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So the charges say they charged money to run relayers. Let's ignore that one. In practice, they are being charged with conspiracy, and the conspiracy is mostly

So the charges say they charged money to run relayers. Let's ignore that one. In practice, they are being charged with conspiracy, and the conspiracy is mostly about running the website with the UI, not about the smart contracts (as i read it). they seem to have been careful not to try to charge them for creating some ethereum contracts. Conspiracy does not require that they could have done something later to stop the conspiracy from completing. The crime of conspiracy was complete when they committed an overt act (towards the overall criminal act). Once that was done, you lose. Here, the overt act cited is paying for the website :) In this case, the thing to do is to withdraw before an overt act. If you successfully withdraw, you are no longer chargeable with conspiracy, even if the act later completes. The model instruction for the defense of withdrawal looks like this: "“(1) One of the defendants, (Defendant’s name), has raised the defense that he withdrew from the agreement before any overt act was committed. Withdrawal can be a defense to a conspiracy charge. But Defendant has the burden of proving to you that he did in fact withdraw. (2) To prove this defense, Defendant must prove each and every one of the following things: (A) First, that he completely withdrew from the agreement. A partial or temporary withdrawal is not enough. (B) Second, that he took some affirmative step to renounce or defeat the purpose of the conspiracy. An affirmative step would include an act that is inconsistent with the purpose of the conspiracy and is communicated in a way that is reasonably likely to reach the other members. But some affirmative step is required. Just doing nothing, or just avoiding the other members of the group, would not be enough. (C) Third, that he withdrew before any member of the group committed one of the overt acts described in the indictment. Once an overt act is committed, the crime of conspiracy is complete. And any withdrawal after that point is no defense to the conspiracy charge. (3) If Defendant proves these three factors by a preponderance of the evidence, then you must find him not guilty. Preponderance of the evidence is defined as “more likely than not.” In other words, the defendant must convince you that the three factors are more likely true than not true." So, for example, for the charge related to running the website, "stop paying for website, tell others this is not okay, cut off all support and help you can" seems likely have been enough to withdraw here, even if you couldn't stop others from using it because it's immutable.

Hizonner 3y ago
... but the question was how they were different from Monero or ZCash. Why couldn't you apply the same argument to those? The developers of both Monero and ZCash definitely know that their systems are in fact used for illegal activity. Monero is probably predominantly used for drug transactions. Surely at least some money laundering too. And absolutely no AML/KYC or other "due diligence". Some of the developers probably even know about specific illegal acts by specific actors. And the illegal activity has been happening throughout the lifetimes of those systems, with plenty of overt acts during any given developer's personal involvement. So if the Tornado Cash people were conspiring with their users to launder money, how are the Monero or ZCash people not conspiring with their users to launder money? What's the required threshold of coordination or participation? In both cases, you're basically looking at somebody sticking some software out there and letting other people use it. It's possible that Tornado had more active participation in specific incidents, but if so, what aspects of that participation matter? If it's a matter of hosting the UI, well, many the Monero and ZCash developers probably also run nodes, so they're actively operating systems that are accepting and relaying obscured transactions, with no attempt to filter out illegal ones. And they can't exactly claim they're ignorant about that. I'm not claiming Tornado Cash is or was not a conspiracy, but if it is, then it seems hard to say that Monero or ZCash isn't. By the way, as far as I know charging money doesn't matter, and I'd put about zero weight on allegations about "running relayers", since there aren't any recognizable "relayers" in the system anyway. The government has a strong interest in ignoring how it actually works, and in muddying any potential distinctions between the automated actions of the smart contracts and the intentional actions of the developers. They've issued actual sanctions forbidding "any interaction with" the smart contracts themselves, and if they let those distinctions become significant, they run the risk of having to explain how the smart contracts are "entities" within their authority to sanction.
- JohnFen 3y ago
  > but the question was how they were different from Monero or ZCash. Why couldn't you apply the same argument to those? IANAL, and maybe DannyBee can correct me if I'm mistaken, but I think the answer to this is "Maybe they do and just haven't been charged yet." If there are a lot of independent people doing the same crime, they're not all going to be charged simultaneously. Each requires a separate investigation. Someone's going to be the first in line.

Hizonner 3y ago

... but the question was how they were different from Monero or ZCash. Why couldn't you apply the same argument to those? The developers of both Monero and ZCash definitely know that their systems are in fact used for illegal activity. Monero is probably predominantly used for drug transactions. Surely at least some money laundering too. And absolutely no AML/KYC or other "due diligence". Some of the developers probably even know about specific illegal acts by specific actors. And the illegal activity has been happening throughout the lifetimes of those systems, with plenty of overt acts during any given developer's personal involvement. So if the Tornado Cash people were conspiring with their users to launder money, how are the Monero or ZCash people not conspiring with their users to launder money? What's the required threshold of coordination or participation? In both cases, you're basically looking at somebody sticking some software out there and letting other people use it. It's possible that Tornado had more active participation in specific incidents, but if so, what aspects of that participation matter? If it's a matter of hosting the UI, well, many the Monero and ZCash developers probably also run nodes, so they're actively operating systems that are accepting and relaying obscured transactions, with no attempt to filter out illegal ones. And they can't exactly claim they're ignorant about that. I'm not claiming Tornado Cash is or was not a conspiracy, but if it is, then it seems hard to say that Monero or ZCash isn't. By the way, as far as I know charging money doesn't matter, and I'd put about zero weight on allegations about "running relayers", since there aren't any recognizable "relayers" in the system anyway. The government has a strong interest in ignoring how it actually works, and in muddying any potential distinctions between the automated actions of the smart contracts and the intentional actions of the developers. They've issued actual sanctions forbidding "any interaction with" the smart contracts themselves, and if they let those distinctions become significant, they run the risk of having to explain how the smart contracts are "entities" within their authority to sanction.

JohnFen 3y ago
> but the question was how they were different from Monero or ZCash. Why couldn't you apply the same argument to those? IANAL, and maybe DannyBee can correct me if I'm mistaken, but I think the answer to this is "Maybe they do and just haven't been charged yet." If there are a lot of independent people doing the same crime, they're not all going to be charged simultaneously. Each requires a separate investigation. Someone's going to be the first in line.