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Arrest of suspected developer of Tornado Cash

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Re: Arrest of suspected developer of Tornado Cash

#191

Post by JumpCrisscross »

dannyw wrote: post #168
diogenes1 wrote: post #136

Earlier quoted context omitted.

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.

> 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 dollar in a bank account is similarly abstractable. Anyone equating crypto to speech is undermining actual privacy rights.

Re: Arrest of suspected developer of Tornado Cash

#192

Post by peyton »

clucas wrote: post #161
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 l…

One fact is that it’s Dutch law enforcement, not international law enforcement. A second fact is that Dutch law enforcement have stated “multiple arrests are not ruled out,” so we’re not talking about “just one guy” anymore.

Finally, I’m not optimizing for credibility when stating my opinion, nor am I defending a single person. I do not think arresting developers is an effective solution for preventing money laundering. It matters not to me who the “bad people” may be.

Re: Arrest of suspected developer of Tornado Cash

#193

Post by dannyw »

JumpCrisscross wrote: post #191
dannyw wrote: post #168

Earlier quoted context omitted.

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.

> 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 dollar in a bank account is similarly abstractable. Anyone equating crypto to speech is undermining actual privacy rights.

There's a distinction, you can't transfer a dollar in a bank account by sending text messages. You could instruct your bank to transfer; but the actual irreversible _movement_ happens out of band.

You _can_ transfer a cryptocurrency by sending its private key on an encrypted messaging app.

What happens if someone makes a mixer that operates over Signal messages? This is not a bad-faith argument: The entire CoinJoin protocol used to operate over IRC; before they developed their own communications system for increased efficiency.

Re: Arrest of suspected developer of Tornado Cash

#194

Post by lottin »

dannyw wrote: post #155

For those who think this is good: 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 don't find it difficult.

Re: Arrest of suspected developer of Tornado Cash

#195

Post by JumpCrisscross »

whatisweb3 wrote: post #143
paulsutter wrote: post #129

Earlier quoted context omitted.

No this means that you should talk with a serious law firm before you start one of these projects. OFAC, KYC, securities, AML/CFT, so many laws apply and without expert advice you can end up in a bad spot Expert lawyers do exist, example: https://www.perkinscoie.com/en/professionals/j-dax-hansen.ht... "Dax has advised and continues to work with many of the leading companies, industry associations and consortia. Proje…

There is still no legal precedent around a case like this as it relates to DAOs and autonomous smart contracts, so a law firm could not have told you anything except "we can neither confirm nor deny." If there is another US sanction that targets a non-custodial smart contract and open source project, please do share. Devastating that it has come to "do not code an E2EE privacy tool because you might find yourself in…

> no legal precedent around a case like this as it relates to DAOs and autonomous smart contracts, so a law firm could not have told you anything except "we can neither confirm nor deny."

Have you hired counsel? This isn’t what lawyers do.

Good counsel should provide guard rails. They will say this is novel and that they can’t guarantee anything, but lawyers do that anyway. They’re giving advice, not judgement.

One of those rails would involve responding to credible public allegations around being used to launder money by Pyongyang.

Re: Arrest of suspected developer of Tornado Cash

#196

Post by plgonzalezrx8 »

peyton wrote: post #192
clucas wrote: post #161

Earlier quoted context omitted.

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 l…

One fact is that it’s Dutch law enforcement, not international law enforcement. A second fact is that Dutch law enforcement have stated “multiple arrests are not ruled out,” so we’re not talking about “just one guy” anymore. Finally, I’m not optimizing for credibility when stating my opinion, nor am I defending a single person. I do not think arresting developers is an effective solution for preventing money launderi…

> we’re not talking about “just one guy” anymore.

Bad people can also work in groups.

> I do not think arresting developers is an effective solution for preventing money laundering.

You're essentially reducing his role to "Just a developer" while ignoring that he might be a lot more than just a developer and might be involved with actual money laundering at many different stages of the process other than "Just writing a little bit of code".

Im not defending one side or the other, just pointing out that by ignoring everything else and calling him "Just a developer" you're not being objective.

Re: Arrest of suspected developer of Tornado Cash

#197

Post by jsmith45 »

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?

Governments define the line.

Relevant questions would include:

- How core to the illegal money laundering is the use of your product? (For a leather wallet, probably not very).

- did you target illegal money laundering in the design of your product, or market your product so as to specifically attract illegal money launderers? (Almost certain not for your leather wallet).

- is the use by criminals to launder money a significant portion of your sales (or use of your services) (probably not).

- are you actually aware of your product/service being used for money laundering? (Maybe?)

- if you are aware and there is significant use of your product/service for illegal money laundering, have you taken reasonable steps to prevent or discourage such use? (Given you flagged North Korean money laundering as your example, such steps could include: Blocking access to your site from North Korea, refusing to ship to countries that don’t enforce sanctions against North Korea, investigating if small tweaks to the design are possible that would make your product/service less useful to money launderers without significantly reducing its usability for other people).

Re: Arrest of suspected developer of Tornado Cash

#198

Post by JohnHaugeland »

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…

This isn't open source privacy code. Whether or not someone else does something bad with it isn't relevant.

Until you can face what it really is, you aren't going to come to terms with what's happening.

This is like making unlicensed guns that don't follow safety or tracking regulations, then complaining "but I'm not the burglar, I didn't kill anyone" when you get shut down.

This is and always has been the obvious explicit purpose of this code. This has nothing to do with "privacy" and you don't actually legally have the right to hide your financial transactions besides.

Re: Arrest of suspected developer of Tornado Cash

#199

Post by darkcha0s »

rvnx wrote: post #9
Arnt wrote: post #2

So a software developer is held responsible for the software. If the software is largely SaaS, then I can see the sense in that. A software developer of SaaS is also a service developer, arguably even a service operator although that depends on how the service is developed and operated. 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…

It seems reasonable to expect that Ethereum operators share responsibility in case of usage of their network for malicious or criminal activity. They have the technical means to control what goes on there or not. Otherwise it's like if you run P2P nodes and claim pedo pictures aren't your problem.

I know I will get a hail of downvotes for this, but again you're comparing apples and oranges. The operators are using crypto for a wide range of applications. Using a mixer has probably 99.9% illegal reasons and 0.1% legitimate uses. Making money laundering harder is a good thing, no matter how many people here will try to convince you it isn't.

Re: Arrest of suspected developer of Tornado Cash

#200

Post by JohnHaugeland »

Tepix wrote: post #29

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. The article is quite murky in that regard. Perhaps they don't know yet. In there is an interesting paragraph explaining what Tornado Cash is: … The ( criminal ) origin of the cryptocurrencies is…

> 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?

No. That's what all the coin people are thinking.

Everyone else is thinking "gee, someone made a tool to try to prevent the financial regulators from regulating, I'm surprised this took this long."

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