7 ms·

This is just like the SEC "not enforcing" securities clauses until they have evidence. I think the writing is on the wall for not just Tornado Cash, but any sys

by Shank 4y ago

This is just like the SEC "not enforcing" securities clauses until they have evidence. I think the writing is on the wall for not just Tornado Cash, but any system that functions like it: if you don't have an AML system that works, and your system is used for anything the government can prove would've been stopped by AML and should have been stopped by AML, it is incompatible, in principle, with the US dollar. Just because Tornado Cash and other mixers survived for this long doesn't mean that the law suddenly changed or anything. All it means is that there was enough evidence collected to justify OFAC/SDN sanctioning. Then, the dominoes fell. Tornado Cash was /never/ okay, but the government waited patiently for the evidence and acted when it had it. The same thing should be assumed to be true for /all/ systems in this sphere. The US dollar is the world reserve currency, and the SDN list is a death sentence for any project or system if that system has outputs to US dollars anywhere in the chain. All electronic cash transfer systems should be assumed to be incompatible unless there's a clear AML chain established that can reasonably defend against a blanket sanction. In the exact same way, the SEC will go after any cryptocurrency "securities" that they want to, as soon as those securities blow up. Filecoin had an ICO just like a lot of other securities, but seemingly because it hasn't blown up, the SEC hasn't come knocking yet. It's just an evidence collection game.

mistrial9 4y ago
ok - except it is a system-of-systems, not one system. The perfection of one and destruction of all others is specifically designed-OUT for lots of important reasons (see HISTORY). Perfect tax enforcement is not even possible, by their own defined rules. There is no perfect system and real evolution needs to deal with that -- all manner of despots and arch-bureaucrats be dammed.
- nradov 4y ago
  That's just a complaint, not a realistic proposal for change. The reality is that in the US, there is a broad and stable political consensus in favor of ever stricter AML enforcement. This is perceived as reducing tax evasion, sanctions evasion, terrorism, and organized crime. It may not be 100% effective but it obviously has some effect. Only a small fraction of voters and campaign donors are negatively impacted so there is little political resistance.
  - junofan 4y ago
    The proposal for change is for FinCEN and others to engage in formal rulemaking so compliance can be achieved.
    - tick_tock_tick 4y ago
      The point is the rules already exist and crypto was just deluding themselves into thinking it didn't apply. There is no reason for proposals or other formal rule-making because that step already happened.
ptudan 4y ago
> In the exact same way, the SEC will go after any cryptocurrency "securities" that they want to, as soon as those securities blow up. Filecoin had an ICO just like a lot of other securities, but seemingly because it hasn't blown up, the SEC hasn't come knocking yet. It's just an evidence collection game. When did XRP blow up? I don't think the SEC is waiting for a rug pull or system failure to sue.
seibelj 4y ago
> Tornado Cash was /never/ okay, but the government waited patiently for the evidence and acted when it had it. The government didn't even sanction all the smart contracts. BSC chain had more activity than the Ethereum contract, but they didn't seem to know about it. Furthermore, Tornado had compliance tools built in that allows users to prove where their funds came from to make themselves compliant with KYC rules. The whole thing seems really hamfisted and poorly thought out. The US Secretary of State even tweeted incorrectly that North Korea built Tornado, then had to delete the tweet! https://www.coindesk.com/policy/2022/08/08/us-secretary-of-state-tweets-deletes-claim-that-crypto-mixer-tornado-cash-is-north-korea-sponsored/ https://www.coindesk.com/policy/2022/08/08/us-secretary-of-s... I don't think the government really thought it through, and future lawsuits will hopefully result in Tornado being un-sanctioned and privacy affirmed as a constitutional right, as it did in the 90s when source code was declared free speech after a long battle https://en.wikipedia.org/wiki/Bernstein_v._United_States https://en.wikipedia.org/wiki/Bernstein_v._United_States
- miohtama 4y ago
  Tornado Cash was sanctioned over e.g. Monero, ZCash or Secret Network that fulfill the same shieled transaction purpose but have existed longer. The reason for this was that Tornado Cash attracted North Korean Lazarus group to use it. The reason why Lazarus used it was that it was non-custodial (no risk of criminals stealing other criminals) and ETH had better exit liquidity over XMR and ZCash that are not often listed on the shady exchanges. When national security interest card is played, laws and even the constitution do not seem to weight so much anymore in the US. If Tornado Cash had been modified in a way that it could not allow easily to deposit and withdraw large amounts by limiting flow/liquidity it would have been less attractive for Lazarus and other hack group purposes. For example, Harmony One hack $100M was pushed through Tornado in one day. Tornado Cash has a compliance tool that could allow centralised exchanges and fiat off ramps to trace transcations through Tornado. However, in practice some US political allies, like those in Dubai, run shady OTC desks that do not do it, making Tornado very practical tool for hack laundering. The best outcome for the situation would be - Tornado Cash code is ”unsanctioned” or deemed free speech - Someone builds a service for shielded transactions that has features to discourage its use for nation state scale money laundering
woojoo666 4y ago
It's interesting how Tornado Cash was sanctioned and not Monero. Perhaps there was more evidence of Tornado Cash being linked to criminal activity, which seems counterintuitive because of how much more popular Monero is. Is it perhaps easier to trace transactions on Tornado Cash?
- tromp 4y ago
  TC just has a lot more liquidity. I mean had...
- acdha 4y ago
  My guess is that it’s both: the Dutch story specifically mentioned direct personal profit, which I’d bet GitHub knew about, and if the story about North Korea using it to launder the proceeds from high-profile hacks are true that’d certainly explain the specificity as not picking one option out of many but rather the one which came up in the process of a big investigation. Half a billion dollars is enough to attract all kinds of attention – I’m sure Monero would get a similar reaction if the Lazarus group was traced to that network, too. What this suggests to me is that these services are about to mostly go underground as primarily criminal organizations’ internal services. It’s like running a Tor exit node but worse due to the liquidity requirements: you have to be an incredibly privacy-minded activity with a huge sense of security to link yourself financially to a service which you know will inevitably be used by one of these groups.
- matheusmoreira 4y ago
  They tried to sanction a Monero wallet once and ended up sanctioning a transaction hash. https://www.treasury.gov/ofac/downloads/sdnlist.txt https://www.treasury.gov/ofac/downloads/sdnlist.txt > Digital Currency Address - XMR 5be5543ff73456ab9f2d207887e2af87322c651ea1a873c5b25b7ffae456c320; https://localmonero.co/blocks/search/5be5543ff73456ab9f2d207887e2af87322c651ea1a873c5b25b7ffae456c320 https://localmonero.co/blocks/search/5be5543ff73456ab9f2d207... It's unclear how resilient Monero will prove to be over the long term but it's certainly looking stronger than centralized coin mixing services.
- rvz 4y ago
  > Is it perhaps easier to trace transactions on Tornado Cash? An exchange can detect if some Ethereum have been through a mixer very easily. Monero on the other hand has been de-listed or banned from exchanges, making it harder for criminals, scammers, etc to cash out or swapping to fiat. As soon as the Tornado contract address has been blacklisted and put on the sanctions list, any wallet address interacting with the contract or Ethereum sent from or to it will flag up and get blacklisted by other centralized entities that have AML/KYC checks like Circle USDC, many exchanges, etc.
rvz 4y ago
> All electronic cash transfer systems should be assumed to be incompatible unless there's a clear AML chain established that can reasonably defend against a blanket sanction. Nonsense absolutism. Is that why Stripe, Moneygram, Circle, etc invested in Stellar, and they are still using ISO 20020 compliant cryptocurrencies like those ones after waiting for regulatory clarity in March 2022?
- arcticbull 4y ago
  If you're referring to ISO20022 that's a messaging standard primarily used between financial institutions, not an AML compliance thing. It's got nothing to do with regulation at all, let alone AML regulations. That's kind of like saying companies that run SMTP servers must therefore be in compliance with GDPR or email archiving laws. As for why Moneygram invested in Stellar who knows? CDPQ invested in Celsius. Better to ask forgiveness than permission, but as the parent said, lack of enforcement does not mean lack of regulation - and it has no bearing on future enforcement. Financial services companies take AML compliance seriously because if they don't their liability is practically unbounded and I have to say Moneygram looks nothing like Tornado.
  - rvz 4y ago
    > As for why Moneygram invested in Stellar who knows? Moneygram knows? Maybe try asking them and others on why they did? I'm very sure that Moneygram had a wide range choices of other projects to build their product but somehow landed with one serious crypto project that happens to be compatible with the ISO 20022 messaging standard which the current system is using and the Stellar Network has stood the test of time since their launch. Didn't stop them from actually launching the product with the Stellar Network and for Stripe investing in the project and waiting for regulatory clarity in March 2022 to announce their cryptocurrency services did it?
    - arcticbull 4y ago
      > Moneygram knows? Maybe try asking them and others on why they did? Why would I ask them? They would never admit to it being a 'shoot first ask question later' play. They would never admit to it being FOMO. They would never admit to it being something they were afraid they'd get left behind on and once they realized it wasn't relevant to their business, sunk cost fallacy took over. They'd never admit to anything that made them look bad. You wouldn't ask Moneygram for the same reason you don't take a criminal's word on not doing crime - there's only downside to telling the truth. I'm not saying it's one of these reasons - but rather if it was they'd never say. Again, ISO 20022 is completely irrelevant to this conversation. I've genuinely no idea how this became a talking point. Again, this has nothing to do with AML compliance which I'm confident each of those companies do - and we know full well that Tornado did not. Again, there's no reason to think that there won't be any future regulatory action simply because there has not yet been any, and I personally doubt any amount of appealing to authority will help.
matheusmoreira 4y ago
> if you don't have an AML system that works, and your system is used for anything the government can prove would've been stopped by AML and should have been stopped by AML, it is incompatible, in principle, with the US dollar Yeah, and I think it's really interesting how widely accepted this stuff is. I mean, it's literally the financial version of global mass surveillance. Governments gotta know every single transaction that's ever happened because reasons, and if anything bad happens and it turns out someone's lack of total surveillance and record keeping of everyone they ever dealt with somehow helped it happen, well... Sometimes it feels like people don't realize how tyrannical and dystopian that is. Like money laundering is some unbelievably evil crime that makes it okay for the government to surveil everything in hopes of stopping it.
- jimcavel888 4y ago
- Nursie 4y ago
  Money laundering is evil. Sorry, this weird obsession people have with "Muh financial privacy" and "I'm just moving it around, that ain't a crime!" is the outlier here. Should the government be handed every transaction on a silver platter every day? Probably not, but I don't think you'll find many people in the big wide world agreeing that financial activity should be forever unavailable to governments, courts or anything else, even under applicable warrant, which is what these services provide. And why is this absolute privacy bad? Where to start? Criminals hiding ill-gotten gains is only a small part of it. We have the funding of rogue nation states and enabling of ransomware, which is roughly in the same ballpark, sure, but very harmful. Then we have straight-out tax evasion. We also have dictators and despots who plunder their countries and enrich themselves. Should their activities be private? Should we just allow them to siphon money off to other countries and live the high life while their population suffer? It happens all too often already, but in much of the west now we are catching this stuff and denying them those things because we can see some of what's gone on. And what about our own democracy? Absolute financial privacy can allow wealthy interests to brazenly buy politicians, with guarantees of untraceability. So no, I don't "realise" how tyrannical and dystopian that is, in fact to me it looks like it helps prevent a variety of forms of dystopia, in which the rich and the corrupt could even more easily and directly buy democracy out from under us. The fact that you can't currently have a system which provides privacy until an authority (such as the court system) demand things be unlocked, well that seems like a problem for cryptocurrency users, not the law.
gonehome 4y ago
This feels like another version of the 90s cryptowars - a lot of the arguments are similar. Encryption enabled regular people to have private communications, but at the cost of bad people also having private communications. Tornado cash allows regular people to have private blockchain transactions on ethereum (where with blockchain everything is extremely public otherwise), but at the cost that bad people can also have privacy. Sanctioning tornado addresses is similar to the export munitions thing with crypto and keys, particularly weird since tornado seemed to go out of their way to build in compliance tooling? IANAL, but there's some strong precedence for speech protections with regard to code.
- soco 4y ago
  Allows regular people to wash the little pocket money they might have, and try to not pay taxes on them.
  - imtringued 4y ago
    A lot of people in Greece simply didn't pay taxes because they could easily get away with it. It might be okay if a few people do it, but if everyone does it, it destabilises the country and the damage will go beyond politicians losing their seats.
    - sgjohnson 4y ago
      > A lot of people in Greece simply didn't pay taxes because they could easily get away with it. It might be okay if a few people do it, but if everyone does it, it destabilises the country and the damage will go beyond politicians losing their seats. No. It's deeply rooted in Greek culture to the point that VAT is basically an optional tax for most entrepreneurs. Virtually nobody at all pays VAT on cash sales in Greece, and there's virtually no enforcement on it, so the only risk of getting caught is if you've pissed off someone with connections. So everyone does it, and Greece is reasonably stable.
  - gonehome 4y ago
    I have no interest in helping the people trying to evade taxes (at least they’re not the group I care about), I care about the people that want private transactions and pay their taxes. There are good reasons to want privacy around financial transactions that are not tax evasion or money laundering. This is especially true in the blockchain world where everything is extremely public. Just like there are good reasons to want private communication even if you're not committing crimes.
capableweb 4y ago
> The US dollar is the world reserve currency, and the SDN list is a death sentence for any project or system if that system has outputs to US dollars anywhere in the chain. If that's so, why not to after the entities that actually convert X into USD? Tornado only allowed you to trade ETH for Tornado tokens, and vice-versa, no USD involved.
- yunohn 4y ago
  I’m not sure if you’re being obtuse, but exchanges are already subject to AML/KYC, and are constantly both enforcing as much as they can, or being fined by governments for failing to do so. Tornado was the exception until now.
yunohn 4y ago
You and others are making really good points, it’s a shame you’re downvoted into the grey. Governments are by and for the citizens. Crypto enthusiasts want to avoid taxes while making profits, because let’s be honest, that’s what Tornado is really about. At best, 1% of traffic is for legitimate services, because you can’t really buy much with crypto except other crypto. What blockchains enable is yet another class of money laundering. It doesn’t help anyone except the crypto minority, but enables the other bad elements to have another system to use for their corrupt activities. Libertarians in a corrupt classist capitalist society cannot “save” themselves by hiding behind a blockchain - it won’t solve societal ills.
SilverBirch 4y ago
This is true of a lot of tech start ups - doing something that is technically not allowed, but the key difference is that to do it successfully you need to get to a scale where you can pivot to something is allowed. For Uber that was slowly changing to adhere to all the regulations around employment law and taxi companies in each jurisdiction. It's questionable that after that pivot they're a great business. In Tornado Cash I guess the equivalent would "You can hide the flow of your crypto from the public but we're still going to comply with the government AML & KYC."

by Shank 4y ago

mistrial9 4y ago

ok - except it is a system-of-systems, not one system. The perfection of one and destruction of all others is specifically designed-OUT for lots of important reasons (see HISTORY). Perfect tax enforcement is not even possible, by their own defined rules. There is no perfect system and real evolution needs to deal with that -- all manner of despots and arch-bureaucrats be dammed.

nradov 4y ago
That's just a complaint, not a realistic proposal for change. The reality is that in the US, there is a broad and stable political consensus in favor of ever stricter AML enforcement. This is perceived as reducing tax evasion, sanctions evasion, terrorism, and organized crime. It may not be 100% effective but it obviously has some effect. Only a small fraction of voters and campaign donors are negatively impacted so there is little political resistance.
- junofan 4y ago
  The proposal for change is for FinCEN and others to engage in formal rulemaking so compliance can be achieved.
  - tick_tock_tick 4y ago
    The point is the rules already exist and crypto was just deluding themselves into thinking it didn't apply. There is no reason for proposals or other formal rule-making because that step already happened.

ptudan 4y ago

> In the exact same way, the SEC will go after any cryptocurrency "securities" that they want to, as soon as those securities blow up. Filecoin had an ICO just like a lot of other securities, but seemingly because it hasn't blown up, the SEC hasn't come knocking yet. It's just an evidence collection game. When did XRP blow up? I don't think the SEC is waiting for a rug pull or system failure to sue.

seibelj 4y ago

> Tornado Cash was /never/ okay, but the government waited patiently for the evidence and acted when it had it. The government didn't even sanction all the smart contracts. BSC chain had more activity than the Ethereum contract, but they didn't seem to know about it. Furthermore, Tornado had compliance tools built in that allows users to prove where their funds came from to make themselves compliant with KYC rules. The whole thing seems really hamfisted and poorly thought out. The US Secretary of State even tweeted incorrectly that North Korea built Tornado, then had to delete the tweet! https://www.coindesk.com/policy/2022/08/08/us-secretary-of-state-tweets-deletes-claim-that-crypto-mixer-tornado-cash-is-north-korea-sponsored/ https://www.coindesk.com/policy/2022/08/08/us-secretary-of-s... I don't think the government really thought it through, and future lawsuits will hopefully result in Tornado being un-sanctioned and privacy affirmed as a constitutional right, as it did in the 90s when source code was declared free speech after a long battle https://en.wikipedia.org/wiki/Bernstein_v._United_States https://en.wikipedia.org/wiki/Bernstein_v._United_States

miohtama 4y ago
Tornado Cash was sanctioned over e.g. Monero, ZCash or Secret Network that fulfill the same shieled transaction purpose but have existed longer. The reason for this was that Tornado Cash attracted North Korean Lazarus group to use it. The reason why Lazarus used it was that it was non-custodial (no risk of criminals stealing other criminals) and ETH had better exit liquidity over XMR and ZCash that are not often listed on the shady exchanges. When national security interest card is played, laws and even the constitution do not seem to weight so much anymore in the US. If Tornado Cash had been modified in a way that it could not allow easily to deposit and withdraw large amounts by limiting flow/liquidity it would have been less attractive for Lazarus and other hack group purposes. For example, Harmony One hack $100M was pushed through Tornado in one day. Tornado Cash has a compliance tool that could allow centralised exchanges and fiat off ramps to trace transcations through Tornado. However, in practice some US political allies, like those in Dubai, run shady OTC desks that do not do it, making Tornado very practical tool for hack laundering. The best outcome for the situation would be - Tornado Cash code is ”unsanctioned” or deemed free speech - Someone builds a service for shielded transactions that has features to discourage its use for nation state scale money laundering

woojoo666 4y ago

It's interesting how Tornado Cash was sanctioned and not Monero. Perhaps there was more evidence of Tornado Cash being linked to criminal activity, which seems counterintuitive because of how much more popular Monero is. Is it perhaps easier to trace transactions on Tornado Cash?

tromp 4y ago
TC just has a lot more liquidity. I mean had...
acdha 4y ago
My guess is that it’s both: the Dutch story specifically mentioned direct personal profit, which I’d bet GitHub knew about, and if the story about North Korea using it to launder the proceeds from high-profile hacks are true that’d certainly explain the specificity as not picking one option out of many but rather the one which came up in the process of a big investigation. Half a billion dollars is enough to attract all kinds of attention – I’m sure Monero would get a similar reaction if the Lazarus group was traced to that network, too. What this suggests to me is that these services are about to mostly go underground as primarily criminal organizations’ internal services. It’s like running a Tor exit node but worse due to the liquidity requirements: you have to be an incredibly privacy-minded activity with a huge sense of security to link yourself financially to a service which you know will inevitably be used by one of these groups.
matheusmoreira 4y ago
They tried to sanction a Monero wallet once and ended up sanctioning a transaction hash. https://www.treasury.gov/ofac/downloads/sdnlist.txt https://www.treasury.gov/ofac/downloads/sdnlist.txt > Digital Currency Address - XMR 5be5543ff73456ab9f2d207887e2af87322c651ea1a873c5b25b7ffae456c320; https://localmonero.co/blocks/search/5be5543ff73456ab9f2d207887e2af87322c651ea1a873c5b25b7ffae456c320 https://localmonero.co/blocks/search/5be5543ff73456ab9f2d207... It's unclear how resilient Monero will prove to be over the long term but it's certainly looking stronger than centralized coin mixing services.
rvz 4y ago
> Is it perhaps easier to trace transactions on Tornado Cash? An exchange can detect if some Ethereum have been through a mixer very easily. Monero on the other hand has been de-listed or banned from exchanges, making it harder for criminals, scammers, etc to cash out or swapping to fiat. As soon as the Tornado contract address has been blacklisted and put on the sanctions list, any wallet address interacting with the contract or Ethereum sent from or to it will flag up and get blacklisted by other centralized entities that have AML/KYC checks like Circle USDC, many exchanges, etc.

rvz 4y ago

> All electronic cash transfer systems should be assumed to be incompatible unless there's a clear AML chain established that can reasonably defend against a blanket sanction. Nonsense absolutism. Is that why Stripe, Moneygram, Circle, etc invested in Stellar, and they are still using ISO 20020 compliant cryptocurrencies like those ones after waiting for regulatory clarity in March 2022?

arcticbull 4y ago
If you're referring to ISO20022 that's a messaging standard primarily used between financial institutions, not an AML compliance thing. It's got nothing to do with regulation at all, let alone AML regulations. That's kind of like saying companies that run SMTP servers must therefore be in compliance with GDPR or email archiving laws. As for why Moneygram invested in Stellar who knows? CDPQ invested in Celsius. Better to ask forgiveness than permission, but as the parent said, lack of enforcement does not mean lack of regulation - and it has no bearing on future enforcement. Financial services companies take AML compliance seriously because if they don't their liability is practically unbounded and I have to say Moneygram looks nothing like Tornado.
- rvz 4y ago
  > As for why Moneygram invested in Stellar who knows? Moneygram knows? Maybe try asking them and others on why they did? I'm very sure that Moneygram had a wide range choices of other projects to build their product but somehow landed with one serious crypto project that happens to be compatible with the ISO 20022 messaging standard which the current system is using and the Stellar Network has stood the test of time since their launch. Didn't stop them from actually launching the product with the Stellar Network and for Stripe investing in the project and waiting for regulatory clarity in March 2022 to announce their cryptocurrency services did it?
  - arcticbull 4y ago
    > Moneygram knows? Maybe try asking them and others on why they did? Why would I ask them? They would never admit to it being a 'shoot first ask question later' play. They would never admit to it being FOMO. They would never admit to it being something they were afraid they'd get left behind on and once they realized it wasn't relevant to their business, sunk cost fallacy took over. They'd never admit to anything that made them look bad. You wouldn't ask Moneygram for the same reason you don't take a criminal's word on not doing crime - there's only downside to telling the truth. I'm not saying it's one of these reasons - but rather if it was they'd never say. Again, ISO 20022 is completely irrelevant to this conversation. I've genuinely no idea how this became a talking point. Again, this has nothing to do with AML compliance which I'm confident each of those companies do - and we know full well that Tornado did not. Again, there's no reason to think that there won't be any future regulatory action simply because there has not yet been any, and I personally doubt any amount of appealing to authority will help.

matheusmoreira 4y ago

> if you don't have an AML system that works, and your system is used for anything the government can prove would've been stopped by AML and should have been stopped by AML, it is incompatible, in principle, with the US dollar Yeah, and I think it's really interesting how widely accepted this stuff is. I mean, it's literally the financial version of global mass surveillance. Governments gotta know every single transaction that's ever happened because reasons, and if anything bad happens and it turns out someone's lack of total surveillance and record keeping of everyone they ever dealt with somehow helped it happen, well... Sometimes it feels like people don't realize how tyrannical and dystopian that is. Like money laundering is some unbelievably evil crime that makes it okay for the government to surveil everything in hopes of stopping it.

jimcavel888 4y ago
Nursie 4y ago
Money laundering is evil. Sorry, this weird obsession people have with "Muh financial privacy" and "I'm just moving it around, that ain't a crime!" is the outlier here. Should the government be handed every transaction on a silver platter every day? Probably not, but I don't think you'll find many people in the big wide world agreeing that financial activity should be forever unavailable to governments, courts or anything else, even under applicable warrant, which is what these services provide. And why is this absolute privacy bad? Where to start? Criminals hiding ill-gotten gains is only a small part of it. We have the funding of rogue nation states and enabling of ransomware, which is roughly in the same ballpark, sure, but very harmful. Then we have straight-out tax evasion. We also have dictators and despots who plunder their countries and enrich themselves. Should their activities be private? Should we just allow them to siphon money off to other countries and live the high life while their population suffer? It happens all too often already, but in much of the west now we are catching this stuff and denying them those things because we can see some of what's gone on. And what about our own democracy? Absolute financial privacy can allow wealthy interests to brazenly buy politicians, with guarantees of untraceability. So no, I don't "realise" how tyrannical and dystopian that is, in fact to me it looks like it helps prevent a variety of forms of dystopia, in which the rich and the corrupt could even more easily and directly buy democracy out from under us. The fact that you can't currently have a system which provides privacy until an authority (such as the court system) demand things be unlocked, well that seems like a problem for cryptocurrency users, not the law.

gonehome 4y ago

This feels like another version of the 90s cryptowars - a lot of the arguments are similar. Encryption enabled regular people to have private communications, but at the cost of bad people also having private communications. Tornado cash allows regular people to have private blockchain transactions on ethereum (where with blockchain everything is extremely public otherwise), but at the cost that bad people can also have privacy. Sanctioning tornado addresses is similar to the export munitions thing with crypto and keys, particularly weird since tornado seemed to go out of their way to build in compliance tooling? IANAL, but there's some strong precedence for speech protections with regard to code.

soco 4y ago
Allows regular people to wash the little pocket money they might have, and try to not pay taxes on them.
- imtringued 4y ago
  A lot of people in Greece simply didn't pay taxes because they could easily get away with it. It might be okay if a few people do it, but if everyone does it, it destabilises the country and the damage will go beyond politicians losing their seats.
  - sgjohnson 4y ago
    > A lot of people in Greece simply didn't pay taxes because they could easily get away with it. It might be okay if a few people do it, but if everyone does it, it destabilises the country and the damage will go beyond politicians losing their seats. No. It's deeply rooted in Greek culture to the point that VAT is basically an optional tax for most entrepreneurs. Virtually nobody at all pays VAT on cash sales in Greece, and there's virtually no enforcement on it, so the only risk of getting caught is if you've pissed off someone with connections. So everyone does it, and Greece is reasonably stable.
- gonehome 4y ago
  I have no interest in helping the people trying to evade taxes (at least they’re not the group I care about), I care about the people that want private transactions and pay their taxes. There are good reasons to want privacy around financial transactions that are not tax evasion or money laundering. This is especially true in the blockchain world where everything is extremely public. Just like there are good reasons to want private communication even if you're not committing crimes.

capableweb 4y ago

> The US dollar is the world reserve currency, and the SDN list is a death sentence for any project or system if that system has outputs to US dollars anywhere in the chain. If that's so, why not to after the entities that actually convert X into USD? Tornado only allowed you to trade ETH for Tornado tokens, and vice-versa, no USD involved.

yunohn 4y ago
I’m not sure if you’re being obtuse, but exchanges are already subject to AML/KYC, and are constantly both enforcing as much as they can, or being fined by governments for failing to do so. Tornado was the exception until now.

yunohn 4y ago

You and others are making really good points, it’s a shame you’re downvoted into the grey. Governments are by and for the citizens. Crypto enthusiasts want to avoid taxes while making profits, because let’s be honest, that’s what Tornado is really about. At best, 1% of traffic is for legitimate services, because you can’t really buy much with crypto except other crypto. What blockchains enable is yet another class of money laundering. It doesn’t help anyone except the crypto minority, but enables the other bad elements to have another system to use for their corrupt activities. Libertarians in a corrupt classist capitalist society cannot “save” themselves by hiding behind a blockchain - it won’t solve societal ills.

SilverBirch 4y ago

This is true of a lot of tech start ups - doing something that is technically not allowed, but the key difference is that to do it successfully you need to get to a scale where you can pivot to something is allowed. For Uber that was slowly changing to adhere to all the regulations around employment law and taxi companies in each jurisdiction. It's questionable that after that pivot they're a great business. In Tornado Cash I guess the equivalent would "You can hide the flow of your crypto from the public but we're still going to comply with the government AML & KYC."