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Investors sue Treasury Department for blacklisting crypto platform Tornado Cash

nytimes.com

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Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash

#41

Post by pclmulqdq »

whatisweb3 wrote: post #29
cguess wrote: post #4

Earlier quoted context omitted.

It was used for tumbling, to the tune of $450m by the North Koreans. It's not a theoretical situation.

450m is a whopping 6% of all deposits on Tornado Cash[1]. The total percentage of illicit activity on the protocol is reported to be in the 10-30% range[2]. What percentage of activity in an E2EE chat application like Matrix is illicit? If a significant but minority percentage of its use is facilitating criminal discussion, should those open protocols also be sanctioned? [1] https://dune.com/poma/tornado-cash_1 [2] h…

This isn't about the fraction of illicit use. A large fraction of Americans with numbered/anonymous Swiss bank accounts did nothing wrong with them - a much larger fraction than tornado cash users. However, they were still banned for US citizens due to US KYC rules.

The land of free speech is obsessed with being able to trace money as it travels. No surprise they would go after a service whose explicit purpose is to break the chain of custody on money.

Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash

#42

Post by woodruffw »

devoutsalsa wrote: post #30
JustLurking2022 wrote: post #24

Earlier quoted context omitted.

It's a service specifically designed to facilitate money laundering. It's a bit like running a business that produces paperwork to make stolen cars indistinguishable from legal ones - there's no reason such a service should be allowed to exist.

So are casinos, banks, money exchanges, and hot dog stands. There are tons of reasons for wanting privacy that have nothing to do with money laundering. Avoiding kidnapping & ransom because someone can’t see the size of your crypto wallet for example.

None of these things has an efficient end in laundering money. That's in contrast to Tornado Cash, which was designed to launder money.

In other words: you can use a hot dog stand to launder money. But if you were to intentionally establish a hot dog stand for the purpose of laundering money, the government would be absolutely correct in seizing your stand.

Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash

#43

Post by jfim »

toolz wrote: post #25
jfim wrote: post #8

Earlier quoted context omitted.

How much of it is used for legitimate reasons versus illicit ones? If the overwhelming majority of the transactions are illicit, it makes sense to ban it.

if central powers stop being lazy then nothing was illicit. No violence can be inflicted from trading digital currencies. It's lazy policing to try and control resources rather than stop the actual violence. If someone owns a resource, no matter who they are, why shouldn't they be able to utilize it? If that resource was acquired with violent means such as human trafficking - then maybe our policing efforts should be…

That may be true if law enforcement authorities have unlimited resources, but in practice they don't.

Imagine that a hypothetical service is used at 99% for illicit transactions and 1% for legitimate ones. Is the best outcome for society to spend say 5 million dollars to shut down that service, or 500 million to figure out who is using that service maliciously and sue only the people who are using it maliciously?

Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash

#44

Post by immigrantheart »

JustLurking2022 wrote: post #24
mikece wrote: post #3

Banning a service because it "might be used for illegal purposes" is insufficient. This is a problem with law enforcement in general: they are lazy and seek to have automated solutions to so much of what used to be called police work. This applies to warrant-less wiretaps, pulling information on people from 3rd party data brokers to side-step warrant and FOIA requirements, and more. I would rather money-launderers ge…

It's a service specifically designed to facilitate money laundering. It's a bit like running a business that produces paperwork to make stolen cars indistinguishable from legal ones - there's no reason such a service should be allowed to exist.

Properties in the USA, laundry, deli, dry cleaners, often use for money laundering.

Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash

#45

Post by bitxbitxbitcoin »

zeusk wrote: post #39
devoutsalsa wrote: post #30

Earlier quoted context omitted.

So are casinos, banks, money exchanges, and hot dog stands. There are tons of reasons for wanting privacy that have nothing to do with money laundering. Avoiding kidnapping & ransom because someone can’t see the size of your crypto wallet for example.

You're really saying; banks, money exchanges and hot dog stands have no other utility other than to "wash" money?

It’s reductionist but yes - “washing” money is a core part of their function. Note OP didn’t say laundering.

Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash

#46

Post by nibbleshifter »

x86x87 wrote: post #28
sam0x17 wrote: post #14

Earlier quoted context omitted.

If that's the cost of a freer internet that's fine with me. I don't care if it's $10t.

That's a very limited way of looking at things. You're fine with banning X and Y because you don't see them impacting you. When Z is banned and you care about Z you'll have a rude awakening.

I think the poster was saying they are fine with that amount if laundry, because its more important for a free internet to exist.

Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash

#47

Post by striking »

realce wrote: post #35
JustLurking2022 wrote: post #24

Earlier quoted context omitted.

It's a service specifically designed to facilitate money laundering. It's a bit like running a business that produces paperwork to make stolen cars indistinguishable from legal ones - there's no reason such a service should be allowed to exist.

Then produce distinct legislation that bans the specific practices used, otherwise it's just giving preference to currently entrenched forms of money laundering. It's not illegal whatsoever to mix up my dollar bills with a group of other people and get the same amount out that I put in. Such a statement is ridiculous.

Folks like to hate on lobbyists (including myself! very much so) but this is exactly the function they serve. They inform the legislators on what legislation would help their industries succeed, and encourage it across the line.

I don't think the crypto industry is lacking in funding enough to be able to hire lobbyists, so I'm not sure why we might blame a legislature that can't be experts in literally everything (setting aside the fact that they tend to be fuddy-duddies for other reasons, it's not even theoretically practical that they could be perfectly informed on everything) for not having made perfect laws around a new industry.

Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash

#48

Post by bitxbitxbitcoin »

pclmulqdq wrote: post #41
whatisweb3 wrote: post #29

Earlier quoted context omitted.

450m is a whopping 6% of all deposits on Tornado Cash[1]. The total percentage of illicit activity on the protocol is reported to be in the 10-30% range[2]. What percentage of activity in an E2EE chat application like Matrix is illicit? If a significant but minority percentage of its use is facilitating criminal discussion, should those open protocols also be sanctioned? [1] https://dune.com/poma/tornado-cash_1 [2] h…

This isn't about the fraction of illicit use. A large fraction of Americans with numbered/anonymous Swiss bank accounts did nothing wrong with them - a much larger fraction than tornado cash users. However, they were still banned for US citizens due to US KYC rules. The land of free speech is obsessed with being able to trace money as it travels. No surprise they would go after a service whose explicit purpose is to…

Banning the use of Tornado Cash is one thing - I didn’t see any Swiss bankers arrested or prosecuted for money laundering during that move.

Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash

#49

Post by realce »

kibwen wrote: post #34
programmarchy wrote: post #27

If Tornado Cash could be banned, couldn't the same logic be used to ban Tor? The former obscures financial transactions, and the latter obscures communications, but there's a similar principle in play.

The US military itself uses Tor. They don't want to ban it, because even if the traffic on Tor is illicit, it still serves to mask the military's own traffic. Don't forget that Tor was originally developed by the US Navy.

I hear NK uses it too, it should probably be made devastatingly illegal therefore.

Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash

#50

Post by TEP_Kim_Il_Sung »

woodruffw wrote: post #38
mikece wrote: post #3

Banning a service because it "might be used for illegal purposes" is insufficient. This is a problem with law enforcement in general: they are lazy and seek to have automated solutions to so much of what used to be called police work. This applies to warrant-less wiretaps, pulling information on people from 3rd party data brokers to side-step warrant and FOIA requirements, and more. I would rather money-launderers ge…

"Might be used for illegal purposes" is a significant understatement. The chief selling point of Tornado Cash is money laundering, which is in and of itself a crime in both the US and Netherlands. Normally, there'd be an aspect of plausible deniability: torrent index operators can, for example, rightfully claim that they're facilitating legal filesharing, or that they're entirely agnostic to the content being shared…

The chief selling point of Tornado Cash is that it's distributed open-source software, with no man in the middle, no single point of failure.

That's right: Government sanctioned open-source SOFTWARE. Are you sure you want this precedent set?

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