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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

#171

Post by npc54321 »

woodruffw wrote: post #98
theplumber wrote: post #85

Earlier quoted context omitted.

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.

Guilty until proven innocent (they are blacklisted/sanctioned) I see.

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

#172

Post by whatisweb3 »

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…

Sure. Then it is irrelevant how much money was funding whom, only that a non-zero amount of value was not strictly traceable through typical financial surveillance systems, and so the US automatically deems this activity illegal regardless of how the funds were used.

This is where the “privacy on the blockchain should be a basic right” argument comes in, and what the plaintiff appears to be arguing.

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

#173

Post by realce »

salawat wrote: post #144
realce wrote: post #63

Earlier quoted context omitted.

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

https://bsaaml.ffiec.gov/references/regulations Here ya go. By the by, all of this is to be known or planned out before becoming a money transmitter . I.e., if you cannot do this, you are not legally allowed to serve as a money transmitter .

But - here ya go - crypto is not money, it's real property. Tornado cash is not a bank, it allows you to swap random Pokemon cards between its' users.

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

#174

Post by pcthrowaway »

woodruffw wrote: post #134
dannyw wrote: post #113

Earlier quoted context omitted.

That's interesting. As a Tornado Cash user, I have never associated this with an intentional money laundering service, but rather a bunch of developers advancing zk-SNARKs and other cryptographic primitives. As someone who was excited by the original Bitcoin whitepaper back in 2011, zk-SNARKS was what excited me about cryptocurrency again in 2021.

Your association isn't what regulators are concerned with. They're concerned with the intent of the creator and operator of the service, which is why he's the one who's been arrested.

And you're buying into propaganda suggesting someone pushing the envelope in cryptography is creating tooling specifically for money laundering. 30 years ago, the NSA toed a similar line in their war on PGP, saying it was used in practice for "money laundering, child pornography, and terrorism" - https://reason.com/video/2020/10/21/cryptowars-gilmore-zimme...

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

#175

Post by samatman »

SkipperCat wrote: post #155
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…

Case in point. Ginsu knife - not regulated. Switchblade - regulated. One is intended to slice a tomato, the other is intended for concealed carry and stabbing people (who are not a tomato).

Odd that you would bring up a tool banned in a wave of media-provoked hysteria, one so useful to the disabled that the ban has been overturned, which was never in fact intended as a weapon, isn't a very good one, and just looks cool.

Probably because banning knives is ludicrous behavior, so there aren't better examples.

So you can see for yourself: https://en.wikipedia.org/wiki/Switchblade

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

#176

Post by npc54321 »

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.

It's obvious sam0x17 is against blocking anything.

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

#177

Post by cdiddy2 »

NelsonMinar wrote: post #132

Mixers never fail to astonish me. They are explicitly a product to facilitate money laundering. They are marketed as a way to wash illicit funds. And then the folks who run them get mad when law enforcement tries to shut them down?

They are explicitly a product for user privacy. Given that the depositor can prove the source of funds put into tornado cash via a zk-proof there is no reason that this should be shut down.

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

#178

Post by JumpCrisscross »

capableweb wrote: post #124
woodruffw wrote: post #42

Earlier quoted context omitted.

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.

You're almost getting it. We still allow hot dog stands to exists, even though you could launder money via them. Instead, we let police investigate cases where money laundering is happening, and if it happens to be via one hot dog stand, take down that specific one. Rather than banning hot dog stands in general. Same goes for Tornado Cash. It was not designed for money laundering, although you could use it for that.…

> take down the entities doing the money laundering instead of attacking a tool

This is what they’re doing. North Korea laundered money via Tornado Cash [1]. Authorities announced it and watched Tornado Cash do nothing. So it got sanctioned. Every other mixer is untouched.

[1] https://www.cnbc.com/2022/06/30/north-korea-likely-behind-10....

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

#179

Post by capableweb »

zeusk wrote: post #169
capableweb wrote: post #130

Earlier quoted context omitted.

I used Tornado Cash (non-US citizen here) for hiding transactions from the public (not hiding from the government), and when I filed my taxes, I still accounted for everything that is stored there + transacted via Tornado Cash, just like I do for my bank account. Appendix contained instructions for how they could access the proof of my transactions and accounts to verify themselves.

> I used Tornado Cash (non-US citizen here) for hiding transactions from the public (not hiding from the government) And how exactly does your bank account publish your transactions to the public?

I think you misunderstand. Transactions happening on most blockchains are public, meaning if I send a transaction on the network, if others know my address, they know it was my transaction.

Tornado Cash allows you to sever the tie between addresses on the Ethereum blockchain, so I don't have to have my transactions public, all while still being able to legally declare my taxes as if I didn't use Tornado Cash at all.

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

#180

Post by npc54321 »

FireBeyond wrote: post #161
x86x87 wrote: post #93

Earlier quoted context omitted.

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 askin…

> 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) Because there was all sorts of white washing like this…

> All those people in Mexican and Colombian villages subject

Just go into the frigging villages and arrest the cartel leaders oh wait they are in cohort with the governments of those countries...

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