In there is an interesting paragraph explaining what Tornado Cash is:
… The (criminal) origin of the cryptocurrencies is often not or hardly checked by such mixing services. Users of a mixing service mostly do this to increase their anonymity.
Note how they sneaked "criminal" in there. There are of course legitimate reasons to desire anonymity for financial transactions! It's one of the reasons people like to pay cash.
Satoshi Nakamoto is wise to remain anonymous.
The problem is it doesn't make sense to treat protocols like companies. And it definitely doesn't make sense to treat protocol devs as if they were the executives of those companies. The CEO of a bank and the lead dev of a protocol have very very different powers and responsibilities, and we can't just throw our hands up in the air and say "the law's the law, and you gotta follow it" (even when it's literally impossible given the decentralized and autonomous nature of the protocol).
Analogously when joint-stock corporations first entered the scene it required the development of whole new branches of Western law. That law had to be tailored to reflect the realities and nature of joint-stock corporations. What would have been very dumb is simply to pretend like nothing changed and say "same rules apply" and make individual shareholders liable for the action of the corporate entity the same way we're trying to make software devs liable for the action of the decentralized protocol.
Money laundering, monetary privacy, wealth obfuscation is perfectly fine. It only becomes an issue when it becomes accessible to us simple minded folks too. The urgency to stop this tech really tells the tale.
Or in other words, laundering "doesn't scale".
> The US sanctioning Tornado Cash and the resulting repercussions is deeply concerning. Whether or not you like crypto, you should not be supporting this if you are a researcher, academic, technologist, cryptographer, or privacy advocate. The code for Tornado Cash is a series of cryptographic and mathematical functions that can be repurposed for a variety of applications unrelated to privatizing user wallets. The protocol itself is designed for one reason: to give users privacy through end to end and zero knowledge cryptography.
> Allowing it to remain open source and accessible as a tool for blockchain privacy and codebase for cryptographic research is a net benefit for the entire world.
> A comparison would be that US decides to sanction the open Matrix protocol along with any user, developer, source host, or sponsor that has ever contributed to it in the past - because it can facilitate end-to-end encrypted terrorist communication.
The bullseye has been painted. And now those who have reaped the benefits of fame will come to know why Satoshi concluded that it was a trap to be avoided. The legal pressure that will be brought to bear on the Ethereum foundation to enact various changes will be enormous and never-ending.
It doesn't matter whether or not this case flies. That will take many years to sort out. In the meantime, rational actors will do the rational thing. Everyone else will receive summons and indictments.
I'm sure the judge will be thrilled to have to listen to arguments about the with the nuances of dev, ops, devops and a distributed platform such as that which executes Ethereum's smart contracts.
Even if this developer is not extradited, the US has again succeeded in maintaining the culture of fear, where they can get their slimy hands on anyone anywhere for any reason they want.
Can anyone explain the difference here? Or why anyone is "shocked" that this is happening cause it's crypto?
Just seems kinda childish to think crypto's somehow special and not just a tool for moving money around. Do people really think cause it's on the block chain it can evade every law in the world? And cause it's open source nobody's going to pay any attention?
Private keys can be represented in text. Like this: KwTHJw865SLeTAjK7otYb5bL5mwutBb2vDxxF7kGf5XvY7QttnvM
Encrypted messaging apps like Matrix or Signal, can be used to send strings with private keys, anonymously.
It's very difficult to hold a position that financial privacy tools are bad, but encrypted messaging apps are good; because they are really not that different.
(I can't verify the veracity of this report, but if true, this looks like it was a coordinated international police operation)
1. Designate a businessman as an SDN
2. Wait for them to conduct some transaction that uses dollars or involves any American company in some way (if you know about correspondent banking you know this will almost inevitably happen)
3. Wait for them to travel to country friendly with America
4. Extradite for conspiring to violate IEEPA
This has happened before (see US v. Tajideen). It seems like there should be some kind of legal case against this which may happen now given all of the rich Russians that are having their stuff seized on this basis.
Edit: And the interesting thing is that the Treasury Department accused Tajideen of being a Hezbollah financier which they could have charged him with when he was extradited from Morocco but they didn’t which to me makes it seem like there wasn’t much of a basis for his designation to begin with.
> It is suspected that persons behind this organisation have made large-scale profits from these transactions.
Where is the line here, and who defines it?
The points about DAOs are also interesting. DAOs have no central authority or elected leadership. Setting up a DAO should not be enough to get out of legal responsibilities of running a financial institution, but people voting in DAOs also shouldn't be treated like CEOs because they have very little actual power.
Conviction in this case might have a serious impact on decentralized crypto schemes. DAOs are a great technical workaround for not having a direct kind of leadership but the real world doesn't care about fancy technical solutions. Someone sets up a certain system and that someone has the responsibilities that come with setting up such system. If that service a free website, the responsibilities are extremely limited; if that service is a financial institution, your responsibilities become more serious.
Re: "this is just a dev", the dev also presumably ran the software they created, and with a seventh of the processed volume being criminal funds, it's almost sure that they operated on dirty funds at some point. Even if the developer's role in the (suspected criminal) DAO is considered insignificant, this might make the dev a money mule as he temporarily stored stolen funds in their crypto wallet. According to Dutch law, money mules may be prosecuted as complicit with fraud and any other financial crimes that take place.
One might defend the cryptocurrency operators by claiming that they can't verify the identities of their customers to comply with money laundering regulations, but that only underlines the illegality of the system: if your system isn't capable of complying with the law, you shouldn't operate such a system. It's like claiming you don't need seat belts in your cars because you can't figure out how seat belts work: your lack of control or creativity is not society's problem.
With how overloaded the courts are, it'll take months or even years to see the impact of this arrest. Whatever the outcome, it'll have a big impact.
Alfred Anaya Put Secret Compartments in Cars. So the DEA Put Him in Prison
Ethereum is switching to PoS at the last minute, PoW miners are very easily forced to enforce sanctions because they can't hide due to enormous physical and legal presence. Home stakers can easily hide and break the law.
Are we really moving back in this direction? Let’s just ban math because criminals use cryptography.
"Since Monday 8 August 2022 Tornado Cash has been placed by the US government on the OFAC sanctions list of America."
If only they had used Codeberg, this would not have been an issue at all, as Codeberg is self hosted and a free hosted version is in Germany.
The issue isn't owning or writing viruses or malicious code, the issue is distribution and deployment of such code.
Privacy is not a crime, it’s a human right! Sorry that it makes the polices job harder, but our rights are more important.
And didn’t we go through all this already in the 90s? Are we now gonna start arresting all cryptographers?
This is because they don’t like money that is independent from state control. They hate the idea of bitcoin and eth not being $ or €. The large majority of money laundering happens through banks, who just pay a fine and sweep it under the rug.
Good example again of low profile laws that are abused by government and police forces to get to their objectives.