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Well how do you know someone sent their coins through a mixer? If they’re dumb and go straight from mixer to an exchange it’s easy, but what if they trade the m

Well how do you know someone sent their coins through a mixer? If they’re dumb and go straight from mixer to an exchange it’s easy, but what if they trade the mixed coins for an nft? Is the former nft owner now implicated?

kube-system 4y ago
How do you know the cash you got out of the ATM hasn't been in North Korea? You don't, and you wouldn't be guilty of sanctions violations even if they were. You violate sanctions if you transact with a sanctioned entity. It is that simple. If the NFT owner accepts coins from a sanctioned address, then yes, they have violated sanctions.
- colinmhayes 4y ago
  So if a sanctioned address sends coins to a different address and that address trades for an nft the nft owner has violated sanctions? So now every time you exchange crypto you have to check if the other party is on a sanction list? What if you want to make a wallet illicit? Don’t you just need to mix some coins and send them to that wallet?
  - kube-system 4y ago
    Again, this is all very simple. Someone who transacts with an address that is on a sanctions list is in violation of sanctions.
    - Sargos 4y ago
      > Again, this is all very simple. Someone who transacts with an address that is on a sanctions list is in violation of sanctions. You sound like one of those devs who shunned Dropbox because it's just a simple internet backed up folder you could implement with rsync and some python. The world isn't that simple and if these "simple rules" turn out to be too complex to easily reason about we as a society will just ignore them.
      - kube-system 4y ago
        I'm just telling you how the sanctions work. That part is simple. Yes, this could have some complicated implications for compliance with that law. This is why big banks employ thousands of people in their compliance departments. If you're in country [x] and you're transferring money, you have to follow laws on transferring money in country [x]. Now yes, if compliance is hard, observed compliance may be low. This affects many laws on the books, and if it becomes a problem for regulators, they may take further action to improve enforcement, as they did with capital gains on crypto transactions at exchanges. This has nothing to do with rsync/dropbox.
    - colinmhayes 4y ago
      So all you have to do is send your coins to a new address once they’ve been mixed? Who’s to say the same person owns both wallets?
      - kube-system 4y ago
        Yes, sanctions lists are a cat-and-mouse game. Cryptocurrencies did not invent this dynamic. Dictators have been doing the same with shell companies and offshore bank accounts for decades.
NovemberWhiskey 4y ago
You don't follow them out of the mixer, you trace back from where they went into the mixer.
- colinmhayes 4y ago
  The whole point of a mixer is that you want to go from psuedononymous wallet to something that can be exchanged for fiat without conflating your identity with the crime. Presumably everyone putting the money in the mixer hasn’t linked their identity to their wallet.
  - kube-system 4y ago
    Of course -- all money laundering attempts to obscure the source of money. Usually, launderers get caught when they make mistakes, or when money is used for goods or services which are more easily observable.
    - notch656a 4y ago
      I have a brilliant idea to address these privacy concerns. Make the bad thing like selling counterfeit oxy or whatever illegal, so that the bad thing is illegal rather than the money. Then we can make "money laundering" not a crime. If it's harder to catch criminals then tough shit, our privacy is worth it.
      - kube-system 4y ago
        It is common and logical to criminalize both the crime and the facilitators of a crime. We don't let a getaway driver get off scot free from a bank robbery just because they weren't the ones pointing the gun inside of the bank. Money laundering is, by definition, money obtained from criminal activity.
        notch656a 4y ago
        We should also prosecute the road crew, because everyone knows when they build the road criminals absolutely will use it for crime. It's facilitating. Road crew like many tornado cash users, they have no "mens rea" intent to aid money launderers, even though they have knowledge it can happen. By your below logic the courts find Tornado Cash user not guilty of "mens rea" money laundering. >Edit to reply to your edit (why not post a reply?): that's exactly why they have been added to the sanctions list explicitly, rather than prosecuting users for money laundering. Awesome, roads used by money launderers should be sanctioned as well so "legitimate" users can't use them either, everyone who built them knew they would be used by criminals and so do the people paying the fuel taxes that maintain them so criminals can drive on them. I'm replying this way because I've run out of replies (I can only reply 5 times per 3 hours).

kube-system 4y ago

How do you know the cash you got out of the ATM hasn't been in North Korea? You don't, and you wouldn't be guilty of sanctions violations even if they were. You violate sanctions if you transact with a sanctioned entity. It is that simple. If the NFT owner accepts coins from a sanctioned address, then yes, they have violated sanctions.

colinmhayes 4y ago
So if a sanctioned address sends coins to a different address and that address trades for an nft the nft owner has violated sanctions? So now every time you exchange crypto you have to check if the other party is on a sanction list? What if you want to make a wallet illicit? Don’t you just need to mix some coins and send them to that wallet?
- kube-system 4y ago
  Again, this is all very simple. Someone who transacts with an address that is on a sanctions list is in violation of sanctions.
  - Sargos 4y ago
    > Again, this is all very simple. Someone who transacts with an address that is on a sanctions list is in violation of sanctions. You sound like one of those devs who shunned Dropbox because it's just a simple internet backed up folder you could implement with rsync and some python. The world isn't that simple and if these "simple rules" turn out to be too complex to easily reason about we as a society will just ignore them.
    - kube-system 4y ago
      I'm just telling you how the sanctions work. That part is simple. Yes, this could have some complicated implications for compliance with that law. This is why big banks employ thousands of people in their compliance departments. If you're in country [x] and you're transferring money, you have to follow laws on transferring money in country [x]. Now yes, if compliance is hard, observed compliance may be low. This affects many laws on the books, and if it becomes a problem for regulators, they may take further action to improve enforcement, as they did with capital gains on crypto transactions at exchanges. This has nothing to do with rsync/dropbox.
  - colinmhayes 4y ago
    So all you have to do is send your coins to a new address once they’ve been mixed? Who’s to say the same person owns both wallets?
    - kube-system 4y ago
      Yes, sanctions lists are a cat-and-mouse game. Cryptocurrencies did not invent this dynamic. Dictators have been doing the same with shell companies and offshore bank accounts for decades.

NovemberWhiskey 4y ago

You don't follow them out of the mixer, you trace back from where they went into the mixer.

colinmhayes 4y ago
The whole point of a mixer is that you want to go from psuedononymous wallet to something that can be exchanged for fiat without conflating your identity with the crime. Presumably everyone putting the money in the mixer hasn’t linked their identity to their wallet.
- kube-system 4y ago
  Of course -- all money laundering attempts to obscure the source of money. Usually, launderers get caught when they make mistakes, or when money is used for goods or services which are more easily observable.
  - notch656a 4y ago
    I have a brilliant idea to address these privacy concerns. Make the bad thing like selling counterfeit oxy or whatever illegal, so that the bad thing is illegal rather than the money. Then we can make "money laundering" not a crime. If it's harder to catch criminals then tough shit, our privacy is worth it.
    - kube-system 4y ago
      It is common and logical to criminalize both the crime and the facilitators of a crime. We don't let a getaway driver get off scot free from a bank robbery just because they weren't the ones pointing the gun inside of the bank. Money laundering is, by definition, money obtained from criminal activity.
      - notch656a 4y ago
        We should also prosecute the road crew, because everyone knows when they build the road criminals absolutely will use it for crime. It's facilitating. Road crew like many tornado cash users, they have no "mens rea" intent to aid money launderers, even though they have knowledge it can happen. By your below logic the courts find Tornado Cash user not guilty of "mens rea" money laundering. >Edit to reply to your edit (why not post a reply?): that's exactly why they have been added to the sanctions list explicitly, rather than prosecuting users for money laundering. Awesome, roads used by money launderers should be sanctioned as well so "legitimate" users can't use them either, everyone who built them knew they would be used by criminals and so do the people paying the fuel taxes that maintain them so criminals can drive on them. I'm replying this way because I've run out of replies (I can only reply 5 times per 3 hours).