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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

#441

Post by davidguetta »

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…

wait what ? literally the entire point of financial regulations is to avoid it to "possibly be used for illegal purposes". Starting with the very basic KYC regulation, or the fact that in many countries cash transaction above a limit are forbidden.

I'm all about privacy and anonymity of transactions personally, but tornado investors going all "surprised pikachu" right now after a more-than-previsible ban is a bit laughable...

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

#442

Post by davidguetta »

redox99 wrote: post #52
JustLurking2022 wrote: post #24

Earlier quoted context omitted.

It's a service specifically designed to facilitate money laundering. It's a bit like running a business that produces paperwork to make stolen cars indistinguishable from legal ones - there's no reason such a service should be allowed to exist.

That's like saying knives are designed to facilitate murder. TC is made for privacy, which either is or should be a basic right. Without tools such as TC if I send you money, show you some POAPs[1] I own, or otherwise interact in any way with my crypto, it is fairly simple to deduce or make educated guesses of how much crypto I own, who I send it to or from, and more. This has serious implications not only for privac…

But the entire spirit of financial laws is that privacy is bad, because privacy usually can help people avoid taxes..

People going all pikachu face on this story is really weird as fuck. It was obvious this was going to happen.

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

#443

Post by SkipperCat »

sixstringtheory wrote: post #415
SkipperCat wrote: post #205

Earlier quoted context omitted.

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.

It also depends on context. You can't bring a kitchen knife on an airplane. You will get funny looks from most if you walk around outside with one, even if that isn't specifically banned, but laws evolve out of social convention, so if enough people did it, you could plausibly see it legislated. I'd bet that if you committed some other offense like public intoxication or indecent exposure, and then resisted arrest, y…

True, walk around with a Ginsu knife outside and you better have a chef's hat on...

I'm not sure I 100% agree with the statement "crypto is a competitor". Sometimes it's a currency, sometimes it's a commodity but at the end of the day, it's a store of value that humans own.

US dollars deposited in a bank and crypto in a wallet are owned by the same people, so it cannot be a competitor. It's just another asset class. The fact that Coinbase is a publicly traded company shows that the US government 100% accepts crypto as what I've described.

What they do care about are items and processes who's main purpose is for illegal activities. Guns are a perfect example. You want to buy and register a gun from a licensed dealer, no problem. You want to buy one from a guy in a van and scratch off the serial number, that's a problem. In the eyes of the government, Tornado Cash is too much like the guy in the van.

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

#444

Post by Pils »

downandout wrote: post #418
xeromal wrote: post #413

Earlier quoted context omitted.

For someone who isn't in the know of this case, can you share some legitimate uses for Tornado Cash?

Sure, I used to use it. I won't explain the strategy, but I have a crypto trading bot that sometimes profits at the expense of other bots. The owners of these bots got so annoyed at this that they would blacklist the address at which my bot was, and would then track any addresses that I sent funds to from there and blacklist those in advance. TC broke this ownership chain, so they could no longer preemptively blackli…

Couldn't you just deposit ETH in an exchange and then send it to a fresh address? Seems like a hassle to use TC for that specific use case.

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

#445

Post by [deleted] »

woodruffw wrote: post #374
throwaway742 wrote: post #301

Earlier quoted context omitted.

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

What project? PGP was bundled up and thrown onto the Internet; there was no development or services community established around it. The US Government threw a hissy fit over that and they ended up distributing it as a "book" instead, converting it into a question of free expression. There is no meaningful sense in which PGP could ever be said to "facilitate" terrorism in the same way that Tornado Cash is rightfully c…

[deleted]

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

#446

Post by ok123456 »

woodruffw wrote: post #38
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…

"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…

> The chief selling point of Tornado Cash is money laundering

The same thing could be said about paper money.

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

#447

Post by jfim »

toolz wrote: post #412
jfim wrote: post #406

Earlier quoted context omitted.

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.

Yeah, no doubt it's attractive for money laundering, but the thing is that it's impossible to stop at this point. There are entire digital currencies built on top of zero-knowledge transactions at this point and they aren't hard to get your hands on those coins in my experience. With that in mind, if in fact it's impossible to stop, it seems rather arbitrary to pick and choose which products get targeted and serves n…

That's a fair point. Not knowing much about the space, I assume that they picked an important mixer. If that's not the case, then maybe it's just for show and it won't have a meaningful impact, just like the war on drugs hasn't really stopped drugs from being consumed.

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

#448

Post by adastra22 »

bee_rider wrote: post #355
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?

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...

I think you’re confused about the facts of the situation here. There was no financial service being operated. There was no ongoing business. There was open source code that was thrown over the wall and was locked on the blockchain and immutable.

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

#449

Post by ok123456 »

chrischattin wrote: post #279
JumpCrisscross wrote: post #162

Earlier quoted context omitted.

> the contemporary attitude of “block first, ask questions later (maybe)” The sanctions followed Tornado being fingered as the laundering service used by Norrh Korea [1][2]. [1] https://hub.elliptic.co/analysis/the-100-million-horizon-hac... [2] https://www.cnbc.com/2022/06/30/north-korea-likely-behind-10... .

DPRK uses SSL and PGP. Should we sanction those code bases as well?

They tried that in the past with export restrictions.

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

#450

Post by sofixa »

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.

SEPA Instant works in seconds regardless of time of day. Next question?
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