141 sats \ 30 replies \ @Cje95 24 Apr \ on: Samourai Indictment Count Two Could Have Serious Implications For All Wallets bitcoin
I am really trying to wrap my head around the indictment to Operate an Unlicensed Money Transmitting Business... It is an extremely broad thing since it is a piece of code and as you pointed out could make all wallets run afoul which is bizarre. Not to mention open-source wallets like TaHo is anyone and everyone who helped open-source it now liable? I don't see how this ends up sticking and my guess would be it's for the big splash of news it will cause for the PR (even though it's a lot of bad PR in my opinion) and to get the people to plead out to some lesser count.
This really has my head spinning. Like you, I'm focused on the fact that these wallets are code. Code has been deemed as speech, which is protected by the First Amendment. You can't criminalize software. But, that's what they seem to be doing. This needs to be fought aggressively. The cypher punks already fought and won this battle. The government shouldn't get a do over.
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To add to that its also not like this is malicious code! If this was code that purposefully did some shady stuff then I can at least see what the government is getting at. This isn't that so I fail to grasp the logic.
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Code is speech. They don't get an exception by calling it malicious under any circumstances, IMO.
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You can't imagine any code that violates free speech? All code, no matter what it does, absolves its creators of culpability? If I created a virus that wrecked the power of a city, resulting in the death of thousands? That's free speech?
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Uh, in that case the damage was done because the city executed the code. Code by itself can't do anything to you unless you run it. Keeping your systems secure is on you.
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Here's another version to better suit your position. Person A drugs you, but person B asks you to go to the ATM, empty it out, and give them all the money. Did person B do anything wrong?
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Morally wrong, sure. But legally? Person A committed the crime. One is an act of violence, the other is not.
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Can we put aside the mixing aspect and focus on count two? You creating a virus would subject you to criminal liability. It's your act that made it criminal. Let's say you made that virus for a white hat defense?
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I'm happy to consider those two things separately, but I think the implication is that some code violates private property.
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I didn't go through it carefully, but I think this article sums up the law regarding code as speech pretty well:
https://www.pbs.org/wgbh/nova/article/is-code-free-speech/
In the 1990s, the Electronic Frontier Foundation—which, at the time, was a fairly new organization—took on a series of cases on behalf of a cryptographer named Daniel Bernstein, who argued that he had a right to make public certain cryptographic programs that he’d created. Bernstein wanted to publish an algorithm, a mathematical paper that explained the algorithm, and the source code for a computer program that incorporated it. But the government required Bernstein to apply for a license to do all of this— and to submit his ideas for federal review.
Bernstein sued and eventually won the case. Software source code was deemed speech protected by the First Amendment.
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I don't think bernstein was charged for using the code, but for publishing it.
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True, but in the case of code, the exceptions aren't inherent -- someone would have to use the code to commit a crime, so it's the action, not the code, that's illegal.
(IANAL, just someone who reads a fuckton and listens to tons of Darknet Diaries, so happy to be corrected.)
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I'm not 110% certain of this but I would find it odd that if you create code that flips off temp regulation in a computer and then give it the ability to adapt and spread on its own that that code itself would be a violation if that makes sense. The code itself might be the one spreading itself but the creator or the code itself would seem to be a violation of freedom of speech since it is harmful
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nod As I noted, I'm not a lawyer (have taken a bunch of infosec classes towards a Master's degree, but that's more focused on tactics than legality), and I'd imagine there is a line at which it would not be speech (though I'm not sure Samurai would fit that bill). And once it's operating as a worm, that's definitely different (as running the application is inherently an attack). Though it's running the code, not writing or possessing it, that would be the issue here.
Also, the cynical side of me wonders why the government hasn't looked at mining software as something that overheats computers dangerously.
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I get your point, but keep in mind that defamation and fraud are usually civil, not criminal, and I can't see the threat analogy applied to software.
Even shady software can have uses -- the same software a hacker might use to get into a system is used by pen testers and white hat hackers to test and secure those same systems. Code is neutral.
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I was using the idea of shady stuff as at least some way to look at some code that for instance turns off a computer's fan to force it to overheat... I would call that shady because while someone could be using it to increase cybersecurity the likelihood would be much more negative hence my reasoning.
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everything on computers is code and I think y'all are fixating on the wrong things in this story. The indictment clearly states that Samourai made millions of dollars worth of bitcoin in fees from running Whirlpool.
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No doubt the mixing will earn the headlines. Count two is a bigger deal, IMO. The US District Court for the Southern District is probably the highest profile federal trial court in the country. They don't just bring counts for the hell of it.
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I think you're confusing the way the charges relate to each other. There are many ways to launder money. The charges allege that the WAY they laundered money was by running an unlicensed money transmitter.
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We disagree.
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The allegations contained in paragraphs 1 through 28 of this Indictment are repeated and realleged as if fully set forth herein
This is the first paragraph of the second charge.
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Every indictment is drafted like that. We can keep going back and forth. I say the defendants are charged criminally with operating a money transmitter business separate and apart from the mixing. You disagree. Let's see how it plays out.
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In a regular wallet the person transmitting the money is the person/people initiating a transaction. coinjoins make use of a coordinator.
I made the point elsewhere, and repeat it here. There are many ways to launder money. In the TV show "Breaking Bad" they buy a car wash to launder money. The car wash was a registered business, paying taxes on claimed revenue, etc.
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Samourai wallet operated a coinjoin coordinator, the service of which they provided for a fee.
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