Arrest of suspected developer of Tornado Cash • Hacker News Board

Re: Arrest of suspected developer of Tornado Cash

#501

Post by ajhurliman » Fri, Aug 12, 2022, 5:51 PM UTC

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.

You mean the miners? Mining Ethereum doesn’t allow for much inspection of what you’re validating in each block.

It’s just a program that runs and guesses a bunch of salts that hopefully result in a hash that meets some particular parameters (e.g. starts with 5 zeros). You want to be the first to guess correctly so you win the reward for that block, so any sort of investigation doesn’t make sense. From what data was stored on-chain in that block and whether it may be problematic (or even what the data represents), to which contracts were involved (and whether they have criminal ties), it’s just not reasonable for any miner to take responsibility for the block chain operating as expected.

I think this is the core issue with the block chain, is that society has always expected there to be some moral agent that you could hold responsible. Except in cases of natural disasters, you can normally blame someone.

But with blockchains, it’s a lot harder to place blame on someone, or link a physical person to the online identity.

Similarly with the 2008 GFC, everything was abstract enough that almost nobody got in trouble for a situation that was most certainly man-made, but hard to place the blame. At least then, though, the government had some amount of control over the banks and also relied on them to return society to normal.

Through the government’s eyes, block chain doesn’t appear necessary for society to operate and is very difficult to regulate, so I’m sure their tolerance is a lot lower for blockchains when financial crimes crop up from it.

Re: Arrest of suspected developer of Tornado Cash

#502

Post by whatisweb3 » Fri, Aug 12, 2022, 5:55 PM UTC

AlexandrB wrote: post #487

whatisweb3 wrote: post #254

Earlier quoted context omitted.

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?

One exists to facilitate privacy, the other exists to facilitate money laundering.

Compare with E2EE Matrix protocol: it does not exist to facilitate criminal communication, but it does facilitate criminal communication.

TC is also different because it is an open source protocol, not a legal entity or group. You deposit funds into the protocol, and anybody in the network can help you withdraw them by relaying your transaction. It is a set of rules that any group of people can follow to allow for private transactions, and the same protocol can run on many blockchains.

Re: Arrest of suspected developer of Tornado Cash

#503

Post by AlexandrB » Fri, Aug 12, 2022, 5:56 PM UTC

seanw444 wrote: post #303

dannyw wrote: post #157

Earlier quoted context omitted.

Does contributing to an encrypted messaging app, like Signal or Matrix, also mean you're enabling / facilitating child pornography and terrorism? Keep in mind that a cryptocurrency private key is just a bunch of bytes, like this: `KwTHJw865SLeTAjK7otYb5bL5mwutBb2vDxxF7kGf5XvY7QttnvM`

The popular consensus on HN seems to be that the government having absolute monopolistic control and power over personal finance is inarguably good. "But money laundering!" so? "But evading taxes!" so? You can catch people in the act of attempting to commit these crimes if your agents aren't lazy shits. Forcing everyone's transactions to be public and traceable just so it's easy for the government to arrest people is…

> Forcing everyone's transactions to be public and traceable

My transactions are not public, but that's because I don't use blockchain. This is a problem created by blockchain technologies. Services like Tornado Cash are a poor solution that introduces new problems (like making laundering much easier).

Traceability is indeed required for large transactions in most jurisdictions. Where the line for this should be drawn is debatable. I think it would be hard for society where all transactions are fully anonymous to function. It's too easy for bad actors to free-ride or otherwise take advantage of the situation. I would prefer a little more freedom/privacy here but it's definitely a situation with trade-offs in both directions.

Also, keep in mind that increasing privacy for financial transactions would disproportionately benefit those with the most money.

Re: Arrest of suspected developer of Tornado Cash

#504

Post by 3np » Fri, Aug 12, 2022, 5:58 PM UTC

dcolkitt wrote: post #260

A lot of the apologists for this are making arguments along the lines of "being decentralized doesn't make you exempt from the rules" or "imagine if a bank laundered this much money". 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…

There also seems to be a lot of conjecture all over here.

We know that the person arrested "is suspected of involvement in concealing criminal financial flows and facilitating money laundering through the mixing of cryptocurrencies through the decentralised Ethereum mixing service Tornado Cash."

The general interpretation is that they were arrested for development of the protocol and software. It may be that they have them on the hook for other actions, such as assisting particular individuals or directly handling funds. Let's see what comes out of this.

We don't yet know which specific acts they are suspected of.

Re: Arrest of suspected developer of Tornado Cash

#505

Post by babypuncher » Fri, Aug 12, 2022, 6:01 PM UTC

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…

Knowledge and intent seem important here. If the developer had specific knowledge of a someone using their service to commit a crime and did nothing to stop it, then they could be an accessory to that crime.

If you sell a weapon to someone knowing ahead of time that they are going to use it to rob a convenience store, you are not innocent.

Re: Arrest of suspected developer of Tornado Cash

#506

Post by Vespasian » Fri, Aug 12, 2022, 6:01 PM UTC

squeaky-clean wrote: post #485

aqme28 wrote: post #405

Earlier quoted context omitted.

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.

Assuming he had some later money (in the Blockchain) that's maybe "just" a few dozen / hundred million worth.

That's plenty money for one person without the liability and the publicity. You can live a life in pure luxury and fulfill all your material wishes.

Maybe he lost the keys or threw away the machine after a year or two. There's nothing to be gained from going public in this case but a massive threat to your life.

Re: Arrest of suspected developer of Tornado Cash

#507

Post by Brybry » Fri, Aug 12, 2022, 6:03 PM UTC

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.

"Taking some leads to all" logic doesn't really follow.

If that idea applied then the US would already not have guns as many types of firearms (ex. fully automatic) and weapons (explosive munitions) are heavily restricted (and have been for a very long time).

Re: Arrest of suspected developer of Tornado Cash

#508

Post by polytely » Fri, Aug 12, 2022, 6:03 PM UTC

greatgib wrote: post #239

It is said that they are prosecuted for:. "environmental crime" Good example again of low profile laws that are abused by government and police forces to get to their objectives.

Read it again, that's not at all what it says.

>Public Prosecutor’s Office for serious fraud, environmental crime and asset confiscation.

The arrest comes from the department that covers 1. serious fraud, 2. environmental crime, 3. asset confiscation

There is nothing in that release that indicates that this arrested was because of environmental crime. You should retract your post.

Re: Arrest of suspected developer of Tornado Cash

#509

Post by AlexandrB » Fri, Aug 12, 2022, 6:06 PM UTC

jvdizzle wrote: post #393

halfmatthalfcat wrote: post #276

Earlier quoted context omitted.

So we're all suppose to become techno-anarchists? HN has a great balance of both, it's just mostly the crypto-obsessed that decry government encroachment because they're still struggling to find a useful purpose for the technology before they get regulated.

It's one thing to be a techno-anarchist and it's another thing to be reasonably skeptical about government and what it considers "justice" and the ramifications of that "justice". The way the government has been approaching cryptography and privacy in general is very much "throw the baby out with the bath water, we don't need it". What is happening in the financial privacy space (i.e. developments in crypto) should b…

Financial privacy has little to do with democracy and at the extreme would be its antithesis. Absolute financial privacy would mean that moneyed interests could quietly buy any legislation they want and the public would be none the wiser because the funding/bribe would be untraceable and unknowable. See Citizens United[1] for an example of how extending human rights to money has negative consequences for democratic society.

[1] https://en.wikipedia.org/wiki/Citizens_United_v._FEC

Edit: I don't get why financial privacy is consistenly presented as a win for the "little guy" against "the man". The "little guy" spends most of his money on necessities and pays moderate to low taxes relative to other parts of society. The parties standing to win the most in a world where any transactions can easily be kept private are those that wield a lot of money, a lot of power, or both. Consider Nancy Pelosi's insider trading and how hard it would be to discover/prove if those transactions could be kept private.

Re: Arrest of suspected developer of Tornado Cash

#510

Post by ROTMetro » Fri, Aug 12, 2022, 6:09 PM UTC

josephcsible wrote: post #479

ROTMetro wrote: post #389

Earlier quoted context omitted.

TLDR: You have no rights in America other than the ones you can afford to pay a lawyer to force to be enforced. Dude, as someone in the system, ex post facto happens all the time. In my case I can challenge it, but if I get slapped with lets say a completely 'theoretical' $5000 ex post facto "fine" it's going to cost more in lawyers to challenge, plus piss off my judge/PO for wasting time. As someone who can't get a…

> ex post facto happens all the time Can you give an example of one such time?

I did above. Fees/assessments that were not part of your sentence get added/imposed after the fact. The sentencing guidelines get changed AFTER what you are sentenced for occured, yet you are sentenced to the 'new' sentencing guidelines sentence, not the sentence that was called for at the time of your offense. There is a whole legal class called 'collateral consequences' that are punishments it would be inconvenient to be called punishments. They are instead 'collateral consequences' that don't fall under ex post facto and are then 'legal' to apply after the fact. Imagine that, an entire type of punishment defined as not a punishment to skirt the Constitution. The courts don't see the constitution as their guiding principle, but as bugs to try find workarounds for.