6 ms·

It's written in the definition of the sanction given by the Department of the Treasury [0], i.e. at the level of US federal law, of which Microsoft must follow

It's written in the definition of the sanction given by the Department of the Treasury [0], i.e. at the level of US federal law, of which Microsoft must follow as a US company. > Sanctions Implications > These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person. [0]: https://home.treasury.gov/news/press-releases/jy0916 https://home.treasury.gov/news/press-releases/jy0916

whatisweb3 4y ago
Is this the first time the US has sanctioned a cryptographic protocol? The quote you pulled specifically refers to "blocked person" but in this case they are not sanctioning a person - they are sanctioning a mathematical protocol that happens to have a popular open source implementation.
- personjerry 4y ago
  I'm not familiar with the industry history but a look at the Treasury website suggests there's been similar past precedents: https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information/sanctions-related-to-significant-malicious-cyber-enabled-activities https://home.treasury.gov/policy-issues/financial-sanctions/... https://home.treasury.gov/system/files/126/virtual_currency_guidance_brochure.pdf https://home.treasury.gov/system/files/126/virtual_currency_...
  - whatisweb3 4y ago
    I don't see a past precedent that targets an open protocol. Imagine the US sanctioning the open Matrix protocol.
- zaphar 4y ago
  No they aren't. They are sanctioning a software project and service that runs on Blockchains not a protocol.
  - whatisweb3 4y ago
    Tornado Cash is a protocol. It targets EVM, and has been deployed on Ethereum, Optimism, Avalanche, Polygon and other networks. It happens to be open source, the code was mirrored on GitHub for research and contributions. They are setting a precedent that any forks or similar implementations of this protocol will also be sanctioned. A comparison would be sanctioning the Matrix protocol because it facilitates end-to-end encrypted communication for terrorists.
    - zaphar 4y ago
      If the matrix project was run by terrorists then your comparison would be accurate. It is not however. Tornado Cash however is run by a group with the express purpose of money laundering which is a crime. This difference is important and is why they are now sanctioned and Matrix is not.
      - Karunamon 4y ago
        If we want to talk about important differences, then you need to understand the difference between money-laundering and privacy. In short, if you are not concealing the source of your funds to conceal a crime being committed, you are not guilty of money-laundering. It's that simple. KYC laws apply to banks and corporations, not individuals and not protocols and not code. Privacy is not against the law, and neither is deploying a privacy tool that happens to be used by criminals. The comparison to matrix is surprisingly apt here. I have no doubt that criminal activity is facilitated by matrix, but the idea that they are responsible for that is ridiculous.
        zaphar 4y ago
        If you are mixing your money with known criminals so that they can hide their money then you are money laundering even if you have other legitimate reasons for hiding your own money. The creative fiction that you can't know you are mixing it with known criminals is just that. A fiction. It has been known for a long time now that these mixers are used by known criminals. Continuing to use and contribute to that means you are knowingly helping to launder their money.
- deleted 4y ago
  [deleted]
nurettin 4y ago
Prohibiting can simply mean deleting the git repo, the forks and contributions from your database. This is just "deleting people because sanctions need to be severe and hurtful".
bad416f1f5a2 4y ago
> US federal law, of which Microsoft must follow as a US company. One interesting and under-appreciated fact about OFAC: they take an, ahem, expansive view of where US law applies. CSE TransTel was a company based in Singapore who was sanctioned in 2017[0]. They had a bank account with a Singapore bank. TransTel did business with Iran, in violation of US sanctions. But neither the company nor the bank were in the US; how did OFAC make that fly? Because TransTel did transactions with a US dollar account, OFAC argued the settlements of that account caused banks inside the US to incidentally violate sanctions. Essentially the presence of US dollars created a nexus and allowed OFAC to enforce US sanctions against what would appear to be an entirely foreign entity. Any wonder MS is treading lightly? [0]: https://home.treasury.gov/system/files/126/20170727_transtel.pdf https://home.treasury.gov/system/files/126/20170727_transtel...

whatisweb3 4y ago

Is this the first time the US has sanctioned a cryptographic protocol? The quote you pulled specifically refers to "blocked person" but in this case they are not sanctioning a person - they are sanctioning a mathematical protocol that happens to have a popular open source implementation.

personjerry 4y ago
I'm not familiar with the industry history but a look at the Treasury website suggests there's been similar past precedents: https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information/sanctions-related-to-significant-malicious-cyber-enabled-activities https://home.treasury.gov/policy-issues/financial-sanctions/... https://home.treasury.gov/system/files/126/virtual_currency_guidance_brochure.pdf https://home.treasury.gov/system/files/126/virtual_currency_...
- whatisweb3 4y ago
  I don't see a past precedent that targets an open protocol. Imagine the US sanctioning the open Matrix protocol.
zaphar 4y ago
No they aren't. They are sanctioning a software project and service that runs on Blockchains not a protocol.
- whatisweb3 4y ago
  Tornado Cash is a protocol. It targets EVM, and has been deployed on Ethereum, Optimism, Avalanche, Polygon and other networks. It happens to be open source, the code was mirrored on GitHub for research and contributions. They are setting a precedent that any forks or similar implementations of this protocol will also be sanctioned. A comparison would be sanctioning the Matrix protocol because it facilitates end-to-end encrypted communication for terrorists.
  - zaphar 4y ago
    If the matrix project was run by terrorists then your comparison would be accurate. It is not however. Tornado Cash however is run by a group with the express purpose of money laundering which is a crime. This difference is important and is why they are now sanctioned and Matrix is not.
    - Karunamon 4y ago
      If we want to talk about important differences, then you need to understand the difference between money-laundering and privacy. In short, if you are not concealing the source of your funds to conceal a crime being committed, you are not guilty of money-laundering. It's that simple. KYC laws apply to banks and corporations, not individuals and not protocols and not code. Privacy is not against the law, and neither is deploying a privacy tool that happens to be used by criminals. The comparison to matrix is surprisingly apt here. I have no doubt that criminal activity is facilitated by matrix, but the idea that they are responsible for that is ridiculous.
      - zaphar 4y ago
        If you are mixing your money with known criminals so that they can hide their money then you are money laundering even if you have other legitimate reasons for hiding your own money. The creative fiction that you can't know you are mixing it with known criminals is just that. A fiction. It has been known for a long time now that these mixers are used by known criminals. Continuing to use and contribute to that means you are knowingly helping to launder their money.
deleted 4y ago
[deleted]

nurettin 4y ago

Prohibiting can simply mean deleting the git repo, the forks and contributions from your database. This is just "deleting people because sanctions need to be severe and hurtful".

bad416f1f5a2 4y ago

> US federal law, of which Microsoft must follow as a US company. One interesting and under-appreciated fact about OFAC: they take an, ahem, expansive view of where US law applies. CSE TransTel was a company based in Singapore who was sanctioned in 2017[0]. They had a bank account with a Singapore bank. TransTel did business with Iran, in violation of US sanctions. But neither the company nor the bank were in the US; how did OFAC make that fly? Because TransTel did transactions with a US dollar account, OFAC argued the settlements of that account caused banks inside the US to incidentally violate sanctions. Essentially the presence of US dollars created a nexus and allowed OFAC to enforce US sanctions against what would appear to be an entirely foreign entity. Any wonder MS is treading lightly? [0]: https://home.treasury.gov/system/files/126/20170727_transtel.pdf https://home.treasury.gov/system/files/126/20170727_transtel...