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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

#221

Post by JumpCrisscross »

ikeboy wrote: post #202
JumpCrisscross wrote: post #164

Earlier quoted context omitted.

> 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...

> Tornado devs blocked all OFAC addresses from accessing the frontend, which is the only power they had, since the contracts themselves are immutable

Which does nothing in practice. Any AML lawyer would have advised them so. The fact that the service was designed to be incompatible with the law isn’t a get-out-of-jail card.

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

#222

Post by letsgo39 »

I just want to say, I find it very Orwellian that HN shuts down immediately any conversation about theft of IP through these 'archive.ph' links, and even removes the 'reply' button to ensure so.

Just watch how quickly this comment will disappear or get downvoted.

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

#224

Post by tmpz22 »

bornfreddy wrote: post #220
tmpz22 wrote: post #213

Can anyone defending Tornado Cash provide a concrete example of mixing crypto revenues in a way that is not clearly illegal? I've scrolled this whole thread, and there are a lot of people defending it, but none of them provided a full e2e example of "I sell x to y, y can only use crypto, y will be persecuted if I don't obscure my transactions from z, so therefore this is a good thing" Yes we can all do the hypothetic…

From the article: > One plaintiff in the lawsuit is a crypto investor who used Tornado Cash to send funds to support the Ukrainian war effort, hoping to preserve his anonymity and avoid retaliation from the Russian government.

Ok so a user who already has crypto and doesn't want to convert it first (fees) may be encouraged to mix it (privacy) and that is a legitimate usecase. That makes sense to me, though it seems like a very rare event that should not be the sole basis for the underlying platform.

Also I should've read the full article first.

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

#225

Post by croes »

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…

Are you sure they are lazy or are they just underfunded and with to few personnel?

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

#226

Post by yieldcrv »

tmpz22 wrote: post #213

Can anyone defending Tornado Cash provide a concrete example of mixing crypto revenues in a way that is not clearly illegal? I've scrolled this whole thread, and there are a lot of people defending it, but none of them provided a full e2e example of "I sell x to y, y can only use crypto, y will be persecuted if I don't obscure my transactions from z, so therefore this is a good thing" Yes we can all do the hypothetic…

Oh this NYTimes article doesn't go into detail but Coinbase's blog entry about them spearheading the lawsuit does have specific use cases, and the associated court filing has even more use cases, that are not theoretical at all.

They all do it for privacy. Someone with a publicly labelled address doesn't want people watching them to know they're making a large purchase, so funds go in through tornado cash, and out to a new address nobody is looking at.

If you are not aware, Tornado Cash already comes with tools to solve investigative zeal, anyone audited can prove the prior source of funds with Tornado Cash, at which point the investigator can tell if they were clean or not, as opposed to just assuming because they aren't familiar with "a concrete example of mixing crypto revenues in a way that is not clearly illegal"

https://storage.courtlistener.com/recap/gov.uscourts.txwd.11...

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

#227

Post by douglaswlance »

hef19898 wrote: post #206
adastra22 wrote: post #200

Earlier quoted context omitted.

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.

It cannot be shut down. The contract is immutable. It's still live, and it will still be live for decades to come, with new duplicates of the contract being published every day.

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

#228

Post by Consultant32452 »

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?

Who do you believe launders more money: all crypto mixers combined or the US intelligence community?

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

#229

Post by bornfreddy »

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…

Also, with PoS coming in a few days, the game changes. IIUC, stakers will be obligated to validate all (valid) transactions unless they are willing to forfeit their staked ETH... No preferential treatment anymore.

(This is still new to me, please correct me if I'm wrong)

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

#230

Post by dannyw »

JumpCrisscross wrote: post #221
ikeboy wrote: post #202

Earlier quoted context omitted.

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...

> Tornado devs blocked all OFAC addresses from accessing the frontend, which is the only power they had, since the contracts themselves are immutable Which does nothing in practice. Any AML lawyer would have advised them so. The fact that the service was designed to be incompatible with the law isn’t a get-out-of-jail card.

What would you say about Signal, designed to be incompatible with the law around lawful subpoenas?
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