4 ms·

> it's a lot easier for someone to create a new mixer A secondary effect of sanctions is indicating what the regulators do and do not consider illegal. Up unti

by WJW 4y ago

> it's a lot easier for someone to create a new mixer A secondary effect of sanctions is indicating what the regulators do and do not consider illegal. Up until now, it was at least marginally possible to state "But I didn't know it was illegal. TornadoCash was doing the exact same thing for years and never got into trouble". After this ruling, that excuse no longer applies and that might dissuade a lot of people who might otherwise be tempted to run a mixer of their own. Also, reputation counts for a lot when it comes to mixers. A mixer that has existed for years is probably legit, a mixer that started up yesterday is a lot more likely to be a rugpull. Even if it will come down to whack-a-mole with the Treasury sanctioning new mixers as they pop up, it might be very difficult for any individual mixer to build up enough reputation to attract significant business.

deleted 4y ago
[deleted]
vl 4y ago
TC mixer is different though, it’s smart contract/zero proof based. Once it’s deployed, it just continues to work. Owners can’t steal funds. If you believe that smart contract is implemented correctly, you can continue to use it. TC utility is diminished by other fact - TC is blocked on exchange level, exchanges do not accept funds coming from TC smart contract.
- bergenty 4y ago
  On a tangent, are smart contracts automatically “open source” - as in anyone can see the source or is there a way to obfuscate what’s on the blockchain?
  - soco 4y ago
    I thought one of the selling points was that everybody can check the contract...
    - saurik 4y ago
      Just because contracts can exist whose code you don't have doesn't mean you don't know how anything works: not only can you build something on Ethereum that is open source and with verifiable behavior, that is currently the norm and obfuscated contracts are not taken seriously.
    - WJW 4y ago
      Just because you don't have the source code does not mean you cannot inspect what a binary does by disassembling it. (And as any programmer will tell you, just because you have the source code available does not automatically mean you can see where it has a tricky edge case with massive security implications. The obfuscated C contests are proof of that)
  - saurik 4y ago
    You can obfuscate source code also--see what people do with JavaScript on websites--so the answer is "no" under any case. (In specific, though, contracts are implemented in a bytecode, so by more basic definitions of "open source" the answer is still "no".)
  - vl 4y ago
    Smart contract’s binary code is visible to anyone once it’s deployed. (And it’s pretty simple to disassemble). For most contracts they link actual source code to make inspection even easier - large part of trust in the system comes from the fact that contracts are inspectable.
    - bergenty 4y ago
      An so just binaries which I guess means it’s not visible for all intents and purposes. Are there ready to go smart contract disassemblers?
      - PaywallBuster 4y ago
        example https://etherscan.io/bytecode-decompiler?a=0x610b8B78da143fC1E38b36C4EA0f68F86cc3b4f4 https://etherscan.io/bytecode-decompiler?a=0x610b8B78da143fC... which uses https://github.com/palkeo/panoramix https://github.com/palkeo/panoramix
    - miohtama 4y ago
      All high profile smart contracts have reproducible and verified source code available on EtherScan.
    - pcthrowaway 4y ago
      Dissambly into Ethereum opcodes is doable, but do you find that readable?
- birdyrooster 4y ago
  But why allow your business to be traceable to a mixer which will put you in scope of criminal investigations? Racketeering is not legal.
saurik 4y ago
> After this ruling, that excuse no longer applies and that might dissuade a lot of people who might otherwise be tempted to run a mixer of their own. What is interesting here, though, is that Tornado Cash doesn't run anything: they may as well not exist as an entity anymore. It also isn't a blockchain and doesn't have nodes: third parties thereby also don't run Tornado Cash. Tornado Cash, instead, is one of many random contracts executing on Ethereum (as well as third-party Ethereum-like constructs; some/many of those are pretty damned centralized, with servers that process and store transactions, so I am gong to concentrate on Ethereum itself as it is the most interesting). So, with the smart contract of Tornado Cash -- as Tornado Cash isn't a group of people or a company: it is just code -- having been sanctioned, if you are a miner and mine a block on Ethereum that includes a transaction that touches Tornado Cash, is that now illegal? I feel like this is how the concept of sanctions would normally play out in meat space with real people, to prevent the sanctioned services from being utilized. If so, and I think this is where it "gets good": let's say 99% of miners care about the sanctions, and 1% don't... when you mine a block, you choose a parent for that block; arguably now, if you actively chose to accept a parent block that includes a Tornado Cash transaction, that should also be illegal (due to being sanctioned).
- 60secs 4y ago
  This is a great example of where the law hasn't caught up to smart contracts. We don't have a good framework in place for sanctioning contracts by address, contract itself, or by effect. I'm expecting a push toward laws will evolve to make calling mixers illegal, but that will likely hit some 1st amendment push back. If money is speech, then is it free if it has no privacy?
  - Fatnino 4y ago
    Money is speech, speech is free, ergo money is free. Note: It is exceedingly rare for the free money to actually be so.
  - trombone5000 4y ago
    > If money is speech, then is it free if it has no privacy? I'm not a lawyer, but I don't think it follows that every financial transaction is a 1st amendment issue, just because spending money to promote a message is protected.
parasense 4y ago
> Up until now, it was at least marginally possible to state "But I didn't know it was illegal. TornadoCash was doing the exact same thing for years and never got into trouble". Oh I totally get that, but... I reasonably believe in good-faith that it hasn't been categorically proven to be illegal. The reasons for this may seem obvious to many, but just it's not for anybody else then I'll give at least one persuasive argument. Illicit activity happens through legitimate financial transactions. For example, if I trade somebody a pizza for $10, how am I to know that $10 wasn't used in a criminal activity, ever, in the total existence of those note's circulation? And further, by using cash at all, as a concept insofar that cash is not rigorously tracked while in circulation, that the whole cash money system is illegal... Cash based economies to a great extent protect the privacy of participants. Those machines that make change, I suppose that's money laundering, and I would suppose they are laundering money for someone, but also... they be making legitimate 20x quarters from a $5 bill in a coin operated business setting. The quarter change making machine is the physical analog of a crypto mixer, but it's perhaps a bad example. Because making change for the sake of privacy is an unlikely activity, albeit a reasonable legitimate (if you ask me) activity. I honestly would love to see more court precedence set on some of these so-called "structuring" laws where somebody intentionally "structure" or "laundered" money for the honest-to-goodness sake of legitimate privacy, or even for somehow being a form of free speech, something like that... to strike away some of these absurd regulatory powers before a panel of jurors.
- nl 4y ago
  > I honestly would love to see more court precedence set on some of these so-called "structuring" laws where somebody intentionally "structure" or "laundered" money for the honest-to-goodness sake of legitimate privacy There's lots of court precedent for this. Courts have overwhelmingly found that the goverment's desire to access transactional data for tax compliance outweighs any right to privacy. Courts generally find that just because there might be legitimate reasons to do something with money that doesn't override the requirement to keep records for for tax purposes.
nootropicat 4y ago
>A secondary effect of sanctions is indicating what the regulators do and do not consider illegal. No, it shows the exact opposite - that mixers are legal and the government has to utilize a completely arbitrary executive power to ban particular mixers.

by WJW 4y ago

deleted 4y ago

[deleted]

vl 4y ago

TC mixer is different though, it’s smart contract/zero proof based. Once it’s deployed, it just continues to work. Owners can’t steal funds. If you believe that smart contract is implemented correctly, you can continue to use it. TC utility is diminished by other fact - TC is blocked on exchange level, exchanges do not accept funds coming from TC smart contract.

bergenty 4y ago
On a tangent, are smart contracts automatically “open source” - as in anyone can see the source or is there a way to obfuscate what’s on the blockchain?
- soco 4y ago
  I thought one of the selling points was that everybody can check the contract...
  - saurik 4y ago
    Just because contracts can exist whose code you don't have doesn't mean you don't know how anything works: not only can you build something on Ethereum that is open source and with verifiable behavior, that is currently the norm and obfuscated contracts are not taken seriously.
  - WJW 4y ago
    Just because you don't have the source code does not mean you cannot inspect what a binary does by disassembling it. (And as any programmer will tell you, just because you have the source code available does not automatically mean you can see where it has a tricky edge case with massive security implications. The obfuscated C contests are proof of that)
- saurik 4y ago
  You can obfuscate source code also--see what people do with JavaScript on websites--so the answer is "no" under any case. (In specific, though, contracts are implemented in a bytecode, so by more basic definitions of "open source" the answer is still "no".)
- vl 4y ago
  Smart contract’s binary code is visible to anyone once it’s deployed. (And it’s pretty simple to disassemble). For most contracts they link actual source code to make inspection even easier - large part of trust in the system comes from the fact that contracts are inspectable.
  - bergenty 4y ago
    An so just binaries which I guess means it’s not visible for all intents and purposes. Are there ready to go smart contract disassemblers?
    - PaywallBuster 4y ago
      example https://etherscan.io/bytecode-decompiler?a=0x610b8B78da143fC1E38b36C4EA0f68F86cc3b4f4 https://etherscan.io/bytecode-decompiler?a=0x610b8B78da143fC... which uses https://github.com/palkeo/panoramix https://github.com/palkeo/panoramix
  - miohtama 4y ago
    All high profile smart contracts have reproducible and verified source code available on EtherScan.
  - pcthrowaway 4y ago
    Dissambly into Ethereum opcodes is doable, but do you find that readable?
birdyrooster 4y ago
But why allow your business to be traceable to a mixer which will put you in scope of criminal investigations? Racketeering is not legal.

saurik 4y ago

> After this ruling, that excuse no longer applies and that might dissuade a lot of people who might otherwise be tempted to run a mixer of their own. What is interesting here, though, is that Tornado Cash doesn't run anything: they may as well not exist as an entity anymore. It also isn't a blockchain and doesn't have nodes: third parties thereby also don't run Tornado Cash. Tornado Cash, instead, is one of many random contracts executing on Ethereum (as well as third-party Ethereum-like constructs; some/many of those are pretty damned centralized, with servers that process and store transactions, so I am gong to concentrate on Ethereum itself as it is the most interesting). So, with the smart contract of Tornado Cash -- as Tornado Cash isn't a group of people or a company: it is just code -- having been sanctioned, if you are a miner and mine a block on Ethereum that includes a transaction that touches Tornado Cash, is that now illegal? I feel like this is how the concept of sanctions would normally play out in meat space with real people, to prevent the sanctioned services from being utilized. If so, and I think this is where it "gets good": let's say 99% of miners care about the sanctions, and 1% don't... when you mine a block, you choose a parent for that block; arguably now, if you actively chose to accept a parent block that includes a Tornado Cash transaction, that should also be illegal (due to being sanctioned).

60secs 4y ago
This is a great example of where the law hasn't caught up to smart contracts. We don't have a good framework in place for sanctioning contracts by address, contract itself, or by effect. I'm expecting a push toward laws will evolve to make calling mixers illegal, but that will likely hit some 1st amendment push back. If money is speech, then is it free if it has no privacy?
- Fatnino 4y ago
  Money is speech, speech is free, ergo money is free. Note: It is exceedingly rare for the free money to actually be so.
- trombone5000 4y ago
  > If money is speech, then is it free if it has no privacy? I'm not a lawyer, but I don't think it follows that every financial transaction is a 1st amendment issue, just because spending money to promote a message is protected.

parasense 4y ago

> Up until now, it was at least marginally possible to state "But I didn't know it was illegal. TornadoCash was doing the exact same thing for years and never got into trouble". Oh I totally get that, but... I reasonably believe in good-faith that it hasn't been categorically proven to be illegal. The reasons for this may seem obvious to many, but just it's not for anybody else then I'll give at least one persuasive argument. Illicit activity happens through legitimate financial transactions. For example, if I trade somebody a pizza for $10, how am I to know that $10 wasn't used in a criminal activity, ever, in the total existence of those note's circulation? And further, by using cash at all, as a concept insofar that cash is not rigorously tracked while in circulation, that the whole cash money system is illegal... Cash based economies to a great extent protect the privacy of participants. Those machines that make change, I suppose that's money laundering, and I would suppose they are laundering money for someone, but also... they be making legitimate 20x quarters from a $5 bill in a coin operated business setting. The quarter change making machine is the physical analog of a crypto mixer, but it's perhaps a bad example. Because making change for the sake of privacy is an unlikely activity, albeit a reasonable legitimate (if you ask me) activity. I honestly would love to see more court precedence set on some of these so-called "structuring" laws where somebody intentionally "structure" or "laundered" money for the honest-to-goodness sake of legitimate privacy, or even for somehow being a form of free speech, something like that... to strike away some of these absurd regulatory powers before a panel of jurors.

nl 4y ago
> I honestly would love to see more court precedence set on some of these so-called "structuring" laws where somebody intentionally "structure" or "laundered" money for the honest-to-goodness sake of legitimate privacy There's lots of court precedent for this. Courts have overwhelmingly found that the goverment's desire to access transactional data for tax compliance outweighs any right to privacy. Courts generally find that just because there might be legitimate reasons to do something with money that doesn't override the requirement to keep records for for tax purposes.

nootropicat 4y ago

>A secondary effect of sanctions is indicating what the regulators do and do not consider illegal. No, it shows the exact opposite - that mixers are legal and the government has to utilize a completely arbitrary executive power to ban particular mixers.