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Wouldn'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 ano

by r1ch 3y ago

Wouldn'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 ago
There was evidence that north korea specifically used tornado cash to hide stolen crypto, which is where this has all stemmed from
- robotnikman 3y ago
  I 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 ago
Actually, 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 ago
The developers of Signal, WhatsApp, iMessage, Matrix, Tor, and BitTorrent would also be liable under this logic.
- ForHackernews 3y ago
  None of those are money transfer protocols, AFAIK. Except wasn't Signal adding some cryptocurrency silliness too? So maybe they would be liable.
  - tw04 3y ago
    Signal integrated someone else's crypto. Presumably mobilecoin would be liable, not signal.
- baby 3y ago
  Movement of money is different from movement of information. That being said I believe Signal has a cryptocoin nowadays.
- woodruffw 3y ago
  This is a false sense of solidarity: each of the above (with maybe the exception of BitTorrent) is a communications platform, not something expressly designed to violate KYC/AML laws. The USG can be legitimately accused of all kinds of gross excesses, but they can't be accused of not understanding the difference between these things. Pretending otherwise doesn't do any party any particular justice.
  - junofan 3y ago
    The real answer is that the IEEPA has an informational materials exemption.
  - miracle2k 3y ago
    > not something expressly designed to violate KYC/AML laws. Tornado Cash was not designed to violate laws as per intent of the authors. Maybe it is your judgement of the design itself. Whether or not it in fact does is something we may possibly find out (if the US plea-deal system doesn't prevent it). Even then, a guilty verdict might hinge on technicalities around the TORN token.
baby 3y ago
I have the same question. I know people who created blockchains that were specifically not privacy coins (when they could have done it) specifically because they were scared of going to prison.
- deleted 3y ago
  [deleted]
DannyBee 3y ago
Lawyer here - you may have plausible arguments about things if you just create software without KYC/AML, and you are outside the US or whatever. If you run an actual service without KYC/AML, uh, yeah, you are probably f'd. If you have specific knowledge that a sanctioned-by-OFAC north korean hacking group is using your service to launder hundreds of millions and you do nothing, you are definitely screwed.
- Hizonner 3y ago
  Once the contracts were installed on the block chain, nobody was "running" them. They're still out there running right now, and nobody could shut them down if they wanted to. A sufficiently sophisticated user can continue to use Tornado Cash regardless of anything these guys do now or in the future. They might have hosted some user interface code; I don't know. They would have been able to shut down or modify anything they were actually hosting. They could have created alternative contracts, and maybe encouraged somebody to use them. But the basic already-running Tornado Cash contracts are immutable and unstoppable without shutting down all of Ethereum. If anything, something like Monero or ZCash seems to have less cover, because if the developers of those release modified code, and if they succeed in actually getting the bulk of the users to use it, they really can change the way the whole chain works. Although if they tried to remove all anonymity, all that would probably happen would be that somebody would fork the project.
  - miracle2k 3y ago
    > They're still out there running right now, and nobody could shut them down if they wanted to. No, but the US could start arresting validators on AML charges, and no doubt, many people here would support this too. > They might have hosted some user interface code; I don't know. That's just a static website though talking only to your wallet app. Somewhat similar to the fight around whether the piratebay is culpable for copyright violations. Many geeks used to support the piratebay. The TC interface is hosted on IPFS. Can IPFS gateway operators not blocking the content be arrested on AML charges?
    - 3y ago

by r1ch 3y ago

dylkil 3y ago

There was evidence that north korea specifically used tornado cash to hide stolen crypto, which is where this has all stemmed from

robotnikman 3y ago
I 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 ago

Actually, 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 ago

The developers of Signal, WhatsApp, iMessage, Matrix, Tor, and BitTorrent would also be liable under this logic.

ForHackernews 3y ago
None of those are money transfer protocols, AFAIK. Except wasn't Signal adding some cryptocurrency silliness too? So maybe they would be liable.
- tw04 3y ago
  Signal integrated someone else's crypto. Presumably mobilecoin would be liable, not signal.
baby 3y ago
Movement of money is different from movement of information. That being said I believe Signal has a cryptocoin nowadays.
woodruffw 3y ago
This is a false sense of solidarity: each of the above (with maybe the exception of BitTorrent) is a communications platform, not something expressly designed to violate KYC/AML laws. The USG can be legitimately accused of all kinds of gross excesses, but they can't be accused of not understanding the difference between these things. Pretending otherwise doesn't do any party any particular justice.
- junofan 3y ago
  The real answer is that the IEEPA has an informational materials exemption.
- miracle2k 3y ago
  > not something expressly designed to violate KYC/AML laws. Tornado Cash was not designed to violate laws as per intent of the authors. Maybe it is your judgement of the design itself. Whether or not it in fact does is something we may possibly find out (if the US plea-deal system doesn't prevent it). Even then, a guilty verdict might hinge on technicalities around the TORN token.

baby 3y ago

I have the same question. I know people who created blockchains that were specifically not privacy coins (when they could have done it) specifically because they were scared of going to prison.

deleted 3y ago
[deleted]

DannyBee 3y ago

Lawyer here - you may have plausible arguments about things if you just create software without KYC/AML, and you are outside the US or whatever. If you run an actual service without KYC/AML, uh, yeah, you are probably f'd. If you have specific knowledge that a sanctioned-by-OFAC north korean hacking group is using your service to launder hundreds of millions and you do nothing, you are definitely screwed.

Hizonner 3y ago
Once the contracts were installed on the block chain, nobody was "running" them. They're still out there running right now, and nobody could shut them down if they wanted to. A sufficiently sophisticated user can continue to use Tornado Cash regardless of anything these guys do now or in the future. They might have hosted some user interface code; I don't know. They would have been able to shut down or modify anything they were actually hosting. They could have created alternative contracts, and maybe encouraged somebody to use them. But the basic already-running Tornado Cash contracts are immutable and unstoppable without shutting down all of Ethereum. If anything, something like Monero or ZCash seems to have less cover, because if the developers of those release modified code, and if they succeed in actually getting the bulk of the users to use it, they really can change the way the whole chain works. Although if they tried to remove all anonymity, all that would probably happen would be that somebody would fork the project.
- miracle2k 3y ago
  > They're still out there running right now, and nobody could shut them down if they wanted to. No, but the US could start arresting validators on AML charges, and no doubt, many people here would support this too. > They might have hosted some user interface code; I don't know. That's just a static website though talking only to your wallet app. Somewhat similar to the fight around whether the piratebay is culpable for copyright violations. Many geeks used to support the piratebay. The TC interface is hosted on IPFS. Can IPFS gateway operators not blocking the content be arrested on AML charges?
  - 3y ago