Earlier quoted context omitted.
It's too early to say that definitively, imo. As a counterexample to the DAO hack, the parity multi-sig hack of 2017 resulted in over $160M worth of ether being frozen on-chain. There were calls to hard fork Ethereum to return it, but the hard fork was never tenable. That was barely a year after the DAO hack and fork. Personally, I believe there is a zero chance that a hard fork based on Tornado Cash becomes viable.…
A hard fork based on tornado cash isn't likely, but what if miners refuse to process blocks that have tornado transactions in them? What happens then?
Investors sue Treasury Department for blacklisting crypto platform Tornado Cash
351–360 of 544 posts
Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash
#352Earlier quoted context omitted.
> 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"... > B…
> Does bitcoin store money? still waiting. > How is a bitcoin address meaningfully different from an account? Well, for one, it's only an address. Not a ledger. Bitcoin transactions point money at one or more address. Transactions, you might argue, are one-off ledgers. But then bitcoin is just a collection of those transactions & relevant/necessary data to support them them, compiled & validated using a variety of ma…
> still waiting.
My answer is still "no (but many banks don't either)", as I said in my previous reply. Unless you mean digitally, but that's just "having accounts". If you mean digitally, then my answer is "obviously yes".
> Well, for one, it's only an address. Not a ledger.
What? The entire mechanical basis of Bitcoin (the blockchain) is a ledger (big database of timestamped transactions) with a somewhat unusual timestamping and tamper proofing mechanism. Each transaction has a set of associated addresses. I was going to say that this is not meaningfully different from individual account ledgers, but actually, this is literally how transaction history would be stored in an RDBMS. It's not different at all.
The existence of this (public) ledger is what creates the demand for things like Tornado Cash in the first place.
> Bitcoin transactions point money at one or more address.
Banks can facilitate transactions between arbitrary whole numbers of accounts also (off the top of my head: 1- paying interest; 2- payment; 3+- escrow)
> bitcoin is just a collection of those transactions & relevant/necessary data to support them them, compiled & validated using a variety of mathematic calculations.
Yes. Functionally, that results in a (limited) bank. Or at least, it's closer to that than it is to cash.
Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash
#353Earlier quoted context omitted.
"The chief selling point of Tornado Cash is money laundering, which is in and of itself a crime in both the US and Netherlands." You have a fundamental misunderstanding of US law with regard to money laundering. Obfuscating the source of funds, by itself, is not money laundering. Money laundering requires a "predicate offense" - the money that is being laundered must be proven to have had an illicit source. Further,…
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 money laundering every minute of every day - on a much larger scale than anything Tornado Cash could ever have achieved. They don't have the intent to aid in these activities though, which is why they are allowed to operate.
Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash
#354Earlier 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…
> What's the difference between money launderying features and privacy features? Really good question. I'd say "if your privacy feature allows you to trade above the trigger limit (usually 10K USD/EUR/GBP) without having to state the source of your funds, then it's actually a money laundering feature"
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.
Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash
#355Earlier 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?
You can't reasonably expect a random commenter to have full insight into their legal situation. They should have talked to their lawyers and found options. There is a chance that their financial service is incompatible with the laws in some jurisdictions, and so they might not be able to do business in those jurisdictions. Financial services are heavily regulated...
Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash
#356Earlier quoted context omitted.
> In an of itself, mixing or trading to obfuscate your identity shouldn't be considered a crime or unreasonable in the slightest. "Financial privacy" isn't a real thing, because you owe taxes on income and investments. Can you explain to me how your tax assessor is able, then, to properly identify your income and tax you on it as appropriate? (Money laundering and tax evasion do not always go hand-in-hand. Many laund…
Privacy exists even if the government violates it due to their tax schemes. A _right_ to privacy may even exist as a natural human right. If a country decides collectively that this is the case, then what ought to change is the tax policy, not every user service. We can argue over how easy it would be, but I would presume its possible for a government to switch over to taxing hard assets like land, machines, and ship…
> If a country decides collectively that this is the case, then what ought to change is the tax policy,
Your post is largely meaningless because, while this line is inarguably true, this also hasn't happened and so AML and KYC are still a thing--and there's precious little to indicate that anyone really cares about it aside from starve-the-beast conservatives and cryptocurrency enthusiasts, and that's not a majority.
If a country does decide so collectively, great! We haven't. So yeah, it's illegal, and the currently-fictive right to financial privacy remains so.
Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash
#357Earlier quoted context omitted.
Code has been, can be, and will be sanctioned. Will they be successful is a different question. The SEC is well-funded, has a strongly supported mandate, and has a long arm. They are playing a long war of attrition.
the SEC isnt involved here .
Of course they are ;)
Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash
#358Earlier quoted context omitted.
Well it probably was, among other things. But we're censoring a network here, not just a tool. Nobody is making the cryptography behind Tornado illegal.
The open source software and cryptographic protocol is implicitly targeted with this order. You can see it in how private companies are now handling the Tornado Cash code and contributor accounts. If you create a similar privacy tool with zk-SNARKs do you really think it won’t also become a target for sanctions in time? This is known as “chilling effect” in a legal context.
To expand on this, the chilling effect here is that even if the code behind tornado cash isn't explicitly illegal, using it on a blockchain in practice is incredibly risky.
People who might otherwise want to use this for financial privacy would be wary, since if they deposit funds to the contract, they don't have any way to know if they'll be able to use the unlinked funds later if withdrawn.
Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash
#359Earlier quoted context omitted.
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.
I live in Europe and routinely do bank transfers in seconds on weekends.
iDEAL? or something else?
Re: Investors sue Treasury Department for blacklisting crypto platform Tornado Cash
#360Earlier quoted context omitted.
If the vast majority of stakers agree to OFAC regulations (which appears to be the case) then the end result is censorship.
What gives the appearance that this is the case? Even if the "vast majority" of stakers agree with the regulation, the regulation is ambiguous as to whether stakers are expected to refrain from including TC transactions in their own blocks, or actively orphan all blocks that include TC transactions. The latter hurts their staking revenue and effectuates a soft fork. (Staking revenue is hurt due to the inactivity corr…
It'll all become clear soon enough.