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What is not used to launder money? What separates pre-sanctions Tornado from any other tech that can feasibly be used for something evil (e.g. cash money, PayPa

What is not used to launder money? What separates pre-sanctions Tornado from any other tech that can feasibly be used for something evil (e.g. cash money, PayPal, any cryptocurrency, e2ee messengers)? Should we ask the government to publish a registry of approved technologies to ensure own safety?

JumpCrisscross 4y ago
> What separates pre-sanctions Tornado from any other tech that can feasibly be used for something evil (e.g. cash money, PayPal, any cryptocurrency, e2ee messengers)? I don’t have the technical answer. But from the instant tumblers became a thing everyone with AML experience saw the endgame. It’s providing, as a service, a function directly analogous to real-world layering. It does nothing else. And nobody involved seems to have taken the prospect of criminals using their product seriously. Messengers are not money, so laundering goes out the window. PayPal is regulated. And crypto does other things. Tornado just served to hide the origin of money. And it was used to launder illegally-gotten gains.
- throwaway290 4y ago
  I do not see a meaningful difference between e2ee messengers and mixers. Both aim to support anonymity. Both can (and do) enable bad things. If you (unlike me) believe that cryptocurrency should be legal, I don't see why you would think mixers should not. Now it is moot after sanctions are in effect. What we are discussing is mental world model of software engineers before Tornado sanctions were announced and their accounts wiped. It might be hard to see in hindsight.
- mindslight 4y ago
  The fundamental problem is that "money laundering" is an oxymoron, because money is fungible. So the government has created an always-applicable law, pinky-swore to only use it to prosecute "bad guys" (like many federal add-on laws), and is now expanding their scope to persecute a project that mitigates a general security vulnerability that exists in most cryptocurrencies, because the existence of that vulnerability hinders criminals.
  - pcwalton 4y ago
    The definition of money laundering is concealing the origin of money obtained from an illegal source. You may not like the fact that this is illegal, but it has a clear definition and most people want it to be outlawed, so it is. It's obviously not "always applicable": I've never taken steps to conceal ill-gotten gains and neither have the vast majority of people.
    - mindslight 4y ago
      Sure, the requirement for an "illegal source" is what made for an "add on" charge - something else illegal had to have been going on for it to apply. But here it is being used by itself to go after a piece of software that provides general financial privacy to anybody, and not merely financial privacy for criminals. So that detail of its definition isn't particularly relevant any more, and it makes sense to talk about the contradictory framing of the concept. A traditional banking analog would be if the feds went after brick and mortar banks for allowing customers to deposit checks from named payors and withdraw cash or create a new check. A law-abiding customer might take advantage of this property to receive a paycheck from an abortion clinic and then make a donation to their church. Whereas a criminal might use the same scrubbing to receive a payment from a known drug dealer and then turn around and pay their mortgage. Yet the bank's whole business isn't declared a priori illegal due to concealing the origin of the funds on the outgoing payment.
      - JumpCrisscross 4y ago
        > it is being used by itself to go after a piece of software that provides general financial privacy to anybody, and not merely financial privacy for criminals The archetypal laundromat also does normal folks’ laundry. It just also launders money for criminals. I’m sure they would happily layer money for non-criminals but nobody does that. > banking analog would be if the feds went after brick and mortar banks for allowing customers to deposit checks and withdraw cash If they did that without checking anyone’s identity and then, after learning—from law enforcement no less—that criminals were using them to launder money, kept going, business as usual, hell yes they’d be shut down and arrested.

JumpCrisscross 4y ago

> What separates pre-sanctions Tornado from any other tech that can feasibly be used for something evil (e.g. cash money, PayPal, any cryptocurrency, e2ee messengers)? I don’t have the technical answer. But from the instant tumblers became a thing everyone with AML experience saw the endgame. It’s providing, as a service, a function directly analogous to real-world layering. It does nothing else. And nobody involved seems to have taken the prospect of criminals using their product seriously. Messengers are not money, so laundering goes out the window. PayPal is regulated. And crypto does other things. Tornado just served to hide the origin of money. And it was used to launder illegally-gotten gains.

throwaway290 4y ago
I do not see a meaningful difference between e2ee messengers and mixers. Both aim to support anonymity. Both can (and do) enable bad things. If you (unlike me) believe that cryptocurrency should be legal, I don't see why you would think mixers should not. Now it is moot after sanctions are in effect. What we are discussing is mental world model of software engineers before Tornado sanctions were announced and their accounts wiped. It might be hard to see in hindsight.
mindslight 4y ago
The fundamental problem is that "money laundering" is an oxymoron, because money is fungible. So the government has created an always-applicable law, pinky-swore to only use it to prosecute "bad guys" (like many federal add-on laws), and is now expanding their scope to persecute a project that mitigates a general security vulnerability that exists in most cryptocurrencies, because the existence of that vulnerability hinders criminals.
- pcwalton 4y ago
  The definition of money laundering is concealing the origin of money obtained from an illegal source. You may not like the fact that this is illegal, but it has a clear definition and most people want it to be outlawed, so it is. It's obviously not "always applicable": I've never taken steps to conceal ill-gotten gains and neither have the vast majority of people.
  - mindslight 4y ago
    Sure, the requirement for an "illegal source" is what made for an "add on" charge - something else illegal had to have been going on for it to apply. But here it is being used by itself to go after a piece of software that provides general financial privacy to anybody, and not merely financial privacy for criminals. So that detail of its definition isn't particularly relevant any more, and it makes sense to talk about the contradictory framing of the concept. A traditional banking analog would be if the feds went after brick and mortar banks for allowing customers to deposit checks from named payors and withdraw cash or create a new check. A law-abiding customer might take advantage of this property to receive a paycheck from an abortion clinic and then make a donation to their church. Whereas a criminal might use the same scrubbing to receive a payment from a known drug dealer and then turn around and pay their mortgage. Yet the bank's whole business isn't declared a priori illegal due to concealing the origin of the funds on the outgoing payment.
    - JumpCrisscross 4y ago
      > it is being used by itself to go after a piece of software that provides general financial privacy to anybody, and not merely financial privacy for criminals The archetypal laundromat also does normal folks’ laundry. It just also launders money for criminals. I’m sure they would happily layer money for non-criminals but nobody does that. > banking analog would be if the feds went after brick and mortar banks for allowing customers to deposit checks and withdraw cash If they did that without checking anyone’s identity and then, after learning—from law enforcement no less—that criminals were using them to launder money, kept going, business as usual, hell yes they’d be shut down and arrested.