3 ms·

That's just playing semantic games. Like saying "well, the police only has authority over people, and a person didn't kill him - a bullet shot from a gun did!".

by smsm42 4y ago

That's just playing semantic games. Like saying "well, the police only has authority over people, and a person didn't kill him - a bullet shot from a gun did!". Somebody was on the back end of that gun, and somebody deployed Tornado Cash. And the police can confiscate the gun and the bullets, and prosecute whoever shot it. The autonomous part here does not solve anything - it's only work if the whole system, ab initio, was autonomous without human intention - but even then the government could claim to regulate an access to it - just as it could, for example, restrict access to an erupting volcano if it wanted, even if no person caused it to erupt. But here it's much simpler because somebody definitely caused TC to operate, so the whole argument disappears.

woodruffw 4y ago
I just want to say: you beat me to using the bullet analogy! If you don't mind, I intend to link to this comment in a blog post.
notch656a 4y ago
The people that 'shot' the bullet though are either the node operators or the users of Tornado Cash. Interestingly the node operators (the people ACTUALLY EXECUTING TC, even at this very moment) haven't been sanctioned at all, despite pulling the trigger that enabled these transactions. Logical consistency would dictate that Ethereum as we know it should end as node operators have immutably absorbed and operate reckless machine gun firing wildly on the chain. In fact many of the people interacted with TC don't even have possession of the gun, rather they pay the 'hitman' the node operators to do it.
- smsm42 4y ago
  Well, in this case the bullet analogy is imperfect, as in financial crimes like these there are more than one side which is violating the law. Probably a drug market would be a better analogy - in this case, all of the buyer, the seller and the market organizer are violating the laws (and there's no actual victim, but that's the topic for a different conversation). > Interestingly the node operators (the people ACTUALLY EXECUTING TC, even at this very moment) haven't been sanctioned at all Because the crime is not "executing TC", the crime is (certain) financial transactions. TC code is just the means by which it is executed, and the node operators do not intend to execute a specific financial transaction and do not specifically benefit from it. Just like, for example, if you are going to buy illegal drugs, and you send the payment for it via Venmo and then send the stash location using Gmail, Venmo and Google would not be liable for the drug transaction (even if Venmo charged a transaction fee) because for them it's just common transaction like any other. Same would go for node operators. > In fact many of the people interacted with TC don't even have possession of the gun It doesn't matter. What matters is who caused the illegal activity to happen. I mean, if you had a chain that is dedicated to money laundering or another illegal activity, and had no other uses whatsoever - it could actually earn OFAC designation probably by itself, as a whole, and then using it and running the node might become a crime. But I don't think OFAC intends to argue that's the case with Ethereum - it's pretty clearly not true, as most Ethereum users and nodes are perfectly happy to follow the law and never do anything illegal.
  - notch656a 4y ago
    >the crime is (certain) financial transactions. So who is the counterparty then? The other random guy(s) who deposited the ETH you end up with? Using the venmo analogy, it would be the actual venmo corporate computers EXECUTING the tornado cash program. It seems a little odd to me here to not hold the people executing the transaction program accountable if it's on the sanction list explicitly noting TORNADO CASH is OFAC sanctioned. Remember those nodes running the ethereum virtual machine are validating and computing the transaction, and thus the entire foundation of ethereum would be guilty per your assessment, no?
    - smsm42 4y ago
      Not every transaction must have a counter-party that is distinct from the initiator. You could transact with yourself, and some form of that may be also illegal - e.g., wash trading or structuring (I am not saying it's how it should be in ideal world, but currently it is definitely the case). > thus the entire foundation of ethereum would be guilty per your assessment, no? No, why would it be? Again, the Ethereum system did not initiate the specific illegal transactions - it was used (without their specific cooperation or knowledge) to perform the transactions, it's very different.
miracle2k 4y ago
> prosecute whoever shot it. Because the law against murder was broken. > and the police can confiscate the gun and the bullets Says who? They can only do this the law provides this mechanism. If there isn't, the gun remains the property of the owner (even if the owner is now a convicted murderer). > but even then the government could claim to regulate an access to it - just as it could, for example, restrict access to an erupting volcano if it wanted They could, if Congress has passed a law giving the government this regulatory power. I get that people might feel "autonomous" is a cop-out, but legally, the argument is narrow. It isn't about people getting a way with crime. The crypto currency community would certainly be opposed to Tornado Cash relayers facing money laundering charges as well, but here they are merely saying that the sanctions authority does not extend to the sanctioning of things. And well, it either does or it doesn't. If Iran secretly plants a cherry tree in Central Park, is OFAC allowed to sanction the cherry tree, and prevent people from eating the cherries? They are arguing no, because OFAC has no authority to sanction trees.
- smsm42 4y ago
  > the sanctions authority does not extend to the sanctioning of things That's the semantic game. If they have authority to limit financial transactions by people, then they have authority to limit financial transactions by people facilitated by things. And things can not (at least not yet, not until general AI exists and recognized as independent legal entity) initiate transactions by itself - somebody caused them to do that, by setting off chain of events that resulted in that transaction. That person can be prosecuted if the transaction is illegal. > If Iran secretly plants a cherry tree in Central Park, is OFAC allowed to sanction the cherry tree What you mean by "sanction the cherry tree"? If people use this tree to, say, exchange money (OFAC does not regulate eating, AFAIK) - for example, by hanging sacks with money on its branches - then yes, OFAC would be able to prohibit this way of transferring money to Iran as well as any other way of doing it. Why not? > They are arguing no, because OFAC has no authority to sanction trees. It has authority to sanction financial transactions. The means by which they are executed is secondary - it's be stupid for Congress to give them authority to regulate transactions made in one way, but ignore same transactions with same effect made in slightly different way. I don't think anybody would have any luck convincing the courts that was the lawmakers' intent.

by smsm42 4y ago

woodruffw 4y ago

I just want to say: you beat me to using the bullet analogy! If you don't mind, I intend to link to this comment in a blog post.

notch656a 4y ago

The people that 'shot' the bullet though are either the node operators or the users of Tornado Cash. Interestingly the node operators (the people ACTUALLY EXECUTING TC, even at this very moment) haven't been sanctioned at all, despite pulling the trigger that enabled these transactions. Logical consistency would dictate that Ethereum as we know it should end as node operators have immutably absorbed and operate reckless machine gun firing wildly on the chain. In fact many of the people interacted with TC don't even have possession of the gun, rather they pay the 'hitman' the node operators to do it.

smsm42 4y ago
Well, in this case the bullet analogy is imperfect, as in financial crimes like these there are more than one side which is violating the law. Probably a drug market would be a better analogy - in this case, all of the buyer, the seller and the market organizer are violating the laws (and there's no actual victim, but that's the topic for a different conversation). > Interestingly the node operators (the people ACTUALLY EXECUTING TC, even at this very moment) haven't been sanctioned at all Because the crime is not "executing TC", the crime is (certain) financial transactions. TC code is just the means by which it is executed, and the node operators do not intend to execute a specific financial transaction and do not specifically benefit from it. Just like, for example, if you are going to buy illegal drugs, and you send the payment for it via Venmo and then send the stash location using Gmail, Venmo and Google would not be liable for the drug transaction (even if Venmo charged a transaction fee) because for them it's just common transaction like any other. Same would go for node operators. > In fact many of the people interacted with TC don't even have possession of the gun It doesn't matter. What matters is who caused the illegal activity to happen. I mean, if you had a chain that is dedicated to money laundering or another illegal activity, and had no other uses whatsoever - it could actually earn OFAC designation probably by itself, as a whole, and then using it and running the node might become a crime. But I don't think OFAC intends to argue that's the case with Ethereum - it's pretty clearly not true, as most Ethereum users and nodes are perfectly happy to follow the law and never do anything illegal.
- notch656a 4y ago
  >the crime is (certain) financial transactions. So who is the counterparty then? The other random guy(s) who deposited the ETH you end up with? Using the venmo analogy, it would be the actual venmo corporate computers EXECUTING the tornado cash program. It seems a little odd to me here to not hold the people executing the transaction program accountable if it's on the sanction list explicitly noting TORNADO CASH is OFAC sanctioned. Remember those nodes running the ethereum virtual machine are validating and computing the transaction, and thus the entire foundation of ethereum would be guilty per your assessment, no?
  - smsm42 4y ago
    Not every transaction must have a counter-party that is distinct from the initiator. You could transact with yourself, and some form of that may be also illegal - e.g., wash trading or structuring (I am not saying it's how it should be in ideal world, but currently it is definitely the case). > thus the entire foundation of ethereum would be guilty per your assessment, no? No, why would it be? Again, the Ethereum system did not initiate the specific illegal transactions - it was used (without their specific cooperation or knowledge) to perform the transactions, it's very different.

miracle2k 4y ago

> prosecute whoever shot it. Because the law against murder was broken. > and the police can confiscate the gun and the bullets Says who? They can only do this the law provides this mechanism. If there isn't, the gun remains the property of the owner (even if the owner is now a convicted murderer). > but even then the government could claim to regulate an access to it - just as it could, for example, restrict access to an erupting volcano if it wanted They could, if Congress has passed a law giving the government this regulatory power. I get that people might feel "autonomous" is a cop-out, but legally, the argument is narrow. It isn't about people getting a way with crime. The crypto currency community would certainly be opposed to Tornado Cash relayers facing money laundering charges as well, but here they are merely saying that the sanctions authority does not extend to the sanctioning of things. And well, it either does or it doesn't. If Iran secretly plants a cherry tree in Central Park, is OFAC allowed to sanction the cherry tree, and prevent people from eating the cherries? They are arguing no, because OFAC has no authority to sanction trees.

smsm42 4y ago
> the sanctions authority does not extend to the sanctioning of things That's the semantic game. If they have authority to limit financial transactions by people, then they have authority to limit financial transactions by people facilitated by things. And things can not (at least not yet, not until general AI exists and recognized as independent legal entity) initiate transactions by itself - somebody caused them to do that, by setting off chain of events that resulted in that transaction. That person can be prosecuted if the transaction is illegal. > If Iran secretly plants a cherry tree in Central Park, is OFAC allowed to sanction the cherry tree What you mean by "sanction the cherry tree"? If people use this tree to, say, exchange money (OFAC does not regulate eating, AFAIK) - for example, by hanging sacks with money on its branches - then yes, OFAC would be able to prohibit this way of transferring money to Iran as well as any other way of doing it. Why not? > They are arguing no, because OFAC has no authority to sanction trees. It has authority to sanction financial transactions. The means by which they are executed is secondary - it's be stupid for Congress to give them authority to regulate transactions made in one way, but ignore same transactions with same effect made in slightly different way. I don't think anybody would have any luck convincing the courts that was the lawmakers' intent.