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Can you show me any statement in US law where such a practice is illegal? What you're describing sounds exactly like a casino.
U.S. Code § 1955 - Prohibition of illegal gambling businesses [1] stops you from starting a gambling parlor or casino on your basement without a government license. [1] https://www.law.cornell.edu/uscode/text/18/1955
Missing from this conversation is the fact that TC was specifically designed to be able to prove your input/output if law enforcement requests it.
It is code.
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 cry…
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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.
Same goes for Tornado Cash. It was not designed for money laundering, although you could use it for that. If the US government finds cases of money laundering happening, take down the entities doing the money laundering instead of attacking a tool.
If you think Tornado Cash was designed for money laundering, please point us to the documents where this is mentioned. I've personally followed the development of the project, but never saw any mentions of money laundering at all, anywhere.
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…
It's not an organization. This is more like the FBI banning GPG because terrorists use it.
FTA:
> They contend that the Treasury Department lacks the authority to restrict access to a software program.
This is the point. No one would have batted an eye if OFAC sanctioned addresses that used TC to launder money. Nobody would have batted an eye if the FBI prosecuted criminals for using GPG to plot a crime.
But what happened here is akin to the FBI, using powers that it hasn't been granted in law, to ban GPG.
https://www.coincenter.org/education/advanced-topics/how-doe...
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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…
Really good question.
I'd say "if your privacy feature allows you to trade above the trigger limit (usually 10K USD/EUR/GBP) without having to state the source of your funds, then it's actually a money laundering feature"
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It's more akin to saying people shouldn't be able to provide banking services if they don't have sufficient KYC practices.
What part of "trustless peer-to-peer electronic CASH", in Satoshi's Bitcoin whitepaper, did you not understand? There is no banking going on.
Sarcasm aside, I think Bitcoin functionally bears much more resemblance to a distributed bank than to distributed cash. It's not perfect resemblance, and there are people who disagree with me. Just saying that it's cash isn't sufficient evidence to convince me, even if the speaker happens to be the inventor.
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Enlighten us with how washing differs from laundering then; because I haven't had the crypto koolaid yet.
-- as it was explained to me (I don't crypto) - because everything is public - you might want to disassociate (wash) transactions from yourself for perfectly legitimate reasons - not really needed in traditional finance as people typically don't have access to your bank account - however - this is not necessarily the same as wanting to take money you gained illegitimately and make it legitimate (launder) --
The government will not carve out a subset of crimes because of an unnecessary self-imposed restriction on financial privacy.
Missing from this conversation is the fact that TC was specifically designed to be able to prove your input/output if law enforcement requests it.