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There’s a big legal distinction whether the developers are collecting fees from operation of the service, since that’s very different from merely developing ope

There’s a big legal distinction whether the developers are collecting fees from operation of the service, since that’s very different from merely developing open source software. I’m curious how this develops > It is suspected that persons behind this organisation have made large-scale profits from these transactions.

rvnx 4y ago
Exactly like original of developers of Bitcoin, it's not because they are not running the nodes themselves that they are not benefiting from facilitating ponzi or money laundering. Nodes are running the network, and developers earn through increased coin value and both are necessary part of the operations of the service.
- Anunayj 4y ago
  Yup exactly, the mistake these guys did here is, instead of creating a token that you have to buy to use the service, then giving yourself 50% of the token supply, and having 50 of your keys control a "DAO" for governance, they decided to flatly price.
  - paulsutter 4y ago
    You've inadvertently explained why a transparent ruse like that wouldn't work. If you want to develop serious privacy technology, make it open source and don't benefit from it financially
    - Anunayj 4y ago
      Oh that was sarcasm directed at the state of cryptocurrencies today :P
- deleted 4y ago
  [deleted]
- paulsutter 4y ago
  Coders logic != legal system
whatisweb3 4y ago
By this logic every blockchain developer should be arrested. The TC developers are not collecting fees directly, but they probably did give themselves a large supply of tokens to maintain control over the protocol, since the tokens were designed for governance. You can name any blockchain and see the same pattern. You can name many applications on top of blockchains, like Uniswap, and see similar. All of these protocols are known to facilitate some amount of illegal activity. Does this mean all developers of these protocols should be charged?
- paulsutter 4y ago
  No this means that you should talk with a serious law firm before you start one of these projects. OFAC, KYC, securities, AML/CFT, so many laws apply and without expert advice you can end up in a bad spot Expert lawyers do exist, example: https://www.perkinscoie.com/en/professionals/j-dax-hansen.html https://www.perkinscoie.com/en/professionals/j-dax-hansen.ht... "Dax has advised and continues to work with many of the leading companies, industry associations and consortia. Projects include U.S. and international digital currency exchanges, vaulting and custody solutions, bitcoin kiosks, tokenized gold and commodities, decentralized exchanges, autonomous smart contracts, stable coins, and Non-fungible tokens (NFTs). Beginning in late 2016, Dax worked with his colleagues to apply a new level of legal counseling to established software projects undertaking token sales related to decentralized applications (DApps) and distributed protocols..."
  - whatisweb3 4y ago
    There is still no legal precedent around a case like this as it relates to DAOs and autonomous smart contracts, so a law firm could not have told you anything except "we can neither confirm nor deny." If there is another US sanction that targets a non-custodial smart contract and open source project, please do share. Devastating that it has come to "do not code an E2EE privacy tool because you might find yourself in jail one day."
    - deleted 4y ago
      [deleted]
dannyw 4y ago
There is no fee paid to the developer when it comes to Tornado Cash, although there is the TORN token, which is a "governance" token.
- whywhywhywhy 4y ago
  Are holders of the "governance" token liable in any way? Like I know the scam of governance tokens is kinda "you control / own part it it, sorta" even though a lot of them don't do anything.
- operator-name 4y ago
  Unless you count relay nodes, but they were run by more than just the developers.

rvnx 4y ago

Exactly like original of developers of Bitcoin, it's not because they are not running the nodes themselves that they are not benefiting from facilitating ponzi or money laundering. Nodes are running the network, and developers earn through increased coin value and both are necessary part of the operations of the service.

Anunayj 4y ago
Yup exactly, the mistake these guys did here is, instead of creating a token that you have to buy to use the service, then giving yourself 50% of the token supply, and having 50 of your keys control a "DAO" for governance, they decided to flatly price.
- paulsutter 4y ago
  You've inadvertently explained why a transparent ruse like that wouldn't work. If you want to develop serious privacy technology, make it open source and don't benefit from it financially
  - Anunayj 4y ago
    Oh that was sarcasm directed at the state of cryptocurrencies today :P
deleted 4y ago
[deleted]
paulsutter 4y ago
Coders logic != legal system

whatisweb3 4y ago

By this logic every blockchain developer should be arrested. The TC developers are not collecting fees directly, but they probably did give themselves a large supply of tokens to maintain control over the protocol, since the tokens were designed for governance. You can name any blockchain and see the same pattern. You can name many applications on top of blockchains, like Uniswap, and see similar. All of these protocols are known to facilitate some amount of illegal activity. Does this mean all developers of these protocols should be charged?

paulsutter 4y ago
No this means that you should talk with a serious law firm before you start one of these projects. OFAC, KYC, securities, AML/CFT, so many laws apply and without expert advice you can end up in a bad spot Expert lawyers do exist, example: https://www.perkinscoie.com/en/professionals/j-dax-hansen.html https://www.perkinscoie.com/en/professionals/j-dax-hansen.ht... "Dax has advised and continues to work with many of the leading companies, industry associations and consortia. Projects include U.S. and international digital currency exchanges, vaulting and custody solutions, bitcoin kiosks, tokenized gold and commodities, decentralized exchanges, autonomous smart contracts, stable coins, and Non-fungible tokens (NFTs). Beginning in late 2016, Dax worked with his colleagues to apply a new level of legal counseling to established software projects undertaking token sales related to decentralized applications (DApps) and distributed protocols..."
- whatisweb3 4y ago
  There is still no legal precedent around a case like this as it relates to DAOs and autonomous smart contracts, so a law firm could not have told you anything except "we can neither confirm nor deny." If there is another US sanction that targets a non-custodial smart contract and open source project, please do share. Devastating that it has come to "do not code an E2EE privacy tool because you might find yourself in jail one day."
  - deleted 4y ago
    [deleted]

dannyw 4y ago

There is no fee paid to the developer when it comes to Tornado Cash, although there is the TORN token, which is a "governance" token.

whywhywhywhy 4y ago
Are holders of the "governance" token liable in any way? Like I know the scam of governance tokens is kinda "you control / own part it it, sorta" even though a lot of them don't do anything.
operator-name 4y ago
Unless you count relay nodes, but they were run by more than just the developers.