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>Did the people who built blockchains with built-in mandatory mixing (Monero) or optional completely obscured transaction inputs (ZCash) also facilitate money l

>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.
      - tromp 4y ago
        I don't see how blockchain devs can do any of these things. Nodes and miners run the network, not devs.
        SpicyLemonZest 4y ago
        Tornado Cash in particular is (was?) a smart contract, so they could straightforwardly have built in an auditing service as an oracle.
        4y ago

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.
    - tromp 4y ago
      I don't see how blockchain devs can do any of these things. Nodes and miners run the network, not devs.
      - SpicyLemonZest 4y ago
        Tornado Cash in particular is (was?) a smart contract, so they could straightforwardly have built in an auditing service as an oracle.
        4y ago