[ZeroZeroOneZero]

I think you're both ignoring one key factor here: intent.

If this was simple service for moving/spending money privately. Sure, probably nothing wrong then. But the indictment specifically states that they knew the service was being using by sanctioned entities and didn't try to prevent it. That's makes a big difference.

[splix]

They knew that because it's a public information and they didn't prevent it because it's already deployed smart contract. They have no ability to prevent a specific party from using it, it's already deployed to the network and note that it's still impossible to change it even now.

As an example, since now it's under US agencies control and they know that sanctioned entities are using it, why they still don't try to prevent it? Are they supporting NK?

[ZeroZeroOneZero]

Fair enough. But the indictment reads as if they were knowingly profiting off of illegal transactions and we may be looking at the case where that line in the sand is drawn.

As a counter example, should the US government not try to stop the cartels from using Swiss banks for money laundering because some arbitrary contract was already in effect?

In other words: Monero might be getting some friends on the Fed's crypto blacklist over this case.

[splix]

"contract" is a wrong term, that's what I always arguing, because it has nothing to do with the legal meaning of the term. Here it's a public (i.e., "deployed") code. It just exists.

Regarding "profiting", it is a good question, and that's what I don't understand in this case. To my understanding there is no direct fees in Tornado Cash. But there are Relays, which, to my understanding, allow to withdraw to a fresh address and take a small fee for that. Anyone can run a Relay, and the use is optional. I think those guys were running one of them too.

A Relay doesn't know who is who and cannot limit withdrawals of money deposited by a sanctioned entity. But as they were told that some of transactions are likely illicit, even though they don't know which particular, they knowingly profiting off it in general. That's very broad and later can be applied to anyone.

Similar can be applied to mining. In general ETH, miners do know the addresses and they do not accept transactions that include sanctioned addresses. So they are fine. But for Monero example, it's the same problem. Even though they don't know the transactions participants, they may make profits off illegal transactions.