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Comment by paulsutter | Hacker News Reader

There’s a big legal distinction whether the developers are collecting fees from operation of the service, since that’s very different from merely developing open source software. I’m curious how this develops

> It is suspected that persons behind this organisation have made large-scale profits from these transactions.

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By this logic every blockchain developer should be arrested. The TC developers are not collecting fees directly, but they probably did give themselves a large supply of tokens to maintain control over the protocol, since the tokens were designed for governance.

You can name any blockchain and see the same pattern. You can name many applications on top of blockchains, like Uniswap, and see similar. All of these protocols are known to facilitate some amount of illegal activity. Does this mean all developers of these protocols should be charged?

No this means that you should talk with a serious law firm before you start one of these projects. OFAC, KYC, securities, AML/CFT, so many laws apply and without expert advice you can end up in a bad spot

Expert lawyers do exist, example:

https://www.perkinscoie.com/en/professionals/j-dax-hansen.ht...

"Dax has advised and continues to work with many of the leading companies, industry associations and consortia. Projects include U.S. and international digital currency exchanges, vaulting and custody solutions, bitcoin kiosks, tokenized gold and commodities, decentralized exchanges, autonomous smart contracts, stable coins, and Non-fungible tokens (NFTs). Beginning in late 2016, Dax worked with his colleagues to apply a new level of legal counseling to established software projects undertaking token sales related to decentralized applications (DApps) and distributed protocols..."

There is still no legal precedent around a case like this as it relates to DAOs and autonomous smart contracts, so a law firm could not have told you anything except "we can neither confirm nor deny." If there is another US sanction that targets a non-custodial smart contract and open source project, please do share.

Devastating that it has come to "do not code an E2EE privacy tool because you might find yourself in jail one day."

> no legal precedent around a case like this as it relates to DAOs and autonomous smart contracts, so a law firm could not have told you anything except "we can neither confirm nor deny."

Have you hired counsel? This isn’t what lawyers do.

Good counsel should provide guard rails. They will say this is novel and that they can’t guarantee anything, but lawyers do that anyway. They’re giving advice, not judgement.

One of those rails would involve responding to credible public allegations around being used to launder money by Pyongyang.

Exactly like original of developers of Bitcoin, it's not because they are not running the nodes themselves that they are not benefiting from facilitating ponzi or money laundering.

Nodes are running the network, and developers earn through increased coin value and both are necessary part of the operations of the service.

Yup exactly, the mistake these guys did here is, instead of creating a token that you have to buy to use the service, then giving yourself 50% of the token supply, and having 50 of your keys control a "DAO" for governance, they decided to flatly price.

You've inadvertently explained why a transparent ruse like that wouldn't work.

If you want to develop serious privacy technology, make it open source and don't benefit from it financially

Oh that was sarcasm directed at the state of cryptocurrencies today :P

Coders logic != legal system

There is no fee paid to the developer when it comes to Tornado Cash, although there is the TORN token, which is a "governance" token.

Are holders of the "governance" token liable in any way?

Like I know the scam of governance tokens is kinda "you control / own part it it, sorta" even though a lot of them don't do anything.

Unless you count relay nodes, but they were run by more than just the developers.

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