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Let's say I have a stack of 1000 hundred dollar bills. Then an OFAC-sanctioned individual adds another hundred dollar bill to the stack, to make 1001 hundred d

Let's say I have a stack of 1000 hundred dollar bills. Then an OFAC-sanctioned individual adds another hundred dollar bill to the stack, to make 1001 hundred dollar bills. Are you saying if I spend 1000 of those, and leave one hundred dollar bill unspent, but the unspent bill is a different piece of paper with a different serial number than the one provided by the sanctioned individual, then I've broken the law? But if I knew the serial number of the specific hundred dollar bill provided by the OFAC-sanctioned individual, and didn't spend that exact piece of paper, but just kept it in my wallet, then somehow that makes all the difference and now I haven't broken the law? Since currency, Ethereum and Bitcoin are all fungible and mutually interchangeable, what difference does it make?

JumpCrisscross 4y ago
> if I knew the serial number of the specific hundred dollar bill provided by the OFAC-sanctioned individual, and didn't spend that exact piece of paper, but just kept it in my wallet, then somehow that makes all the difference and now I haven't broken the law? If it's in your wallet you've broken the law. If it magically appeared on your doorstep and you call the FBI, you should be fine. (You'll be investigated.) Anyone who ever sent to or received from Tornado any funds should be talking to counsel.
- panarky 4y ago
  Doesn't seem to matter whether I spent the hundred dollar bill with the specific serial number provided by an OFAC-sanctioned individual, or if I kept that serial number in my wallet and spent a different piece of paper, since currency is fungible. By analogy, there's no practical difference between a balance in an Ethereum address getting dusted with tainted funds, or a Bitcoin address with a tainted UTXO that I don't touch.
eis 4y ago
Coins in Bitcoin are not necessarily fungible. Tainted coins (from sanctioned individuals, from hacks etc) are traced and for anyone else who has to adhere to for example US law these tainted coins are not of the same value as non-tainted ones. Exchanges might not accept them for example. Now in Ethereum there are no coins like in Bitcoin and hence you can't taint them. You can taint an address and now if you received funds from a tainted address you get tainted as well. It's infectious and that's the whole idea behind this dusting attack. Of course law enforcement can use discretion when it's only small amounts of funds but where exactly is the cutoff? What are the exact guidelines when you receive such funds and how do you stay 100% on the right side of the law? And why would a normal user have to care about all of this? I'm not saying Bitcoin is a lot better than Ethereum in this regard. It's not a great situation in both chains and there will need to be better tools, laws and guidelines to handle these as time goes by.

JumpCrisscross 4y ago

> if I knew the serial number of the specific hundred dollar bill provided by the OFAC-sanctioned individual, and didn't spend that exact piece of paper, but just kept it in my wallet, then somehow that makes all the difference and now I haven't broken the law? If it's in your wallet you've broken the law. If it magically appeared on your doorstep and you call the FBI, you should be fine. (You'll be investigated.) Anyone who ever sent to or received from Tornado any funds should be talking to counsel.

panarky 4y ago
Doesn't seem to matter whether I spent the hundred dollar bill with the specific serial number provided by an OFAC-sanctioned individual, or if I kept that serial number in my wallet and spent a different piece of paper, since currency is fungible. By analogy, there's no practical difference between a balance in an Ethereum address getting dusted with tainted funds, or a Bitcoin address with a tainted UTXO that I don't touch.

eis 4y ago

Coins in Bitcoin are not necessarily fungible. Tainted coins (from sanctioned individuals, from hacks etc) are traced and for anyone else who has to adhere to for example US law these tainted coins are not of the same value as non-tainted ones. Exchanges might not accept them for example. Now in Ethereum there are no coins like in Bitcoin and hence you can't taint them. You can taint an address and now if you received funds from a tainted address you get tainted as well. It's infectious and that's the whole idea behind this dusting attack. Of course law enforcement can use discretion when it's only small amounts of funds but where exactly is the cutoff? What are the exact guidelines when you receive such funds and how do you stay 100% on the right side of the law? And why would a normal user have to care about all of this? I'm not saying Bitcoin is a lot better than Ethereum in this regard. It's not a great situation in both chains and there will need to be better tools, laws and guidelines to handle these as time goes by.