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> The crime--facilitating money laundering Did the people who built blockchains with built-in mandatory mixing (Monero) or optional completely obscured transac

by tromp 4y ago

> The crime--facilitating money laundering Did the people who built blockchains with built-in mandatory mixing (Monero) or optional completely obscured transaction inputs (ZCash) also facilitate money laundering? If not, what is the crucial difference? Am I myself in trouble for having (co-)designed a mixing service [1]? [1] https://forum.grin.mw/t/mimblewimble-coinswap-proposal https://forum.grin.mw/t/mimblewimble-coinswap-proposal

tromp 4y ago
According to the company developing it, there is no evidence of "substantive use of Zcash for money laundering, terrorism financing or trade in illicit goods and services." So I guess what made Tornado Cash criminal, is that there was evidence of such...
WoahNoun 4y ago
>Did the people who built blockchains with built-in mandatory mixing (Monero) or optional completely obscured transaction inputs (ZCash) also facilitate money laundering? Yes >Am I myself in trouble for having (co-)designed a mixing service [1]? Possibly? Depends on the details.
- jacooper 4y ago
  > Yes Then american banks should be sanctioned, they are also involved in money laundering too.
  - WoahNoun 4y ago
    Banks make good faith efforts to prevent money laundering. (KYC and SARs in particular). If tornado had KYC, this wouldn't be an issue. :)
    - bad416f1f5a2 4y ago
      "I'm the compliance officer for a crypto mixer" sounds like a job you do in purgatory.
  - skywhopper 4y ago
    When they fail to take steps to prevent it, they are often punished. Here’s a few big ones from 2021 alone: https://www.forbes.com/sites/forbestechcouncil/2022/03/24/lessons-from-the-seven-largest-aml-bank-fines-in-2021/ https://www.forbes.com/sites/forbestechcouncil/2022/03/24/le... Why aren’t these banks put on the sanction list where it’s a crime to do business with them? Because the vast majority of what they do is not money laundering and when they are discovered money laundering, they generally stop. And when they don’t, they are added to this list: https://www.treasury.gov/ofac/downloads/sdnlist.txt https://www.treasury.gov/ofac/downloads/sdnlist.txt Whereas Tornado Cash is a service that is known to enable huge amounts of money laundering, and nothing was done to stop it.
    - tromp 4y ago
      > and nothing was done to stop it. What could be done to stop it? It's just a contract run on the blockchain. I suppose they could limit throughput, but not much else?! Similarly, what could the Monero or ZCash developers do to stop money laundering on their blockchains? Here, not even throughput can be limited since amounts of transactions are completely hidden.
      - JumpCrisscross 4y ago
        > What could be done to stop it? Dunno. If you learn your product is being used to commit crimes and can’t figure out how to counter it, you should stop building it. (Or at least pause and call a lawyer.)
      - SpicyLemonZest 4y ago
        Well, there's a lot of obvious strategies that money processors in similar positions employ. They could confirm the identity of their users so that known criminals can be filtered and blocked. They could manually audit large transactions and require documentation demonstrating that they're legitimate. I understand why they don't want to do things like this, but I'm just not sympathetic; it sounds to me like a group of bankers in 2012 announcing their strong ideological commitments that LIBOR manipulation is good and they should be allowed to continue doing it.
JumpCrisscross 4y ago
> Did the people who built blockchains with built-in mandatory mixing (Monero) or optional completely obscured transaction inputs (ZCash) also facilitate money laundering? If not, what is the crucial difference? Probably not? Tornado Cash provided one service: mixing. (In AML parlance, layering.) We know it was used to launder the proceeds of crimes. The developers knew that too, and they kept working on it. Semenov styled himself as a co-founder and the group advertised open positions on its website. All that looks much more like an enterprise knowingly facilitating laundering than a developer publishing interesting code. ZCash and Monero look like cash. Tornado (and every mixer I’ve seen) looks like a layering service. Those aren’t illegal per se. But you’re at risk if a criminal uses it. (You’re in deeper shit if it becomes known a criminal used it and you do nothing about it.)
fragmede 4y ago
I mean probably not, but given what has come to pass, if I were you, I’d be looking for an actual, reputable lawyer in this area to ask, not some randoms on the Internet.

by tromp 4y ago

tromp 4y ago

According to the company developing it, there is no evidence of "substantive use of Zcash for money laundering, terrorism financing or trade in illicit goods and services." So I guess what made Tornado Cash criminal, is that there was evidence of such...

WoahNoun 4y ago

>Did the people who built blockchains with built-in mandatory mixing (Monero) or optional completely obscured transaction inputs (ZCash) also facilitate money laundering? Yes >Am I myself in trouble for having (co-)designed a mixing service [1]? Possibly? Depends on the details.

jacooper 4y ago
> Yes Then american banks should be sanctioned, they are also involved in money laundering too.
- WoahNoun 4y ago
  Banks make good faith efforts to prevent money laundering. (KYC and SARs in particular). If tornado had KYC, this wouldn't be an issue. :)
  - bad416f1f5a2 4y ago
    "I'm the compliance officer for a crypto mixer" sounds like a job you do in purgatory.
- skywhopper 4y ago
  When they fail to take steps to prevent it, they are often punished. Here’s a few big ones from 2021 alone: https://www.forbes.com/sites/forbestechcouncil/2022/03/24/lessons-from-the-seven-largest-aml-bank-fines-in-2021/ https://www.forbes.com/sites/forbestechcouncil/2022/03/24/le... Why aren’t these banks put on the sanction list where it’s a crime to do business with them? Because the vast majority of what they do is not money laundering and when they are discovered money laundering, they generally stop. And when they don’t, they are added to this list: https://www.treasury.gov/ofac/downloads/sdnlist.txt https://www.treasury.gov/ofac/downloads/sdnlist.txt Whereas Tornado Cash is a service that is known to enable huge amounts of money laundering, and nothing was done to stop it.
  - tromp 4y ago
    > and nothing was done to stop it. What could be done to stop it? It's just a contract run on the blockchain. I suppose they could limit throughput, but not much else?! Similarly, what could the Monero or ZCash developers do to stop money laundering on their blockchains? Here, not even throughput can be limited since amounts of transactions are completely hidden.
    - JumpCrisscross 4y ago
      > What could be done to stop it? Dunno. If you learn your product is being used to commit crimes and can’t figure out how to counter it, you should stop building it. (Or at least pause and call a lawyer.)
    - SpicyLemonZest 4y ago
      Well, there's a lot of obvious strategies that money processors in similar positions employ. They could confirm the identity of their users so that known criminals can be filtered and blocked. They could manually audit large transactions and require documentation demonstrating that they're legitimate. I understand why they don't want to do things like this, but I'm just not sympathetic; it sounds to me like a group of bankers in 2012 announcing their strong ideological commitments that LIBOR manipulation is good and they should be allowed to continue doing it.

JumpCrisscross 4y ago

> Did the people who built blockchains with built-in mandatory mixing (Monero) or optional completely obscured transaction inputs (ZCash) also facilitate money laundering? If not, what is the crucial difference? Probably not? Tornado Cash provided one service: mixing. (In AML parlance, layering.) We know it was used to launder the proceeds of crimes. The developers knew that too, and they kept working on it. Semenov styled himself as a co-founder and the group advertised open positions on its website. All that looks much more like an enterprise knowingly facilitating laundering than a developer publishing interesting code. ZCash and Monero look like cash. Tornado (and every mixer I’ve seen) looks like a layering service. Those aren’t illegal per se. But you’re at risk if a criminal uses it. (You’re in deeper shit if it becomes known a criminal used it and you do nothing about it.)

fragmede 4y ago

I mean probably not, but given what has come to pass, if I were you, I’d be looking for an actual, reputable lawyer in this area to ask, not some randoms on the Internet.