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... 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 ZCas

... 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.
DannyBee 3y ago
I'll try to give you a line for those devs: If the developers are running for a UI that helps, or paying for a UI that helps, or paying to run services that help get the money out, then i would say they may be on the hook for charges. These all have to be knowing, btw. If you just donate somewhere and they do something bad with it, not your issue. If you donate somewhere, knowing they will do something bad with it, that's different :) You are correct that charging money or not doesn't really matter, it just gets used to show they profited from the illegal enterprise overall. As for further lines, if all they did was write some Ethereum contracts and let them loose, I doubt someone would come after them. If they are making it easy by building UI/services around it, without any KYC/AML, and then the UI/services get used to launder money, then yes, they are likely on the hook. I also doubt the government wants to start a case about interaction with smart contracts - it would be very muddy and possibly set bad precedent, at least right now. They would rather take cases like the one you see here, where someone did something more than make an ethereum contract, and the facts don't look great, and prosecute those. Maybe sometime later if they win a bunch like this they will go after more complex cases around smart contracts, but you generally want to ease courts into this sort of thing if you want the best chances. It's not always possible, mind you. If you look at early decisions in new fields where someone threw a really complex and hairy technology case at a court, the decisions are sometimes weird/strange. The courts do their best (and often hire special masters with expertise in the area and ....), but the legal system is a deliberately iterative one, and often takes iterations over years to get things to a stable point.

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.

DannyBee 3y ago

I'll try to give you a line for those devs: If the developers are running for a UI that helps, or paying for a UI that helps, or paying to run services that help get the money out, then i would say they may be on the hook for charges. These all have to be knowing, btw. If you just donate somewhere and they do something bad with it, not your issue. If you donate somewhere, knowing they will do something bad with it, that's different :) You are correct that charging money or not doesn't really matter, it just gets used to show they profited from the illegal enterprise overall. As for further lines, if all they did was write some Ethereum contracts and let them loose, I doubt someone would come after them. If they are making it easy by building UI/services around it, without any KYC/AML, and then the UI/services get used to launder money, then yes, they are likely on the hook. I also doubt the government wants to start a case about interaction with smart contracts - it would be very muddy and possibly set bad precedent, at least right now. They would rather take cases like the one you see here, where someone did something more than make an ethereum contract, and the facts don't look great, and prosecute those. Maybe sometime later if they win a bunch like this they will go after more complex cases around smart contracts, but you generally want to ease courts into this sort of thing if you want the best chances. It's not always possible, mind you. If you look at early decisions in new fields where someone threw a really complex and hairy technology case at a court, the decisions are sometimes weird/strange. The courts do their best (and often hire special masters with expertise in the area and ....), but the legal system is a deliberately iterative one, and often takes iterations over years to get things to a stable point.