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Arrest of suspected developer of Tornado Cash

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Re: Arrest of suspected developer of Tornado Cash

#481

Post by dlubarov »

kube-system wrote: post #461
eric_cc wrote: post #429

Earlier quoted context omitted.

> A money laundering operation Tornado Cash is not a money laundering operation. It is a privacy tool.

Nobody has said it is not a privacy tool. It is a privacy tool that has documented use in money laundering. Building tools is generally legal, using them to commit crimes is something different. The developer here is not accused of building privacy tools, they are accused of knowingly being in on the money laundering and profiting from it.

It's not clear from their vague, weasely language whether they're accusing him of any involvement beyond building the privacy tool. If they had any evidence of that, presumably they would have said so.

> suspected of involvement in concealing criminal financial flows and facilitating money laundering

Re: Arrest of suspected developer of Tornado Cash

#482

Post by april_22 »

closewith wrote: post #127
biglearner1day wrote: post #70

Earlier quoted context omitted.

> Anonymous cash transactions So not crypto.

The law also applies to barter with equivalent Euro thresholds, so cryptocurrencies aren't excluded. Anyway, the point stands, financial privacy (from the State, at least) is not a feature of life in the Netherlands (or anywhere in the EU, with AML3/4/5/6).

But wasn't the whole point of cryptocurrencies to be anonymus? or am I missing something here?

Re: Arrest of suspected developer of Tornado Cash

#483

Post by omginternets »

diogenes1 wrote: post #470
omginternets wrote: post #288

Earlier quoted context omitted.

Where did you see that this was connected to the US financial system? They mention in passing that the US has sanctioned Tornado Cash, but I didn't get the impression that this was the reason why this person was arrested.

there have been multiple coordinated attacks being made, it's quite naiive to assume US is not involved here

I'm very open to the idea that they are. I'm asking whether there's evidence.

Re: Arrest of suspected developer of Tornado Cash

#484

Post by arcticbull »

tadfisher wrote: post #477
arcticbull wrote: post #472

Earlier quoted context omitted.

> Is everyone at WhatsApp also guilty of a crime for continuing to work on WhatsApp even though they know the Taliban uses it for communication? Of course not, because intent matters. The team at WhatsApp works super hard to keep people who shouldn't be using it off the platform, so that everyone else can derive use and enjoyment. If WhatsApp was built as a platform to facilitate terrorist communication you're damn r…

> It has no other purpose but to conceal the source of funds which only matters the funds were acquired illicitly. This doesn't feel sincere. Obviously money laundering is one reason why anonymity matters, but you can't think of any other reason? I'll give a prompt: Several threads ago, someone expressed their desire to pay for a VPN service in cryptocurrency.

Remind me why you need to launder your crypto to do that?

Re: Arrest of suspected developer of Tornado Cash

#485

Post by squeaky-clean »

aqme28 wrote: post #405
im3w1l wrote: post #386

Earlier quoted context omitted.

Satoshi owns a huge hoard of bitcoin that has never moved. He has a lot to gain (and a lot to lose) by making use of that money.

If you have maybe 300MM from early investments, and are a private person who doesn't want fame, then what does Satoshi's hoard actually buy you?

His unsold hoard is currently worth about 20 billion dollars.

Re: Arrest of suspected developer of Tornado Cash

#486

Post by desperadovisa »

seanw444 wrote: post #473
alsetmusic wrote: post #467

Earlier quoted context omitted.

> It's the same argument people make for banning guns in the US. To be fair, I think most are arguing to restrict guns rather than ban. I’m not saying you did this, but many people deliberately distort that into “they wanna take all your guns” in bad faith.

Taking some leads to all. It's not something that should be compromised on. Gun restrictions won't end until ownership is so legally complex and time consuming that nobody can reasonably do it anymore. Of course it won't be an outright ban. That would never succeed. The frog in boiling water analogy applies here perfectly.

No post body was provided.

Re: Arrest of suspected developer of Tornado Cash

#487

Post by AlexandrB »

whatisweb3 wrote: post #254
JohnHaugeland wrote: post #204

Earlier quoted context omitted.

You seem to believe that if a tool is illegal, as long as it's open source and the people making it don't have a criminal background, and as long as you call it something like "privacy software," somehow it's suddenly not illegal But this is a tool whose specific purpose it is to make it difficult to track illegal transactions. Of course this is happening. Programmers get way too wrapped up in "but I called it open s…

Matrix protocol’s sole purpose is to obscure usernames and messages and enable privacy. Tornado Cash’s sole purpose is to obscure blockchain addresses and enable privacy. Privacy is not a crime. Using Matrix to hire a hit-man would be a crime, but we don’t sanction the Matrix protocol or it’s developers just because it can be used by criminals to obscure their crimes.

What's the practical difference between the kind of privacy Tornado Cash provides and the kind of privacy offered by a local money laundering operation? If there is none, why should the latter be illegal while the former remains legal?

Re: Arrest of suspected developer of Tornado Cash

#488

Post by A4ET8a8uTh0 »

JumpCrisscross wrote: post #156
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? Probably. That said, he is arrested under Dutch law. We have no evidence this is tied to U.S. sanctions. As others mention, Dutch law restricts cash transactions in ways U.S. law does not. Also, in June—when the link says they began the investigation—it was publicly known Tornado was being…

"We have no evidence this is tied to U.S. sanctions."

Hmm, I suppose you are correct technically ( no direct evidence of connection ), however:

1. Sanctions are issued on 08/08/22 for Tornado Cash by OFAC 2. Guy writing software for Tornado Cash is arrested

It does not take a large leap of faith. I will go a step further, given how much companies like to avoid OFAC issues ( and that does include non-US companies ), I am all but certain the two are connected.

Source: I used to work with sanctions in banking environment.

Re: Arrest of suspected developer of Tornado Cash

#490

Post by beeboop »

droopyEyelids wrote: post #453
beeboop wrote: post #383

Earlier quoted context omitted.

Let's be clear - this isn't money laundering. Money laundering is taking illicit funds and making them look legitimately sourced. Tornado Cash does not do this, it is clear that the source is Tornado Cash, and it does nothing to legitimize funds. To spend crypto you still most likely need to convert it to fiat and that fiat money will still be under scrutiny for its source.

It absolutely is money laundering- which has three phases. Placement, Layering, and Integration. The Layering phase is when the original source of money is concealed through transactions or bookkeeping tricks. https://www.investopedia.com/terms/m/moneylaundering.asp

"Placement surreptitiously injects the “dirty money” into the legitimate financial system."

Tornado Cash doesn't move the funds between financial systems at all

"Layering conceals the source of the money through a series of transactions and bookkeeping tricks"

The source of the coins is in plain sight - it's clearly from Tornado Cash, and when converted into fiat currency the source is very likely also obvious (some exchange) unless you do some in-person exchange of cash for coins, in which case this has nothing to do with Tornado Cash

"Integration, the now-laundered money is withdrawn from the legitimate account to be used for whatever purposes the criminals have in mind for it"

Again there's no legitimacy for the coins after going through Tornado Cash and the fiat currency is still under scrutiny.

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