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Comment by whatisweb3 | Hacker News Reader

The US sanctioning Tornado Cash and the resulting repercussions is deeply concerning. Whether or not you like crypto, you should not be supporting this if you are a researcher, academic, technologist, cryptographer, or privacy advocate. The code for Tornado Cash is a series of cryptographic and mathematical functions that can be repurposed for a variety of applications unrelated to privatizing user wallets. The protocol itself is designed for one reason: to give users privacy through end to end and zero knowledge cryptography.

Allowing it to remain open source and accessible as a tool for blockchain privacy and codebase for cryptographic research is a net benefit for the entire world.

A comparison would be that US decides to sanction the open Matrix protocol along with any user, developer, source host, or sponsor that has ever contributed to it in the past - because it can facilitate end-to-end encrypted terrorist communication.

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> The code for Tornado Cash is a series of cryptographic and mathematical functions that can be repurposed for a variety of applications unrelated to privatizing user wallets.

You can deconstruct anything like this: "a gun is merely a set of mechanical parts that can be repurposed for a variety of applications unrelated to shooting things".

Besides, the code or math isn't banned or illegal, the organisation is. Quite different things.

> A comparison would be that US decides to sanction the open Matrix protocol along with any user, developer, source host, or sponsor that has ever contributed to it in the past

That is not what happened so it's not a comparison at all.

> Besides, the code or math isn't banned or illegal, the organisation is. Quite different things.

Which shows the US government still don't understand cryptography, cryptocurrencies, smart contracts, or Open Source.

The Tornado Cash "organisation" is just a bunch of researchers and open source developers, now being sanctioned for having the gaul to write code that is privacy-preserving. The Tornado Cash smart contracts live on on every chain they are deployed to, and the IPFS-hosted UI is untouched.

Amusingly, you can also prove transaction history with Tornado Cash if you want to, for example, to prove to law enforcement or a bank that your funds are legitimate. So these sanctions are only actually going to affect legitimate users who simply wanted on-chain privacy, such as "famous" people with `.ens` domains attached to their addressses.

The Tornado Cash project was explicitly advertising itself as an organization and officially looking to pay developers, as well as having a copy that screamed "you can launder your money through us". Hell, the only reason half the crypto people I know mention using tornado is to obscure your money after you've stolen coins or scammed some NFTs. It was not "researchers" "banding together" for a higher privacy preserving purpose. From the very beginning it was made to launder cryptocurrency.

Absolutely hilarious that cryptobros were the first ones to scream that blockchains allowed for a fully open history and that anyone could see where the funds of their banks were coming from, but the moment they can't hide that they have $200k in cryptocurrencies and that they bought $2000 worth of stuff on analbeadsandcocaine.eth, they cry foul. It's working exactly as designed.

The goal of Tornado Cash has always been privacy. I would tell you to look at the GitHub repo yourself, and you’d see a range of developers contributing to this open source project, and lots of side projects that are influenced by it. The code is one of the most popular and earliest production grade zk-SNARK circuits built with Circom that targets the EVM - the cryptography employed was very high quality and helping to push privacy forward in the blockchain space.

But alas, the code and any research knowledge it provided has been removed to comply with this deeply unethical move by the US.

Yes, privacy to help hide your coins acquired through dubious means, we know that. That some researchers got suckered into it thinking that it serves a higher purpose is regrettable, but tornado has always been about laundering money.

Despite what you're attempting to lie about, the tornadocash code is not illegal. Feel free to repost it on any host that does not work with the US (or that isn't as trigger happy as github). The Tornado Cash organization has been blacklisted. The cryptography that runs it hasn't been made illegal.

> Feel free to repost it on any host that does not work with the US

An obvious place to post this code and protocol would be on Ethereum, which is censorship resistant. This is what the original developers of TC have done, and the result is a contract that becomes immutable and accessible, and is now the target of the sanction.

But I will not do that, as that would put me at risk of 30 years of jail time.

I will also not post the code on Gitlab or another service, as the repercussions can be severe. Whether it is just my Gitlab account being deleted, or whether it is more significant like the US government investigating me, I do not want to put myself in that situation.

However since you are the one saying there is no problem at all with it, I wonder if you would like to do that for us?

> Yes, privacy to help hide your coins acquired through dubious means, we know that.

It is sad that you default to assuming criminal behavior. The same argument is being made today by politicians and governments to try to add back doors to E2EE chat protocols and cryptographic signature schemes.

>However since you are the one saying there is no problem at all with it, I wonder if you would like to do that for us?

Unfortunately, most of the services I use comply with US law and would therefore be likely to remove the repository immediately. As a second, very unfortunate point, I don't give a shit about reposting a service whose primary purpose is money laundering. Very sorry about that. Maybe researchers could have thought for a second before putting all their efforts on what is widely known as a mixer made for money laundering.

>It is sad that you default to assuming criminal behavior.

My dude. 20% of the transactions going through Tornado Cash were for money laundering. The 80 other percent literally only serve the purpose of hiding the trails. If TC was used 100% for money laundering, everyone would still know that everything coming out is still illegal money. Having "legitimate" transactions going through (whether from privacy conscious users, or people sending legal money though to blur tracks) is a feature of every money laundering service.

My dude. It is not illegal to seek privacy on the internet, privacy is not a crime.

Matrix, Tor, PGP, these are all beneficial tools for the world, used by people that are not criminals. These are also widely known as tools used by criminals.

It is indeed, not illegal to seek privacy on the internet. It's not illegal in real life either! However, if you end up seeking shelter in a known mobster joint, maybe don't be so surprised when it gets closed down, you get kicked out and you're considered suspcious for a while.

lol. the same argument is being used by politicians to try and stifle development of Tor and E2EE chat apps - "only criminals need to use these privacy tools."

Zzzzz. You're not interested in accepting that you can be wrong, and conflate whole ecosystems with products in an attempt to blur the lines and sell your precious Web 3 future.

Banning Tor as a whole is stupid, because it's not meant to be only used for that, and is a protocol. However, putting anyone who regularly posts on overthrowthegovernment.onion on a watch list is reasonable (even if they only posted pictures of kittens), as well as is closing the website, as much as possible, since it causes a net harm on society as a whole.

Banning E2EE as a whole is stupid, because it's not meant to be only used for that, and is a protocol. However, raiding the office of the man that hosts the "Bring The 4th Reich" chatroom is reasonable, as well as closing it and keeping a close eye on anyone who participated is also reasonable (even if they only posted pictures of kittens), since it causes a net harm on society as a whole

Banning cryptocurrencies as a whole is stupid, because it's not meant to be only used for that, and is a (bunch of) protocol(s). However, sanctioning the service that is mostly used to launder money (which comes from criminal activities) named tornado.cash is reasonable, as well as keeping an eye on everyone that participated (even if they only wanted to hide their transactions) since it causes a net harm on society as a whole.

Welcome to the real world, where going to the seedy place where at least 1/5th of the people in there are engaging in criminal activities might get you in trouble. Feel free to look for a mixer that does a little bit of research on the source of the funds before taking them in. You are not entitled to privacy if your actions may cause harm or contribute to causing harm on society.

your argument rests on the axiom that tornado cash protocol is only being used for illegal money laundering, which is not supported by the evidence - this line of thinking is directly comparable to the claim that the Tor protocol is only used by criminals. sad that you are unable to make this connection.

> your argument rests on the axiom that tornado cash protocol is only being used for illegal money laundering, which is not supported by the evidence

If it was only being used for money laundering, it wouldn't actually be laundering. To launder money you need to mix up your illegal funds with a larger pool of legal funds to give some plausible deniability to whether your funds are legal or not.

Not sure if that is correct. If 100% of funds entering a mixer were from many different exploits, it would still be laundering and obscuring the source of funds from illegal activity. It would no longer be clear which wallets are associated with which hacks.

Still money laundering, just not with clean money on the other side.

Lmao no. The whole point of a launderer is that you can't know if it's clean money or not. You _need_ a stream of clean money to hide your dirty cash in. Otherwise you just have a firehose of dirty money.

In this hypothetical scenario, it would all be dirty, but you would have no way to pinpoint which funds are associated with which illicit activity. At this point it becomes hard to levy any specific charges: "you are hereby charged with either breaking into a $100M bank vault, or fleecing grandma for $10, but we aren't sure which exactly."

In practical terms it might not matter, the funds would just be frozen. But it is still a form of money laundering that obscures the true source of the funds.

I'm pretty sure that money laundering exists to hide an illegal source of money, not to put a flashing siren on your head and dare prosecutors to figure out what you did.

Which privacy tools are not "mobster joints"?

When lack of privacy becomes the default, everybody with a sense of privacy becomes suspicious.

The government is not sanctioning the mechanics of a gun. You can read in books and online about how they work in full detail, the “code” and designs for them is usually open. A lot of hobbyists use this to build their own airsoft, potato guns, and other nonlethal mechanisms.

Violence and privacy are also different categories. A weapon that can quickly kill dozens or hundreds of people should arguably be regulated differently than a blockchain protocol that enables user privacy.

> the code or math isn't banned or illegal, the organisation is

There is no organization. The protocol is sanctioned - meaning if you fork the code, or build your own implementation, you risk the same fate as the tornado cash developers.

> That is not what happened so it's not a comparison at all.

It is very similar. The US sanctioned the Tornado Cash protocol and anybody who is using or contributing to it.

> The government is not sanctioning the mechanics of a gun. You can read in books and online about how they work in full detail, the “code” and designs for them is usually open. A lot of hobbyists use this to build their own airsoft, potato guns, and other nonlethal mechanisms.

The government hasn't sanctioned the code of Tornado Cash, only the concrete instance present on a couple wallet addresses.

When I use the public knowledge of a library book on how to create a gun to actually create a gun, I create an instance of a gun - and in all developed countries, I will run into weapons laws and regulations at that point. As for spud guns, these are questionably legal or outright banned in many large nations outside of the US [1].

[1] https://en.wikipedia.org/wiki/Spud_gun_legality

> The government hasn't sanctioned the code

The code is implicitly sanctioned. Any person who posts the code will probably have their repo removed, and maybe their account flagged or deleted. If you continue to try posting the code to many different hosting services you might be seen as supporting Tornado Cash, and could be facing jail time.

The protocol - the math and rules - is also implicitly sanctioned. If you build a new protocol using similar cryptographic tools, you will probably face similar risks.

> only the concrete instance present on a couple wallet addresses.

If you feel this US will stop at only these addresses, you are very naive. Any individual can fork the protocol, and it will be on a new address. Any individual can also build a competitor to Tornado Cash using similar cryptography, and they will probably also be putting themselves and their project at risk of US sanctions.

> When I use the public knowledge of a library book

However, the information is free - you can find it in a public library, and nobody is attempting to censor it.

There are two separate problems here. One is that the US sanctions are leading to censorship of knowledge and cryptographic research, which is concerning. The other is that the US sanctions are targeting an open source protocol enabling E2EE privacy on the blockchain, not that different than if they were to sanction Matrix protocol.

I disagree with everything you wrote:

The Tornado Cash organization was not sanctioned, the contract addresses were. The Europeans were not sanctioned, a registered entity was not sanctioned. The code was sanctioned and this is new. The code and all the pooled funds were sanctioned simply because there is no way to distinguish withdrawals from licit or illicit funds and playing on the popular and incorrect perception of deposits being illicit, and this is new.

There are many more similarities to the analogy presented. Analogies compare dissimilar things for the ways they are similar, not the ways they are different.

In this case, the private sector - Github - responded to the sanctions by deleting the accounts of contributors to Tornado Cash github repository.

This is clearly wrong.

No one has said you can't distribute the TC source code.

What you can't do is run a money laundering service with it. And the vast majority of TC transactions seem to have been exactly that - ways of hiding crypto from tax offices.

> A comparison would be that US decides to sanction the open Matrix protocol along with any user, developer, source host, or sponsor that has ever contributed to it in the past - because it can facilitate end-to-end encrypted terrorist communication.

A better comparison is the Phantom Secure sting, where a network that was used for primarily criminal purposes was shutdown.

https://www.reuters.com/world/how-an-informant-messaging-app...

> No one has said you can't distribute the TC source code.

So github removed it for no reason?

GitHub removed it because if you're a US company, you'd rather err on safety and cut all contact with not just the blacklisted company itself but everything related to it, because there is nothing worse than the US Financial Services looking into you.

In the same way that if you ask me to keep a bag and I learn two days later you've been arrested for murder, I'm definitely not keeping that bag, even if the bag itself isn't accused of murder.

> No one has said you can't distribute the TC source code.

The government has explicitly said that all property and interests in property of Tornado Cash, and anybody found to be supporting it it any way, is blocked. This is why GitHub and all hosting services will refuse to allow it on their platforms. If you try to publish TC source code, you could be considered aiding the blocked persons, and face up to 30 years in jail.

If you build a new implementation of the same or similar protocol, you might also be putting yourself at risk.

> And the vast majority of TC transactions seem to have been exactly that - ways of hiding crypto from tax offices.

The vast majority of TC transactions are for privacy. How much of that is evading tax offices or illegal money laundering is less clear. Estimates put it in the 10-20% range[1]. There are many users that would like to use TC but have avoided it because of the lack of regulatory clarity. Had the US government instead come out saying specifically that TC-style privacy on blockchain is a right that all users should be entitled to, the rates of non-criminal activity would probably be much higher than 80-90%.

> A better comparison is the Phantom Secure sting

This is a poor comparison. Phantom Secure was not an open source E2EE protocol like Tornado Cash or Matrix - it was a private company and network led by a single individual who profited immensely by selling devices to known criminals.

If you think TC is comparable to Phantom Secure, then Matrix and Tor should also be comparable to Phantom Secure, but of course that is a bad comparison.

[1] https://twitter.com/bantg/status/1557053714405490691

>>What you can't do is run a money laundering service with it. And the vast majority of TC transactions seem to have been exactly that - ways of hiding crypto from tax offices.

This is a completely baseless allegation, that seems to rely on nothing more than the assumption that seeking privacy is an indication of criminal intent. It's the kind of logic used to rationalize dragnet surveillance programs that do away with privacy rights.

>>A better comparison is the Phantom Secure sting, where a network that was used for primarily criminal purposes was shutdown.

That's completely incomparable. That was a service to sell bug-proof phones, not the phone itself, and the service was expressly marketed to criminals to avoid police surveillance. The police infiltrated the service and bugged the phones.

The Matrix example, where a generic privacy tool is outright banned, is far more comparable.

In US Constitutional law, bare communication has significantly greater protections than the non-speech-related transfer of money from one party to another.

I thought we had previously sorted out that money is speech?

If that money is funding speech, especially political speech, yes.

If it’s being used in some random commercial transaction, not so much.

If North Korea donates stolen money to American political campaigns, is that protected free speech?

North Korea is not a US citizen and "they" are not located in the United States they don't get constitutional protections.

True. And that only goes to highlight that the US consitution is not a universal inherent moral code for humanity, but ideas on how a bunch of people in a region should get along.

While this applies in this instance, it doesn't make it right.

I'm sure if you traced campaign contributions back you'd find what is legal already isn't that much different. I'd much rather see money out of politics.

Any foreign contributions to any US political campaign are forbidden, so no?

> Federal law prohibits contributions, donations, expenditures(including independent expenditures) and disbursements solicited, directed, received or made directly or indirectly by or from foreign nationals in connection with any federal, state or local election. This prohibition includes advances of personal funds, contributions or donations made to political party committees and organizations, state or local party committees for the purchase or construction of an office building funds under 11 CFR 300.35, and contributions or disbursements to make electioneering communications.

https://www.fec.gov/help-candidates-and-committees/foreign-n...

Bribing an official with money isn't speech, say.

Politicians who got those bribes decided that it was speech, so now it is legal.

(the supreme court are so closely tied to politicians that their decisions can't really be separated)

Who as far as we know will gladly accept any kind of speech in an envelope slid under the door.

It's not a bribe, just a donation!

This is so much of an oversimplification as to be more wrong than right.

Author here. That is a gross oversimplification imo. Money can be used for expression of speech but most commercial transactions shouldn't fall under it. I am of the opinion that money laundering/tax evasion etc are illegal activities which should be monitored and banned. Blanket banning a legitimate service by uploading Etherscan tags is super stupid and affects a lot of normal people.

Equivalent would be to block all withdrawals/deposits for all users at an international bank because they were found to be violating AML laws in some country.

Which is going to introduce some interesting jurisprudence wherever financial systems are reducible to communication systems.

A financial system is a communication system about the transfer of money (or perhaps other valuable assets). It is the transfer of money/value that brings this out of free speech and into the domain of financial law, not the mechanism of how that transfer is encoded.

I'm really starting to think there is an argument where the OFAC list cannot apply to smart contracts, at least on Ethereum or EVMs.

OFAC literally means the Office of Foreign Assets Control, it cannot be applied domestically to American assets.

In EVMs, no node is aware of which node saw a transaction first to relay it to miners. Therefore, one argument is that the deployment of the contracts cannot be known to be done in a non-American source. To strengthen an adversarial argument one could move to the account owner that paid for the contract deployment, but I believe there are challenges for that as well since sole custody of a private key cannot be known, only assumed.

This isn't to weasel around any attempt at government control or consequences, only the OFAC designation. It seems like the incorrect authority.

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