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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

#91

Post by mattficke »

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…

Financial privacy is a limited right in the US (and in most other countries), you’re not allowed to hide financial assets or transactions from the government. You can think that’s bad, but it’s unambiguously the law (the Supreme Court ruled on the constitutionality of the Bank Secrecy Act back in the 70’s.) The sanctions were entirely predictable, no one should be surprised.

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

#92

Post by toolz »

jfim wrote: post #43
toolz wrote: post #25

Earlier quoted context omitted.

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?

impossible to answer that question - what if the 1% of activity continues to grow and encourages billions more dollars of pro-social economic activity in the future?

All we can know for sure is that shutting down a white-market financial service or worse, blacklisting its users, has the guarantee that innocent people will be harmed.

Further: disrupting a single avenue of finances for the funding of illicit activity at best slows down the criminals. The overwhelming majority of crime is financed in fiat and the overwhelming majority of laundering happens in fiat, which can't be "shutdown".

It's simply ineffective and hurts innocent people. I'm not in favor of hurting innocent people even with modest efficacy and I don't believe that's what we're seeing here. I believe we're hurting innocent people with little to no efficacy.

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

#93

Post by x86x87 »

speedylight wrote: post #26
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…

You could also say that Silk Road was an E-commerce business that might’ve been used to sell drugs, who knows!

Not one to defend Silk Road, but pause and think about it for a second: it enabled you to buy something deemed illegal by the authorities (drugs) in a safe manner and the products bought were higher quality than what you could buy on the street. Why was it a problem to begin with and why where significant resources used to shut it down? (Again, not defending it, and the founder was probably a scumbag, I am just asking the question)

People were breaking stupid laws from the 70s established after mass hysteria around drugs by one of the scummies US president ever. More than that, the tax man was not getting its cut.

Now to put things in perspective let's compare to some things US agencies have done in the past: https://en.m.wikipedia.org/wiki/Allegations_of_CIA_drug_traf...

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

#95

Post by pclmulqdq »

bitxbitxbitcoin wrote: post #48
pclmulqdq wrote: post #41

Earlier quoted context omitted.

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.

You mean like these Swiss bankers?

https://www.reuters.com/article/us-usa-switzerland-tax/ex-sw...

https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-c...

https://www.justice.gov/opa/pr/former-ubs-banker-charged-hel...

This wasn't mainstream news, but neither was the sanctioning of Tornado cash. You just happened to hear about one but not the other.

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

#96

Post by TEP_Kim_Il_Sung »

ouid wrote: post #76
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…

You seem to think that freedom means a world in which you are allowed to hide your assets from the government. You have never been allowed to do that. You're going to have to change the law, and because you live in more or less a democracy, you're going to have to convince people that its good to change the law.

For the time being the government has yet to decide wether crypto is money, a currency, an asset, or a security. Instead it has been going after people for all of them.

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

#97

Post by theplumber »

woodruffw wrote: post #87
redox99 wrote: post #52

Earlier quoted context omitted.

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…

> That's like saying knives are designed to facilitate murder. There are plenty of knives that are designed to facilitate murder, and they are correspondingly regulated. We don't regulate kitchen knives in that way, because they don't represent the same intent. If your financial instrument leaks all of your transactions and makes you a target of criminal scrutiny, you should consider using a different instrument. Soc…

>> There are plenty of knives that are designed to facilitate murder, and they are correspondingly regulated. We don't regulate kitchen knives in that way, because they don't represent the same intent.

I'm pretty sure the majority of knives used for criminal activities are rather kitchen knifes.

Compare Tornado Cash with cash money and tell me how they are different. Being untraceable does not make it a criminal instrument or does it? Is it criminal to conceal your financial transactions from the government?

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

#98

Post by woodruffw »

theplumber wrote: post #85
woodruffw wrote: post #59

Earlier quoted context omitted.

I have no problem with Tornado Cash being openly available software under a permissive license. I have a problem with people running a Tornado Cash-based service that is really just a money laundering service. You should take a step back: "open source" does not rinse away the underlying properties of a service. I can't write and deploy a web application that contracts hitmen and use the MIT license as a defense; the…

What's the difference between money launderying features and privacy features? Tornado Cash in itself does is not launderying money because you still have to prove to the IRS how you got the money or the asset(i.e bills, invoice etc) and you still have to obey KYC rules. You can't just say the money is from Tornado Cash and be done with it. Is the U.S Mint a money launderying service because it provides an untraceabl…

The features don't matter. What matters is intent and demonstrating that intent.

Both the Treasury and Dutch authorities have reason to believe that Tornado Cash was operated with the intent of facilitating money laundering. It's up to a court to determine the veracity of that accusation.

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

#99

Post by SpicyLemonZest »

I think the crypto framing obscures the story here. If the government issued sanctions against a traditional financial organization engaged in money laundering, and then Goldman Sachs bankrolled a lawsuit arguing that the organization is allowed to engage in money laundering due to some quirk of the organizational structure, everyone would understand what's going on and nobody outside of the finance industry would be on the pro-lawsuit side.

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

#100

Post by mattficke »

theplumber wrote: post #85
woodruffw wrote: post #59

Earlier quoted context omitted.

I have no problem with Tornado Cash being openly available software under a permissive license. I have a problem with people running a Tornado Cash-based service that is really just a money laundering service. You should take a step back: "open source" does not rinse away the underlying properties of a service. I can't write and deploy a web application that contracts hitmen and use the MIT license as a defense; the…

What's the difference between money launderying features and privacy features? Tornado Cash in itself does is not launderying money because you still have to prove to the IRS how you got the money or the asset(i.e bills, invoice etc) and you still have to obey KYC rules. You can't just say the money is from Tornado Cash and be done with it. Is the U.S Mint a money launderying service because it provides an untraceabl…

To your last question, this is why financial institutions are required to report cash transactions over $10,000. There are a number of constraints on how untraceable cash is.
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