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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

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.
- verdverm 4y ago
  I'm told that detecting if a transaction will involve the tornado contract is similar to the halting problem, because someone can write a proxy contract that behaves one way while being checked and another way when being executed. They can catch the easy cases, but it is impossible to detect all prior.
  - imtringued 4y ago
    This is like selling a sufficiently hardened hardware wallet instead of doing a transaction, doable in theory but impractical.
    - verdverm 4y ago
      no, it's all in software because you can create any smart contract and it can call any other. There is a difference in knowing after the transaction has finalized and predicting beforehand, which is when you would want to block the transaction. https://www.youtube.com/watch?v=macM_MtS_w4 https://www.youtube.com/watch?v=macM_MtS_w4
- matheusmoreira 4y ago
  > Monero on the other hand has been de-listed or banned from exchanges That's pretty strange since the biggest centralized exchanges do list Monero: Binance, Kraken, Bitfinex.

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.

verdverm 4y ago
I'm told that detecting if a transaction will involve the tornado contract is similar to the halting problem, because someone can write a proxy contract that behaves one way while being checked and another way when being executed. They can catch the easy cases, but it is impossible to detect all prior.
- imtringued 4y ago
  This is like selling a sufficiently hardened hardware wallet instead of doing a transaction, doable in theory but impractical.
  - verdverm 4y ago
    no, it's all in software because you can create any smart contract and it can call any other. There is a difference in knowing after the transaction has finalized and predicting beforehand, which is when you would want to block the transaction. https://www.youtube.com/watch?v=macM_MtS_w4 https://www.youtube.com/watch?v=macM_MtS_w4
matheusmoreira 4y ago
> Monero on the other hand has been de-listed or banned from exchanges That's pretty strange since the biggest centralized exchanges do list Monero: Binance, Kraken, Bitfinex.