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

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

#301

Post by throwaway742 » Mon, Sep 12, 2022, 5:14 PM UTC

woodruffw wrote: post #247

pcthrowaway wrote: post #174

Earlier quoted context omitted.

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...

For the umpteenth time in this thread: intent matters. Regardless of what the NSA said 30 years ago, it is manifestly apparent to every single person in this conversation that neither HTTPS nor PGP nor any other cryptographic scheme designed for individual privacy was designed with money laundering in mind. At the absolute worst , they were agnostic to the presence of criminal activity. This is in contrast to Tornado…

So if the developers of PGP were told that ISIL was using their service to facilitate terrorism should they shut down the project?

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

#302

Post by JumpCrisscross » Mon, Sep 12, 2022, 5:15 PM UTC

cdiddy2 wrote: post #282

JumpCrisscross wrote: post #252

Earlier quoted context omitted.

> Doesn't mean that we should ban cash Mixers aren’t banned. A mixer that was used to launder money by North Korea was.

And yet US banks aren't banned https://www.nbcnews.com/news/world/secret-documents-show-how...

> yet US banks aren't banned

Banks which collect KYC and respond to criminal probes. Those that don’t absolutely get sanctioned.

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

#303

Post by TEP_Kim_Il_Sung » Mon, Sep 12, 2022, 5:17 PM UTC

qeternity wrote: post #278

TEP_Kim_Il_Sung wrote: post #96

Earlier quoted context omitted.

For the time being the government has yet to decide wether crypto is money, a currency, an asset, or a security. Instead it has been going after people for all of them.

Because crypto claims to be all 3 and has created various forms that behave like all 3.

This would hold up if government treated individual forms individually, yet they mix&match arbitrarily.

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

#304

Post by phatfish » Mon, Sep 12, 2022, 5:18 PM UTC

hef19898 wrote: post #198

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…

Everytime a major bank is caught doing something like that, UBS and Deutsche Bank come to mind, there is huge outcry about the lack of consequences. If a crypto exchange get's caught doing it, and there are consequences, there is huge outcry (among certain people) because there are consequences. Added severity, in the case of tornado cash, was helping North Korea. So not just money laundering but also circumventing s…

It's plain old double standards, Tornado Cash is the "peoples" money laundering service, anyone can use it, so it could be of benefit to them at some point.

Global banks that could facilitate the same thing would only consider doing it for the super-rich to hedge against the possibility of getting caught and fined. So are not open to the average person, hence people have no problem calling for them to be held to account.

Both should get the same treatment. That goes doubly for the global banks that have historically caused far greater problems than TC.

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

#305

Post by toomuchtodo » Mon, Sep 12, 2022, 5:18 PM UTC

joyfylbanana wrote: post #233

josh2600 wrote: post #186

Earlier quoted context omitted.

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…

> The problem is that on ethereum it's not possible to censor a deployed contract. It is possible, via a hard work. Similarly as it was possible to transition from PoW to PoS. The question is, if there is political will for that. Clearly changing the protocol rules is possible has it has been done with ethereum in the past, including for censorship reasons (in the earlier hard fork the reason was to cancel a hack).

It is delightfully ironic to see code as law slowly chipped away by Law until law is code and you’re back to finance business logic on a slow distributed computer fabric.

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

#306

Post by amalcon » Mon, Sep 12, 2022, 5:20 PM UTC

mr_spothawk wrote: post #296

amalcon wrote: post #291

Earlier quoted context omitted.

Interesting how you think I don't know what a bank is, or what Bitcoin is. I know what Bitcoin is; I have read both the whitepaper and (more importantly) most of the code (at the time). I do concede that I have an incomplete understanding of what a bank is, since banks do a lot of different things. Adjusting the money supply and intermediating/securing transactions are both among the things that banks do. Those are t…

Banks store money, right? Does bitcoin store money? Banks have accounts, right? Does bitcoin have accounts?

> Banks store money, right? Does bitcoin store money?

You mean physically? Plenty of banks (especially online banks and investment banks) don't physically store any more cash than something like a jewelry store. Physical storage is hardly a core characteristic of banking; I've never been to a branch of any of my current banks. If you don't mean physically, I can't see how this is different than "have accounts"...

> Banks have accounts, right? Does bitcoin have accounts?

An account is just a ledger of credits and debits coupled with some form of access control. How is a bitcoin address meaningfully different from an account? Keep in mind that not all accounts are interest bearing, and it's very possible (even common) for one individual to have multiple accounts.

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

#307

Post by colejohnson66 » Mon, Sep 12, 2022, 5:22 PM UTC

chrischattin wrote: post #276

sofixa wrote: post #170

Earlier quoted context omitted.

Why don't you use the traditional banking system, which doesn't result in publicly listed transactions? I struggle to find a legitimate use case for hiding transactions from your bank and thus tax authority (assuming a developed country).

Have you ever tried to make a wire transfer on a weekend? Having access to your money outside of banking hours is just one of many use cases I can think of off the top of my head.

The vast majority of the time, you don't need a wire transfer. And if your debit/credit card doesn't work on the weekend, you need a new bank; That's not the fault of banking as a whole.

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

#308

Post by JumpCrisscross » Mon, Sep 12, 2022, 5:24 PM UTC

ikeboy wrote: post #243

JumpCrisscross wrote: post #221

Earlier quoted context omitted.

> 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.

I read the lawsuit in question. None of the plaintiffs were arrested. Their issue is that OFAC overstepped the bounds of their statutory authority, which none of your arguments address. I'm also not aware of what US law would have been violated by either 1. Coding and publishing the tornado source code 2. Deploying several instances to the blockchain in 2019. There's no US prosecutions based on creating or operating…

> issue is that OFAC overstepped the bounds of their statutory authority, which none of your arguments address

Plaintiffs' argument relies on Tornado Cash not being "a person, entity, or organization" [1]. The complaint declares OFAC exceeded its statutory authority, but provides no specifics. (The code cited in ¶ 9 [2] gives courts the authority to tell agencies not to do bad things. That isn't an argument for or against OFAC's specific actions in this case.)

In summary, it's a hope-and-a-prayer complaint. Maybe someone at OFAC fucked up the paperwork, thereby giving rise to some modicum of relief.

[1] https://storage.courtlistener.com/recap/gov.uscourts.txwd.11... ¶ 4

[2] https://www.law.cornell.edu/uscode/text/5/706

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

#309

Post by Fnoord » Mon, Sep 12, 2022, 5:29 PM UTC

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…

If its used for a high percentage of criminal purposes (for example 90%) banning is legitimate.

Also, who are these "investors"? They're speculators. When you speculate, there's risk involved. This is one of them. This case is an unnecessary burden on our legal systems, I hope it gets thrown out of court ASAP.

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

#310

Post by dcolkitt » Mon, Sep 12, 2022, 5:30 PM UTC

Jasper_ wrote: post #238

dcolkitt wrote: post #218

Earlier quoted context omitted.

> when technology is designed in a way that makes it hard to work within the bounds of the legal system, it's usually the case that the legal system wins, not the technology. If this was true, Internet pornography would have been successfully squashed by the existing obscenity laws that heavily regulated pornographic material.

It was, though? And continues to be. In the mid-90s, you could pretty easily find illegal material without looking too hard. It was already illegal by the Child Protection and Obscenity Enforcement Act, an early Internet bill which mostly said "illegal porn is still illegal, even if it's on a computer", and it also required producers of pornography to keep detailed records on talent & crew in the production. By the m…

> Pornography isn't illegal in the US

I'm sorry, but this isn't true. At the early onset of the web there were a huge number of state and local laws regulating obscene material. Many states even tried to explicitly regulate Internet pornography:

> Between 1995 and 2002, almost half of the states were considering bills to control internet pornography, and more than a quarter of states enacted such laws.[1]

Along similar lines, sex toys were prohibited or heavily regulated in a number of US states before 2000. The technological reality of e-commerce means that the vast majority of the enforcement of those laws became impossible, and sex toys are de facto legal in every jurisdiction in America.

[1]https://en.wikipedia.org/wiki/United_States_obscenity_law