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Wow, just wow. Am i alone in thinking this is not going to fly if all he did was write some software that helps with your financial anonymity? There must be mor

• pie_flavor 4y ago
  An American could be excused for thinking it is not going to fly if all he did was write some software that helps with your financial anonymity. Unfortunately much of the world does not operate under American law.
• parasense 4y ago
  > The (criminal) origin of the cryptocurrencies is often not or hardly checked by such mixing services. Even omitting the "criminal" implication, that sentence has a big problems. > The origin of the cryptocurrencies is often not or hardly checked by such mixing services. Let me rephrase that: > The origin of cryptocurrencies is not checked by cryptocurrencies services. The idea is ridiculous at face value. However, it does illustrate the best & worst part of blockchains -- everything goes on the blockchain. The government loves that audit trail. But how is an ordinary person to know some wallet addr is a pedophile, or terrorist, or druglord, or whatever? I mean that as an honest question. Is there some public crypto-wallet watch-list everyone is supposed to be referencing prior to doing p2p transactions? Like you, I wonder how this person could be prosecuted? In the free-world, writing software is considered free-speech, at least in the USA, but I'm not sure in the Netherlands or wherever this person was apprehended? There are of course exceptions... like writing malware or viruses, etc.. So like you, the situation seems to entail something more.. like perhaps running an operation with clearly articulate facts indicating criminal activity. You know, the old saying goes "it's what you know, and when you knew it". So like, if the person was aware of criminal activity, taking part in criminal activity, etc.. I suppose an argument could be made.
• seanw444 4y ago
  Everyone keeps mentioning how "it's why criminals use cash, so there's no point in banning this, as they'll just resort to using cash." But they must fail to notice that various governments of the world are trying to implement a trackable digital currency to replace cash. They don't even like cash either.
  • akimball 4y ago
    Halting grey and black market transactions would destroy ~15% of global GDP, causing mass disruption, poverty, starvation, global unrest. Bad idea.
• jasonlotito 4y ago
  From the article: "He is suspected of involvement in concealing criminal financial flows and facilitating money laundering through the mixing of cryptocurrencies through the decentralised Ethereum mixing service Tornado Cash." This does not read as "all he did was write some software." Yes, he might have written software, but if it was with the purpose of money laundering, for example, and that can be proven, that's not just writing some software. We do not have enough information to decide either way, but what information we do have now (which has yet to be verified, of course) is that he did not just "write some software."
• gfodor 4y ago
  I think the question of "deployment" is an interesting one when it comes to smart contracts. When you deploy a contract, you're publishing the code to the network to run, not deploying it to a server you operate. I think we are going to need to have a much better legal framework around what exactly a person is doing, legally, when they deploy a smart contract to the blockchain.
• LatteLazy 4y ago
  It doesn't have to "fly" if you can waste 10 years of his life in court and ruin his finances, relationships and employability. The effect on him and the deterrent to others is basically the same...
• babypuncher 4y ago
  Knowledge and intent seem important here. If the developer had specific knowledge of a someone using their service to commit a crime and did nothing to stop it, then they could be an accessory to that crime. If you sell a weapon to someone knowing ahead of time that they are going to use it to rob a convenience store, you are not innocent.
• forgetfulness 4y ago
  How often are cryptocurrency projects developed with no interest in personal gain? This isn't the DeCSS days of hackers just wanting to stick it to the RIAA and MPAA. Chances are that the developer was involved in running a for profit service based on their software.
• baby 4y ago
  That's quite the claim when we don't know anything about the arrest yet. Come on.
• caeril 4y ago
  > this is not going to fly if all he did was write some software Stephen Watt had his life destroyed because he wrote some software. He didn't use it, he didn't directly victimize anyone; he just wrote the software that other people used[1]. Case law already exists that simply writing software can be a crime, so let's not fool ourselves that prosecutors/judges/juries will even remotely consider this line of defense valid. [1] https://www.wired.com/2009/12/stephen-watt https://www.wired.com/2009/12/stephen-watt
• preseinger 4y ago
  Financial anonymity is _actually bad_. KYC and anti-money-laundering regulations and etc. are _actually good_. These positions are the result of thousands of years of human history and economic activity. Ignore them at your peril (shrug)
• ezoe 4y ago
  Reminds me of the arrest of Isamu Kaneko, the developer P2P file sharing software, Winny, in Japan. He was prosecuted for aiding copyright infringement for writing a software that can share any files including copyright protected files. He won the case at supreme court but it costs a lot. Many Japanese free software developers lost their interest for publishing the software may lead to the arrest from police who don't understand any of the technology behind it.
• sph 4y ago
  Satoshi has demonstrated inhuman levels of restraint. The only explanation is that he is dead. The others are that he is not human, or that it's a committee defying Hanlon's razor: i.e. not governed by stupidity like most human affairs, but malice. Both are equally improbable.
  • LatteLazy 4y ago
    Or he\she\they\it just burnt the keys and forever gave up those early bitcoin when they were worth a few 100 or 1000...
  • MrPatan 4y ago
    Yes! Plus Faketoshi most likely waited until the person/people he knew (or strongly suspected) were Satoshi were dead to launch his scams. Less chance of a forum post saying "I'm not Craig Wright".
    • tim333 4y ago
      It would be rather funny if Satoshi did that. Though having faketoshi out there probably increases the deniability.
  • baby 4y ago
    The most likely explanation to me is that it was hal finney, who is dead now (presumably).
  • tim333 4y ago
    I think most people in the space have a pretty good idea who it is, quite likely the guy who made the predecessor. The important thing is it's ambiguous and unproven which stops this kind of legal stuff.
  • chaosite 4y ago
    Or that he has lost the private keys.
    • sph 4y ago
• sva_ 4y ago
  People getting arrested over crypto mixers is nothing new at all.
  • whatisweb3 4y ago
    US sanctions on mixers in the past have been associated with an individual, not a piece of code. This is the first sanction to target an open source and non-custodial mixer.
    • deleted 4y ago
      [deleted]
    • sva_ 4y ago
      A piece of code that has been actively maintained by a group of people.
      • whatisweb3 4y ago
        Yes. Like putting a sanction on the open Matrix protocol, and blocking any user who has interacted with it.
      • matthewdgreen 4y ago
        Maintaining code is, in the US, likely a 1st Amendment-protected activity. Operating live services like a mixer (including any RPCs needed for Tornado) is not. (And yes I know this arrest was not made in the US, so that might be the distinction.)
        • sangnoir 4y ago
          > Maintaining code is, in the US, likely a 1st Amendment-protected activity. How did the 1A defense work out for sharing "Ghost gun" CAD files?
          • matthewdgreen 4y ago
            You can take a look at the Wikipedia site for Defense Distributed, which filed suit against the state department for blocking the distribution of CAD files under export control rules. It hasn't been smooth sailing, but many of the legal cases seem to be breaking in the direction of DD. Of course that case is more complicated given that there is both a 1A and a 2A argument. [1] https://en.wikipedia.org/wiki/Defense_Distributed https://en.wikipedia.org/wiki/Defense_Distributed
• closewith 4y ago
  Anonymous cash transactions in the Netherlands over €10,000 are already illegal (https://www.amlc.eu/cash-limit/ https://www.amlc.eu/cash-limit/). The government intends to ban cash transactions over €3,000.
  • hansvm 4y ago
    The way I read that, large anonymous cash transactions in a non-professional capacity are still fine? Could I not gift somebody a million cash euros or buy a home with cash?
    • throwaway2037 4y ago
      Ahh... Gift tax (in all advanced countries in the world)? I am confused. Is this a serious post?
    • oneplane 4y ago
      I doubt any company wil accept that, and suddenly owning a new house with no data on where that money might have come from will raise so many red flags, you'll be able too start a new flag company.
    • jagged-chisel 4y ago
      In cash? Anonymously? Probably not, even without regulation.
    • PeterisP 4y ago
      IIRC you can't buy a house anonymously in Netherlands, no matter if you pay with cash or not, you'd be required to register the transfer of ownership in the cadastral system, and any real estate deals must be with a written contract that identifies both parties. And I believe the NL tax reporting for large gifts also requires you to identify the donor. In essence, the limitation is not on the method of payment but on the core activity, that any significant income from contracts, deals, trades, barters, transfers, gifts, settlements etc need to be non-anonymous in order to be legitimate, so if the method of payment does not identify the payer (i.e. cash) then simply it's your duty to identify who you're dealing with, from whom you are earning money.
• ABeeSea 4y ago
  If you are told repeatedly that your work is facilitating money laundering and you keep doing that work, don’t be surprised if you get arrested for facilitating money laundering.
  • dcolkitt 4y ago
    Told by whom?
  • biglearner1day 4y ago
    Please do remind me how many persons named in the Panama Papers have been arrested, or had their assets seized.
    • pjc50 4y ago
      You could do your own research? https://en.wikipedia.org/wiki/Panama_Papers https://en.wikipedia.org/wiki/Panama_Papers I see at least https://www.icij.org/investigations/panama-papers/20160425-cartel-arrests-uruguay/ https://www.icij.org/investigations/panama-papers/20160425-c... and https://www.justice.gov/usao-sdny/pr/four-defendants-charged-panama-papers-investigation https://www.justice.gov/usao-sdny/pr/four-defendants-charged... ; the originators of the scheme, Mossack Fonseca, are wanted by multiple countries https://apnews.com/article/arrests-tax-evasion-panama-city-panama-jurgen-mossack-c20c5fac6ef5f73aca8d43324288d223 https://apnews.com/article/arrests-tax-evasion-panama-city-p... Jurisdiction is something of a problem, as we can see with the Panamanians being non-extraditable. That's why it was the Panama papers in the first place! But if you're going to facilitate money laundering, at least have the common sense to not do it under your own name in a jurisdiction where that is illegal or that will extradite you to the US.
    • JohnHaugeland 4y ago
      So far about 1200, including 400 celebrities, three heads of state, nine former heads of state, and 150 sitting politicians worldwide. It's the third largest successful corruption sting in history. Also, edgelords online who don't know what's happening in the real world like to pretend there was no fallout, so that they can feel wise about corruption, and like to demand that other people look things up for them so they can feel like they made a point. In reality, it was about half of the names in the document base so far, and that's despite it being international prosecution with an unwilling nation. Things in the Panama Papers are going quite well for law and order, albeit slowly. Would you be kind enough to tell us what result you were expecting, and what point you were trying to make? In the future, would you please consider knowing the answers to your sarcastic questions before asking them, please?
• alkonaut 4y ago
  > Wow, just wow. Am i alone in thinking this is not going to fly if all he did was write some software that helps with your financial anonymity? There must be more. Perhaps he also deployed it? That would be a different story. Does that really make a difference? I’d not worry about writing anything and putting it online saying “this can be used for evil so don’t do that”. But if I was approached by a criminal who asked me to write code for their criminal activity and I did so knowingly, then I’d expect legal consequences, possibly even if my code was never deployed at all. The difference must be in whether or not there was a conspiracy to commit crimes or if there wasn’t? In this case I don’t know whether this was purely open and no such contact between user and developer existed. But in principle I’d expect writing (almost) anything in the open to be safe.
  • whatisweb3 4y ago
    This is not a criminal hiring a contractor to work on Tornado Cash. It is an open source project on GitHub that many developers and researchers contributed to, in the interest of privacy. To use an analogy, see the open Matrix protocol, a tool for privacy that can facilitate encrypted communication between criminals.
    • alkonaut 4y ago
      Yeah, in that case unless there are specific laws violated by the code (earlier DMCA violations come to mind) then it should be safe as I said. But as usual things are only legal until it’s tried. A machine that prints counterfeit bills might be illegal to make or sell even without ever being used in some jurisdictions while not in others. And whether the machine has other, legal purposes, may or may not matter. The “dual use” thing is a common argument for most technical things when there is talk of bans and regulation. I think it’s mostly a hollow argument in cases where the primary actual users are criminal users. That some technology can be used for illegal purposes should not be enough to ban it, but nor should whether there exists a legal use for a technology be enough argument that it shouldn’t be outlawed.
    • JohnHaugeland 4y ago
      You seem to believe that if a tool is illegal, as long as it's open source and the people making it don't have a criminal background, and as long as you call it something like "privacy software," somehow it's suddenly not illegal But this is a tool whose specific purpose it is to make it difficult to track illegal transactions. Of course this is happening. Programmers get way too wrapped up in "but I called it open source! I called it privacy software!" What you label it has no actual power here. It was used in illegal behavior and that appears to be its goal. Of course it's going away.
• jackmott 4y ago
• throwoutway 4y ago
  I think the only real case the gov would have is if he ‘knowingly’ supported laundering for sanctioned nations, like if he noticed it, and commented on Twitter or discord to a friend like “Ha! Look, DPRK used my tool”. However, if that did happen, the gov also just gave him threee days lead time to delete any evidence of that, which is extraordinary. I’m surprised the arrest and sanction did not happen on the same day
  • dannyw 4y ago
    They were waiting for the reactions from the community. There's a low chance there could have been extreme and unified non-compliance, e.g. everyone depositing funds to Tornado Cash (which is still up and operating at https://cloudflare-ipfs.com/ipns/tornadocash.eth/ https://cloudflare-ipfs.com/ipns/tornadocash.eth/ )
  • PeterisP 4y ago
    I don't think there's any causation from the USA sanctions to the arrest, possibly even vice versa, with some investigation before this arrest leading to some part of the sanctions. The specific USA sanctions are not retroactive, it's not a crime to have violated them before an entity was sanctioned; and I doubt if it's a Netherlands crime to violate USA sanctions. In any case, the article seems quite clear that he was arrested for facilitating money laundering, not for a sanctions-related offense, the sentence about sanctions was just extra information for context. And for this part, the big issue is intent - if it turns out that he developed this mixer with the intent to facilitate hiding illegal transactions, that would be facilitating money laundering. And looking at some comments here I wouldn't be that surprised that he might have explicitly admitted it in writing.
• egorfine 4y ago
  This is perfectly going to fly if they find one small chat where he admits he merely knows that his code was used for money laundering. If memory serves me correctly, the ground for convicting Phantom Secure was the fact that one of the founders admitted that he knew that his service caters to criminals, although the service itself is not illegal.
• JumpCrisscross 4y ago
  > Am i alone in thinking this is not going to fly if all he did was write some software that helps with your financial anonymity? Probably. That said, he is arrested under Dutch law. We have no evidence this is tied to U.S. sanctions. As others mention, Dutch law restricts cash transactions in ways U.S. law does not. Also, in June—when the link says they began the investigation—it was publicly known Tornado was being used to launder money. If the developer kept working on it, they knew what they were doing. Again, I think that wouldn’t per se lead to criminal charges in the U.S. But we’re sticklers about speech and privacy in ways most of the world is not.
  • carlosdp 4y ago
    > Also, in June—when the link says they began the investigation—it was publicly known Tornado was being used to launder money. If the developer kept working on it, they knew what they were doing. People keep saying this in this thread. Is everyone at WhatsApp also guilty of a crime for continuing to work on WhatsApp even though they know the Taliban uses it for communication?
    • seanw444 4y ago
      As usual, it's an argument for harming people that produce legitimately useful things that criminals pervert. It's the same argument people make for banning guns in the US.
      • alsetmusic 4y ago
        > It's the same argument people make for banning guns in the US. To be fair, I think most are arguing to restrict guns rather than ban. I’m not saying you did this, but many people deliberately distort that into “they wanna take all your guns” in bad faith.
        • seanw444 4y ago
          Taking some leads to all. It's not something that should be compromised on. Gun restrictions won't end until ownership is so legally complex and time consuming that nobody can reasonably do it anymore. Of course it won't be an outright ban. That would never succeed. The frog in boiling water analogy applies here perfectly.
• JohnHaugeland 4y ago
  > Am i alone in thinking this is not going to fly if all he did was write some software that helps with your financial anonymity? No. That's what all the coin people are thinking. Everyone else is thinking "gee, someone made a tool to try to prevent the financial regulators from regulating, I'm surprised this took this long."