Tornado Cash Founders Charged With Money Laundering And Sanctions Violations \ stacker news ~tech

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Tornado Cash Founders Charged With Money Laundering And Sanctions Violations www.justice.gov/usao-sdny/pr/tornado-cash-founders-charged-money-laundering-and-sanctions-violations

1528 sats \ 8 comments \ @1EastSideTony 23 Aug 2023 tech

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483 sats \ 0 replies \ @k00b 23 Aug 2023

Those charged today engaged in a conspiracy to launder money for cybercriminals, including for a North Korean cybercrime organization seeking to evade sanctions.

How can you live with yourself saying stuff like this? How don't you just melt into a puddle when you tell bold faced lies?

0 sats \ 0 replies \ @AyCaramba 24 Aug 2023

I see 3 elements here:

The code for the contract (open source code)
The chain implementing and executing transactions with the contract (eth chain and eth miners including transactions that interacted with the mixer)
The URL and corresponding hosting that provides an endpoint to a UI for the contract (the now closed site https://tornado.cash/)

If the accused people did not have anything to do with point 3, then it is unjustified. If OTOH they were actually running the service URL, that would be more complicated. IMHO.

That is why centralized services have risk.

I do not know how Wasabi and Whirlpool services work. If they are only a feature of a p2p application (like Bisq) then the risk will be very low, but if their services have some kind of central coordinator or something, then they are also at risk.

0 sats \ 0 replies \ @franzap 24 Aug 2023

"Justice"

150 sats \ 4 replies \ @Zepasta 23 Aug 2023

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36 sats \ 3 replies \ @k00b 23 Aug 2023

I don't think it is protected generically. Regardless, the charges aren't specific to producing code:

The defendants and their co-conspirators created the core features of the Tornado Cash service, paid for critical infrastructure to operate the Tornado Cash service, promoted the Tornado Cash service, and made millions of dollars in profits from operating the Tornado Cash service. The Tornado Cash service advertised to customers that it provided untraceable and anonymous financial transactions, and STORM and SEMENOV chose not to implement know your customer or anti-money laundering programs as required by law.

1075 sats \ 2 replies \ @orthzar 23 Aug 2023

Code is protected by the 1st amendment like any other form of expression. But in this case, the code is irrelevant. It's undoubtedly about KYC/AML.

This case will have consequences on other privacy projects. Consider this scenario:

The defendants and their co-conspirators created the core features of Monero, promoted Monero, and made unknown profits from selling XMR. They advertised to users that Monero provided untraceable and anonymous financial transactions, and the developers chose not to implement Know Your Customer or Anti-Money Laundering programs as required by law.

Yes, the above is a stretch, and that's the problem. It would only be a stretch to apply similar charges to people working on other privacy-related cryptocurrency projects.

Moreover, simply arresting developers does severe damage. For instance, the police would keep whatever computers they steal in the process of arresting developers.

90 sats \ 1 reply \ @Zepasta 23 Aug 2023

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165 sats \ 0 replies \ @orthzar 23 Aug 2023

That is the catch-22: these sort of software projects cannot implement KYC/AML without destroying their decentralization. In effect, this case will determine whether KYC/AML laws can constitutionally prohibit someone from releasing certain kinds of code.

So, I guess this is about the code afterall, and it is a 1st Amendment issue. The Tornado Cash devs should mount a 1st Amendment defence. Perhaps the EFF could help.