Investors sue Treasury Department for blacklisting crypto platform Tornado Cash • Hacker News Board

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

#201

Post by hef19898 » Mon, Sep 12, 2022, 4:03 PM UTC

josh2600 wrote: post #186

JumpCrisscross wrote: post #158

Earlier quoted context omitted.

> chief selling point of Tornado Cash is money laundering, which is in and of itself a crime in both the US and Netherland Also, law enforcement publicly announced Tornado was used to launder billions by North Korea [1]. Months ago [2]. Everyone continued as if nothing happened. This wasn’t based on hypotheticals. [1] https://hub.elliptic.co/analysis/the-100-million-horizon-hac... [2] https://www.cnbc.com/2022/06/30/…

Just going to point out that Tornado cash did invoke chainalysis oracles for all of their interface tools. The problem is that on ethereum it's not possible to censor a deployed contract. There is a possibility that miners could collude not to authenticate blocks with tornado cash transactions in them, but that gets into some interesting game theory in a globally distributed system. Not every miner is subject to US l…

Sanctions against North Korea are not just US law, in fact they apply in basically every jurisdiction that actually worth operating in.

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

#202

Post by ikeboy » Mon, Sep 12, 2022, 4:04 PM UTC

JumpCrisscross wrote: post #164

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.

> have never associated this with an intentional money laundering service Most customers of a canonical money launderer, a laundromat, don’t realise it’s a front. That doesn’t matter if the owner is laundering money. Tornado laundered money for North Korea [1]. (It announced this months before the sanctions, a period in which the developers could have reacted but didn’t [EDIT: in any meaningful way].) That it was als…

This is incorrect. Tornado devs blocked all OFAC addresses from accessing the frontend, which is the only power they had, since the contracts themselves are immutable. See https://www.coindesk.com/tech/2022/04/15/tornado-cash-adds-c...

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

#203

Post by TEP_Kim_Il_Sung » Mon, Sep 12, 2022, 4:04 PM UTC

JumpCrisscross wrote: post #167

TEP_Kim_Il_Sung wrote: post #119

Earlier quoted context omitted.

So say you, and yet my claim is self-evident, while yours needs hordes of robe&badge clad bureaucrats, and the promise of violence, to enforce.

> yet my claim is self-evident, while yours needs hordes of robe&badge clad bureaucrats You’re describing due process. That’s a feature. An AK-47 being metallic may be self evident. That doesn’t make it relevant to a murder investigation.

An AK-47 is not relevent to a murder investigation.

There are thousands of them in the U.S. and owned by innocents. It would be unreasonable to come after all AK-47 owners because one was used in a crime. Rather, it would be up to the cops to find other facts about the weapon, perhaps how much more metallic it looked than your standard AK, and in which spots. Wear marks can be just as revealing as serial numbers.

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

#204

Post by x86x87 » Mon, Sep 12, 2022, 4:05 PM UTC

polygamous_bat wrote: post #154

x86x87 wrote: post #139

Earlier quoted context omitted.

Yes. Anecdotal evidence. The best kind! Who decides who the mafia is?

As I said, this is only a first order estimate, but even that is over hundreds of millions. I am sure the FBI has a much more detailed forensic account of tornado that they will bring up in the courts, which will then rule according to the law based on the evidence. On the other hand, if you don't trust FBI, the law, or the courts to do the right thing, you have a different problem entirely, at which point none of wh…

There are at least 2 things here: 1) the laws and how they are applied and 2) what is in the interest of the people and what should the laws be?

I can trust law enforcement to do its job. Heck I might even trust it to do the right thing when it comes to gray areas / methods they use. But... I can definitely disagree with some laws. In fact, people doing something because it's law without critically thinking about it has worse consequences than disagreeing with the law.

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

#205

Post by SkipperCat » Mon, Sep 12, 2022, 4:05 PM UTC

samatman wrote: post #175

SkipperCat wrote: post #155

Earlier quoted context omitted.

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

You're right - the switchblade is an odd example. I've now learned a good bit about it from that link!

But the core point is that societies will ban things that generate more harm than benefit, be it real or perceived. This is the crux of the gun debate in America right now.

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

#206

Post by hef19898 » Mon, Sep 12, 2022, 4:06 PM UTC

adastra22 wrote: post #200

JumpCrisscross wrote: post #194

Earlier quoted context omitted.

> What could the developers have done? Not sure. Their problem. If the only option was shutting it down, that. It would have looked better, which could have prompted sympathetic legislation. At the very least, it would have likely avoided sanctions.

You can’t just say “they had months to react but didn’t” if you don’t have any idea of what they could have done differently. React how?

Close down until you figured out a way to react. Money laundering is serious crime, helping North Korea is as well. Tornado cash did apparently both, and authorities gave them a heads up. If it was me, I would close my shop down.

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

#207

Post by realce » Mon, Sep 12, 2022, 4:06 PM UTC

polygamous_bat wrote: post #190

realce wrote: post #173

Earlier quoted context omitted.

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.

Great news, helping people get rid of their stolen goods, aka "fencing" is also illegal. [1] https://www.justice.gov/archives/jm/criminal-resource-manual...

I'm sure that's why eBay, Craigslist, and every other marketplace are blocked by the US Treasury? "Great news" pfft come on.

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

#208

Post by whatisweb3 » Mon, Sep 12, 2022, 4:08 PM UTC

sjsdaiuasgdia wrote: post #61

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…

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 la…

There is no doubt known cyber criminals and enemies of the US are using this tool. The question I raised is: what percentage of illicit activity is acceptable? If the E2EE chat app Matrix facilitates 10-30%, should it also be considered a primarily criminal tool worthy of a sanction?

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

#209

Post by x86x87 » Mon, Sep 12, 2022, 4:08 PM UTC

georgyo wrote: post #147

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?

I think it is more crazy that that are so openly breaking the law. The same is true with all the loto and gambling crypto sites. They run without any oversight and are blatantly breaking the law.

which law are they breaking? in which jurisdiction?

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

#210

Post by ASalazarMX » Mon, Sep 12, 2022, 4:08 PM UTC

cdiddy2 wrote: post #177

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.

> They are explicitly a product for user privacy

That's the facade. In my experience, Bitcoin is still the main ecoin demanded in phishing/ransomware incidents, even when more privacy-friendly ecoins exist. A tumbler's purpose is distorting Bitcoin's public blockchain (one of its core tenets), and that's very attractive to criminals.