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I take issue with the claim that tornado can “effectively launder money for criminals.” All it can do is leave you with an asset with a less-than-clear on chain

I take issue with the claim that tornado can “effectively launder money for criminals.” All it can do is leave you with an asset with a less-than-clear on chain history. If you want to cash out, you still have to explain how you wound up with 100 ETH or whatever.

notch656a 4y ago
Even if it does, who gives a shit? The interstate road crew happily builds the interstate, knowing money launderers use it without taking the slightest precaution to stop them. They cash their paycheck, knowing some of the money thrown in the 'mixer' of the treasury was the money of the money launderers paying their taxes that build the interstate.
- mint2 4y ago
  The road crew is like the workers at an internet provider or maybe an isp, and the vast majority of the traffic is legal. That original analogy makes it seem like the verdict on tornado was already made, now we just need to grasp at arguments to support the pre-made conclusion. It backfires. Don’t shoot the messenger.
cypress66 4y ago
Exactly. I hate this false idea that TC launders your money. Your TC money isn't any more laundered than a pile of cash you got by selling meth. Laundering means making up some origin for such money (such as a business).
- rattlesnakedave 4y ago
  Kinda. Money laundering consists of placement, layering, and integration. There is a (very weak, imo) argument that TC can be a part of the “layering” process, but it certainly does not do all three.
oceanstone 4y ago
North Korea laundered a billion dollars through Tornado https://markets.businessinsider.com/news/currencies/north-korea-launder-treasury-ethereum-us-billion-sanctions-tornado-cash-2022-8 https://markets.businessinsider.com/news/currencies/north-ko...
- rattlesnakedave 4y ago
  Money laundering is comprised of three parts: placement, layering, and integration. The government here is attacking the “layering” part of the process that tornado _may_ contribute to (the norks still have to explain how they ended up with a billion of ETH). But to truly be “money laundering” you have to have all three elements. The equivalent here would be banning casino chips or something.
  - JumpCrisscross 4y ago
    > equivalent here would be banning casino chips or something If someone pays for a house with casino chips, and you don’t do your diligence on why they chose that mode of settlement, you’re rightfully exposed to legal risk if they were in fact laundering money.
- BLKNSLVR 4y ago
  If that's true, then it can't launder money very well can it? Definitely feels like a false narrative has been created by the fact they're able to point it out. Like pointing at someone and accusing them of hiding, but the very fact you can point them out means it's either not actually happening or not happening very effectively.
  - fogof 4y ago
    Anyone can see what amount of money one address has put into Tornado Cash, so it’s no surprise that we can estimate how much money North Korea has put in. The whole reason they do put that money in, though, is so that they can have a different account take that money out, and have it not be clear where the money came from. For a sanctioned country, that output seems much more spendable.
yieldcrv 4y ago
> I take issue with the claim that tornado can “effectively launder money for criminals.” All it can do is leave you with an asset with a less-than-clear on chain history. If you want to cash out, you still have to explain how you wound up with 100 ETH or whatever. ehhhhhhhh. you can play with asset prices and valuations to fix this. you have a little clean money savings from your job right? okay, great, with a little bit of dirty/flaggable money in a different address, launch an erc20 token and liquidity pool, add 100% of the erc20 to the liquidity pool. now with your clean money, be an early buyer. now with MORE of your dirty/flaggable money (other tornado cash notes withdrawn to different virgin addresses via the relayer), buy into the liquidity pool. this pumps the price of the token. now with your clean money, sell. cash out, pay capital gains tax, move on. indistinguishable from any other crypto trader. bots and many others would have bought into the liquidity pool too as they have alerts. everyone else can play amongst themselves in perpetuity, and it can't go below the initial price that you set when you launched the pool (in Uniswap V2 style liquidity pools, and just if you want to feel better about it). hey, maybe if it keeps running then your tornado cash funded addresses might be able to sell back into the liquidity pool again.
- rattlesnakedave 4y ago
  With this scheme you just dreamed up I wouldn’t even need Tornado.
  - yieldcrv 4y ago
    you don't need, there is still benefit in unlinking the transaction history and normalizing that behavior. virgin addresses funded by a third party relayer does that. you don't want your $30,000,000 bridge heist funds to be buying a newly launched token. you want a bunch of unknown sources to be buying the newly launched token, various identities. edit: actually I could see the crypto community finding it hilarious and "aping in" knowing that a large buyer is supporting. easier to blend in.
  - aaaaaaaaata 4y ago
    > just dreamed up Please.
nl 4y ago
"Explaining" is easy. You sold an NFT and they paid via Tornado. The hiding is a real issue here.

notch656a 4y ago

Even if it does, who gives a shit? The interstate road crew happily builds the interstate, knowing money launderers use it without taking the slightest precaution to stop them. They cash their paycheck, knowing some of the money thrown in the 'mixer' of the treasury was the money of the money launderers paying their taxes that build the interstate.

mint2 4y ago
The road crew is like the workers at an internet provider or maybe an isp, and the vast majority of the traffic is legal. That original analogy makes it seem like the verdict on tornado was already made, now we just need to grasp at arguments to support the pre-made conclusion. It backfires. Don’t shoot the messenger.

cypress66 4y ago

Exactly. I hate this false idea that TC launders your money. Your TC money isn't any more laundered than a pile of cash you got by selling meth. Laundering means making up some origin for such money (such as a business).

rattlesnakedave 4y ago
Kinda. Money laundering consists of placement, layering, and integration. There is a (very weak, imo) argument that TC can be a part of the “layering” process, but it certainly does not do all three.

oceanstone 4y ago

North Korea laundered a billion dollars through Tornado https://markets.businessinsider.com/news/currencies/north-korea-launder-treasury-ethereum-us-billion-sanctions-tornado-cash-2022-8 https://markets.businessinsider.com/news/currencies/north-ko...

rattlesnakedave 4y ago
Money laundering is comprised of three parts: placement, layering, and integration. The government here is attacking the “layering” part of the process that tornado _may_ contribute to (the norks still have to explain how they ended up with a billion of ETH). But to truly be “money laundering” you have to have all three elements. The equivalent here would be banning casino chips or something.
- JumpCrisscross 4y ago
  > equivalent here would be banning casino chips or something If someone pays for a house with casino chips, and you don’t do your diligence on why they chose that mode of settlement, you’re rightfully exposed to legal risk if they were in fact laundering money.
BLKNSLVR 4y ago
If that's true, then it can't launder money very well can it? Definitely feels like a false narrative has been created by the fact they're able to point it out. Like pointing at someone and accusing them of hiding, but the very fact you can point them out means it's either not actually happening or not happening very effectively.
- fogof 4y ago
  Anyone can see what amount of money one address has put into Tornado Cash, so it’s no surprise that we can estimate how much money North Korea has put in. The whole reason they do put that money in, though, is so that they can have a different account take that money out, and have it not be clear where the money came from. For a sanctioned country, that output seems much more spendable.

yieldcrv 4y ago

> I take issue with the claim that tornado can “effectively launder money for criminals.” All it can do is leave you with an asset with a less-than-clear on chain history. If you want to cash out, you still have to explain how you wound up with 100 ETH or whatever. ehhhhhhhh. you can play with asset prices and valuations to fix this. you have a little clean money savings from your job right? okay, great, with a little bit of dirty/flaggable money in a different address, launch an erc20 token and liquidity pool, add 100% of the erc20 to the liquidity pool. now with your clean money, be an early buyer. now with MORE of your dirty/flaggable money (other tornado cash notes withdrawn to different virgin addresses via the relayer), buy into the liquidity pool. this pumps the price of the token. now with your clean money, sell. cash out, pay capital gains tax, move on. indistinguishable from any other crypto trader. bots and many others would have bought into the liquidity pool too as they have alerts. everyone else can play amongst themselves in perpetuity, and it can't go below the initial price that you set when you launched the pool (in Uniswap V2 style liquidity pools, and just if you want to feel better about it). hey, maybe if it keeps running then your tornado cash funded addresses might be able to sell back into the liquidity pool again.

rattlesnakedave 4y ago
With this scheme you just dreamed up I wouldn’t even need Tornado.
- yieldcrv 4y ago
  you don't need, there is still benefit in unlinking the transaction history and normalizing that behavior. virgin addresses funded by a third party relayer does that. you don't want your $30,000,000 bridge heist funds to be buying a newly launched token. you want a bunch of unknown sources to be buying the newly launched token, various identities. edit: actually I could see the crypto community finding it hilarious and "aping in" knowing that a large buyer is supporting. easier to blend in.
- aaaaaaaaata 4y ago
  > just dreamed up Please.

nl 4y ago

"Explaining" is easy. You sold an NFT and they paid via Tornado. The hiding is a real issue here.