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Arrest of suspected developer of Tornado Cash

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Re: Arrest of suspected developer of Tornado Cash

#631

Post by joe_the_user »

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…

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.

If the state can arrest people and cause activity to stop, it makes sense in the way states think.

The approach of bitcoin and crypto process in general hasn't been to ask permission but aim for a protocol that states can't stop. Neither governments nor "society" "signed off" on crypto. People just started doing it with the principle "this is too distributed to stop". Well, if states can stop it, that approach failed, right?

Analogously when joint-stock corporations first entered the scene it required the development of whole new branches of Western law.

Limited-liability enterprises still aren't very popular. But these were legitimized by courts and legislation based on them provide (alleged) benefits. Crypto generally hasn't been legitimized by society, crypto advocates often act like they don't need such legitimization and by that token, the state has no obligation not to treat crypto activities as being within it's existing categories - especially it this work: they don't like money laundering and fraud through crypto and hey, a lot of people going to jail.

Re: Arrest of suspected developer of Tornado Cash

#632

Post by cortesoft »

whatisweb3 wrote: post #313
codyb wrote: post #228

If someone built something that said "Launder your money here" and it took in a bunch of money, and then disbursed it sans fees to hide where it came from... they'd say it was money laundering and arrest the person. 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 mone…

A private key is a 256 bit integer. > If someone built something that said "Launder your [256 bit integers] here" and it took in a bunch of [256 bit integers], and then [encrypted] it sans fees to hide where it came from... they'd say it was [256 bit integer] laundering and arrest the person. When you compare this to encrypting 256 bit integers, text, or E2EE chat protocols, the shock is easier to understand. People…

Except the law isn’t talking about the private key or the encryption or the math, it is talking about what they are using those things for.

You are focusing on the numbers themselves and the math, but that isn’t the important part. This would be like someone getting arrested for check fraud and then trying to argue, “they are just a bunch of lines on a paper in a certain format, how can that be a crime!”

The crime isn’t that arrangement of ink on the paper, the crime is using those lines on the paper to commit fraud. Same thing here, it isn’t the numbers or math that are criminal, it is using those numbers and math to commit crime.

Re: Arrest of suspected developer of Tornado Cash

#633

Post by LawTalkingGuy »

mulmen wrote: post #572
WFHRenaissance wrote: post #548

Earlier quoted context omitted.

No ban, just increasingly restrictive laws on ownership and use that end up resulting in something tantamount to a ban. Look at gun ownership in most countries in Europe if you want an idea of what the future could look like. Then give some thought to what Europe was like in the early 20th century!

As always, correlation doesn't imply causation. It's not clear that gun laws themselves even enabled the rise of fascism or that they had any negative impact on quality of life. With widespread gun ownership early 20th century Europe could have been even worse. This argument is so tired it has it's own Wikipedia entry: https://en.wikipedia.org/wiki/Nazi_gun_control_argument > "The Jews of Germany constituted less tha…

That argument is a bit of a straw-man though. Nobody is realistically claiming the Jews, or East Germans, or Soviet citizens, or Syrian citizens, could defeat their government with personal weapons.

The more reasonable version of the argument is that the unofficial purges, before the evil becomes fully embraced by the government (the Nazis), or where hidden and unofficial (the KGB), can be deterred by armed civilians. If you know the Stasi are coming to take you away in the night to certain death you'll be willing to fight, and if armed you have a real chance at inflicting casualties. And if every raid leads to dead troops and PR disasters the state is less likely going to get to the point where the terrorists adopt the mantle of government (Nazi Germany) and can then bring the sum total of state forces to bear.

tl;dr the argument is more about resisting unsanctioned or non-governmental terrorism so it doesn't become governmental.

Re: Arrest of suspected developer of Tornado Cash

#634

Post by joelthelion »

Scoundreller wrote: post #544
joelthelion wrote: post #514

Earlier quoted context omitted.

It's not. Trying to sell it would crash the market. Still worth a lot, obviously.

Can he just pay off some kind of smart contract with it that ignores the provenance of the Bitcoin? Like, get a loan for $20b in a stablecoin with the payback being $21b in btc in a year?

It's not just about the provenance. I don't think the bitcoin market can stomach a 20 billion sell-off, no matter who does it.

Re: Arrest of suspected developer of Tornado Cash

#635

Post by wly_cdgr »

carlosdp wrote: post #264
JumpCrisscross wrote: post #156

Earlier quoted context omitted.

> 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…

> Also, in June—when the link says they began the investigation—it was publicly known Tornado was being used to launder money. If the developer kept working on it, they knew what they were doing. People keep saying this in this thread. 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?

Yeah, this line of reasoning is exceedingly silly. Stethoscopes can be used to help crack safes, should the people who make them be in legal jeopardy as a result? Good luck convincing anyone to invest in innovation in that kind of legal environment, my friends.

Demonstrating that there's one legitimate use should probably be sufficient in most cases. If you want to be uptight you can think about adding a requirement that the best fit use case must always be legitimate

Re: Arrest of suspected developer of Tornado Cash

#636

Post by dlubarov »

AlexandrB wrote: post #493
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.

The local mob-owned laundromat is also a privacy tool. Both are meant to hide the provenance of money from others. What's the difference besides the implementation details?

The difference is that one provides privacy exclusively to money launderers, while the other is a generic tool which anyone can use to obtain financial privacy.

Re: Arrest of suspected developer of Tornado Cash

#637

Post by acdha »

nostrademons wrote: post #608
acdha wrote: post #564

Earlier quoted context omitted.

This seems like a better argument for using a system which is correctly designed. A public ledger is a bad fit for currency and layering kludges on top isn’t as good as a better design, especially when that exposes you to being an accessory to criminal activity.

There are cryptocurrencies that are private-by-default, eg. Monero and ZCash. It'll be interesting to see how that evolves and whether governments go after them as well, particularly since (I suspect) Monero is used for a lot more illegal activity than Tornado.cash. The thing about Ethereum's public ledger approach is that it enables a lot of features - broadly advertised smart contracts, for example. Tornado.cash is…

Yeah, I’ve been surprised to see so many people prosecuted after using Bitcoin for serious things long after the privacy concerns were well-publicized. I guess it shows how many people fall for marketing.

Re: Arrest of suspected developer of Tornado Cash

#638

Post by notch656a »

mulmen wrote: post #572
WFHRenaissance wrote: post #548

Earlier quoted context omitted.

No ban, just increasingly restrictive laws on ownership and use that end up resulting in something tantamount to a ban. Look at gun ownership in most countries in Europe if you want an idea of what the future could look like. Then give some thought to what Europe was like in the early 20th century!

As always, correlation doesn't imply causation. It's not clear that gun laws themselves even enabled the rise of fascism or that they had any negative impact on quality of life. With widespread gun ownership early 20th century Europe could have been even worse. This argument is so tired it has it's own Wikipedia entry: https://en.wikipedia.org/wiki/Nazi_gun_control_argument > "The Jews of Germany constituted less tha…

Events such as the Warsaw Ghetto Uprising showed some Jews really were willing to defend themselves with arms. The Jews were not cowards and the characterization as people who won't "mount resistance" is woefully wrong. It may be true they may have not been able to successfully overthrow the Nazis, but it is possible some of the oppressed may have survived another 10 or 15 minutes (in the Warsaw Ghetto, days) after initiating self defense and even if them being armed would have made things worse for them, that should have been their choice to make and not yours.

There is some sort of fundamental honor as well to allow to allow someone the tools to at least maybe shoot a Nazi on their way out, as one last act of resistance before certain death. Arms are a right even when desperate circumstance make it almost only symbolic.

Edit: also some may enjoy this amusing bumper sticker, created by a Jewish organization in America who themselves criticize Nazi gun control (https://store.jpfo.org/40-large_default/-all-in-favor-of-gun...).

Re: Arrest of suspected developer of Tornado Cash

#639

Post by andai »

joe_the_user wrote: post #617
carlosdp wrote: post #264

Earlier quoted context omitted.

> Also, in June—when the link says they began the investigation—it was publicly known Tornado was being used to launder money. If the developer kept working on it, they knew what they were doing. People keep saying this in this thread. 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?

I think this sort of question is being argued with youtube-dl and we can see where it goes. The entertainment industry argues the purpose of youtube-dl is to pirate content. Youtube-dl argues that there are in fact many legitimate uses for it and this argument has so far prevailed. In the case of WhatsApp, the app has many legitimate uses, notably speech, which is often protected as a right. In the case of Tornado Ca…

Many countries have strong privacy protections. Why should the same not apply to transactions?

Re: Arrest of suspected developer of Tornado Cash

#640

Post by jobs_throwaway »

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?

Writing is used by criminals. Should writing be made illegal?
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