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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

#61

Post by sjsdaiuasgdia »

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…

It's worth noting your second reference only mentions illicit activity volume in passing, linking to this study as a source: https://blog.chainalysis.com/reports/crypto-mixer-criminal-v...

It's also worth noting the headline of that link: "Crypto Mixer Usage Reaches All-time Highs in 2022, With Nation State Actors and Cybercriminals Contributing Significant Volume"

Quoting from later in that study, "Overall, if we label cybercriminal organizations with known nation state affiliations, we can see that these groups make up a significant and growing share of all illicit cryptocurrency sent to mixers."

It's not 10-30% as you summarized. It's 12% last year increasing to 23% this year, or nearly doubling from a 1/8 to 1/4 share.

This source does not support the position that illicit traffic is an insignificant share of mixer traffic.

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

#62

Post by adastra22 »

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 purpose of a mixer is financial privacy. It’s just that on a public blockchain privacy from snoops and privacy from law enforcement can’t be differentiated.

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

#63

Post by realce »

polygamous_bat wrote: post #51
realce wrote: post #35

Earlier quoted context omitted.

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.

If you ran an establishment where people would come in with big bags of cash with dubious source, swirl them around in a big vat, and someone else would come in with a chit to take out some cash from your vat, I am sure your establishment will get investigated and shut down. In this way it's no different from the real world. Just because it's online doesn't make it ok.

Can you show me any statement in US law where such a practice is illegal? What you're describing sounds exactly like a casino.

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

#64

Post by erk__ »

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.

That depends entirely on what the intent is. If the intent is to launder money then yes it is probably illegal. If the intent is to swap notes with your favourite serial numbers then yes it is probably legal. Intent is a important part of most legislations.

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

#65

Post by jfim »

Wowfunhappy wrote: post #18
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.

I agree with you, but I'd like to point out that the same logic could be applied to e.g. game console emulators. ...and as much as I hate to say it, I do think the logic might be correct in both situations. (I say this as a heavy user of console emulators—albeit also as someone who does go through the trouble to legally dump his own games.)

It depends on how you see it.

One way to look at it is to say "I derived this rule based on what the ratio of licit to illicit usage is, thus it should apply everywhere." From that perspective, then yes, your observation that it would apply to both situations is correct.

Another way to look at it is "for this particular scenario, what is the optimal outcome?" If you're running a game console emulator for a system that's not being sold anymore, with games that are not being sold anymore, one could argue that that scenario would be net positive considering the lack of harm; in other words, you get to enjoy the game, while nobody gets hurt, so it's positive overall.

The first perspective is called "rule utilitarianism," while the latter is called "act utilitarianism," in case you want to learn more about those.

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

#66

Post by res0nat0r »

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.

The primary reason casinos, banks, money exchanges and hot dog stands exist aren't to facilitate money laundering, unlike Tornado, according to the government.

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

#67

Post by polygamous_bat »

lampshades wrote: post #23
yunohn wrote: post #19

Earlier quoted context omitted.

You’re right, a crypto mixer primarily used to launder money or evade taxes is *exactly the same* as highways and SMS.

Quoted post unavailable.

You can literally go through the rekt leaderboard [1] and count how many of the stories end with "and then the funds were routed to tornado cash, fin." It's not exactly a secret, and it doesn't require any specuation.

[1] https://rekt.news/leaderboard/

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

#68

Post by [deleted] »

redox99 wrote: post #52
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.

That's like saying knives are designed to facilitate murder. TC is made for privacy, which either is or should be a basic right. Without tools such as TC if I send you money, show you some POAPs[1] I own, or otherwise interact in any way with my crypto, it is fairly simple to deduce or make educated guesses of how much crypto I own, who I send it to or from, and more. This has serious implications not only for privac…

[deleted]

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

#69

Post by bitxbitxbitcoin »

woodruffw wrote: post #56
bitxbitxbitcoin wrote: post #45

Earlier quoted context omitted.

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

No, it isn't. Banks exist to induce stability and liquidity (i.e., the efficient flow of capital) within the economy. Hot dog stands exist to sell hot dogs. Money exchanges exist to transfer currencies to (you guessed it) facilitate commerce in different regions. The hair you're attempting to split between "laundering" and "washing" does not exist in the financial world, and would not impress financial regulators.

The difference between laundering and washing doesn’t exist in current financial regulation.

It does to those who believe in financial privacy.

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

#70

Post by TEP_Kim_Il_Sung »

wil421 wrote: post #11
mikece wrote: post #5

Earlier quoted context omitted.

And yet, somehow, we knew exactly who was doing it. Why the urgency to shut it down?

Why should North Korea be allowed to steal and hack from other country’s people and organizations? It should be shut down immediately. I feel like your trying to say NK and Tornado should be able to do illegal activities that harm people. Just because you don’t like the police or something.

By all means, shutting down North Korea is the real issue here; Don't ruin the internet on your way.
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