Recently, the US government has made it illegal for US companies/citizens to interact with the Tornado Cash smart contract [0] [1]. If you receive any amount of ETH from Tornado Cash, US citizens/companies cannot legally accept any of your ETH. I think this is hilarious, and in a moment you will too.

Well, some absolute chad of a madlad has sent 0.1 ETH through Tornado Cash to the EthDev address. It is now illegal for any US exchange to accept the ETH from that address -- effectively stopping the Ethereum Foundation from selling that part of their pre-mine.

As you can see, Operation Tornado Dust has already begun! πŸŽ‰ The next step is for others to start sending Tornado Cash-tainted ETH to other major institutional ETH addresses. Here is a convenient list of the top ETH addresses sorted by balance. You will notice that several are named after exchanges. It would be a shame if people were to send small amounts of tainted ETH to each those addresses, thus locking them up.

You will also notice that the top address is the ETH 2.0 staking contract. I recall Vitalik saying that that address is kind of important to the future of Ethereum.

Happy dusting, Orthzar McGee

[0] OFAC ruling: https://home.treasury.gov/news/press-releases/jy0916 [1] list of prohibited ETH addresses: https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220808

What amazes me is that the code to unstake just doesn't exist yet. They will fork for sure. Imo "ETH" will be the OFAC compliant because all the big stakers will go full regulatory, in their own interest. Which way the market will go ?

La suite au prochain Γ©pisode.

This is a complete shitshow, popcorn time coming

And even when withdrawals are eventually enabled, they are planned to be rate limited where early depositors get priority (last I checked). Shitshow indeed.

I don't know what the responsible thing to do at this stage would be. I'd like to say they should postpone the merge, which isn't so crazy given that Ethereum is thriving on PoW (with a higher fee market than Bitcoin even), and the things enabled by PoS like sharding are years away anyway.

But then you have the billions locked up in that deposit contract that investors are eager to claw back. And if it isn't ready now, after years of delays, when will it ever be?

1077 sats \ 3 replies \ @glix 16 Aug

I have mixed feelings about this. At one point it's funny and based and other is that it promotes toxicity and tribalism. My approach is to ignore shitcoin-ary and focus on bitcoin rather than attack said shitcoin.

I totally respect that position; ignoring shitcoins is the best play for most people.

The only reason I bring this up is that shitcoins are helping to delay bitcoinization, and Ethereum produces the greatest individual delaying effect through their marketing/shilling, ERC-20 shitcoins, NFTs, and even Ethereum clones (e.g. Cardano and Solana). If Ethereum were to collapse this very moment, tons of shitcoins would vanish as well.

I'm not sure Tornado Dust qualifies as an attack, because The Ethereum Foundation has spent the last 7 years defrauding people by selling ETH and saying that Ethereum is decentralized. The centralization of Ethereum is so intense that one smart contract being sanctioned by the US could undermine the foundations Ethereum (i.e. their fraudulant claims of decentralization). Vitalik and Co aren't idiots; they knew this sort of thing was possible. They just refused to disclose this in their marketing to retail investors. The Ethereum Foundation's refusal to disclose this is fraud, which is an attack. By sending some dust to big addresses, we can expose Ethereum as the fraud it is.

I don't think this qualifies as tribalism either. Shitcoins push the separation of state and money further into the future, which delays the myriad benefits to humanity that Bitcoin promises. While shitcoiners are telling everyone to focus on tokenomics, yield, staking, and other nonsense, states are bombing people in Yemen and Ukraine.

100 sats \ 0 replies \ @Wil 16 Aug

I would rather see ETH collapse under its own weight but people are free to do what they like.

it's not an attack on shitcoins, it is an attack on forced censorship and readily compliant "crypto" businesses who would drag us all into full compliance mode when asked to.

by making this ridiculous point we can show that applying old methods to new money is not going to work.

I have mixed feelings about this. I hate Ethereum. I'm a Bitcoin Maxi. However, code is free speech. What's happening to Tornado Cash and their developer is NOT right at all. This is just a dick move, though I do find it kind of funny. In the end, a dick move is worse because it hurts innocent people.

100 sats \ 0 replies \ @j24 16 Aug

Code is free speech. However, free speech does not mean that you shouldn't point out if someone says something stupid.

It is now illegal for any US exchange to accept the ETH from that address

Show me that law.

There are specific ETH addresses that are listed on the Treasury notice. Your post includes the link to that list. The ETHDev address is not among those, however.

Therefore, it is NOT illegal for any US exchange to accept the ETH from the ETHDev address at this time.

But to de-risk, platforms are rejecting deposits from an address that received from a Tornado Cash transaction, such as the ETHDev address They are not required to reject but they are doing it to avoid any issues down the road.

Plus, you can't "reject" a payment sent to your address. So what happens then to the amount received by the exchange? Frozen forever? Returned? Who knows.

What a complete shitshow.

Can someone help me understand what evidence actually points to shitcoins being bad for bitcoin? And if shitcoins go down, who is to say that benefits bitcoin?

I am not talking about the impact on an individual getting rekt. But why do some assume that shitcoin money would map 1:1 back into BTC?

I have heard way more stories (including mine personally) about shitcoins leading people to BTC than vice versa.

100 sats \ 2 replies \ @glix 17 Aug

I am confused. Your last paragraph contradicts the earlier two. If shitcoins lead people to bitcoin, then why wouldn't said shitcoin's demise increase interest in bitcoin, which to the shitcoiner seems more and more stronger and stable by the day? It will definitely not map 1:1, but majority of the value will find its way to bitcoin (apart from the few people who can't seem to live without their animal nfts, who would just go to the next shitcoin in the queue)

A few alternative scenarios:

  1. Someone gets rekt on a shitcoin and becomes a fiat maximalist for life, lumping bitcoin in with shitcoins.
  2. Someone had no knowledge of bitcoin, but learned about it through (celebrity nft project). They organically learn about bitcoin now having skin in the game.

If bitcoin is what we believe it to be, it will absorb the value eventually. But in the present cultural reality NFTs or DeFi are just things tech people are interested in. And they happen to help the larger cause of removing money from state. And they teach baby steps into self sovereignty and permissionless tech. Hate to break it to you but a lot of liberal NPC-types are repulsed by "freedom talk" but might be enticed by stablecoin yield. Baby steps.

Well, yeah there a spectrum of people out there, no doubt. You can't account for all of them and predict their actions. As for the separation of state and money, that's not something that happens overnight. Might take half a century even, who knows, but i hope it happens sooner.

This chad move highlights the absolute debacle that the clownfest over at OFAC actually is - no-one should have the right to block transactions at all - but in the current world they currently do: This is why censorship resistance and all it's many composite factors are so important.

Dropping TC into every major ETH wallet certainly highlights that .. expensive tuition

100 sats \ 0 replies \ @based 16 Aug

Long term this will help. If everything is tainted then nothing is tainted, as those which censor will have no users left and thus no power to censor users.

Can someone explain the "account model" (I think that's the term) for ETH addresses and how it's different from BTC's UTxO model?

Because a similar attack wouldn't be possible in Bitcoin. If someone sent "illegal BTC" to my addresses, I could use coin control to ignore those UTxO's and keep my BTC 100% "clean".

You described it more or less.

The conceptual difference is that the account model updates user balances globally. The UTXO model only records transaction receipts. In the UTXO model, account balances are calculated on the client-side by adding up the available unspent transaction outputs (UTXOs).

https://academy.horizen.io/technology/expert/utxo-vs-account-model/

Wholesome =)

Tommy from https://AllArk.io

Who cares about meth stuff? Please keep stackernews shitcoin free

If you need functionial coinjoins for bitcoin have a look at joinmarket

No fan of ETH, but hey I guess this is one use for them, since there's no coin control and its a balance system all them wallets be tainted

Lol I've been saying this about bitcoin too, best opsec is to taint all the coins, if institutions don't want to hold them tough titties, i'll take all the UTXOs I can get, because laws aren't immutable, bitcoin is when governments come under pressure and those UTXos grow in value they will capitulate, so give me all the dirty bitcoin i'll gladly take it

As for those who don't feel that way, I mean they can isolate UTXOs I suppose, if you want to be a simp

EFF has joined the chorus of crypto and privacy advocates pushing back against the U.S. Treasury Department's decision to issue sanctions that ban American citizens from using the Tornado Cash coin mixer.

1 "EFF is deeply concerned that the U.S. Treasury Department has included an open source computer project, Tornado Cash, on its list of sanctioned individuals,” the organization tweeted. "Code has long been recognized as speech, so there are clear First Amendment implications whenever the government inhibits the publication of computer code on a public website,"

Yeah… β€œdeeply concerned”. That’s really close to saying nothing at all. I’d like to see them take a more pro-privacy stance and promote good bitcoin practices.

guess they are trying to be distant from any specific ideology. The good part is they start to step out of previous stigma to help projects like crypto.

I think one could make the case that they are using a FIFO accounting method and therefore all credits spendable until the OFAC incompliant credit.

B A S E D

The most important adresses to sent to are the rollups and then have it frozen. because if their centralized nature arent revealed, and they continue to grow, network effects wil determine that the future of crypto belong to those centralized rollups.

Sounds funny.

But I think if it played out in a court ETHdevs could argue that the 0.1 ETH is still on the address & hasn't been spent.

154 sats \ 0 replies \ @glix 16 Aug

Yeah I don't it works that way. There are no UTXOs in eth, it's account based. So you recieve eth into your account and then all your other eth also get tainted.

It won’t play in court and that’s the problem. Prominent figures like ETHdev or Fallon will be able to argue with CEXes that their balance is tainted against their will and will be heard. Might be slightly painful. But all the small people will suffer with no recourse. cf https://overcast.fm/+npr8wEN58

In case anyone asks, I have never owned any ETH.