5 ms·

With being in the IT field for 25 years, I was still on the fence about cryptocurrency. I wasn't for it or against it because it didn't affect me. I understand

With being in the IT field for 25 years, I was still on the fence about cryptocurrency. I wasn't for it or against it because it didn't affect me. I understand the arguments for it and against it, along with the privacy aspect of it. However actions like this push me towards being against it.

asah 4y ago
meh this whole thing is stupid - law enforcement proxies (chainalysis) can trivially ignore the dust in tracking down who's using Tornado to launder material amounts of wealth.
- amanaplanacanal 4y ago
  Exactly. Every law enforcement agency has prosecutorial discretion. They can easily ignore this and still go after the bad guys they want to target.
  - klyrs 4y ago
    That cuts both ways though. If you're a political dissident and you've been dusted, prosecutorial discretion isn't in your favor.
    - asah 4y ago
      If you have crappy legal representation then sure - but I should hope any decent attorney can show that your a member of a LARGE set including a who's who of upstanding citizens, have a witness (or you) explain to a jury what "dusting" is and that it's harmless. There's maybe even an analogy to prosecuting someone because of trace amounts of cocaine on the bills in their wallet, at a level consistent with everyone's paper bills. But I'm not gonna say that political dissidents aren't at risk - heck, a government can just plant evidence. I'm just saying that dusting is a low risk.
      - deleted 4y ago
        [deleted]
      - klyrs 4y ago
        > If you have crappy legal representation then sure Yes. That describes most people.
  - fernandguil 4y ago
    although you are correct on their ability to enforce prosecutorial discretion, the reality is that the way they exercise that discretion sets precedents in the court of law. It will be very interesting to see how they go about trialing any of the OFAC cases involving Tornado Cash.
- kragen 4y ago
  I don't think it's so trivial, and it can easily be made much more complicated. Suppose sanctioned party A pays B, a citizen of Indonesia who lives in Indonesia, $X. B's chain analysis decides that $X is "not material", so they continue using the account, and then transfer C $Y < $X. C's chain analysis decides that $Y is "material". What happens now? The first question is whether C delivers B the goods B was paying for without demanding an additional form of payment. If so, they have exposed themselves to sanctions from the US, potentially a large problem if they are a US person. If not, the second question is, do they refund the payment or not? If not, they have defrauded B; if so, they have potentially exposed themselves to additional sanctions from the US. The third question is, what if A decides to only spend "not material" amounts? They spend a small amount on extra transaction fees, but the sanctions become ineffective. All this uncertainty about where exactly the line is seems like it could put significant stress on Ethereum's fungibility. To make it more complicated, consider that we're talking about US$400M here that the OFAC is trying to freeze. That's enough to transfer US$11000 to each of 36000 different accounts, or, more practically, random numbers of thousands of dollars to tens of thousands of different accounts over the next year or two. If the would-be sanctions evaders (who, as R. Nikhil points out in https://rnikhil.com/2022/08/09/tornado-cash-block.html https://rnikhil.com/2022/08/09/tornado-cash-block.html, could include anyone who doesn't want their medical insurance provider to know what OTC drugs they buy, doesn't want their employer to know everything they spend their money on, or wants to donate to a political cause they don't talk about) are willing to spend 30% of their money to unfreeze the rest, they could get a pretty interesting number of people sanctioned with "material amounts of wealth". By the way, I still remember your grilled portobellos decades later. I'm glad to see you're still out there, and I appreciate the chance to discuss things like this with you.
  - asah 4y ago
    Whoa! Sent you email. ;-) Back to the thread, I believe "material" is defined by the amount of the source wallets not the destination wallet. But it's also risky to accept large amounts of money from strangers because of the reasonable presumption of a transaction, and best practice to make a good faith effort to return or dispose it (same qty minus transaction costs), which seems trivial in this case. (But IANAL and we're getting a bit arcane...)
tomp 4y ago
I’d expect anyone that’s been in IT for so long to easily predict such a scenario. “Here have my banned bitcoins” is literally the most obvious action.

asah 4y ago

meh this whole thing is stupid - law enforcement proxies (chainalysis) can trivially ignore the dust in tracking down who's using Tornado to launder material amounts of wealth.

amanaplanacanal 4y ago
Exactly. Every law enforcement agency has prosecutorial discretion. They can easily ignore this and still go after the bad guys they want to target.
- klyrs 4y ago
  That cuts both ways though. If you're a political dissident and you've been dusted, prosecutorial discretion isn't in your favor.
  - asah 4y ago
    If you have crappy legal representation then sure - but I should hope any decent attorney can show that your a member of a LARGE set including a who's who of upstanding citizens, have a witness (or you) explain to a jury what "dusting" is and that it's harmless. There's maybe even an analogy to prosecuting someone because of trace amounts of cocaine on the bills in their wallet, at a level consistent with everyone's paper bills. But I'm not gonna say that political dissidents aren't at risk - heck, a government can just plant evidence. I'm just saying that dusting is a low risk.
    - deleted 4y ago
      [deleted]
    - klyrs 4y ago
      > If you have crappy legal representation then sure Yes. That describes most people.
- fernandguil 4y ago
  although you are correct on their ability to enforce prosecutorial discretion, the reality is that the way they exercise that discretion sets precedents in the court of law. It will be very interesting to see how they go about trialing any of the OFAC cases involving Tornado Cash.
kragen 4y ago
I don't think it's so trivial, and it can easily be made much more complicated. Suppose sanctioned party A pays B, a citizen of Indonesia who lives in Indonesia, $X. B's chain analysis decides that $X is "not material", so they continue using the account, and then transfer C $Y < $X. C's chain analysis decides that $Y is "material". What happens now? The first question is whether C delivers B the goods B was paying for without demanding an additional form of payment. If so, they have exposed themselves to sanctions from the US, potentially a large problem if they are a US person. If not, the second question is, do they refund the payment or not? If not, they have defrauded B; if so, they have potentially exposed themselves to additional sanctions from the US. The third question is, what if A decides to only spend "not material" amounts? They spend a small amount on extra transaction fees, but the sanctions become ineffective. All this uncertainty about where exactly the line is seems like it could put significant stress on Ethereum's fungibility. To make it more complicated, consider that we're talking about US$400M here that the OFAC is trying to freeze. That's enough to transfer US$11000 to each of 36000 different accounts, or, more practically, random numbers of thousands of dollars to tens of thousands of different accounts over the next year or two. If the would-be sanctions evaders (who, as R. Nikhil points out in https://rnikhil.com/2022/08/09/tornado-cash-block.html https://rnikhil.com/2022/08/09/tornado-cash-block.html, could include anyone who doesn't want their medical insurance provider to know what OTC drugs they buy, doesn't want their employer to know everything they spend their money on, or wants to donate to a political cause they don't talk about) are willing to spend 30% of their money to unfreeze the rest, they could get a pretty interesting number of people sanctioned with "material amounts of wealth". By the way, I still remember your grilled portobellos decades later. I'm glad to see you're still out there, and I appreciate the chance to discuss things like this with you.
- asah 4y ago
  Whoa! Sent you email. ;-) Back to the thread, I believe "material" is defined by the amount of the source wallets not the destination wallet. But it's also risky to accept large amounts of money from strangers because of the reasonable presumption of a transaction, and best practice to make a good faith effort to return or dispose it (same qty minus transaction costs), which seems trivial in this case. (But IANAL and we're getting a bit arcane...)

tomp 4y ago

I’d expect anyone that’s been in IT for so long to easily predict such a scenario. “Here have my banned bitcoins” is literally the most obvious action.