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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 no

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.
        whatisweb3 4y ago
        It is known that criminals use E2EE, ergo anybody using this technology is knowingly helping a criminal. what a bad take.
        Nursie 4y ago
        Those aren't remotely equivalent, given that mixers mix up their inputs to obscure their outputs. By using E2EE yourself, you are not actively giving cover in the same way.
deleted 4y ago
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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.
      - whatisweb3 4y ago
        It is known that criminals use E2EE, ergo anybody using this technology is knowingly helping a criminal. what a bad take.
        Nursie 4y ago
        Those aren't remotely equivalent, given that mixers mix up their inputs to obscure their outputs. By using E2EE yourself, you are not actively giving cover in the same way.

deleted 4y ago

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