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Tornado Cash devs charged with laundering more than $1B
- ShamelessC 3y agoGood riddance. A lot of people here defended the living hell out Tornado. Hopefully this will change your mind but somehow I doubt it.
- deleted 3y ago[deleted]
- monero-xmr 3y agoWhy would this change my mind? They created Tornado, government said it was illegal a year ago, now they are arrested. I still think having a panopticon watching all financial transactions is bad, and cash should not be outlawed. I also think watching all my internet history is bad, so I use tools to hide that above and beyond what the default legal protections are, because I don’t trust the government, ISPs, and adtech data miners.
- JohnFen 3y ago> cash should not be outlawed Good news! It's not.
- ShamelessC 3y agoYeah like what does that even mean? I don't even care to know the answer at this point.
- monero-xmr 3y agoThe government would absolutely ban cash if they could, because it’s anonymous value transfer. Tornado enabled bearer instruments - cryptocurrency is digital cash equivalent - to be anonymous. The government obviously hates this for the same reason it hates cash.
- JohnFen 3y ago> cryptocurrency is digital cash equivalent It's legally not, though. That may be the fundamental disconnect in the two viewpoints here.
- Ar-Curunir 3y agoYes, because the government only prosecutes people who do “bad” things.
- ShamelessC 3y agoIt's for laundering. The notion that it's for privacy is to get hordes of suckers like you to defend them on the internet.
- Ar-Curunir 3y agoI mean, I work on privacy-preserving technology, so I think I know what I'm talking about technically.
- ShamelessC 3y ago[flagged]
- CuriousCosmic 3y agoWell that's a terrifying precedent they are trying to set. Tornado Cash devs blocked known OFAC sanctioned addresses or associated addresses from interacting with the service yet they are still being put on the hook for people hiding their identity to attempt to bypass those sanctions.
- woodruffw 3y agoI don't think this is unprecedented: the USG's reasoning (appears) to be that all actions here were ultimately the product of human behavior. Put another way: it's still a crime to kick puppies, even if you only indirectly kick puppies through your newly-invented fully-automatic Puppy Kicker 3000. Edit: to refine the analogy: it doesn't stop being a Puppy Kicker 3000 just because you add a screening phase that eliminates puppies designated by the American Kennel Club.
- nabakin 3y agoYour analogy would only make sense if Tornado Cash (Puppy Kicker 3000) was created for the purpose of money laundering (kicking puppies), but it seems like it was created for consumer privacy reasons.
- CPLX 3y agoPrivacy for consumers of money transmitting services is called money laundering.
- Ar-Curunir 3y agoSeems like cash users (everyone) and cash issuers (the government) are money launderers under this exceedingly broad definition.
- CPLX 3y agoTransmitting cash for others without reporting it would in fact make you a money launderer as well.
- LapsangGuzzler 3y ago> Storm suggested creating a version of Tornado with KYC / AML enabled, but Tornado’s unnamed venture capital investors were dismissive, saying, “I just don’t know if anyone will actually want this.” The investor added, “It would be unlikely as a fund that we’d use a ‘compliant mixer.’” Doesn’t this directly implicate the investor as well? It’s always frustrating to see founders punished and the money get away scot free when everyone knows they’re pressuring the founders to grow at all costs.
- ajross 3y agoThat sourcing of that paragraph is pretty ambiguous. My guess is that this is coming from the Romans' lawyers, and it's precisely that: an attempt at constructing a defense where they were just pawns of a bigger fish. And maybe it'll work, but given the context I'd apply salt until we have a name attached to the "unnamed venture capital investors" and some level of documentation of that conversation.
- miracle2k 3y agoIt's from the indictment: https://twitter.com/matthew_d_green/status/1694414422804996501/photo/2 https://twitter.com/matthew_d_green/status/16944144228049965...
- st3fan 3y ago> Storm and Semenov in fact knew that they were helping hackers and fraudsters conceal the fruits of their crimes.” Let me fix that for you … Storm and Semenov in fact knew that they were helping criminals conceal the fruits of their crimes.”
- deleted 3y ago[deleted]
- polygamous_bat 3y ago"It is difficult to get a man to understand something, when his salary depends on his not understanding it."
- r1ch 3y agoWouldn't the developers of privacy-focused blockchains like Zcash and Monero also be liable under this logic? Surely they also knew that criminals would use anonymous transactions and they did nothing to implement KYC / AML.
- dylkil 3y agoThere was evidence that north korea specifically used tornado cash to hide stolen crypto, which is where this has all stemmed from
- robotnikman 3y agoI wouldn't be surprised if crypto makes up a good chunk of their cash right now. They have definitely stepped up their hacking attempts in the last decade.
- EGreg 3y agoActually, with governments around the world, increasingly stepping up the war on end to end, encryption, anyone caught developing software that facilitates encrypted communication without allowing the government to execute a man in the middle attack, will be liable for anything that takes place on those networks. Whether it’s sharing, illicit content, seditious, content, or planning some sort of violent act, or perhaps sending billion dollar transactions through encrypted channels in an attempt to circumvent capital controls, or hiding their speech from censorship, thereby harming the body politic with vaccine, denial, or criticizing some war effort. The list goes on and on. The United States has literally the best protections for freedom of speech of any country in the world, and even here there are constant attacks on encryption. So yes, I think they would simply go after the businesses first, since those do The actual transactions. Every business would have to look over their shoulder every time they use paper, cash, or Z cash, or Monero. If they use an encrypted channel to communicate, they can get a knock on the door from the state. And that’s in this country. The majority of other countries are much worse.
- holmesworcester 3y agoThe developers of Signal, WhatsApp, iMessage, Matrix, Tor, and BitTorrent would also be liable under this logic.
- holmesworcester 3y agoHow many people here on HN have submitted a PR that criminals could use to do bad things? Security tools, encrypted messaging, jailbreaking tools, VPNs, file hosting tools, anonymity tools...etc. The complaint itself cites 'writing instructions on how to use a VPN' as evidence that the developers were knowingly doing something criminal. A VPN! You might hate crypto and believe that open source private money is different than open source private messaging. But that is not what the government's ability to jail these developers hinges on. Any argument prosecutors are making here could be made (and in many countries has been made) about any of the tools I list above. To cheer this on is to throw the past 40 years of legal advocacy around privacy, encryption, and anticensorship tools in the trash.
- deleted 3y ago[deleted]
- jshen 3y agoYou can't cherry pick that out of context, criminal indictments often cite things that can be ordinary. Buying duct tape isn't a crime, but it can be evidence of a kidnapping. As far as I can tell these people created a business to profit off of money laundering, and they were helping teach people how to hide their identity.
- holmesworcester 3y agoYes. We agree completely on the facts here. These people built a business to profit off the provision of online privacy, and as part of they were helping teach people how to preserve their online privacy. Some people used their tool for money laundering, just as some people have surely used encrypted messaging and VPNs for theft, terrorism, child abuse, and other crimes. The point is that online privacy always has significant legitimate, non-criminal use cases, and developers can have legitimate, non-criminal (noble, even) reasons for building for those use cases. And the larger point is that, if we want to have tools that give us any meaningful online privacy, we must stand up for the developers that build such tools when they are (inevitably, perennially) accused of aiding criminals and terrorists.
- gloryless 3y agoSeems like it wasn't writing and giving away the tool but running it as a service? I don't know the facts here, was it OSS as well a service?
- thinkmassive 3y agoNot only open source, also deployed as a smart contact on the Ethereum blockchain. It’s possible to deploy a smart contract with no way to modify it, meaning it’s literally impossible to shutdown (without shutting down the entire network). This is rare, most dev teams retain admin keys and compose the smart contact components from additional layers of abstraction to allow for updates. But those admin keys typically also allow the possessor to abscond with all funds locked in the contracts (a rugpull). My understanding is Tornado Cash eventually added a limited form of KYC to the frontend web UI. That’s simply a convenient interface to use the smart contract though, and it’s possible to interact with the smart contact directly (where there’s no KYC).
- steno132 3y agoCrypto’s still alive. The grifters get indicted, the greedy pivot to AI and only the true believers will remain. And they’re building, and they’ll keep building, and a more open financial system will be built. It might take decades but it will happen.
- luxuryballs 3y agoshould have made Tornado Commit first
- chaosbolt 3y agoAnyone who thinks they deserve to be charged or punished in any way is a Mr Smith tier agent, those are developers, their software was used for money laundering, did they host it? Who cares? Lockheed Martin knows the shit they make and sell to X or Y country is used to kill people, no one cares about that, HSBC launders cartel money and whenever they get found they get a tap on the wrist, etc. But hey, by now it's obvious totalitarianism is coming back and is probably here to stay.
- sdeep27 3y agoOne of the biggest users of Tornado Cash was Vitalik. He was not using it as a criminal, so there are some valid use cases outside of criminal behavior.
- null0pointer 3y agoI find it insane that they chose to reveal their real identities. Despite building a tool ostensibly for preserving privacy they were extremely negligent about their own. They must be incredibly naive to think they wouldn't immediately be under intense scrutiny from LEOs. I also find it insane that they had investors (who somehow remain unnamed and uncharged???).
- alphanullmeric 3y ago[flagged]
- johngladtj 3y ago[flagged]