4 ms·

For fun: were the developers making the software to knowingly profit off of criminal behavior, and to what degree? Can someone smarter than me talk about how w

For fun: were the developers making the software to knowingly profit off of criminal behavior, and to what degree? Can someone smarter than me talk about how we might judge the mens rea and criminal intent of the developers?

etchalon 4y ago
We can't really judge it without evidence, which is likely what authorities are trying to gather.
- TAKEMYMONEY 4y ago
  Couldn't we argue that the devs reasonably knew it was being used for money laundering? It got a light shined on it during the investigation of the crypto.com hack. If so, they knew they were profiting off of it, right? [1] Tornado Cash also did not comply with the OFAC list of known sanctioned wallets. However, it's clearly not that simple, from the article: > "If Tornado Cash knows who deposited the money and who took it out, that’s not money laundering." > "Smart contracts are not legal contracts." > "Every service provider has a certain amount of illicit activity." https://www.coindesk.com/business/2022/01/21/is-tornado-cash-complicit-in-laundering-stolen-crypto-its-complicated-says-former-law-enforcement-agent/ https://www.coindesk.com/business/2022/01/21/is-tornado-cash...
  - notch656a 4y ago
    So what if they profited off money laundering, and knew it? The guy on the interstate road crew knows damn well the road is used for money laundering, and he builds it anyway and happily deposits his paycheck without taking the slightest effort to impede the launderers.
    - acdha 4y ago
      His paycheck comes from the state, not the mobsters. There’s a big difference between building something which criminals can misuse and being paid by someone with no connection to the criminals compared to building something which is designed for criminal activity and directly receiving payment from them. The Dutch release sounds like they intend to prove that, which is a pretty significant distinction if they can back it up.
      - notch656a 4y ago
        No his paycheck also comes from the mobsters. Most of the mobsters are still registering their vehicles, buying gasoline (gas tax), and if they are money laundering they are funneling it through legitimate avenues that they (typically) pay taxes on. I also object strongly to Tornado Cash being "designed" for illegal activity.
        acdha 4y ago
        > No his paycheck also comes from the mobsters This the root of your misunderstanding: his paycheck is not in any way coming directly – note how your very next sentence directly contradicts this assertion – and criminals paying some taxes like everyone else doesn’t mean that the purpose of the tax is criminal, and nobody working on the project thinks their goal is to facilitate crime. Tornado Cash’s design does not comply with legal requirements in many countries. Until that changes, it’s going to be seen as a tool for breaking laws because that’s what it does by default.
        notch656a 4y ago
        I would object that you have evidence that Tornado Cash was created with the goal of facilitating crime. Sure they knew it would facilitate crime, just like the roads do, but we don't know that was the goal (and I doubt it was). >Tornado Cash’s design does not comply with legal requirements in many countries. As far as I know there were plenty of legal reasons for many people to use Tornado Cash, probably even Americans (up until it was sanctioned). One example is a legally owned "cold wallet" being firewalled from a hot wallet. It's not wrong to create something that may be used illegally some (or even most) of the time or some of the places. >his paycheck is not in any way coming directly – note how your very next sentence directly contradicts this assertion – If that's your assertion, then the person selling gasoline to the mobsters is culpable then, knowing that mobsters buy gas and knowing that gas facilitates crime, but doing nothing to specifically check if someone is a mobster before selling the gas. > purpose of the tax is criminal, and nobody working on the project thinks their goal is to facilitate crime. But that's precisely my point as well. You can operate or design a mixer without the goal of facilitate crime, even with the knowledge it will. The purpose of profiting may be to profit off of legitimate users using the mixer, and the unfortunate byproduct is bad people sometimes use a service for ill despite you not intending for that to happen. Now I can't prove intent, but I doubt you can either. >paycheck is not in any way coming directly A second point -- your problem is that it went directly and not through an intermediary? OK, so it would have been fine if a cousin or whatever set up a shell company and then paid them through the shell company, then it would be indirect. I don't buy that an extra layer of indirection somehow makes it better. Mobster paying tax (or shell company) and that tax (or shell company tranfer) going to you is a mobster paying, with an extra step. I mean Tornado cash is doing an analogous thing to what's happening with tax money -- the users may or may not be doing illegal things but the people getting paid out of the 'mixer' of the tax treasury are getting a mix of good and mobster money. You could argue taxation is in part just a way of money laundering to profit off of mobsters and crimes. Of course the difference here is with tax money, there really is the provable intent make money directly from crime. Even if someone informs the IRS their source of money is criminal in the same envelope the money is in, IRS will happily take 100% criminal money with full intent for the coffers to directly profit off the crime.

etchalon 4y ago

We can't really judge it without evidence, which is likely what authorities are trying to gather.

TAKEMYMONEY 4y ago
Couldn't we argue that the devs reasonably knew it was being used for money laundering? It got a light shined on it during the investigation of the crypto.com hack. If so, they knew they were profiting off of it, right? [1] Tornado Cash also did not comply with the OFAC list of known sanctioned wallets. However, it's clearly not that simple, from the article: > "If Tornado Cash knows who deposited the money and who took it out, that’s not money laundering." > "Smart contracts are not legal contracts." > "Every service provider has a certain amount of illicit activity." https://www.coindesk.com/business/2022/01/21/is-tornado-cash-complicit-in-laundering-stolen-crypto-its-complicated-says-former-law-enforcement-agent/ https://www.coindesk.com/business/2022/01/21/is-tornado-cash...
- notch656a 4y ago
  So what if they profited off money laundering, and knew it? The guy on the interstate road crew knows damn well the road is used for money laundering, and he builds it anyway and happily deposits his paycheck without taking the slightest effort to impede the launderers.
  - acdha 4y ago
    His paycheck comes from the state, not the mobsters. There’s a big difference between building something which criminals can misuse and being paid by someone with no connection to the criminals compared to building something which is designed for criminal activity and directly receiving payment from them. The Dutch release sounds like they intend to prove that, which is a pretty significant distinction if they can back it up.
    - notch656a 4y ago
      No his paycheck also comes from the mobsters. Most of the mobsters are still registering their vehicles, buying gasoline (gas tax), and if they are money laundering they are funneling it through legitimate avenues that they (typically) pay taxes on. I also object strongly to Tornado Cash being "designed" for illegal activity.
      - acdha 4y ago
        > No his paycheck also comes from the mobsters This the root of your misunderstanding: his paycheck is not in any way coming directly – note how your very next sentence directly contradicts this assertion – and criminals paying some taxes like everyone else doesn’t mean that the purpose of the tax is criminal, and nobody working on the project thinks their goal is to facilitate crime. Tornado Cash’s design does not comply with legal requirements in many countries. Until that changes, it’s going to be seen as a tool for breaking laws because that’s what it does by default.
        notch656a 4y ago
        I would object that you have evidence that Tornado Cash was created with the goal of facilitating crime. Sure they knew it would facilitate crime, just like the roads do, but we don't know that was the goal (and I doubt it was). >Tornado Cash’s design does not comply with legal requirements in many countries. As far as I know there were plenty of legal reasons for many people to use Tornado Cash, probably even Americans (up until it was sanctioned). One example is a legally owned "cold wallet" being firewalled from a hot wallet. It's not wrong to create something that may be used illegally some (or even most) of the time or some of the places. >his paycheck is not in any way coming directly – note how your very next sentence directly contradicts this assertion – If that's your assertion, then the person selling gasoline to the mobsters is culpable then, knowing that mobsters buy gas and knowing that gas facilitates crime, but doing nothing to specifically check if someone is a mobster before selling the gas. > purpose of the tax is criminal, and nobody working on the project thinks their goal is to facilitate crime. But that's precisely my point as well. You can operate or design a mixer without the goal of facilitate crime, even with the knowledge it will. The purpose of profiting may be to profit off of legitimate users using the mixer, and the unfortunate byproduct is bad people sometimes use a service for ill despite you not intending for that to happen. Now I can't prove intent, but I doubt you can either. >paycheck is not in any way coming directly A second point -- your problem is that it went directly and not through an intermediary? OK, so it would have been fine if a cousin or whatever set up a shell company and then paid them through the shell company, then it would be indirect. I don't buy that an extra layer of indirection somehow makes it better. Mobster paying tax (or shell company) and that tax (or shell company tranfer) going to you is a mobster paying, with an extra step. I mean Tornado cash is doing an analogous thing to what's happening with tax money -- the users may or may not be doing illegal things but the people getting paid out of the 'mixer' of the tax treasury are getting a mix of good and mobster money. You could argue taxation is in part just a way of money laundering to profit off of mobsters and crimes. Of course the difference here is with tax money, there really is the provable intent make money directly from crime. Even if someone informs the IRS their source of money is criminal in the same envelope the money is in, IRS will happily take 100% criminal money with full intent for the coffers to directly profit off the crime.