For those who think this is a good thing: can you explain why people should have access to HTTPS and Tor (web privacy), PGP and Signal (communication privacy), but not Tornado Cash (financial privacy)?
>[The Congress shall have Power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes
4th amendment
>The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
Basically, when you engage in commerce, your rights to be secure and have privacy in personal matters is diminished because you've entered into a public sphere interacting with others with money.
Law gets to reach in and have influence in how people exchange money and goods, but not into their personal affairs. There are graduated levels of "this is my business" vs. "laws can be made about this behavior" depending on the activity.
If you want to change, it'll be a big uphill battle.
[0] https://www.cato.org/blog/money-laundering-laws-ineffective-...
OFAC's predecessor was established in 1940. OFAC itself was founded in 1950 and expanded in 1977 [2].
[1] https://en.wikipedia.org/wiki/Executive_Order_8389
[2] https://en.wikipedia.org/wiki/International_Emergency_Econom...
Nonsense. AML laws are precisely a way to ease police investigations.
It's true that they aren't very effective against the largest criminals. That should be fixed by forcing disclosure of beneficial ownership arrangements but that has turned into a roadblock for investigations now precisely because AML laws mean police investigations can get that far.
For example, police investigations used to be stymied by numbered Swiss bank accounts. Now AML laws mean that is no longer a protection, and now they are stymied by being unable to force disclosure of who is the beneficial owner of "This is not a criminal gang PTY LTD" from the Cayman Islands.
Are there any actual examples of this? Nearly every major jurisdiction, including UAE, BVI, all of EU, have UBO registers now (except America because despite having authority to do so FINCEN can't make a basic CRUD website). UBO in terms of actually stopping crime is useless because there is nothing that prevents people from lying about it. There are lawyers who will find homeless people to serve as straw men in just about every place in the world. If you're involved in drugs or large scale fraud the extra 2 years or whatever from lying on the UBO form doesn't deter you anyways since if you get caught it will run concurrent with the 10 years you got for your actual crime or it will make your plea deal slightly worse.
In the EU alone as recently as 2021 Hungary, Italy and Lithuania didn't have any type of beneficial ownership registers[1].
Even in cases of lying UBO is useful for tying company structures together.
[1] https://www.transparency.org/en/news/eu-beneficial-ownership...
You cannot transact in such a way as to break source/destination. It is built into the system. It is an axiom that has been etched into stone, and is fundamental to the way the system works. Tax authorities can't do their thing without it. Law enforcement can't do their thing without it. The Feds can't keep foreign adversaries out of the system without a reasonable amount of compliance with GAAP.
It absolutely blows that apparently professional discretion is dead; and businesses like Plaid/Visa/card providers/payment processors/merchants are passing around transaction data like hot cakes. However, the agreement was made through legislative consensus that auditability, and due process constrained financial record access served the public interest more than it hurt it.
Personally, I think we're too intrusive in financial monitoring right now, especially in reference to the lower end of the income bracket, and way lighter on the higher side than we should be, but it is what it is at this point. I'm just a bit nervous about the abusability of this mechanism at this point.
People who want to see a functioning society and pay their taxes get screwed. The rich and criminals get to do whatever they want.
So, business as usually really, but average person has to take the small wins when they get them.
Personally i think the permanent public record of the blockchain is a good guard rail. If you want to make small transactions anonymously cash is there.
[1] https://techcrunch.com/2022/08/08/treasury-tornado-cash-laun...
For example, if somebody who owns several private businesses, including one that people frown upon but that makes them a lot of money (think producing legal pronography), but have their businesses interact in such a way that to most people it looks like they are making most of their money from real estate investments, that is generally fine as long as they follow applicable tax laws, don't try to bypass the government's anti-money laundering controls, and are not trying to defraud others by saying something like "Look how much money I'm making from real estate investment. Your investment firm should hire me."
But here we had a mixer service where an estimated 20% of funds it hides were criminal in nature. It is not legal to knowingly facilitate criminal money laundering. If viewed as an unincorporated association operating this service (which is how the treasury views this), and with that sort of proportion of its use being criminal, it is implausible that the operators did not know that the service was being widely used for illegal money laundering, not just the legal kind. Because of this, the operators had a duty to modify the service they offer to make it harder to use for illegal money laundering, or to shut the service down entirely.
If you want to run a smart contract based mixing service like this, you pretty much need to design it to only accept funds that someone has verified are not criminal proceeds. Perhaps you as the operator does the verification, or perhaps to avoid centralization you allow for a variety of trusted organizations to verify lawful nature of the source of the funds, with each organization after verifying creating some form of signature for the mixer user to submit along with the funds to avoid the transaction getting rejected.
You don't seem to understand how smart contracts work. You upload the code and it lives on forever. Unless you code a way to shut it down or modify it there is no way to do so.
Tornado cash the app on Ethereum is still alive and well today and will probably be alive and well in 2100.
https is primarily used for legitimate purposes and without it the internet wouldn't function in a secure way. Tornado Cash is at the other end of the spectrum. It barely makes sense to use it for anything that isn't crime. Private messaging sits somewhere in the middle. I think demands to be able to tap communication with a warrant are legitimate.