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Investors sue Treasury Department for blacklisting crypto platform Tornado Cash

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

#401

Earlier quoted context omitted.

You're addressing 18 USC 1956 (a)(1)(A)(i) and (a)(1)(B)(i). I'm concerned with (a)(1)(B)(ii), which concerns reporting requirements. The kind of financial transactions that Tornado Cash enables are fundamentally incompatible with the US's Federal reporting requirements. My understanding of the Dutch criminal code (which is not great!) is that their standard is even weaker: it is sufficient to demonstrate mere concea…

At least under US law, intent is still required. Meaning that while some users of TC may have violated this law, the devs did not, nor did they knowingly aid in it or have any provable intent to do so. I don't know what Dutch law says with regard to intent/knowing participation, but I suspect that any system of laws in a civilized country would generally require it for criminal convictions.

(B)(ii) does not require specific intent. It requires knowledge that the transaction fails to meet reporting requirements.

The intent in question is manifested in Tornado Cash's design, which doesn't pass the malfeasance smell test: you can't absolve yourself of illegality by automating the illegality.

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

#402
post #261

Earlier quoted context omitted.

Quoted post unavailable.

They could if they really wanted to. The ethereum block chain has rolled back to protect rich people's money

Ok, seems like it is time to debunk the usual shitstorm of "arguments"...

There was no "rollback". The DAO hack was reverted through a state change that only happened because there was a consensus on the miners to do it.

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

#403

Earlier quoted context omitted.

At least under US law, intent is still required. Meaning that while some users of TC may have violated this law, the devs did not, nor did they knowingly aid in it or have any provable intent to do so. I don't know what Dutch law says with regard to intent/knowing participation, but I suspect that any system of laws in a civilized country would generally require it for criminal convictions.

(B)(ii) does not require specific intent. It requires knowledge that the transaction fails to meet reporting requirements. The intent in question is manifested in Tornado Cash's design, which doesn't pass the malfeasance smell test: you can't absolve yourself of illegality by automating the illegality.

The intent in question is manifested in Tornado Cash's design, which doesn't pass the malfeasance smell test: you can't absolve yourself of illegality by automating the illegality.

Given that it also has legitimate uses, I think that's a very difficult case to make. Also, with very limited exceptions, nearly all crimes in the US require intent and/or knowing participation. It's a fundamental tenet of our system. There is a reason that they aren't being prosecuted in the US, and those reasons are outlined above. Perhaps Dutch law is different enough to allow a conviction; time will tell.

I'd also point out that Apple's device encryption scheme was specifically designed so that Apple itself cannot unlock devices, which thwarts law enforcement subpoenas for assistance. They can legitimately throw their hands up in the air and say "we have no ability to help you" - and that's by design. It is not illegal to design systems in this way. It just shifts the legal liability for misuse onto the users, where it should be.

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

#404
post #54

Does anyone have a link to the suit itself ?

I believe it's this : https://storage.courtlistener.com/recap/gov.uscourts.txwd.11... Courtesy of https://web3isgoinggreat.com/?id=coinbase-funds-lawsuit-agai...

Thank you!

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

#405

Earlier quoted context omitted.

Wouldn't filing a form 8300 be unconstitutional violation of the 5th amendment if the cash is an element of the crime of both parties? As an example, felons can't be charged with NFA violations for owning a short barrel rifle for example because registering their firearm would be self-incrimination. I believe Timothy Leary also got out of being charged with Marijuana reporting [tax] requirement because filing for the…

I have NEVER heard of any of this. Can you provide any sources? I think the 5th has been restricted enough by the courts that it literally only matters if you EXPLICITLY invoke it. (At least this is my understanding of Berghuis v. Thompkins.)

Leary v United States https://supreme.justia.com/cases/federal/us/395/6/

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

#406
post #189
post #152

Earlier quoted context omitted.

What's the legitimate use case for using cryptocurrency mixers? What would be this kind of activity that would grow and encourage "pro-social economic activity?" What harm is encountered by these innocent people? From my perspective, an economically rational actor would want to minimize overall money transmission costs, so they'd avoid cryptocurrency mixers unless they had a particular reason to.

with open ledgers everyone can see your revenue. This isn't something businesses want to show competitors. Anything that can obscure your wallet (which gives away how much you own as well as shows income) can help obscure this data, which is extremely valuable to some types of businesses. I'm sure there are other examples, but this is a good one off the top of my head and I personally have used mixers for this very p…

Hadn't considered the fact that wallet balances are public, but it seems like a rather niche need as opposed to having the ability to launder funds and irrevocably transfer them. The latter I believe is very appealing to people who are transferring proceeds from criminal activities.

Thanks for sharing though, I hadn't thought of wanting to hide one's wallet balance from other people as a need.

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

#407
post #344

Earlier quoted context omitted.

Money laundering requires a "predicate offense" Structuring is one of the most common methods of facilitating money laundering. No predicate offense required. It’s illegal all on its own. https://bsaaml.ffiec.gov/manual/Appendices/08

Yes, but the same intent provisions still apply to the entity that enabled the structuring. Tornado Cash has legitimate use cases - I had one prior to the OFAC issue (hiding the source of funds to an address in order to prevent certain bots from reacting to it). So the devs cannot have formed intent to aid in any of the crimes that TC may have unwittingly enabled. Casinos are used as vehicles for structuring and mone…

[Casinos] don't have the intent to aid in these activities though, which is why they are allowed to operate.

Casinos are allowed to operate because not only do they not have the intent to aid these activities, they happily track and report everything they're required which is just as much as a bank is required. They aren't the hotbed of money laundering you seem to think they are.

https://www.fincen.gov/resources/statutes-regulations/guidan...

https://casinogrounds.com/blog/know-your-customer-gambling/

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

#408

Earlier quoted context omitted.

If the funds aren't procured through criminal activity, then it can't be considered money laundering. Only if the individual doesn't declare a taxable event to a tax authority has a crime been committed.

no, it's money laundering even if the funds haven't been procured from criminal activity. The regulations don't care where the money comes from, they're just specifying what reporting needs to happen around the movement of money. Not being able to properly describe where the money comes from is a crime. I've worked in the finance industry, and I've worked with people who've seen bad guys turn up with suitcases full o…

>>no, it's money laundering even if the funds haven't been procured from criminal activity.

You are wrong.

FINCEN "Money laundering involves disguising financial assets so they can be used without detection of the illegal activity that produced them."

WIKIPEDIA "Money laundering is the process of concealing the origin of money obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source."

https://www.fincen.gov/what-money-laundering

https://en.wikipedia.org/wiki/Money_laundering

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

#409

Earlier quoted context omitted.

> If a smart contract does something illegal, the person who deployed it has no more responsibility than if someone does something illegal with encryption software downloaded from Github. If I rig up my car to explode when someone walks by whistling the right tune, am I without responsibility? I didn't blow up the car.. the car blew itself up. Obviously I'm at fault. There is no debate here. Any automation you create…

> If I rig up my car to explode Mechanical devices are not protected as speech. > If I hire a hitman.. I am guilty of murder. SCOTUS has already carefully defined this in the Brandenburg test . Speech is only not protected when it results in direct, imminent lawless action. And SCOTUS has consistently ruled that the boundary for the test is extremely concrete. (Contrary to popular opinion yelling fire in a crowded th…

The person you're responding to wasn't making a "free speech argument". And I don't see how this is in way way a free speech issue.

He's saying just because you set up an ATM in the middle of a city and say, and then say feel free to wash your illegal cash here to do some money laundering.

The act of it being on blockchain and "decentralized" wont make a difference, anyone offering said "launder ATM" could be convicted of a crime.

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

#410
post #407

Earlier quoted context omitted.

Yes, but the same intent provisions still apply to the entity that enabled the structuring. Tornado Cash has legitimate use cases - I had one prior to the OFAC issue (hiding the source of funds to an address in order to prevent certain bots from reacting to it). So the devs cannot have formed intent to aid in any of the crimes that TC may have unwittingly enabled. Casinos are used as vehicles for structuring and mone…

[Casinos] don't have the intent to aid in these activities though, which is why they are allowed to operate. Casinos are allowed to operate because not only do they not have the intent to aid these activities, they happily track and report everything they're required which is just as much as a bank is required. They aren't the hotbed of money laundering you seem to think they are. https://www.fincen.gov/resources/sta…

They aren't the hotbed of money laundering you seem to think they are.

I spent a fair amount of time in the gaming business, and I can tell you that this statement is patently false. Very little of it gets caught, because the people involved in such schemes know what the rules are and simply work around them. Casinos themselves also sometimes turn a blind eye to such activity when it is especially profitable for them. Example [1]. That occurred even with the reporting requirements.

[1] https://www.justice.gov/usao-cdca/pr/operator-venetian-resor...

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