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The US broadly defines entity as “a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization.” This is written in 31

by Shank 4y ago

The US broadly defines entity as “a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization.” This is written in 31 CFR 510.305, https://www.ecfr.gov/current/title-31/subtitle-B/chapter-V/part-510/subpart-C/section-510.305 https://www.ecfr.gov/current/title-31/subtitle-B/chapter-V/p.... This is one of the interesting intersections of US law where interpretation is everything. Until you can find a judge that wants to strictly define all of these words and the term “entity” to establish precisely what an entity is, or unless the code is rewritten, an entity can practically be anything OFAC wants it to be. Based on how this was written, I almost think that if a judge ruled that sanctioning the contract didn’t count, the entire ethereum network could easily be classified as an “entity” as a group of networked computers. The possibilities of this definition are quite profound.

jMyles 4y ago
Agreed. But even by this vague standard, it's an incredible stretch. Tornado Cash is a document, published on github. Anybody can deploy it, or fork it and deploy their fork, and many people have done that. If OFAC wanted to go after members of the $TORN DAO under the theory that, together, they represent an entity, then at least I can see some vague adherence to the rule of law (albeit one in which vagueness is abused in the ways that you point out). But they didn't do that, because they would be difficult, both logistically and politically. Instead, they designated a document, held on many thousands of computers around the world, a "specially designated national." This is a facially childish and unserious move, and is not befitting a state which wishes to be viewed as a serious arbiter of its laws. The designation letter from the Treasury Department[0] reads like something from The Onion. 0: https://ofac.treasury.gov/recent-actions/20220808 https://ofac.treasury.gov/recent-actions/20220808
- flangola7 4y ago
  What do you propose be done instead about things like Tornado Cash that would be more effective at stopping it?
  - jMyles 4y ago
    I don't even understand the question. It's like asking, "what can you imagine might be effective at stopping integer factorization?" Math is real. It works reliably. The idea that it can be "stopped" is just... I don't know - childish is the word that comes to mind.
    - flangola7 3y ago
      I mean as in a tool that streamlines money laundering and sanctions evasion. The underlying math/science is beside the point. The service tornado cash is ran on physical hardware owned by physical human beings who can be placed in handcuffs.
      - jMyles 3y ago
        ...so, if that's the assertion (that _running an ethereum node_ is against the law), why not place those people in handcuffs? Why do this bizarre song-and-dance of writing a designation letter which passive-aggressively refers to an algorithm? There's nothing anybody can do to stop this particular piece - or any other piece - of math. And that comes as a relief to freedom-loving humans everywhere. So why pretend to make an effort to do so? Other than to decrease respect for the rule of law, what's being achieved here?
        flangola7 3y ago
        Fission and high end radar designs are just math too. We restrict those, which is both effective and does not degrade freedom or the rule of law. Your meandering suppositions are baseless and unsupported.
- amluto 4y ago
  I am no expert in reading these notices, but they seem to be designating a bunch of addresses, not a PDF. I imagine that a reasonable way to handle these things would be to designate a problematic contract or implementations thereof as well as the outflows from it. So any tornado cash contract would be sanctioned, and the assets removed from it would be sanctioned, and assets derived from them, etc. A law-abiding cryptocurrency should have a way to track these assets so they can be frozen properly. If, say, Ethereum can’t do that, then Ethereum has a problem and it would be reasonable to entirely ban the conversion of ETH to USD.
  - jMyles 4y ago
    > they seem to be designating a bunch of addresses, not a PDF. Those are some of the addresses to which the contract suite was deployed at the time the letter was written (of course there are now many more). They are a reference to the source code. > A law-abiding cryptocurrency should have a way to track these assets so they can be frozen properly. If, say, Ethereum can’t do that, then Ethereum has a problem What you see as a problem, many people see as a feature. The whole point of an agnostic piece of software able to resolve transactions is to subvert the role of criminal cartels in censoring them.
- acdha 4y ago
  > Tornado Cash is a document, published on github I think this misunderstanding is causing the confusion: Tornado Cash is also a running service which North Korea used to launder money. That’s what was sanctioned, not the source code – if Matt Green wanted to run his own copy he’d be free to do so but no doubt would want to limit it to his students unless he really enjoys spending time in court. The guy who was arrested was specifically charged with receiving funds so it seems likely that the charges are going to be based on him personally receiving a cut of the transaction fees the NK ransomware ring paid. This also seems reasonable in the larger context: they must have situations like this frequently where they know funds are linked to criminal activity but haven’t yet identified every person involved on either end of the transaction. They can say account X is verboten before they can identify the true owner.
  - jMyles 4y ago
    > I think this misunderstanding is causing the confusion: Tornado Cash is also a running service which North Korea used to launder money. The "misunderstanding" in question is the result of obtuse and confusing language, such as you are using here. The "service" to which you refer is, of course, the ethereum blockchain. And I don't know who "Tornado Cash" is with respect to your sentence, but they aren't "running" the ethereum blockchain any more than any node operator is. > That’s what was sanctioned, not the source code "It's not the source code that was sanctioned, it was the contract deployed to the ethereum blockchain". That's... source code. The sanction isn't against nodes who subsequently evaluate that source code for the purposes of executing a transaction, but against the code itself (listed by the addresses which refer to it), as you can plainly read in the designation letter. > The guy who was arrested As you obviously already know, that is a separate, but similarly capricious, case to the one we're discussing here - a criminal case in The Netherlands. OFAC has said nothing about Pertsev and has only designated this contract (again, source code) as a "specially designated national". They could have chosen to designate individuals who holding $TORN DAO token (one of many which govern a contract running the software that OFAC sanctioned), but they didn't, because they would be difficult or impossible, both practically and politically. I'm not sure why you are pretending that they took this (arguably more reasonable) action. Credit where credit is not due. > they must have situations like this frequently where they know funds are linked to criminal activity but haven’t yet identified every person involved on either end of the transaction. ...yet they have never listed a piece of bank software as a specially designated national. Strange, don't you think?

by Shank 4y ago

jMyles 4y ago

Agreed. But even by this vague standard, it's an incredible stretch. Tornado Cash is a document, published on github. Anybody can deploy it, or fork it and deploy their fork, and many people have done that. If OFAC wanted to go after members of the $TORN DAO under the theory that, together, they represent an entity, then at least I can see some vague adherence to the rule of law (albeit one in which vagueness is abused in the ways that you point out). But they didn't do that, because they would be difficult, both logistically and politically. Instead, they designated a document, held on many thousands of computers around the world, a "specially designated national." This is a facially childish and unserious move, and is not befitting a state which wishes to be viewed as a serious arbiter of its laws. The designation letter from the Treasury Department[0] reads like something from The Onion. 0: https://ofac.treasury.gov/recent-actions/20220808 https://ofac.treasury.gov/recent-actions/20220808

flangola7 4y ago
What do you propose be done instead about things like Tornado Cash that would be more effective at stopping it?
- jMyles 4y ago
  I don't even understand the question. It's like asking, "what can you imagine might be effective at stopping integer factorization?" Math is real. It works reliably. The idea that it can be "stopped" is just... I don't know - childish is the word that comes to mind.
  - flangola7 3y ago
    I mean as in a tool that streamlines money laundering and sanctions evasion. The underlying math/science is beside the point. The service tornado cash is ran on physical hardware owned by physical human beings who can be placed in handcuffs.
    - jMyles 3y ago
      ...so, if that's the assertion (that _running an ethereum node_ is against the law), why not place those people in handcuffs? Why do this bizarre song-and-dance of writing a designation letter which passive-aggressively refers to an algorithm? There's nothing anybody can do to stop this particular piece - or any other piece - of math. And that comes as a relief to freedom-loving humans everywhere. So why pretend to make an effort to do so? Other than to decrease respect for the rule of law, what's being achieved here?
      - flangola7 3y ago
        Fission and high end radar designs are just math too. We restrict those, which is both effective and does not degrade freedom or the rule of law. Your meandering suppositions are baseless and unsupported.
amluto 4y ago
I am no expert in reading these notices, but they seem to be designating a bunch of addresses, not a PDF. I imagine that a reasonable way to handle these things would be to designate a problematic contract or implementations thereof as well as the outflows from it. So any tornado cash contract would be sanctioned, and the assets removed from it would be sanctioned, and assets derived from them, etc. A law-abiding cryptocurrency should have a way to track these assets so they can be frozen properly. If, say, Ethereum can’t do that, then Ethereum has a problem and it would be reasonable to entirely ban the conversion of ETH to USD.
- jMyles 4y ago
  > they seem to be designating a bunch of addresses, not a PDF. Those are some of the addresses to which the contract suite was deployed at the time the letter was written (of course there are now many more). They are a reference to the source code. > A law-abiding cryptocurrency should have a way to track these assets so they can be frozen properly. If, say, Ethereum can’t do that, then Ethereum has a problem What you see as a problem, many people see as a feature. The whole point of an agnostic piece of software able to resolve transactions is to subvert the role of criminal cartels in censoring them.
acdha 4y ago
> Tornado Cash is a document, published on github I think this misunderstanding is causing the confusion: Tornado Cash is also a running service which North Korea used to launder money. That’s what was sanctioned, not the source code – if Matt Green wanted to run his own copy he’d be free to do so but no doubt would want to limit it to his students unless he really enjoys spending time in court. The guy who was arrested was specifically charged with receiving funds so it seems likely that the charges are going to be based on him personally receiving a cut of the transaction fees the NK ransomware ring paid. This also seems reasonable in the larger context: they must have situations like this frequently where they know funds are linked to criminal activity but haven’t yet identified every person involved on either end of the transaction. They can say account X is verboten before they can identify the true owner.
- jMyles 4y ago
  > I think this misunderstanding is causing the confusion: Tornado Cash is also a running service which North Korea used to launder money. The "misunderstanding" in question is the result of obtuse and confusing language, such as you are using here. The "service" to which you refer is, of course, the ethereum blockchain. And I don't know who "Tornado Cash" is with respect to your sentence, but they aren't "running" the ethereum blockchain any more than any node operator is. > That’s what was sanctioned, not the source code "It's not the source code that was sanctioned, it was the contract deployed to the ethereum blockchain". That's... source code. The sanction isn't against nodes who subsequently evaluate that source code for the purposes of executing a transaction, but against the code itself (listed by the addresses which refer to it), as you can plainly read in the designation letter. > The guy who was arrested As you obviously already know, that is a separate, but similarly capricious, case to the one we're discussing here - a criminal case in The Netherlands. OFAC has said nothing about Pertsev and has only designated this contract (again, source code) as a "specially designated national". They could have chosen to designate individuals who holding $TORN DAO token (one of many which govern a contract running the software that OFAC sanctioned), but they didn't, because they would be difficult or impossible, both practically and politically. I'm not sure why you are pretending that they took this (arguably more reasonable) action. Credit where credit is not due. > they must have situations like this frequently where they know funds are linked to criminal activity but haven’t yet identified every person involved on either end of the transaction. ...yet they have never listed a piece of bank software as a specially designated national. Strange, don't you think?