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That's interesting. As a Tornado Cash user, I have never associated this with an intentional money laundering service, but rather a bunch of developers advancin

by dannyw 4y ago

That's interesting. As a Tornado Cash user, I have never associated this with an intentional money laundering service, but rather a bunch of developers advancing zk-SNARKs and other cryptographic primitives. As someone who was excited by the original Bitcoin whitepaper back in 2011, zk-SNARKS was what excited me about cryptocurrency again in 2021.

woodruffw 4y ago
Your association isn't what regulators are concerned with. They're concerned with the intent of the creator and operator of the service, which is why he's the one who's been arrested.
- pcthrowaway 4y ago
  And you're buying into propaganda suggesting someone pushing the envelope in cryptography is creating tooling specifically for money laundering. 30 years ago, the NSA toed a similar line in their war on PGP, saying it was used in practice for "money laundering, child pornography, and terrorism" - https://reason.com/video/2020/10/21/cryptowars-gilmore-zimmermann-cryptography/ https://reason.com/video/2020/10/21/cryptowars-gilmore-zimme...
  - woodruffw 4y ago
    For the umpteenth time in this thread: intent matters. Regardless of what the NSA said 30 years ago, it is manifestly apparent to every single person in this conversation that neither HTTPS nor PGP nor any other cryptographic scheme designed for individual privacy was designed with money laundering in mind. At the absolute worst, they were agnostic to the presence of criminal activity. This is in contrast to Tornado Cash, which was repeatedly told that their service was being used to launder money.
    - throwaway742 4y ago
      So if the developers of PGP were told that ISIL was using their service to facilitate terrorism should they shut down the project?
      - woodruffw 4y ago
        What project? PGP was bundled up and thrown onto the Internet; there was no development or services community established around it. The US Government threw a hissy fit over that and they ended up distributing it as a "book" instead, converting it into a question of free expression. There is no meaningful sense in which PGP could ever be said to "facilitate" terrorism in the same way that Tornado Cash is rightfully characterized as facilitating money laundering. PGP is a program that runs on your host, encrypting your email. Tornado Cash is a service, run by an individual who was warned to cease serving sanctioned entities, and failed to do so.
        pcthrowaway 4y ago
        Ignoring the front-end (which is unnecessary to use it), Tornado Cash is a protocol, run by a decentralized network of computers. The code for the protocol is shared by a network of computers execute this code according to specific rules and validate transactions. A specific deployment of the code was sanctioned, but this means anyone else using the code (which has to be deployed to this network to be used trustlessly) is risky to use now
        str4d 4y ago
        > Tornado Cash is a service, _run by an individual_ who was warned to cease serving sanctioned entities, and failed to do so. This is false. The (vast majority of the) Tornado Cash contracts were either deployed to Ethereum as immutable contracts, or updated in 2020 to revoke mutability (once the final zkSNARK parameters were included) [0], meaning that they could not later be updated by the user(s) that deployed them. Arguing that Tornado Cash is run by an individual means arguing that the entire Ethereum network is run by an individual. There was no way for a warned individual to comply with that warning. [0] https://www.coincenter.org/education/advanced-topics/how-does-tornado-cash-work/ https://www.coincenter.org/education/advanced-topics/how-doe... - Section titled "Can Tornado Cash be removed or updated? If so, by whom?"
  - plonk 4y ago
    Well it probably was, among other things. But we're censoring a network here, not just a tool. Nobody is making the cryptography behind Tornado illegal.
    - whatisweb3 4y ago
      The open source software and cryptographic protocol is implicitly targeted with this order. You can see it in how private companies are now handling the Tornado Cash code and contributor accounts. If you create a similar privacy tool with zk-SNARKs do you really think it won’t also become a target for sanctions in time? This is known as “chilling effect” in a legal context.
      - pcthrowaway 4y ago
        To expand on this, the chilling effect here is that even if the code behind tornado cash isn't explicitly illegal, using it on a blockchain in practice is incredibly risky. People who might otherwise want to use this for financial privacy would be wary, since if they deposit funds to the contract, they don't have any way to know if they'll be able to use the unlinked funds later if withdrawn.
JumpCrisscross 4y ago
> have never associated this with an intentional money laundering service Most customers of a canonical money launderer, a laundromat, don’t realise it’s a front. That doesn’t matter if the owner is laundering money. Tornado laundered money for North Korea [1]. (It announced this months before the sanctions, a period in which the developers could have reacted but didn’t [EDIT: in any meaningful way].) That it was also obfuscating legitimate flows is frankly irrelevant. [1] https://www.bloomberg.com/news/articles/2022-08-08/crypto-mixer-tornado-cash-sanctioned-by-us-treasury-department https://www.bloomberg.com/news/articles/2022-08-08/crypto-mi...
- adastra22 4y ago
  What could the developers have done?
  - JumpCrisscross 4y ago
    > What could the developers have done? Not sure. Their problem. If the only option was shutting it down, that. It would have looked better, which could have prompted sympathetic legislation. At the very least, it would have likely avoided sanctions.
    - adastra22 4y ago
      You can’t just say “they had months to react but didn’t” if you don’t have any idea of what they could have done differently. React how?
      - hef19898 4y ago
        Close down until you figured out a way to react. Money laundering is serious crime, helping North Korea is as well. Tornado cash did apparently both, and authorities gave them a heads up. If it was me, I would close my shop down.
        douglaswlance 4y ago

by dannyw 4y ago

woodruffw 4y ago

Your association isn't what regulators are concerned with. They're concerned with the intent of the creator and operator of the service, which is why he's the one who's been arrested.

pcthrowaway 4y ago
And you're buying into propaganda suggesting someone pushing the envelope in cryptography is creating tooling specifically for money laundering. 30 years ago, the NSA toed a similar line in their war on PGP, saying it was used in practice for "money laundering, child pornography, and terrorism" - https://reason.com/video/2020/10/21/cryptowars-gilmore-zimmermann-cryptography/ https://reason.com/video/2020/10/21/cryptowars-gilmore-zimme...
- woodruffw 4y ago
  For the umpteenth time in this thread: intent matters. Regardless of what the NSA said 30 years ago, it is manifestly apparent to every single person in this conversation that neither HTTPS nor PGP nor any other cryptographic scheme designed for individual privacy was designed with money laundering in mind. At the absolute worst, they were agnostic to the presence of criminal activity. This is in contrast to Tornado Cash, which was repeatedly told that their service was being used to launder money.
  - throwaway742 4y ago
    So if the developers of PGP were told that ISIL was using their service to facilitate terrorism should they shut down the project?
    - woodruffw 4y ago
      What project? PGP was bundled up and thrown onto the Internet; there was no development or services community established around it. The US Government threw a hissy fit over that and they ended up distributing it as a "book" instead, converting it into a question of free expression. There is no meaningful sense in which PGP could ever be said to "facilitate" terrorism in the same way that Tornado Cash is rightfully characterized as facilitating money laundering. PGP is a program that runs on your host, encrypting your email. Tornado Cash is a service, run by an individual who was warned to cease serving sanctioned entities, and failed to do so.
      - pcthrowaway 4y ago
        Ignoring the front-end (which is unnecessary to use it), Tornado Cash is a protocol, run by a decentralized network of computers. The code for the protocol is shared by a network of computers execute this code according to specific rules and validate transactions. A specific deployment of the code was sanctioned, but this means anyone else using the code (which has to be deployed to this network to be used trustlessly) is risky to use now
      - str4d 4y ago
        > Tornado Cash is a service, _run by an individual_ who was warned to cease serving sanctioned entities, and failed to do so. This is false. The (vast majority of the) Tornado Cash contracts were either deployed to Ethereum as immutable contracts, or updated in 2020 to revoke mutability (once the final zkSNARK parameters were included) [0], meaning that they could not later be updated by the user(s) that deployed them. Arguing that Tornado Cash is run by an individual means arguing that the entire Ethereum network is run by an individual. There was no way for a warned individual to comply with that warning. [0] https://www.coincenter.org/education/advanced-topics/how-does-tornado-cash-work/ https://www.coincenter.org/education/advanced-topics/how-doe... - Section titled "Can Tornado Cash be removed or updated? If so, by whom?"
- plonk 4y ago
  Well it probably was, among other things. But we're censoring a network here, not just a tool. Nobody is making the cryptography behind Tornado illegal.
  - whatisweb3 4y ago
    The open source software and cryptographic protocol is implicitly targeted with this order. You can see it in how private companies are now handling the Tornado Cash code and contributor accounts. If you create a similar privacy tool with zk-SNARKs do you really think it won’t also become a target for sanctions in time? This is known as “chilling effect” in a legal context.
    - pcthrowaway 4y ago
      To expand on this, the chilling effect here is that even if the code behind tornado cash isn't explicitly illegal, using it on a blockchain in practice is incredibly risky. People who might otherwise want to use this for financial privacy would be wary, since if they deposit funds to the contract, they don't have any way to know if they'll be able to use the unlinked funds later if withdrawn.

JumpCrisscross 4y ago

> have never associated this with an intentional money laundering service Most customers of a canonical money launderer, a laundromat, don’t realise it’s a front. That doesn’t matter if the owner is laundering money. Tornado laundered money for North Korea [1]. (It announced this months before the sanctions, a period in which the developers could have reacted but didn’t [EDIT: in any meaningful way].) That it was also obfuscating legitimate flows is frankly irrelevant. [1] https://www.bloomberg.com/news/articles/2022-08-08/crypto-mixer-tornado-cash-sanctioned-by-us-treasury-department https://www.bloomberg.com/news/articles/2022-08-08/crypto-mi...

adastra22 4y ago
What could the developers have done?
- JumpCrisscross 4y ago
  > What could the developers have done? Not sure. Their problem. If the only option was shutting it down, that. It would have looked better, which could have prompted sympathetic legislation. At the very least, it would have likely avoided sanctions.
  - adastra22 4y ago
    You can’t just say “they had months to react but didn’t” if you don’t have any idea of what they could have done differently. React how?
    - hef19898 4y ago
      Close down until you figured out a way to react. Money laundering is serious crime, helping North Korea is as well. Tornado cash did apparently both, and authorities gave them a heads up. If it was me, I would close my shop down.
      - douglaswlance 4y ago