I think the regulators will simply go after any exchanges that deal with Tornado Cash, rather than Tornado Cash itself. This just causes a new kind of cat and mouse game to happen while the money laundering industry greases their palms.
To be honest, with the incoming Trump administration’s cryptocurrency-friendly views and the likelihood they will turn a blind eye to outright scamming, I think it will only be a matter of time before something huge really cleans the majority of folks out in the biggest rugpull of all time.
I can’t possibly know when that will happen if it does. But this speedrunning the wild-cat bank situation from ages ago is probably going to be interesting to watch unfold.
This already happened with SBF who operated under a democrat administration.
The more interesting conversation is how could the UX and potentially AI based investment assistants prevent people from making financially unsound decisions.
Ease of washing crypto is a big win for Russia and NK.
Without these tumblers crypto changes hands, is traced to Russia and accomplices are on the hook for jail time. So you really don't want to do it. With these washers it's totally safe, do it and take your cut. It's a direct way around sanctions and it fuels violence and oppresion.
1) That is a direct argument against anything that is a global good. If we do something that is good for everyone, bad people will benefit from it because they are people too. Bad people benefiting doesn't, in isolation, tell us anything about whether something is a good idea.
2) Money being hard to trace is a bigger problem for authoritarian regimes than it is a help. Places like Russia, China, etc, rely fairly heavily on financial controls to stop people sending money to places with the most reliable legal system. If you live in a world where the tax offices can't track money, authoritarians will struggle more than anyone else to raise funds.
Making money hard to trace most directly hurts countries like the USA that are used to using the financial system to enforce their will. For example virtually every crime worth doing turns into money laundering when you try to turn your profits back into money you can use in normal ways.
The bad actors that you name generally come into conflict with the USA at some point, and the USA tries to use the financial system to punish them. Conversely those bad actors do not want effective financial controls, because the may exploiters of their poor financial barriers are powerful insiders who manage to funnel money to their own bank accounts. The rank and file will get punished for the attempt, but who gets punished is political. Top leaders are always taking money, and don't want it to be trackable.
Is that bad for the country? Sure. But so is dictatorship. This is unlikely to convince dictators to step down though.
2) depends on the country, and imo is largely an outdated view. NK for example has undeniably seen enormous benefits from cryptos, much more than any potential drawbacks. China has such extensive societal level tracking and tracing in place aleady that even crypto tumblers are unlikely to have a significant impact on the amount of money the government fails to track.
2) the amounts crypto is used by regular people to work around some gov restriction is absolutely negligeble, a sand grain compared to the scale at which the gov does it.
And if it somehow becomes a problem it's only enough to make it illegal and report a few visible arrests in media for 90% of ordinary citizens to never even think of it again.
In Russia ISPs are already obligated to install special gov-provided black boxes (https://roskomsvoboda.org/en/post/usloviya-tspu/) that pass all traffic through them and as of last week VPN is illegal to promote or recommend in public. Using VPN to access restricted content? also illegal. Don't encrypt your DNS? Your visit to crypto exchange or VPN site is going to be noticed.
(And exchanges that are allowed to work in Russia legally are obligated to disclose transactions to the gov by law obviously)
So think about it. Those boxes, the police and military to ensure compliance and make necessary arrests, morning pre-trial cocaine for the judge, whatever. This machine is fueled by sanction workarounds instrumented by Western crypto-bros thinking they are helping "free" people in those countries.
absolutely not true btw - the largest use-case for stable-coins atm are people evading capital controls in emerging markets, including China, India, Nigeria, and similar, and in many latin American countries.
Where do they need tumblers for personal non industrial scale operations? I know ppl in South America who use crypto to save on dollar conversion fees when sending money abroad to family. No washing needed.
Where on the planet an oppressive gov somehow has the resources to track insignificant personal crypto amounts from ordinary people instead of just banning crypto? Check if crypto fuels this oppression machine in much larger amounts in the first place?
>It's a direct way around sanctions and it fuels violence and oppression
The US has been behind the vast majority of global violence and oppression over the past few decades, anything that limits its power is a global good. Telling people from other countries how they can spend their money is literally oppression.
One developer went to prison for facilitating money laundering in Holland, IIRC. It wasn't just for the smart contract, though. IIRC, they had him dead to rights marketing the contract as a money-laundering tool to various bad actors.
https://archive.is/pYIbv
https://www.ca5.uscourts.gov/opinions/pub/23/23-50669-CV0.pd... (opinion, pdf)
It’s the Fifth Circuit. Coinbase steered the case there given its record of judicial activism. I wouldn’t take the outcome for granted.
You think SCOTUS or en banc tribunal is going to overturn it? If not, then it’s in fact granted.
[dupe] https://news.ycombinator.com/item?id=42257881
https://archive.ph/pYIbv
I think the regulators will simply go after any exchanges that deal with Tornado Cash, rather than Tornado Cash itself. This just causes a new kind of cat and mouse game to happen while the money laundering industry greases their palms.
To be honest, with the incoming Trump administration’s cryptocurrency-friendly views and the likelihood they will turn a blind eye to outright scamming, I think it will only be a matter of time before something huge really cleans the majority of folks out in the biggest rugpull of all time.
I can’t possibly know when that will happen if it does. But this speedrunning the wild-cat bank situation from ages ago is probably going to be interesting to watch unfold.
This already happened with SBF who operated under a democrat administration.
The more interesting conversation is how could the UX and potentially AI based investment assistants prevent people from making financially unsound decisions.
The “AI based investment assistants” will be designed specifically to steer people in to whatever scam the creator is selling.
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Ease of washing crypto is a big win for Russia and NK.
Without these tumblers crypto changes hands, is traced to Russia and accomplices are on the hook for jail time. So you really don't want to do it. With these washers it's totally safe, do it and take your cut. It's a direct way around sanctions and it fuels violence and oppresion.
1) That is a direct argument against anything that is a global good. If we do something that is good for everyone, bad people will benefit from it because they are people too. Bad people benefiting doesn't, in isolation, tell us anything about whether something is a good idea.
2) Money being hard to trace is a bigger problem for authoritarian regimes than it is a help. Places like Russia, China, etc, rely fairly heavily on financial controls to stop people sending money to places with the most reliable legal system. If you live in a world where the tax offices can't track money, authoritarians will struggle more than anyone else to raise funds.
Your second point is questionable at best.
Making money hard to trace most directly hurts countries like the USA that are used to using the financial system to enforce their will. For example virtually every crime worth doing turns into money laundering when you try to turn your profits back into money you can use in normal ways.
The bad actors that you name generally come into conflict with the USA at some point, and the USA tries to use the financial system to punish them. Conversely those bad actors do not want effective financial controls, because the may exploiters of their poor financial barriers are powerful insiders who manage to funnel money to their own bank accounts. The rank and file will get punished for the attempt, but who gets punished is political. Top leaders are always taking money, and don't want it to be trackable.
Is that bad for the country? Sure. But so is dictatorship. This is unlikely to convince dictators to step down though.
2) depends on the country, and imo is largely an outdated view. NK for example has undeniably seen enormous benefits from cryptos, much more than any potential drawbacks. China has such extensive societal level tracking and tracing in place aleady that even crypto tumblers are unlikely to have a significant impact on the amount of money the government fails to track.
2) the amounts crypto is used by regular people to work around some gov restriction is absolutely negligeble, a sand grain compared to the scale at which the gov does it.
And if it somehow becomes a problem it's only enough to make it illegal and report a few visible arrests in media for 90% of ordinary citizens to never even think of it again.
In Russia ISPs are already obligated to install special gov-provided black boxes (https://roskomsvoboda.org/en/post/usloviya-tspu/) that pass all traffic through them and as of last week VPN is illegal to promote or recommend in public. Using VPN to access restricted content? also illegal. Don't encrypt your DNS? Your visit to crypto exchange or VPN site is going to be noticed.
(And exchanges that are allowed to work in Russia legally are obligated to disclose transactions to the gov by law obviously)
So think about it. Those boxes, the police and military to ensure compliance and make necessary arrests, morning pre-trial cocaine for the judge, whatever. This machine is fueled by sanction workarounds instrumented by Western crypto-bros thinking they are helping "free" people in those countries.
absolutely not true btw - the largest use-case for stable-coins atm are people evading capital controls in emerging markets, including China, India, Nigeria, and similar, and in many latin American countries.
The stuff about Russia is true and is actually letter of the law
Also read how much NK gets from ransomware. Their nuclear program basically runs on crypto.
I never denied that regular people benefit in a small way, but the amount is incomparable and hey, they also don't need tumblers.
> hey, they also don't need tumblers
Yes they do need tumblers. Otherwise when they spend their undeclared crypto it is likely to be tracked by the government.
Where do they need tumblers for personal non industrial scale operations? I know ppl in South America who use crypto to save on dollar conversion fees when sending money abroad to family. No washing needed.
Where on the planet an oppressive gov somehow has the resources to track insignificant personal crypto amounts from ordinary people instead of just banning crypto? Check if crypto fuels this oppression machine in much larger amounts in the first place?
Who said crypto was a global good?
3 trillion US dollar (that's the market cap) or rather their former owners.
It's a giant stretch to claim that China has a "less reliabe" legal system than the US.
Yup! They get to launder money to fund terrorists and war. And us based crypto bros get to turn a blind eye and make millions.
Reminds me of London's laundromat for traditional banking system (now crippled by sanctions). Turning a blind eye is tempting if it makes money.
>It's a direct way around sanctions and it fuels violence and oppression
The US has been behind the vast majority of global violence and oppression over the past few decades, anything that limits its power is a global good. Telling people from other countries how they can spend their money is literally oppression.
[dead]
This is after all the developers went to prison, though, right?
One developer went to prison for facilitating money laundering in Holland, IIRC. It wasn't just for the smart contract, though. IIRC, they had him dead to rights marketing the contract as a money-laundering tool to various bad actors.
Good but reminder that btc tumbler aren't actually sufficient and using an actual private currency like monero XMR is the way to go.
What can go wrong with relying on a BTC tumbler alone?