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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

#101

Post by eropple »

bitxbitxbitcoin wrote: post #69
woodruffw wrote: post #56

Earlier quoted context omitted.

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.

There's no such thing as financial privacy when you, by virtue of being a citizen of a country, consent to be taxed on income and investment. Your financial actions may not be necessarily public to your fellow citizens but they absolutely and without possible argument must be to your tax assessor, and this exists to hide transactions from them. Of course it's illegal.

You can revoke that consent, as it is possible to become a citizen of no country, but I wouldn't recommend it.

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

#102

Post by helen___keller »

I kind of agree that Treasury should not have exactly this power to ban Tornado protocol. However, I believe Treasury certainly has the power to ban all transactions with networks hosting money laundering protocols.

It would certainly be worse for crypto if it were illegal to buy sell ETH and friends because their networks host Tornado protocol. I see this attempt to moderate the network itself as “going easy” on crypto investors.

The crux of the issue comes down to moderation. In a sufficiently large and complex network, moderation becomes a necessity not an option. This won’t be the last case.

Regulators generally strike when sufficiently popular technology makes it sufficiently easy to perform sufficiently damaging illegal activity.

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

#103

Post by logicalmonster »

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…

> Normally, there'd be an aspect of plausible deniability

If it was publicly known that you had exactly 1 ton of legally acquired gold in your house, would you feel perfectly safe sleeping at night? Is there not 1 sicko out there that would be willing to torture your family to find the combination to your vault?

Plausible deniability exists here. It's called wanting privacy, and there's perfectly valid and non-criminal reasons to want privacy, despite repeated false claims.

Here is the problem. Many cryptos are not actually anonymous. If somebody has somebody's wallet address, they can look into tracing information about them like their net worth and their purchasing history. Even if you were smart enough to use a different wallet address for each transaction, you inevitably have to spend money to live or send money to others and then you can be traced. As tools grow more sophisticated and more data about wallet address ownership gets out there, the more at risk people will be. And once your identity gets out there, there's no shaking the ability to track it short of some form of mixing or obfuscation. In an of itself, mixing or trading to obfuscate your identity shouldn't be considered a crime or unreasonable in the slightest.

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

#104

Post by pigtailgirl »

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…

-- if I move $10k - my institution automatically tells the government I moved $10k - if in the US - the receiving institution also tells the government - I don't have an expectation of privacy - is this also true with Tornado Cash? --

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

#105

Post by phantomathkg »

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…

In the life without crypto. The only way to achieve this is like movies in the 80s, you hand over a suitcase of cash and get whatever you need.

With the invention of paperless transaction, Government steps in and ensure every transaction record is there to show the party of the transaction. This happened, before the invention of the internet.

If you wanna fight, then you will have to undo all the legal changes.

Compare of the little loss of the privacy, and the possibility of funding the evil state like North Korea and its infamous neighbour. I would choose get rid of the evil country.

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

#106

Post by woodruffw »

theplumber wrote: post #97
woodruffw wrote: post #87

Earlier quoted context omitted.

> 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 inst…

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

Regardless of whether this is true (which it probably isn't, at least in the US), it doesn't change the intent. We regulate different things differently based on their intended use.

This should cover your second question as well. Intent is what the government cares about in this instance. And yes, it is indeed illegal to conceal your transactions from the government, at least insofar as they concern money that the government is entitled to tax or review.

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

#107

Post by mzs »

gerikson wrote: post #13

Does anyone have a link to the suit itself ?

The complaint is linked here, you can make a free trial account: https://www.law360.com/articles/1528566/attachments/0

https://www.law360.com/articles/1528566/coinbase-backs-suit-...

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

#108

Post by netheril96 »

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.

That is the point of your parent comment: defeating their argument by their logic. To be logically consistent, the US should either ban both Tornado Cash and Tor or allow both.

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

#109

Post by salawat »

adastra22 wrote: post #62
woodruffw wrote: post #38

Earlier quoted context omitted.

"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.

Most ledgers are not public, or based on any methodology requiring public view, because the only way to both transact, keeping intact a tightly coherent paper trail as required by law is, and ensure privacy is to not make the ledger available in all it's glory to everyone.

Doing what Tornado.cash does, is by definition, laundering, and if you didn't want your financial matters known to the world, mayhaps you should not have used a technology based on public ledger?

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

#110

Post by mattficke »

theplumber wrote: post #97
woodruffw wrote: post #87

Earlier quoted context omitted.

> 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 inst…

Yes, it is a crime to conceal your financial transactions from the government.
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