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by pclmulqdq 1382 days ago
This isn't about the fraction of illicit use. A large fraction of Americans with numbered/anonymous Swiss bank accounts did nothing wrong with them - a much larger fraction than tornado cash users. However, they were still banned for US citizens due to US KYC rules.

The land of free speech is obsessed with being able to trace money as it travels. No surprise they would go after a service whose explicit purpose is to break the chain of custody on money.
2 comments
whatisweb3 1382 days ago
Sure. Then it is irrelevant how much money was funding whom, only that a non-zero amount of value was not strictly traceable through typical financial surveillance systems, and so the US automatically deems this activity illegal regardless of how the funds were used.

This is where the “privacy on the blockchain should be a basic right” argument comes in, and what the plaintiff appears to be arguing.

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pclmulqdq 1382 days ago
When you want to make legal arguments, you do it when you have good facts, and this is not that time.

The facts about Tornado cash are terrible: pretty much everyone using it is either doing something provably illegal or trying to avoid being found, you have to go out of your way to use it (and pay an extra fee), and it's been part of a large number of bad news stories about crypto theft. A minimum of 10% of its throughput is provably due to frauds and thefts, and probably a lot more. It is not an exaggeration to say that many people's life savings have been funneled through Tornado cash into the wallets of criminals. In comparison, numbered Swiss bank accounts likely had more legitimate use than Tornado cash.

In comparison, the facts about Monero, Zcash, and the Wasabi BTC wallet (another mixer, but attached to a wallet) are a lot better. Privacy is free and/or the default option with those services, and they are a little more like cash: lots of victimless crimes (darknet sales, etc.), some use by ransomware attacks, but also a lot of legitimate use.

This lawsuit has a nonzero chance of throwing out the baby (privacy on blockchains) with the bathwater (tornado cash).

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whatisweb3 1382 days ago
25% of funds being illicit does not mean “pretty much everybody” is using it for illicit reasons. Your argument really falls apart here, but the sweeping generalizations don’t help.

Monero and TC are equal parts useful for non-criminals who are seeking privacy.

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pclmulqdq 1382 days ago
The 23% from the article is one estimate that counts only transactions from publicly known illicit wallets. It is a lower bound.
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bitxbitxbitcoin 1382 days ago
Banning the use of Tornado Cash is one thing - I didn’t see any Swiss bankers arrested or prosecuted for money laundering during that move.
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pclmulqdq 1382 days ago
You mean like these Swiss bankers?

https://www.reuters.com/article/us-usa-switzerland-tax/ex-sw...

https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-c...

https://www.justice.gov/opa/pr/former-ubs-banker-charged-hel...

This wasn't mainstream news, but neither was the sanctioning of Tornado cash. You just happened to hear about one but not the other.

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