Arrest of suspected developer of Tornado Cash • Hacker News Board

Re: Arrest of suspected developer of Tornado Cash

#161

Post by clucas » Fri, Aug 12, 2022, 1:18 PM UTC

clippablematt wrote: post #60

Ah yes, arrest developers of open source privacy code and blame them for North Korea money laundering rather than going after the people actually committing crimes. Sounds about right. 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…

If the international law enforcement community is really trying to go after "all cryptographers" why do you think we haven't seen more arrests? Why do you think they only arrested this guy?

I get that you really want to defend crypto, but I think a simpler explanation is that they have good reasons to believe that this guy was doing more than just the stuff you're trying to defend (making privacy code).

It would be like... if two dozen people were picketing outside of a big corporation, and the police came and arrested one dude. You would be the guy saying "they're coming for the protesters!" and I'm the guy saying "Well, if they're really after protesters why didn't they arrest all of them? And isn't that the guy they were investigating for a bank robbery?"

Defending literally every crypto guy is short-sighted if you're a true proponent of the tech. It's possible that there are bad people involved in crypto, and you'll be a lot more credible as an advocate if you acknowledge that possibility and wait for the facts.

Re: Arrest of suspected developer of Tornado Cash

#162

Post by dannyw » Fri, Aug 12, 2022, 1:20 PM UTC

nootropicat wrote: post #142

Governments started the offensive. Now decentralization actually starts to matter. 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.

Decentralization really is starting to matter. It's a wake up call for a lot of developers in this space, that pragmatic shortcuts (e.g. centralized RPCs, centralized stablecoins like USDC) have disadvantages that may no longer outweigh the advantages.

Re: Arrest of suspected developer of Tornado Cash

#163

Post by djbusby » Fri, Aug 12, 2022, 1:20 PM UTC

sidewndr46 wrote: post #140

wolongong942 wrote: post #133

Earlier quoted context omitted.

I doubt you could buy a house anonymously anywhere in the west. Typically all large transactions get auto reported to the financial intelligence unit, with the tax man getting access to the data set as well. If paid via crypto they'd find out when the recipient cashes out, forcing him/her to do source of funds.

At least in the US, house purchases are by default anonymous. The only reason I know the sellers of my house is because they put in their trust name their full legal names. Last time I sold a house, the only reason I met with the buyer directly was because I didn't use an agent for the sale.

If it's anon, how does the government get their property taxes?

Re: Arrest of suspected developer of Tornado Cash

#164

Post by dannyw » Fri, Aug 12, 2022, 1:21 PM UTC

pxeger1 wrote: post #109

If I create a new type of leather wallet and then North Korea uses it for money laundering, can I be charged for "facilitation"? What about if I discovered electricity, which lead to money laundering? Where is the line here, and who defines it?

Or a more pressing question: if you create an encrypted messaging app, and people use it to do illegal stuff, can you be charged for facilitation?

Let's cut to the chase: it's virtually guaranteed that Signal and Matrix are used for sharing child porn.

Re: Arrest of suspected developer of Tornado Cash

#165

Post by JumpCrisscross » Fri, Aug 12, 2022, 1:21 PM UTC

whatisweb3 wrote: post #158

JumpCrisscross wrote: post #153

Earlier quoted context omitted.

> US sanctioning Tornado Cash Zero evidence this is connected to U.S. sanctions. Dutch law protects even cash transactions less than American law. When the investigation started, in June, the U.S. had already released evidence Tornado Cash was used to launder money. If a Dutch person kept working on it, it might be trivial to show they broke Dutch criminal statute.

The first time a developer of open source, non-custodial and autonomous smart contract code has been arrested comes days after the US sanctions the same smart contract. Probably just a coincidence.

> first time a developer of open source, non-custodial and autonomous smart contract code has been arrested comes days after the US sanctions the same smart contract. Probably just a coincidence

Zero chance this is solely on account of U.S. sanctions. It takes time to build an arrest case under domestic law, as well as for sanctions to percolate across legal systems.

There was likely coördination. Maybe the Dutch waited, to bolster their arrest case. Maybe the evidence that Tornado was used to launder money processed under similar time frames at OFAC and the FIOD.

Re: Arrest of suspected developer of Tornado Cash

#166

Post by dannyw » Fri, Aug 12, 2022, 1:21 PM UTC

paulsutter wrote: post #10

There’s a big legal distinction whether the developers are collecting fees from operation of the service, since that’s very different from merely developing open source software. I’m curious how this develops > It is suspected that persons behind this organisation have made large-scale profits from these transactions.

There is no fee paid to the developer when it comes to Tornado Cash, although there is the TORN token, which is a "governance" token.

Re: Arrest of suspected developer of Tornado Cash

#167

Post by alkonaut » Fri, Aug 12, 2022, 1:22 PM UTC

whatisweb3 wrote: post #113

alkonaut wrote: post #93

Earlier quoted context omitted.

> Wow, just wow. Am i alone in thinking this is not going to fly if all he did was write some software that helps with your financial anonymity? There must be more. Perhaps he also deployed it? That would be a different story. Does that really make a difference? I’d not worry about writing anything and putting it online saying “this can be used for evil so don’t do that”. But if I was approached by a criminal who ask…

This is not a criminal hiring a contractor to work on Tornado Cash. It is an open source project on GitHub that many developers and researchers contributed to, in the interest of privacy. To use an analogy, see the open Matrix protocol, a tool for privacy that can facilitate encrypted communication between criminals.

Yeah, in that case unless there are specific laws violated by the code (earlier DMCA violations come to mind) then it should be safe as I said.

But as usual things are only legal until it’s tried.

A machine that prints counterfeit bills might be illegal to make or sell even without ever being used in some jurisdictions while not in others. And whether the machine has other, legal purposes, may or may not matter.

The “dual use” thing is a common argument for most technical things when there is talk of bans and regulation. I think it’s mostly a hollow argument in cases where the primary actual users are criminal users. That some technology can be used for illegal purposes should not be enough to ban it, but nor should whether there exists a legal use for a technology be enough argument that it shouldn’t be outlawed.

Re: Arrest of suspected developer of Tornado Cash

#168

Post by dannyw » Fri, Aug 12, 2022, 1:22 PM UTC

diogenes1 wrote: post #136

diogenes1 wrote: post #131

one of the most shameful moments in digital human rights after the arrest of pgp creator in 1993. Code is speech, it is not a weapon. Banning maths is fascist

even more shameful is the tone of conversation regarding this in internet forums now vs in 1993. How the hell can you be pro arrest of developers

People don't seem to realize that there is little fundamental distinction between a crypto privacy service, and encrypted messaging apps like Signal and matrix.

A bitcoin private key is just "KwTHJw865SLeTAjK7otYb5bL5mwutBb2vDxxF7kGf5XvY7QttnvM" after all.

Re: Arrest of suspected developer of Tornado Cash

#169

Post by raverbashing » Fri, Aug 12, 2022, 1:23 PM UTC

sidewndr46 wrote: post #140

wolongong942 wrote: post #133

Earlier quoted context omitted.

I doubt you could buy a house anonymously anywhere in the west. Typically all large transactions get auto reported to the financial intelligence unit, with the tax man getting access to the data set as well. If paid via crypto they'd find out when the recipient cashes out, forcing him/her to do source of funds.

At least in the US, house purchases are by default anonymous. The only reason I know the sellers of my house is because they put in their trust name their full legal names. Last time I sold a house, the only reason I met with the buyer directly was because I didn't use an agent for the sale.

But you have the seller and buyer's name in the title no?

Re: Arrest of suspected developer of Tornado Cash

#170

Post by diogenes1 » Fri, Aug 12, 2022, 1:23 PM UTC

dannyw wrote: post #162

nootropicat wrote: post #142

Governments started the offensive. Now decentralization actually starts to matter. 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.

Decentralization really is starting to matter. It's a wake up call for a lot of developers in this space, that pragmatic shortcuts (e.g. centralized RPCs, centralized stablecoins like USDC) have disadvantages that may no longer outweigh the advantages.

true. none of smart contract blockchains today are actually a practical tool till lightclients that run on smartphones are mainstream