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The Tornado Cash situation is interesting to me because being treated as a money laundering facility seems like the most foreseeable risk here. Did the people

The Tornado Cash situation is interesting to me because being treated as a money laundering facility seems like the most foreseeable risk here. Did the people working on this really think they wouldn’t be smacked down hard for it (unjustifiably so, imo) by governments that want to keep money laundering the province of bankers in their favor, high powered corporate donors, and government agents? It’s a big club, and we aren’t in it.

simple-thoughts 4y ago
Tornado cash still hasn’t been shut down. You can even visit it like a normal website if you have IPFS companion installed. Some people care more about freedom than compliance.
dist1ll 4y ago
> Did the people working on this really think they wouldn’t be smacked down hard for it Of course they knew. That doesn't stop a hacker. Individual freedoms will always be hard-fought. And authoritarian governments will always resist them
tadfisher 4y ago
Wait, is crypto a currency or a security? The SEC and OFAC apparently disagree on this point.
hakfoo 4y ago
I never quite understood the bugabear about money laundering in the abstract. If there's fundamentally a criminal or security problem, it seems like that should be the core thing that law enforcement should be chasing. Disguising the source of funds, while arguably distasteful, shouldn't be the issue as long as appropriate taxes are paid. It's amusing that the IRS has explicit "declare your illegal income and we are not allowed to turn you over for doing so" mandates. My guess is that it provides a simpler case for prosecution. So to speak, they'd rather go after Al Capone for tax evasion. Rather than having to build a case on the "base" crime-- "prove he sold specific drugs at a specific time" or "prove he was involved in a specific deal with $sanctioned_country" -- they can move to "prove that this neighbourhood Subway franchise isn't turning over $75 million a year", which can largely be proven with a couple people sitting over Excel, rather than on-the-ground investigations and witnesses.
- jackpeterfletch 4y ago
  In reality though, you wouldn’t ‘launder’ money that wasn’t ‘dirty’. As an activity it’s basically always indicative of a crime. (Wether you agree with the law or not) And by its very purpose, it makes the ‘base’ crime harder to prosecute and trace. I think you’ve flipped the causality. So I don’t think it’s so much that prosecutors just think it’s easier way forward, and if they put their mind to it they could prosecute the base crime, but don’t want to. As much as the laundering activity itself has made it too hard to prosecute.
  - sowbug 4y ago
    And VPNs are only for downloading child porn.
  - hakfoo 4y ago
    I could imagine businesses in stealth phases trying to intentionally obfuscate their externally visible finances to keep a low profile. "Hey, $big_client, can you pay us through a chain of sham companies so it looks like you're buying office chairs from Crazy Teddy's Furniture and Waffles, so we can make a big splash when we announce our partnership at the launch event?" seems like something not that far out of line. Legitimate firms might want to blur their supply chains and vendor relationships. If a manufacturer of some small component discovers the end buyer is Apple, for example, it might increase the temptation for "ghost shifts" and supplying extra components into the knockoff-product and aftermarket repair ecosystems.
SilverBirch 4y ago
Honestly, the thing that surprises me isn't that Tornado Cash got in trouble, it's that things like Ethereum haven't. Loads of Ethereum's work is explicitly to prevent government intervention and it's not like they even try to have plausible deniability, if you ask them why their doing it they will literally tell you they don't want the US government to be able to intervene in transactions in any way - even if the interventions are perfectly morally justified. It's like... ok guys, but I don't see how you aren't all just going to end up sanctioned when you eventually cross the line. It's like running a site that allows adult content - it doesn't matter how legit the service is, it ends up being a porn site. In the same way it doesn't matter what Ethereum devs intentions are, it will end up as a neat tool for North Korea and Iran.

simple-thoughts 4y ago

Tornado cash still hasn’t been shut down. You can even visit it like a normal website if you have IPFS companion installed. Some people care more about freedom than compliance.

dist1ll 4y ago

> Did the people working on this really think they wouldn’t be smacked down hard for it Of course they knew. That doesn't stop a hacker. Individual freedoms will always be hard-fought. And authoritarian governments will always resist them

tadfisher 4y ago

Wait, is crypto a currency or a security? The SEC and OFAC apparently disagree on this point.

hakfoo 4y ago

I never quite understood the bugabear about money laundering in the abstract. If there's fundamentally a criminal or security problem, it seems like that should be the core thing that law enforcement should be chasing. Disguising the source of funds, while arguably distasteful, shouldn't be the issue as long as appropriate taxes are paid. It's amusing that the IRS has explicit "declare your illegal income and we are not allowed to turn you over for doing so" mandates. My guess is that it provides a simpler case for prosecution. So to speak, they'd rather go after Al Capone for tax evasion. Rather than having to build a case on the "base" crime-- "prove he sold specific drugs at a specific time" or "prove he was involved in a specific deal with $sanctioned_country" -- they can move to "prove that this neighbourhood Subway franchise isn't turning over $75 million a year", which can largely be proven with a couple people sitting over Excel, rather than on-the-ground investigations and witnesses.

jackpeterfletch 4y ago
In reality though, you wouldn’t ‘launder’ money that wasn’t ‘dirty’. As an activity it’s basically always indicative of a crime. (Wether you agree with the law or not) And by its very purpose, it makes the ‘base’ crime harder to prosecute and trace. I think you’ve flipped the causality. So I don’t think it’s so much that prosecutors just think it’s easier way forward, and if they put their mind to it they could prosecute the base crime, but don’t want to. As much as the laundering activity itself has made it too hard to prosecute.
- sowbug 4y ago
  And VPNs are only for downloading child porn.
- hakfoo 4y ago
  I could imagine businesses in stealth phases trying to intentionally obfuscate their externally visible finances to keep a low profile. "Hey, $big_client, can you pay us through a chain of sham companies so it looks like you're buying office chairs from Crazy Teddy's Furniture and Waffles, so we can make a big splash when we announce our partnership at the launch event?" seems like something not that far out of line. Legitimate firms might want to blur their supply chains and vendor relationships. If a manufacturer of some small component discovers the end buyer is Apple, for example, it might increase the temptation for "ghost shifts" and supplying extra components into the knockoff-product and aftermarket repair ecosystems.

SilverBirch 4y ago

Honestly, the thing that surprises me isn't that Tornado Cash got in trouble, it's that things like Ethereum haven't. Loads of Ethereum's work is explicitly to prevent government intervention and it's not like they even try to have plausible deniability, if you ask them why their doing it they will literally tell you they don't want the US government to be able to intervene in transactions in any way - even if the interventions are perfectly morally justified. It's like... ok guys, but I don't see how you aren't all just going to end up sanctioned when you eventually cross the line. It's like running a site that allows adult content - it doesn't matter how legit the service is, it ends up being a porn site. In the same way it doesn't matter what Ethereum devs intentions are, it will end up as a neat tool for North Korea and Iran.