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If you are moving money around on behalf of others and you have a reasonable belief that some of your users are Americans or will eventually deal with American
by rmah 4y ago
If you are moving money around on behalf of others and you have a reasonable belief that some of your users are Americans or will eventually deal with American financial institutions (pretty much everyone in the world), then you should have AML (Anti-Money Laundering) and KYC (Know Your Customer) processes in place. Not doing so is just asking for trouble. When you are eventually investigated by the authorities, saying "we didn't ask so we didn't know" is not considered a valid defense.
More to the point, crypto mixers are obviously being used to hide the origin of funds. This is money laundering in the colloquial sense. Whether it reaches the level of criminality will obviously depend on a case by case basis. Running a mixer is, IMO, a very very dangerous road to go down.
- staringback 4y agoNobody using tornado cash is moving money around on behalf of others.
- rmah 4y agoTornado Cash is described as a decentralized crypto-mixing service. Given that description, all it did was move money around. Is this a mischaracterization?
- 3np 4y agoCalling it a "service" might be a (frustratingly common) mischaracterization, yes.
- 8note 4y agothat seems like a distinction crypto folks want to create to avoid liability, rather than a semantic one.
- 3np 4y agoLook at the different stakeholders in the system. Who is the provider of what service? The fundamental separation and removal of custody and trust is precisely what makes something like Tornado Cash a completely different thing than a traditional tumbler / mixing service.
- 3np 4y agoThe relayers are. Relayers are a subset of TC users and are an optional part of the process.
- everfree 4y agoRoad builders do not actually move money around on behalf of others, and Tornado Cash developers do not actually move money around on behalf of others. They don't "run a mixer" or otherwise operate the Tornado Cash smart contract. They did provide an interface for interacting with it, but that's not really the issue in question. Tornado Cash runs autonomously on immutable code. Nobody can force the already-running code to start doing AML/KYC. In my eyes, you either argue that it was not against the law for the devs to publish the code, or you argue that code is not protected by the first amendment. There's not really an in-between.
- JumpCrisscross 4y ago> Tornado Cash runs autonomously on immutable code. Nobody can force the already-running code to start doing AML/KYC The hypothetical involved creating “a new TC instance with new addresses and website.” That’s not already-running code. If you do that and then it’s used for money laundering and you do and don’t do all the things Tornado Cash did and didn’t, yes, obviously, we have that precedent.
- everfree 4y agoPublishing a new TC instance can be done anonymously from anywhere in the world, by anyone who can follow the compilation instructions in the readme, so it's not really an interesting legal question in my opinion. I'm more interested in discussing the legality of publishing the source code in the first place (is it protected by the first amendment?) and the legal questions surrounding already-instantiated code.
- vorpalhex 4y agoThe treasury has your answer: Publish the code all you want. If you run it and don't follow KYC, you will be found guilty of money laundering.
- notch656a 4y agoThe people 'running' the code are basically the Ethereum virtual mcahine nodes. That is to say, using your definition Ethereum comes crashing down because everyone running the ethereum virtual machine and this application, which still exists on the chain, are criminals guilty of running the code without KYC.