Hacker News Reader

Comment by turingfeel | Hacker News Reader

Probably not a hugely popular viewpoint, but I can’t help but immediately think there’s a good chance it’s dirty money. There’s just so much of it that can’t be laundered so it’s worthless except for altruistic purposes like this.

View on HN

If you trace back the addresses, you get to this:

https://etherscan.io/address/0x6365abaad54863bfd11acb6c4b611...

Which in turn shows it came from Tornado Cash which was put on the OFAC blacklist in August. So redox will likely have a very hard time to get this converted.

See here for more https://www.coincenter.org/u-s-treasury-sanction-of-privacy-...

if u use it with people that also accepts eth as a form of payment, there is no need to convert anything.

>So redox will likely have a very hard time to get this converted.

Why would he? People sell tornado cash tainted eth on big US exchanges every day. The sanctions don't forbid this.

Pretty sure that they do.

But in reality they don't.

The sanctions technically only forbid future interactions with Tornado Cash contracts. However the compliance employees would get a note from Chainalysis saying that this guy received a bunch of ETH that was indirectly sourced from Tornado Cash and potentially do something about it (Kucoin Bitfinex et al would probably do nothing).

He doesn't need to get it converted though. There are enough people that don't live in the US and would be happy to get paid in ETH to work on an open source project.

In a way, it seems almost like a feature that he can't just take out and convert the money :)

If the person who received the ETH is a US person, it may not be a great idea to use the tainted money to pay foreigners for services.

By that logic US persons can't use Ethereum at all. If you withdraw ETH from Coinbase it is very likely that those coins will have passed through tornado.cash at some point.

This logic obviously doesn't hold up to even the slightest scrutiny. There's too much American money invested in Ethereum for any government agency to even seriously consider the idea of destroying it like this.

Hey now you're getting it

> There's too much American money invested in Ethereum for any government agency to even seriously consider the idea of destroying it like this.

The US government routinely spends enormous sums of money to destroy industries where significant amounts of American money is invested.

> By that logic US persons can't use Ethereum at all.

Entirely possible.

> There's too much American money invested in Ethereum for any government agency to even seriously consider the idea of destroying it like this.

I think you underestimate!!

The reality right now is that there are coloured coins by default. We said this would happen back like at least five years ago, and now it is finally here. This is only the start and is essentially the doom of the libertarian case for the blockchain, and once that is out the window I see very little use for it that a normal DB of cryptographic public keys couldn't handle.

> The reality right now is that there are coloured coins by default.

Not for fungible coins

Yet.

There is still a diversification benefit, if you distrust the national currency, and use cryptocurrency similarly to gold.

That has been my main (only?) use case.

They just have to come to Eastern Europe and trade it for cash OTC. Works very well here.

This is why eth/bitcoin are not suitable crypto. There should be no address trail, same as cash.

Wouldn't the ledger dictate that there is a trail?

I’m assuming they mean something like Monero (maybe also ZK-something). I don’t understand how it works, but enough people say they are anonymous, that I believe them ;)

When the IRS is offering $100k bounties to break the anonymous features, it sounds pretty secure. Although if there is enough interest in breaking the obfuscation, these things normally end up finding the hole.

Only time will tell.

If I wanted people to think I hadn't cracked the anonymous features, I would post a $100k bounty to break it.

And when people go to collect on that bounty?

A lot of security companies with have multiple holes in a system. Having more backdoors isn't a bad thing.

I agree. I meant more in the sense that if the vulnerability is fairly obvious, multiple people will claim the bounty and if you try to simultaneously not pay all these people because their find was not unique, and also say that nobody has claimed the bounty, I can't imagine that going well. People tend to get mad when they don't get paid.

I did think this too. I would hope that I am small enough fish that I'm not worth them wasting that backdoor on, as I assume it will be patched once revealed.

At what point do I have to stop being paranoid so that I can get anything done?

Join me friend and welcome to the finer arts of procrastination, where our minds shall tirelessly conjure up vivid departures from reality in order to avoid doing something simple that needs to be done.

My understanding of the sanctions is that it's only the contract and a few addresses that are sanctioned. Coins that once went through tornado are fine.

As opposite to the clean money banks like HSBC put in circulation right? Money is like genetics, follow the thread long enough and you'll find a rapist, a cartel drug lord, etc.

HSBC ain't a story about a bank moving dirty money without consequence. https://www.ice.gov/news/releases/hsbc-admits-anti-money-lau...

That's not the whole story though. HSBC was literally founded so that the brits could bank the cash they were making by smuggling opium into China illegally. They're still net positive from banking drug money.

That's more a story about sovereignty and not about AML evasion.

The consequence by law was the revocation of their banking license. But because they are "too big to fail", they got away with a slap on the wrist instead.

The appropriate degree of the consequence is debatable, I'm just saying, ~$2 billion of fines/penalties does not equal "clean".

The fine was less than 20% of their annual income, for a crime committed over decades. Compared to what the law says, they got away completely clean. The punishment was barely more than a sternly worded letter.

>There’s just so much of it that can’t be laundered

How come? What money can't be laundered?

when you launder money, it has to be in a way that's actually plausible to the IRS. So if you have a small bookstore making 1 million per year, it might look suspicious.

Isn't that what NFCs are for?

NFC is near-field communication, a system your bank cards and modern smartphones use for transmitting data over very short distances.

Maybe you’re thinking of NFS? ;)

NFS is network file system, a system for computers to access files from other computers over a network.

Maybe you're thinking of NFL?

NFL is the national football league. They play a game called football even though they seem to be carrying the ball with their hands, most of the time. Seems important in the US…

Maybe you're thinking of NFV?

Network firewall virtualization certainly could be built on top of a new microkernel in Rust, such as this one, and it may gain some benefits in correctness — but looking at its site, the datacenter networking space doesn't really seem to be part of Redox's core ambitions.

Perhaps you're thinking of NAFTA?

NAFTA was the North American Free Trade Agreement.

This was an agreement signed by Canada, Mexico, and the United States that created a trilateral trade bloc in North America. Even if you could make use of it, it ended in 2020.

Perhaps you're thinking of NFO?

NFO is the National Farmer's Organization, a producerist movement founded in the United States in 1955.

Perhaps you're thinking of NeWS?

NFO is the National Farmer's Organization, an American farmer's organisation with the stated goal of obtaining higher prices for farm produce

perhaps you're thinking of .nfo?

Non-Fungible Crap^hTokens

Pardon my ignorance: what does IRS have to do with money laundering?

https://www.irs.gov/compliance/criminal-investigation/how-cr...

They'll obviously look into how your business has developed over the past years, compare expenses and income, also to other businesses from the same field, and see if something seems odd.

So, starting to book lots of income without scaling expenses etc. will likely raise suspicion and lead to further investigation which can then be passed to law enforcement.

The IRS is responsible for checking if you are paying the correct amount of taxes, and a component of that is knowing what income you have and where it comes from - since tax depends on the source of income typically (you have to pay different amounts of tax on money you got by selling shares versus money you stole from a shop).

This is how they managed to finally bust Al Capone, and probably other untouchables.

Money laundering can be seen as spending a lot of effort to pay tax on your criminal earnings.

If you managed to launder it in a way that the IRS will accept it and the cops don't notice, you've succeeded and now have spendable money.

Someone who launders money has two ways of handling that on their taxes:

1. lie about it, and commit tax fraud

2. tell the truth about it, and document their laundered money

So? You can just invest more into the laundering infrastructure.

Reply on news.ycombinator.com