Comment by toolz | Hacker News Reader

Comment by toolz | Hacker News Reader

Parent Full thread

> People who used Tornado Cash aren’t getting screwed.

Incorrect, as per sanctions putting the onus on private entities to get things right, circle has blacklisted any USDC address that has been owned by the tornado cash protocol, which means anyone using tornado cash for legit purposes will lose every dollar they had in USDC. I'm really not sure how you came to the conclusion innocent people weren't getting screwed here, but it's irrefutable that they are, unless of course your definition of guilty is someone that used tornado cash, which would be a silly definition. I've used mixers plenty for completely legit reasons. I don't want people knowing how much crypto I have and I don't want to manage tons of addresses so when I transact in open ledgers I have at times had people pay me via mixers to hide the addresses I own and thus hide how much crypto I own from people doing business with me. All completely white market business dealing with buying/selling electronics too, for that matter.

> People laundering money through banks get sanctioned and jailed. When banks make a habit of laundering money, they too get sanctioned. There is ample historical record of all of this.

Incorrect, they pay fines that rarely even cover the profits they made to begin with.

> circle has blacklisted any USDC address that has been owned by the tornado cash protocol, which means anyone using tornado cash for legit purposes will lose every dollar they had in USDC

Wasn’t aware of that. Fair enough. Innocent people will get harmed.

That said, innocent users whose USDC was frozen haven’t lost their money. They’ll have to show they weren’t laundering money. When they do, they should be able get it unfrozen. If that doesn’t work they can pursue legal remedies, though the law in all of this is obviously undeveloped. We are in dire need of stablecoin legislation; something to add might be controlled redemption for users the issuer no longer wishes to associate with.

Their situation is analogous to getting money stuck at PayPal. If you don’t want to take that risk, don’t use PayPal. If you don’t want to run the risk of your stablecoin getting stuck, don’t use mixers. Particularly after they’ve been publicly identified for laundering money.

People have been talking about all of this for years. It was continuously shouted down, or claimed to be impossible because blockchains are above the law or something. I get that there was a lot of noise above that signal. But like, it’s North Korea. On the balance of harms, of course this is what happens. There was never another endgame. The wheels of justice just turn slower than bullshitters spin yarn.

> They’ll have to show they weren’t laundering money. When they do, they should be able get it unfrozen.

I hope you're right, but the process to make this happen will be painful and slow and the damages will not be compensated I suspect.

> If you don’t want to run the risk of your stablecoin getting stuck, don’t use mixers. Particularly after they’ve been publicly identified for laundering money.

Following this logic, should people stop using HSBC or any of the top international mega-banks? We're talking about banks that didn't "accidentally" let money laundering happen. They actively facilitated it. HSBC specifically laundered money for one of the most violent cartels in the world and not a soul went to jail.

Bit of a rant, but my point is that exactly where should people keep their money that is safe from being caught up in laundering? Such a place doesn't exist as far as I'm aware.

Morally speaking? Yeah, you should probably not use those banks if you care about the ramifications of money laundering.

Practically speaking? HSBC laundered $881 million in 2012 – but they had trillions of dollars of assets under custody. They may have to pay a big fine, but your ability to get at your money will not be impacted.

And even if you deposited your money into your account at "Money Laundering Bank N.A." where everyone but you was a specially designated national, you still have legal recourse to those funds backed by decades of case law. That same case law might help you if you keep money from a mixer in stablecoin that becomes frozen, but it's going to get way hairier.

Reply on news.ycombinator.com