There are so many other applications for Tornado Cash than “money laundering.” What if I don’t want my employer or friends to see what I do with my known wallet on a fully traceable public blockchain?
Privacy is not illegal.
Privacy is not illegal.
Just because you find a use for a technology doesn't make the technology good. Nuclear weapons are a highly effective alternative to insect repellent, but that does not justify the general purpose use of nuclear weapons for repelling insects.
It's like saying the local brothel can't be shut down because the building could potentially be used to teach the word of the lord while the employees aren't otherwise busy. The exclusive purpose of the brothel's existence is enabling trafficking and sex work, and the benefit of any potential imaginary supplementary uses are grossly outweighed by the benefit to society of closing it down.
Privacy as such is not illegal, but that does not mean that government may not prohibit certain specific ways of achieving privacy.
There are a variety of sanctions mechanisms. Tornado didn’t have to be controlled by North Korea (it isn’t), just used by them to fall afoul of U.S. law.
The state has the power to levy taxes and prevent transactions with entities that it considers harmful (OFAC is effectively this); this is the state taking steps to do so, while GitHub is deciding that people who are attempting to evade those laws are outside the risk profile of "who we want to provide services to".
I hear the US government actually supports this method.
Cryptocurrency enthusiasts like to think that just because their transactions are done inefficiently on a blockchain, banking laws don't apply to them. Of course they apply. The only difference is their transactions are more expensive.
Operating an illegal money transmitter that demonstrates no capability/intent to actively filter OFAC specified sanction targets, however, is.
And no, things like monero and zcash aren't a working solution to this problem either, that's a whole different discussion though.
Things like the Bank Secrecy Act are only there to guarantee a level of secrecy/protection from other customers. Law enforcement, government, and third party service providers are not counted there realistically. If you want financial privacy, you keep your own books. By that same token though, you don't get to act surprised when the authorities come a knocking with a warrant to crack open your books when they find out you made a poor decision of people to work/transact with.
Surely you accept that illegal trade happens through cash and even through banks, so you will agree that there is some level at which you cannot ban an entire system.
[0] FBI/CIA/etc