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Can anyone defending Tornado Cash provide a concrete example of mixing crypto revenues in a way that is not clearly illegal? I've scrolled this whole thread, an

by tmpz22 4y ago

Can anyone defending Tornado Cash provide a concrete example of mixing crypto revenues in a way that is not clearly illegal? I've scrolled this whole thread, and there are a lot of people defending it, but none of them provided a full e2e example of "I sell x to y, y can only use crypto, y will be persecuted if I don't obscure my transactions from z, so therefore this is a good thing" Yes we can all do the hypothetical "dissident in AUTHORITARIAN_COUNTRY needs to buy x and will totally be persecuted otherwise" but I want an actual production example not a moral whataboutism.

bornfreddy 4y ago
From the article: > One plaintiff in the lawsuit is a crypto investor who used Tornado Cash to send funds to support the Ukrainian war effort, hoping to preserve his anonymity and avoid retaliation from the Russian government.
- tmpz22 4y ago
  Ok so a user who already has crypto and doesn't want to convert it first (fees) may be encouraged to mix it (privacy) and that is a legitimate usecase. That makes sense to me, though it seems like a very rare event that should not be the sole basis for the underlying platform. Also I should've read the full article first.
  - bornfreddy 4y ago
    Not sure how rare it is. There is lots of people who got crypto-rich. It is easier to donate money that came easily... I would assume making a nontrivial donation in fiat privately is also very difficult.
  - yieldcrv 4y ago
    > though it seems like a very rare event that should not be the sole basis for the underlying platform. not rare, 12,000+ unique users on just the ethereum network alone only a handful would be from large scale hacks, a bigger handful from phishing even the treasury's estimates were that less than 20% of use was illicit, it is a totally new standard to vilify it based on whatever it is vilified for https://dune.com/poma/tornado-cash_1 https://dune.com/poma/tornado-cash_1
- null0pointer 4y ago
  Although I agree that this is a morally good usage of TC, I think that given the intent of using TC is to avoid retaliation from the Russian government it would probably be considered illegal in the users jurisdiction. A better example might be to pay for a legal service without revealing your entire wallet balance to that service.
  - bpodgursky 4y ago
    The Russian government sent FSB agents to kill dissidents in the UK. They kill people wherever they want to kill people, and it's entirely reasonable to be afraid even if you don't live in Russia.
- aeturnum 4y ago
  Though I personally support breaking Russian law in this case - I also think this is almost certainly in the "clearly illegal" category for Russian law.
yieldcrv 4y ago
Oh this NYTimes article doesn't go into detail but Coinbase's blog entry about them spearheading the lawsuit does have specific use cases, and the associated court filing has even more use cases, that are not theoretical at all. They all do it for privacy. Someone with a publicly labelled address doesn't want people watching them to know they're making a large purchase, so funds go in through tornado cash, and out to a new address nobody is looking at. If you are not aware, Tornado Cash already comes with tools to solve investigative zeal, anyone audited can prove the prior source of funds with Tornado Cash, at which point the investigator can tell if they were clean or not, as opposed to just assuming because they aren't familiar with "a concrete example of mixing crypto revenues in a way that is not clearly illegal" https://storage.courtlistener.com/recap/gov.uscourts.txwd.1188185/gov.uscourts.txwd.1188185.1.0.pdf https://storage.courtlistener.com/recap/gov.uscourts.txwd.11...
deleted 4y ago
[deleted]
lawn 4y ago
Do you know that crypto is normally completely traceable? So if I for instance withdraw 100 million from an exchange, in a completely legal manner, and then visit a store or webshop to buy something with the same funds, then the store now knows that I have 100 million dollars? Mixing can be used for self protection.
- mrsteveman1 4y ago
  > So if I for instance withdraw 100 million from an exchange, in a completely legal manner, and then visit a store or webshop to buy something with the same funds, then the store now knows that I have 100 million dollars? The more common this example of legitimate use becomes, the less useful it is, defeating the purpose. If it becomes common for crypto known to have come from Tornado to be there because the person is concealing ownership of a large amount of crypto, the store can infer the same thing the previously could see on-chain: this person probably has a large amount of crypto. And then all the same risks apply, albeit with a minor unknown as to the amount. But since we're basically talking about a "rubber hose" attack here it doesn't really matter if they can directly see it on-chain, they're still going to assume it and likely do the same thing.
  - lawn 4y ago
    The obvious point is that everyone should mix it, not only the very rich people. Of course that means that something like Monero is far superior, since every transaction is always hidden and "mixed".
nevi-me 4y ago
I get paid in crypto. My colleagues don't know how much I earn. If any of them discovered the address I'm paid into, they'd know my salary by looking up my address. I see the need for privacy in this instance.

by tmpz22 4y ago

bornfreddy 4y ago

From the article: > One plaintiff in the lawsuit is a crypto investor who used Tornado Cash to send funds to support the Ukrainian war effort, hoping to preserve his anonymity and avoid retaliation from the Russian government.

tmpz22 4y ago
Ok so a user who already has crypto and doesn't want to convert it first (fees) may be encouraged to mix it (privacy) and that is a legitimate usecase. That makes sense to me, though it seems like a very rare event that should not be the sole basis for the underlying platform. Also I should've read the full article first.
- bornfreddy 4y ago
  Not sure how rare it is. There is lots of people who got crypto-rich. It is easier to donate money that came easily... I would assume making a nontrivial donation in fiat privately is also very difficult.
- yieldcrv 4y ago
  > though it seems like a very rare event that should not be the sole basis for the underlying platform. not rare, 12,000+ unique users on just the ethereum network alone only a handful would be from large scale hacks, a bigger handful from phishing even the treasury's estimates were that less than 20% of use was illicit, it is a totally new standard to vilify it based on whatever it is vilified for https://dune.com/poma/tornado-cash_1 https://dune.com/poma/tornado-cash_1
null0pointer 4y ago
Although I agree that this is a morally good usage of TC, I think that given the intent of using TC is to avoid retaliation from the Russian government it would probably be considered illegal in the users jurisdiction. A better example might be to pay for a legal service without revealing your entire wallet balance to that service.
- bpodgursky 4y ago
  The Russian government sent FSB agents to kill dissidents in the UK. They kill people wherever they want to kill people, and it's entirely reasonable to be afraid even if you don't live in Russia.
aeturnum 4y ago
Though I personally support breaking Russian law in this case - I also think this is almost certainly in the "clearly illegal" category for Russian law.

yieldcrv 4y ago

Oh this NYTimes article doesn't go into detail but Coinbase's blog entry about them spearheading the lawsuit does have specific use cases, and the associated court filing has even more use cases, that are not theoretical at all. They all do it for privacy. Someone with a publicly labelled address doesn't want people watching them to know they're making a large purchase, so funds go in through tornado cash, and out to a new address nobody is looking at. If you are not aware, Tornado Cash already comes with tools to solve investigative zeal, anyone audited can prove the prior source of funds with Tornado Cash, at which point the investigator can tell if they were clean or not, as opposed to just assuming because they aren't familiar with "a concrete example of mixing crypto revenues in a way that is not clearly illegal" https://storage.courtlistener.com/recap/gov.uscourts.txwd.1188185/gov.uscourts.txwd.1188185.1.0.pdf https://storage.courtlistener.com/recap/gov.uscourts.txwd.11...

deleted 4y ago

[deleted]

lawn 4y ago

Do you know that crypto is normally completely traceable? So if I for instance withdraw 100 million from an exchange, in a completely legal manner, and then visit a store or webshop to buy something with the same funds, then the store now knows that I have 100 million dollars? Mixing can be used for self protection.

mrsteveman1 4y ago
> So if I for instance withdraw 100 million from an exchange, in a completely legal manner, and then visit a store or webshop to buy something with the same funds, then the store now knows that I have 100 million dollars? The more common this example of legitimate use becomes, the less useful it is, defeating the purpose. If it becomes common for crypto known to have come from Tornado to be there because the person is concealing ownership of a large amount of crypto, the store can infer the same thing the previously could see on-chain: this person probably has a large amount of crypto. And then all the same risks apply, albeit with a minor unknown as to the amount. But since we're basically talking about a "rubber hose" attack here it doesn't really matter if they can directly see it on-chain, they're still going to assume it and likely do the same thing.
- lawn 4y ago
  The obvious point is that everyone should mix it, not only the very rich people. Of course that means that something like Monero is far superior, since every transaction is always hidden and "mixed".

nevi-me 4y ago

I get paid in crypto. My colleagues don't know how much I earn. If any of them discovered the address I'm paid into, they'd know my salary by looking up my address. I see the need for privacy in this instance.