cash already comes with tools to
| solve investigative zeal, anyone audited can prove the prior
| source of funds with Tornado Cash, at which point the
| investigator can tell if they were clean or not, as opposed to
| just assuming because they aren't familiar with "a concrete
| example of mixing crypto revenues in a way that is not clearly
| illegal"
|
| https://storage.courtlistener.com/recap/gov.uscourts.txwd.11...
| nevi-me wrote:
| I get paid in crypto. My colleagues don't know how much I earn.
| If any of them discovered the address I'm paid into, they'd
| know my salary by looking up my address.
|
| I see the need for privacy in this instance.
| [deleted]
| lawn wrote:
| Do you know that crypto is normally completely traceable?
|
| So if I for instance withdraw 100 million from an exchange, in
| a completely legal manner, and then visit a store or webshop to
| buy something with the same funds, then the store now knows
| that I have 100 million dollars?
|
| Mixing can be used for self protection.
| mrsteveman1 wrote:
| > So if I for instance withdraw 100 million from an exchange,
| in a completely legal manner, and then visit a store or
| webshop to buy something with the same funds, then the store
| now knows that I have 100 million dollars?
|
| The more common this example of legitimate use becomes, the
| less useful it is, defeating the purpose.
|
| If it becomes common for crypto known to have come from
| Tornado to be there because the person is concealing
| ownership of a large amount of crypto, the store can infer
| the same thing the previously could see on-chain: this person
| probably has a large amount of crypto. And then all the same
| risks apply, albeit with a minor unknown as to the amount.
|
| But since we're basically talking about a "rubber hose"
| attack here it doesn't really matter if they can directly see
| it on-chain, they're still going to assume it and likely do
| the same thing.
| bornfreddy wrote:
| From the article:
|
| > One plaintiff in the lawsuit is a crypto investor who used
| Tornado Cash to send funds to support the Ukrainian war effort,
| hoping to preserve his anonymity and avoid retaliation from the
| Russian government.
| aeturnum wrote:
| Though I personally support breaking Russian law in this case
| - I also think this is almost certainly in the "clearly
| illegal" category for Russian law.
| null0pointer wrote:
| Although I agree that this is a morally good usage of TC, I
| think that given the intent of using TC is to avoid
| retaliation from the Russian government it would probably be
| considered illegal in the users jurisdiction.
|
| A better example might be to pay for a legal service without
| revealing your entire wallet balance to that service.
| bpodgursky wrote:
| The Russian government sent FSB agents to kill dissidents
| in the UK.
|
| They kill people wherever they want to kill people, and
| it's entirely reasonable to be afraid even if you don't
| live in Russia.
| tmpz22 wrote:
| Ok so a user who already has crypto and doesn't want to
| convert it first (fees) may be encouraged to mix it (privacy)
| and that is a legitimate usecase. That makes sense to me,
| though it seems like a very rare event that should not be the
| sole basis for the underlying platform.
|
| Also I should've read the full article first.
| yieldcrv wrote:
| > though it seems like a very rare event that should not be
| the sole basis for the underlying platform.
|
| not rare, 12,000+ unique users on just the ethereum network
| alone
|
| only a handful would be from large scale hacks, a bigger
| handful from phishing
|
| even the treasury's estimates were that less than 20% of
| use was illicit, it is a totally new standard to vilify it
| based on whatever it is vilified for
|
| https://dune.com/poma/tornado-cash_1
| bornfreddy wrote:
| Not sure how rare it is. There is lots of people who got
| crypto-rich. It is easier to donate money that came
| easily...
|
| I would assume making a nontrivial donation in fiat
| _privately_ is also very difficult.
| yieldcrv wrote:
| This is the least spineless thing Brian Armstrong has ever
| publicly done
|
| And I think we should commend him for that
|
| since there really are consequences for his relationship with the
| government and Coinbase's relationship with the government
| siilats wrote:
| Look treasury can ban Bitcoin addresses and then make tumbler not
| accept incoming money from certain addresses. But if they haven't
| done it they cannot go retroactively say tornado cash laundered
| North Korean money. If the address was obviously North Korean
| treasury should have banned it.
| roleplayer wrote:
| Missing from this conversation is the fact that TC was
| specifically designed to be able to prove your input/output if
| law enforcement requests it.
| capableweb wrote:
| I used Tornado Cash (non-US citizen here) for hiding
| transactions from the public (not hiding from the government),
| and when I filed my taxes, I still accounted for everything
| that is stored there + transacted via Tornado Cash, just like I
| do for my bank account. Appendix contained instructions for how
| they could access the proof of my transactions and accounts to
| verify themselves.
| zeusk wrote:
| > I used Tornado Cash (non-US citizen here) for hiding
| transactions from the public (not hiding from the government)
|
| And how exactly does your bank account publish your
| transactions to the public?
| capableweb wrote:
| I think you misunderstand. Transactions happening on most
| blockchains are public, meaning if I send a transaction on
| the network, if others know my address, they know it was my
| transaction.
|
| Tornado Cash allows you to sever the tie between addresses
| on the Ethereum blockchain, so I don't have to have my
| transactions public, all while still being able to legally
| declare my taxes as if I didn't use Tornado Cash at all.
| dannyw wrote:
| Also, TC took zero fees, had immutable smart contracts with no
| privileged roles or admin keys, etc, is open source.
|
| It is code.
| turdnagel wrote:
| This is definitely a pandora's box type issue. I believe it is
| different from the "code is speech" series of arguments around
| PGP because a deployed smart contract is not merely source code /
| compiled bytecode, but also a wallet containing funds. Of course,
| you still need the Ethereum "world computer" to make it run, and
| Tornado Cash is not very helpful without a significant amount of
| liquidity to sufficiently provide cover for people who want to
| obfuscate the source of their funds. These issues are likely to
| arise in court and I don't believe the conclusions will all be
| favorable to crypto supporters because I don't think the
| situation is as clear cut.
| dcolkitt wrote:
| When a smart contract is deployed, literally all that happens
| is that the code is broadcast to the network. It is true that
| the contract itself has a wallet and runs operations, but it
| operates autonomously outside the control of the person who
| deployed the contract.
|
| If a smart contract does something illegal, the person who
| deployed it has no more responsibility than if someone does
| something illegal with encryption software downloaded from
| Github. The only responsible part you could really argue for is
| the Ethereum node operators, since they're the ones actually
| carrying out the illegal computation. But is the government
| really going to outlaw the Ethereum network?
| Jasper_ wrote:
| Here's a thing: when technology is designed in a way that
| makes it hard to work within the bounds of the legal system,
| it's usually the case that the legal system wins, not the
| technology. The view of the legal system is focused around
| people and their intentions, regardless of how much you try
| and confuse things with technology.
|
| They will most likely view the smart contract and its wallet
| as one entity, despite that being technically not how it
| works technologically. Because as many people have tried and
| failed to figure out over the years, laws are interpreted by
| juries and judges, not computers. Technological roadblocks
| are things they don't have any problems jumping over, and
| deliberately trying to add roadblocks like that with the
| imagination they're untouchable also tends to piss them off
| even more.
| dcolkitt wrote:
| > when technology is designed in a way that makes it hard
| to work within the bounds of the legal system, it's usually
| the case that the legal system wins, not the technology.
|
| If this was true, Internet pornography would have been
| successfully squashed by the existing obscenity laws that
| heavily regulated pornographic material.
| Jasper_ wrote:
| It was, though? And continues to be. In the mid-90s, you
| could pretty easily find illegal material without looking
| too hard. It was already illegal by the Child Protection
| and Obscenity Enforcement Act, an early Internet bill
| which mostly said "illegal porn is still illegal, even if
| it's on a computer", and it also required producers of
| pornography to keep detailed records on talent & crew in
| the production. By the mid 2000s, large sweeps of
| enforcement happened, and thousands of studios without
| proper documentation and recordskeeping shutting down.
| The CIPA act required schools, libraries and public
| places where children could be to install internet
| filters, and make policies preventing children from
| viewing such material.
|
| Pornography isn't illegal in the US, it's pretty well-
| regulated, and once the Internet started entering
| mainstream culture, it quickly adapted to the existing
| legal framework and culture that was already there.
|
| This is, of course, a very US-centric view, but so is a
| lot of early Internet history, along with its culture.
| dcolkitt wrote:
| > Pornography isn't illegal in the US
|
| I'm sorry, but this isn't true. At the early onset of the
| web there were a huge number of state and local laws
| regulating obscene material. Many states even tried to
| explicitly regulate Internet pornography:
|
| > Between 1995 and 2002, almost half of the states were
| considering bills to control internet pornography, and
| more than a quarter of states enacted such laws.[1]
|
| Along similar lines, sex toys were prohibited or heavily
| regulated in a number of US states before 2000. The
| technological reality of e-commerce means that the vast
| majority of the enforcement of those laws became
| impossible, and sex toys are de facto legal in every
| jurisdiction in America.
|
| [1]https://en.wikipedia.org/wiki/United_States_obscenity_
| law
| vorpalhex wrote:
| > If a smart contract does something illegal, the person who
| deployed it has no more responsibility than if someone does
| something illegal with encryption software downloaded from
| Github.
|
| If I rig up my car to explode when someone walks by whistling
| the right tune, am I without responsibility? I didn't blow up
| the car.. the car blew itself up.
|
| Obviously I'm at fault. There is no debate here. Any
| automation you create is acting on your behalf - and you are
| liable for it. If I hire a hitman.. I am guilty of murder.
|
| AI or software isn't some clever loophole here. If you deploy
| an autonomous money laundering system.. you are doing money
| laundering.
| dcolkitt wrote:
| > If I rig up my car to explode
|
| Mechanical devices are not protected as speech.
|
| > If I hire a hitman.. I am guilty of murder.
|
| SCOTUS has already carefully defined this in the
| _Brandenburg test_. Speech is only not protected when it
| results in direct, imminent lawless action. And SCOTUS has
| consistently ruled that the boundary for the test is
| extremely concrete. (Contrary to popular opinion yelling
| fire in a crowded theatre is actually protected by
| Brandenburg under the First Amendment.)
|
| Sending a text message to a hitman telling him to "wack
| Tony at midnight" fails the Brandenburg test because it
| leads to imminent lawless action. But you can literally
| publicly advocate for an ideology to overthrow the United
| States government and murder millions of people, and that's
| Constitutionally protected because there's no imminent
| lawless action.
|
| Writing and publishing open source software is
| Constitutionally protected, because the simple act of
| publishing software does not lead to imminent lawless
| action. Even if it's reasonable to assume that the software
| will likely be adopted for illegal purposes. Again this
| isn't hypothetical, SCOTUS has consistently ruled that the
| government cannot restrict the ability to publish
| instructions on how to make pipe bombs or 3D printed guns.
| esotericimpl wrote:
| The person you're responding to wasn't making a "free
| speech argument". And I don't see how this is in way way
| a free speech issue.
|
| He's saying just because you set up an ATM in the middle
| of a city and say, and then say feel free to wash your
| illegal cash here to do some money laundering.
|
| The act of it being on blockchain and "decentralized"
| wont make a difference, anyone offering said "launder
| ATM" could be convicted of a crime.
| dcolkitt wrote:
| An ATM machine is not protected as speech. Courts have
| consistently ruled that software _is_ protected speech.
| So, yes blockchains do make a substantial difference
| because they divorce the act of writing software
| (protected by the 1st Amendment) from the act of
| operating the business around that software.
|
| SCOTUS has consistently required an extremely high bar to
| regulating speech, so it's simply not enough to say "well
| we regulate this other non-speech thing, what's the
| difference".
| vorpalhex wrote:
| An ATM isn't a dog either.
|
| Executing code isn't free speech. The code may be. The
| execution not so much.
| AntonyGarand wrote:
| https://archive.ph/ZIWNt
| letsgo39 wrote:
| I just want to say, I find it very Orwellian that HN shuts down
| immediately any conversation about theft of IP through these
| 'archive.ph' links, and even removes the 'reply' button to ensure
| so.
|
| Just watch how quickly this comment will disappear or get
| downvoted.
| dang wrote:
| (FWIW, users flagged your comment.)
|
| Could you please stop creating accounts for every few comments
| you post? We ban accounts that do that. This is in the site
| guidelines: https://news.ycombinator.com/newsguidelines.html.
|
| You needn't use your real name, of course, but for HN to be a
| community, users need some identity for other users to relate
| to. Otherwise we may as well have no usernames and no
| community, and that would be a different kind of forum.
| https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme...
| 2OEH8eoCRo0 wrote:
| Have your cake and eat it too. Files lawsuit to continue breaking
| the law.
|
| I suppose the lawsuit is a good thing. The government will have
| to defend their decision in court which will strengthen their
| position regardless.
| wollsmoth wrote:
| I think my crypto info is behind the times.
|
| Can someone explain to me why people don't just exchange crypto
| for monero and then back if they want to "wash" it?
| colinsane wrote:
| the Ethereum client ecosystem is one of the most robust. yeah,
| one can go eth -> zcash/monero back to eth, but that's like a
| day-long process once you factor in blockchain syncing and
| blocktime/transaction settlement. TC is/was 5 minutes to enter
| and 5 minutes to exit.
| chizhik-pyzhik wrote:
| Tornado is nice because you can stay entirely within the
| Ethereum blockchain- no need to involve a centralized entity
| like an exchange to facilitate this.
|
| It's also arguably more private than monero. Tornado uses zk
| math instead of coinjoin; tornado also sticks to only a few
| values (1 eth, 10 eth, 100 eth...) which minimizes traceability
| from wrote:
| Changenow and Morphtoken have very high slippage when you get
| in the millions of dollars also these are (temporarily)
| custodial exchanges who could basically take your money and say
| GFY. Coins from these exchanges are tainted anyways so it
| doesn't really make a difference from a laundering perspective
| along with the fact that the fees are higher.
| martinko wrote:
| Generally you need to use a custodial exchange to do this,
| which creates a point of failure/censorship. Doing this onchain
| / trustlessly on protocols such as thor have significant
| liquidity limits afaik.
| wollsmoth wrote:
| I thought you could use something like uniswap which should
| avoid that I think? Haven't tried myself.
| LatteLazy wrote:
| This is effectively a test case for banning Monero etc. This is
| similar because it's just a tumbler, not a currency etc with a
| Tumbler built in.
| wollsmoth wrote:
| Well idk how one would go about banning Monero. You can ban
| it from exchanges that connect with the banking system but
| via decentralized exchanges it's still possible to convert.
| LatteLazy wrote:
| I think the same applies to Tornado? I am not sure and
| would be happy to be corrected.
|
| As far as I can tell, being sanctioned like this makes it
| illegal for US companies and people to do business with
| you. So I think in either case it would be users who were
| prosecuted?
|
| Enforcement is always the even messier bit of these broad
| and badly defined laws...
___________________________________________________________________
(page generated 2022-09-12 23:01 UTC)