Tornado Cash devs blocked known OFAC sanctioned addresses or associated addresses from interacting with the service yet they are still being put on the hook for people hiding their identity to attempt to bypass those sanctions.
> Tornado Cash operated without know-your-customer (KYC) or anti-money laundering (AML) programs as required by US law, the document alleges. It also did not register with FinCEN as a money-transmitting business, the indictment says. Semenov and Storm also created a document called “Tips to Remain Anonymous,” which advised customers to consider using Tor or a VPN, delete data from their web browsers, and leave their money in Tornado for longer periods of time to better anonymize their transactions. They also advised users to employ different IP addresses for deposit and withdrawal.
As a bonus, the investors wouldn't fund a compliant version:
> Storm suggested creating a version of Tornado with KYC / AML enabled, but Tornado’s unnamed venture capital investors were dismissive, saying, “I just don’t know if anyone will actually want this.” The investor added, “It would be unlikely as a fund that we’d use a ‘compliant mixer.’”
I'd say these investors are as complicit in whatever conspiracy the devs are being charged with as well.
Put another way: it's still a crime to kick puppies, even if you only indirectly kick puppies through your newly-invented fully-automatic Puppy Kicker 3000.
Edit: to refine the analogy: it doesn't stop being a Puppy Kicker 3000 just because you add a screening phase that eliminates puppies designated by the American Kennel Club.
Take a million dollars and buy something with it. Even just depositing 10k in a bank account gets reported to the feds, and possibly investigated (And using lower amounts is illegal under structuring.)
That's setting aside the instances of civil asset forfeiture where money is seized because driving with large amounts of cash is assumed to be the product of a crime.
So yeah, whether it's a good policy or not, it definitely seems to be the view.
Should the original developers face additional charges for that?
What if the original developers only published the contracts but never deployed them on Ethereum, leaving that up to someone else to do? Is it the author or the deployer or the user who is liable?
I mean, someone has to be liable if it didn't exist before and then it did, but if it's the author and not the deployer, you could be charged for code you wrote entirely offline and published to GitHub (if someone else later deploys it and it sees use).
The answer to all of your questions is the same. When you run this code to facilitate money laundering the deployer gets in trouble and that's how it should be I can't imagine how else it could work.
The code is absolutely free speech, the application of it is not. I can sell you a book that says how to circumvent financial controls, I can even give a talk about circumventing financial controls, what I can't do is fly to North Korea to talk about it.
The people charged are the subset of the Tornado Cash devs who ran the service, not for solely developing some code.
In this case, there actually are safe harbor laws in place that protect banks from being prosecuted in exactly this way as long as they correctly implement KYC/AML protocols. Tornado didn't feel they wanted to do this, so quite deliberately and publicly flaunted the law that would have protected them. And this is what happens.
What's the "precedent" being set exactly here? Follow the law like your competitors do and you won't get fingered as an accomplice?
Freedom of speech in the US is not, and never has been, absolute. There is all sorts of speech that is illegal to engage in.
> That is a serious question, how come he was able to get away?
He was absolutely investigated for ITAR violations, but the government elected not to press charges in the end. I forget why they made that decision, but I think it was a combination of the book being published only in the US at the time (which was undeniably legal) plus the huge amount of pressure -- especially public ridicule -- from the hacker community about the ridiculousness of the ITAR regulations.
If they had just written some software and told people how to operate it anonymously, they could not be prosecuted under these laws.
For some reason too much time spent working with machines clouds the judgement of how law and the court work.