Cryptocurrency: WarOnCrypto - Tornado.Cash SW Speech CensorBanned by UST OFAC SDN and their Apologists
Straight to the Supreme Court... War on Crypto and Crypto Privacy just leveled up... https://www.coincenter.org/u-s-treasury-sanction-of-privacy-tools-places-swe... https://www.youtube.com/watch?v=XpTrCA3tEKM P.v.Valkenburgh: Code Is Free Speech, Privacy is Valid FreeSpeech Code Gets CensorBanned, no court order. Microsoft Github cancels accounts. https://news.bitcoin.com/eth-mixer-tornado-cash-reveals-blocking-ofac-sancti... https://cryptoslate.com/coins/tornado-cash https://home.treasury.gov/policy-issues/financial-sanctions/specially-design... https://www.treasury.gov/ofac/downloads/ https://home.treasury.gov/policy-issues/office-of-foreign-assets-control-san... https://home.treasury.gov/policy-issues/terrorism-and-illicit-finance Charity and Action responds to arbitrary political sanctions. If you're not developing your code speech entirely within the darknets, if you're not operating your apps over I2P/Tor/etc, if you're not outside building the physical P2P Guerrilla Internet, and most importantly if you're not out in the real world fighting back against the Censors and Arbitrary Authoritarian Political Policy, you are at high risk of shutdown. US Sec State Blinken deletes his own corrupt tweet speech off twitter. Clearnet RPC servers blocked and taken down... lol. https://t.me/TornadoCashOfficial https://tornado.cash/ https://twitter.com/tornadocash https://twitter.com/semenov_roman_ https://github.com/tornadocash https://tornado-cash.medium.com/ https://twitter.com/WUTornado https://wutornado.medium.com/ https://dune.com/poma/tornado-cash_1 US taxpayers forced to pay for wasted bandwidth on every page... <!-- __ __ ____ ______ _________________ .====/ /=/ /=/ __/===/_ __/==================================/######__________/ .== / / / / \ \ / / _______ ___ ___ __ ________ __ /######__________/ .== / /_/ / __\ \ / / / __/ -_) _ \(_--/ // / __/ // / /######__________/ .== \____/ /____/ /_/ /_/ \__/\_/_/___/\___/_/ \_ / /________________/ =====================================================__/ /===/________________/ /___/ -->
######################################## šŖļø Tornado.cash šŖļø @TornadoCash A fully decentralized protocol for private transactions on Ethereum. Joined July 2019 Tweets 446 Following 268 Followers 52,734 Likes 1,627 29 Photos and videos š Today we are witnesses of a crucial event in @TornadoCash history. šŖ Tornado Cash Classic UI is now fully open-source This is a huge step towards (even) more decentralization and transparency. Fork, code & build with TC DAO anons š tornado-cash.medium.com/tornā¦ Tornado Cash Classic UI is now Open Source By making our Tornado Cash Classic UI open source, our DAO takes a huge step towards transparency. One of many valid use cases of privacy protocols: donating to a cause that might get you in trouble if done publicly @VitalikButerin Replying to @technocrypto I'll out myself as someone who has used TC to donate to this exact cause. Martin Kƶppelmann šŗš¦ @koeppelmann Seems like USDC has indeed blacklisted the @TornadoCash contracts, meaning if you had USDC deposited in Tornado you can not access it anymore even if everything you did was perfectly legit and legal. Dylan LeClair š @DylanLeClair_ NEW: @circlepay's USDC has officially blacklisted every Ethereum address sanctioned by the US Treasury. š„ø Do you know #TakeMyMuffin (@TMM66131654)? š @TornadoCash sponsors this cartoon, go watch it Tornadoes š¤© @TornadoCash and @WUTornado tweets are available on @CryptoSlate flux š If you want to be updated on the latest news about the #1 privacy soluti Tornado Cash is a decentralized, non-custodial privacy solution built on Ethereum. š³ Last 24 hours to vote on the latest snapshot to decide whether or not the community fund should withdraw its $TORN from Opium and cBridge! šŖ Don't forget to cast your vote Tornadoes, every $TORN counts and it is 100% freešš» snapshot.org/#/torn-communitā¦ š ĀæAre you a @telegram aficionado? Then we have a good news for you! š¢ @WUTornado extends with a @TornadoCash DAO Announcement channel š To be always up to date on our beloved tornado progress, join us! ā¬ļø t.me/tornadocashdaoannouncemā¦ Tornado cash DAO Announcements - WUTornado Official Tornado cash DAO channel - managed by WUTornado āļøIt might be summer but @TornadoCash is spinning more than ever! šŖļøWe have taken care to explain you all of our beloved tornado peripeties šEnough bla-bla, time for your quarterly recap! ā¬ļø wutornado.medium.com/whats-uā¦ Whatās Up Tornado?āāāFrom Spring to Summer Updates It might already be summer, the sun is bright and one thing for sureā¦ as the world of cryptos rapidly expands, our tornado never stopsā¦ wutornado.medium.com š The @TornadoCash DAO is always looking for new ways to integrate deeper within the crypto ecosystem. š„ This topic opens the discussion for a potential stablecoin support on Nova. Private payments in stablecoins š What do you think anon ?š torn.community/t/add-a-stablā¦ Add a stablecoin to Nova Hey everyone, As you know, Nova is doing pretty well, with more than 6,100 wallets registered, 11,300 ETH deposited and 12,000 transfers. Since 2 months, Nova deposit limit... torn.community Sebastian | HOPR š” @SCBuergel Ethereum gas prices still ridiculously low, wat do? This is the perfect time to set up your accounts on @TornadoCash Nova and move your $ETH into a shielded pool from which you can move arbitrary amounts to other addresses without doxing your privacy docs.tornado.cash/tornado-caā¦ Logging in Tornado Cash Nova docs.tornado.cash eric.eth @econoar Wait, since when did Coinbase stop giving you newly derived addresses every time you generate a receive address? This is a dox nightmare now. š We are proud to announce that @VitalikButerin has used (once again) @TornadoCash to protect his privacy ! š Whether you want to pay a beer, your rent, or get paid for a gig, personal information is YOURS, not THEIRS! ā Privacy is an human right, anons. #privacymatters @TornadoCash is an indispensable tool for the crypto world. šŖš¤šŖ @TornadoCash Nova update ā Unique users (7 days): 220 āØ Total Unique users: 5691 ā Nr of transfers (7 days): 586 š¦ Total nr of transfers: 10876 š¬ ETH deposited (7 days): 1243.53 šŖ Total ETH deposited: 9540.76 šŖšŖšŖ @BSCNews These #BNBChain projects continue to accumulate a ton of new capital š¹ Let's celebrate the Top TVL Gainers on the @BNBCHAIN in the last 24 hours š @TornadoCash @ForTubeFi @Bolide_fi @SpartanProtocol @iotube_org #BSCNews #DeFi #DEX š³ļø We need you to vote Tornadoes, it is free! š„ A new ARC listing proposal was made on Aave to list TORN as collateral to the AAVE V2 Market š TORN could have access to a $5B market, increase its liquidity & more exposure.. Vote NOW (end of the post)ā¬ļø governance.aave.com/t/arc-ā¦d ARC: Add TORN (Tornado Cash DAO Token) Listing Proposal: Add TORN (Tornado Cash DAO Token) Proposal made by bt11ba, Head of Community of the Tornado Cash DAO Sentence Rationale We would like to add the TORN token to the AAVE v3 market... governance.aave.com Bear @BearishEquity What is Tornado Cash? @TornadoCash Tornado Cash is a supposed fully decentralized protocol on Ethereum, Arbitrum, BSC , Avalanche and Optimism that helps enable private transactions. @CoinDesk #Ethereum privacy app @TornadoCash just announced it will fully open-source the Tornado Cash Classic user interface. @FrederickMunawa reports. trib.al/Gxu0WLK Decentralized Mixer Tornado Cash Makes Its User Interface Open-Source The privacy protocol is stepping up transparency by inviting more eyeballs to review code. tornado-cash.medium.com @TheBlock__ Tornado Cash governance rejects plan to diversify treasury holdings theblock.co/post/155799/tornā¦ The Tornado Cash community voted against a plan to sell 50,000 vested native tokens for at least $480,000 in ETH. ššŖ @TornadoCash proves again it's decentralization. The last proposal has been disputed, and after 5 days of voting the community decided against it. š³ tornadocash.eth.limo/governaā¦ š³ š+200% votes inflow since the previous proposal. šThanks to every voter out there! ######################################## Roman Semenov šŖļø šŗš¦ @semenov_roman_ Building @tornadocash and other privacy and scalability related stuff for Ethereum Joined September 2009 Tweets 1,874 Following 353 Followers 8,679 Likes 2,767 60 Photos and videos My @GitHub account was just suspended š¤· Is writing an open source code illegal now? KaanĀ³ @kaanuzdogan Sooo.. Is Eth2.0 deposit contract illegal? š¤š¤š¤ TIL the creator address of the Eth2.0 Deposit contract was funded with Tornado cash, created the contract and donated the rest to Wikileaks BowTiedIguana @BowTiedIguana READ THIS THREAD OR GO TO JAIL FOR 30 YEARS (sorry not kidding) Tornado Cash added to US sanctions list - $437m of assets blocked. What is OFAC, what are sanctions, and what does this mean for DeFi š @muneeb Itās time to put our crypto tribalism aside; the crypto wars II are starting: US Treasury puts privacy tool Tornado Cash on the sanctions list. This list is meant for people, not tech tools. Privacy tools are for every American. Neeraj K. Agrawal @NeerajKA In today's impromptu presentation on the Tornado Cash sanctions, @valkenburgh lays out the case that this is an unconstitutional restriction on freedom of speech. "We are looking right at the chilling effect" You can watch the whole thing here: PaperImperium @ImperiumPaper Replying to @bantg Thatās not how it works. Ford makes cars. Some of those cars might end up in DPRK. Ford does not go to jail because they are unable to remotely disable cars in DPRK banteg @bantg US Treasury says Tornado Cash was used to launder over $7 billion, but this figure seems to come from a dashboard indicating all-time deposits. Does anyone seriously believe 90%+ of funds there are illicit and are attributed to NK? dune.com/poma/tornado-cash_1 Blockchain ecosystem analytics by and for the community. Explore and share data from Ethereum, xDai, Polygon, Optimism, BSC and Solana for free. ćć¼ćć¼ć @0xdev0 It's happening. @infura_io and @AlchemyPlatform are now blocking RPC requests to @TornadoCash Centralized RPC services are one of the cancers that undermine the core benefits of crypto. As long as they dominate the market, no protocol is truly permissionless. Jerry Brito @jerrybrito Todayās action does not seem so much as a sanction against a person or entity with agency. It appears instead to be the sanctioning of a tool that is neutral in character and that can be put to good or bad uses like any other technology. coincenter.org/u-s-treasury-ā¦ U.S. Treasury sanction of privacy tools places sweeping restrictions on all Americans - Coin Center Sanctioned Tornado Cash smart contract is a tool, not a person. @jchervinsky For years, @USTreasury has carefully distinguished bad actors from the neutral tools & technology that they (plus everyone else in the world) are able to use. The decision to sanction @TornadoCash, a decentralized protocol, threatens that smart & balanced approach to crypto. Replying to @SecBlinken @USTreasury Thanks for fixing this. Tornado Cash community tries its best to make sure it can be used to by good actors by providing compliance tools for example. Unfortunately it's technically impossible to block anyone from using the smart contract on the blockchain. Lefteris Karapetsas | Hiring for @rotkiapp @LefterisJP Sanctioning is one thing. But accusing @semenov_roman_ and team of being a DPRK state-sponsored hacking group without any proof is crossing a line. The secretary of state of the U.S. should absolutely provide proof for these claims or immediately retract them. This tweet is unavailable Interesting that a static landing page url tornado.cash was sanctioned but not urls which can be used to access the actual dapp. So does it mean that Circle now has to freeze all USDC on Tornado Cash contracts? rainbow queen @ercwl People are complaining how centralizing PoS is over PoW. But what they fail to mention is that with just 32 ETH I get to be one of 400,000+ validators who actually gets to make a block. In Bitcoin its just the mining pools who have that power (Stratum V2 has v low adoption). deAlex @AlexSmirnov__ 1/ @deBridgeFinance has been the subject of an attempted cyberattack, apparently by the Lazarus group. PSA for all teams in Web3, this campaign is likely widespread. Replying to @dfern_eth @JaEsf @Keycard_ How about DIY hardware wallet on a Pi or Arduino? Could be open source with open hardware. ######################################## Peter Van Valkenburgh @valkenburgh Director of Research @CoinCenter | Board Member @ZcashFoundation | JD @NYULaw | We broke the ruptured structure built of age. Washington, DC Joined July 2009 Tweets 18,759 Following 1,530 Followers 47,609 Likes 12,559 2,410 Photos and videos Peter Van Valkenburgh @valkenburgh 3 acres per head and the national mall could accommodate about 100 bison. Documenting Bitcoin š @DocumentingBTC "Banning software publication is banning speech" > Explained @valkenburgh during a must-watch impromptu presentation by the non profit CoinCenter. Watch it here and share: E61 @esixtyone Replying to @ara2049 @DocumentingBTC @valkenburgh This court can find no meaningful difference between computer language, particularly high-level languages as defined above, and German or French...Like music and mathematical equations, computer language is just that, language, and it communicates information" -Judge Patel, 1996 Peter Van Valkenburgh @valkenburgh The original trading with the enemy act is from 1917 and a lot of it still exists in the US code, so there are fun details like how the government can take your ship and also any "tackle" attached to the ship. Sanctions penalties are adjusted for inflation. Of course, that's where you'd do inflation adjustment, not on SARs, CTR, or 6050i surveillance thresholds, on penalties. (TWEA = trading with the enemy act) @HaileyLennonBTC Watched @valkenburgh great talk this afternoon on today's OFAC news. One thing I hadn't thought about is how OFAC has a procedure to remove named persons/entities from the SDN list. But in the case of open source software like Tornado Cash, who petitions? home.treasury.gov/policy-issā¦ Filing a Petition for Removal from an OFAC List 1.How do I file a request for removal from an OFAC sanctions list? To request removal from any OFAC sanctions list, including the SDN List, simply write to OFAC and request removal. This begins the... home.treasury.gov Peter Van Valkenburgh @valkenburgh I bless you madly, Sadly as I tie my shoes Replying to @hdevalence Crap, I just realized I didn't get to this! Takings! "[t]he general rule at least is that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking." Oliver Wendell Holmes Ian Miers @secparam Because the US gov banned Americans using tornadocash, I am unable to use it as part of a homework assignment in my class on Real World Security and Privacy. But now I have a new lecture topic. @valkenburgh , want to give a guest lecture? Peter Van Valkenburgh @valkenburgh I'll be giving a short summary of the OFAC Tornado cash SDN listing and our early thoughts about constituional and statutory issues live at #Zcon3 taking some questions over the event discord. It will be at 4:40- 5-10 PM Pacific time here: Zcon 3 - Day 2 Track 1 Please join us on Discord to ask speakers questions and engage in discussion with other attendees: https://discord.gg/sMNcpwU39qTo view our full program, vis... Neeraj K. Agrawal @NeerajKA ājust using freely available software to make sure the entire world canāt see my financial transactions. wait what was that noiāā Iva Nachkebia @Ivanachkebia "Even worse, because of the nature of blockchain transactions, an American who is sent money through the Tornado.cash address is not even able to reject the transaction, and yet may be, at that moment, technically in violation of OFAC rules." #TornadoCash Non-custodial, trustless, serverless, private transactions on Ethereum network Hudson Jameson @hudsonjameson TornadoCash contracts & websites being added to the OFAC list highlights the desperate need for a blockchain with both base layer privacy & programmability. Dapps or L2 solutions for privacy are not enough. Zcash is the best shot we have at achieving this š§µ Mikko Ohtamaa š® @moo9000 TornadoCash smart contracts and websites put on OFAC sanctions list home.treasury.gov/policy-issā¦ Miller @millercwl "It is not any specific bad actor who is being sanctioned, but instead it is all Americans who may wish to use this automated tool in order to protect their own privacy while transacting online who are having their liberty curtailed without the benefit of any due process." These are very serious allegations. Is there any evidence? This tweet is unavailable šØ We're still digesting the potential constitutional ramifications. Either way, big development in real limitations on your legitimate privacy rights. Read the post. coincenter.org/u-s-treasury-ā¦ š¶The DC hills are alive with the smell of corpses!š¶ @PoPville ALERT: ANOTHER Corpse Flower about to Bloom!! In my almost 16 years of monitoring corpse flowers I cannot recall a more prolific summer: popville.com/2022/08/alert-aā¦ NewTraditional Arch Memes @THICCtorianChad Nothing wrong with copying a perfect recipe. The Val DāEurope is a new transit-oriented walkable development outside of Paris which emulates what people love about European Architecture and urbanism. ######################################## What's Up Tornado? @WUTornado The place to be to get news about the Tornado.Cash protocol & its community! wutornado.medium.com/ Joined June 2021 Tweets 397 Following 231 Followers 1,382 Likes 379 49 Photos and videos What's Up Tornado? @WUTornado About the U.S. Treasury Sanction ā¬ļø @TornadoCash as a project has no knowledge of who is using the dApp. Tornado Cash contracts are a tool for privacy, individuals in a free society have a natural right to privacy, including financial privacy. 1/5 š§µ banteg @bantg Only 10.5% of funds pooled in Tornado Cash came from hacks ā Chainalysis blog.chainalysis.com/reportsā¦ Here's the list of Tornado Cash resources that were banned - Tornado Cash @GitHub organization - personal @GitHub accounts of TC contributors - all $USDC on Tornado Cash contracts @circlepay - @infura_io RPC - @AlchemyPlatform RPC - tornadocash.eth.limo domain @eth_limo suzuha ā”š @dystopiabreaker so basically ofac can just decide arbitrary individuals are criminals with 0 oversight? is that seriously how it works crv.mktcap.eth @CurveCap August 9, 2022: Tornado Chasers šŖļø šŗšøš³ The World Laughs at America's Futile War on Encryption and Privacy curve.substack.com/p/august-ā¦ 1/6 The World Laughs at America's Futile War on Encryption and Privacy curve.substack.com what is the justification for deleting tornado code from github reza @RezaJafery "If you're not doing anything illegal why do you want to use Tornado Cash" is a lazy argument that often comes from people of privilege. You have the privilege of not needing privacy. You have the privilege of not being scared of your government. Mikerah @badcryptobitch Thinking about holding an impromptu online hackathon for TC (as that word is kind of banned now). No shilling of other privacy projects/shitcoins No animosity Just pure blockchain privacy tech regardless of ecosystem. joseph.eth @josephdelong Someone is out dusting a bunch of wallets from Tornado with 0.1 ETH lmaaaaooooo etherscan.io/txsInternal?a=0ā¦ suzuha ā”š @dystopiabreaker when legal fund to protect tornado devs Dylan LeClair š @DylanLeClair_ Ethereum infrastructure project Infura is now blocking access to Tornado Cash. Infura is the default RPC provider of MetaMask, and is a leading provider of key Ethereum infrastructure. Chris Blec @ChrisBlec @eth_limo why did you do this? Were you asked to? š©@eth_limo censored @TornadoCash today while claiming to be a "decentralized alternative" and "a privacy focused gateway" šOther eth.limo URLs keep functioning as usual šŖ@TornadoCash is a (really) decentralized tool for privacy Privacy is a human right, anon! How to access @TornadoCash from Brave with IPFS? š 1ļøā£ Download Brave & go to one of this URL: Tornado Cash Classic IPFS ipfs://bafybeicu2anhh7cxbeeakzqjfy3pisok2nakyiemm3jxd66ng35ib6y5ri Tornado Cash Nova IPFS ipfs://bafybeiho72nozeq2mi6egptem77omhujt5ovpx4jjskg5sz2ti57zlunmm 2ļøā£ Either you can launch a Local IPFS Node or a Public Gateway, we advice you to run a Brave Local IPFS Node while using a VPN (Mullvad is good). 3ļøā£ After you have finished using Tornado Cash, turn off your node: -> Settings -> IPFS 4ļøā£ Choose "Disabled" from the dropdown list.
Pronoun game questionably diminishing to headline cause... https://home.treasury.gov/news/press-releases/jy0916 Treasuryās clumsy approach to Tornado.cash is a threat to the future of financial privacy https://www.fightforthefuture.org/news/2022-08-09-statement-treasurys-clumsy... August 9, 2022, 5:34 PM This statement can be attributed to Lia Holland (they/she), Campaigns & Communications Director at Fight for the Future. āIn an effort to punish hackers and cybercriminals, Treasury just made a clumsy attempt to sanction Tornado.cash, an open source protocol. Tornado.cash was a mixing protocol that worked by letting many people send Ethereum to a specific address, mixing all the cryptocurrency it holds together, then letting those who had sent funds withdraw better-anonymized money. Services like Tornado.cash exist because the permanent, public, and immutable records kept on blockchains like Ethereum arenāt inherently privacy-preserving. But after Treasuryās actions, the open source code used to run this protocol has been censored, and developers contributing to the protocol are reporting that their GitHub accounts have been deleted. Let us be clear, hackers and cybercriminals, as well as those that support them, are deplorable and should be stoppedābut not in a way that compromises human rights and the first amendment. Treasuryās sanctions were meant first as a tire-slash to the Lazarus Group, cyberthieves affiliated with North Korea, who used Tornado.cash to anonymise stolen Ethereum, and prevent them (and, it seems, anyone else who was using it) from being able to withdraw from the service anonymously. It also seems that Treasuryās sanctions were meant as a warning shot to projects attempting to build anonymous digital assets, and an attack on the first amendment right to code. Treasury did not only sanction the individuals or corporations involved with the Lazarus Group; they sanctioned all the mechanismsāethereum addressesāby which the Tornado.cash protocol provides its blending service, because that service was used by bad actors. This is a rough equivalent to sanctioning the email protocol in the early days of the internet, with the justification that email is often used to facilitate phishing attacks. Tornado.cash is code, and rather than identify those who were aiding and abetting criminals the Treasury simply sanctioned that code. Code is speech. Already, the Internet is feeling the chilling effects of this choice: the open source code used to run Tornado.cash has been taken down from Github. And unfortunately it seems that such an effect is exactly what the US government was seeking. In yesterdayās press release announcing sanctions against Tornado.cash, Treasury states clearly that āwhile most virtual currency activity is licit, it can be used for illicit activityāāessentially a statement that could be made about cash. But as Politico reports "The Biden administration wants cryptocurrency companies to voluntarily adopt internationally agreed-upon technologies for combating money laundering, including collecting all usersā personal information. The senior Treasury official said the sanctions on Tornado Cash would send a strong message to companies that still havenāt done this." (Bolded emphasis is our own.) Anonymity is not a crime, and there are many legitimate reasons to seek anonymity in financial transactions. Privacy tools are important to, for example, activists in authoritarian states where revealing financial information could get someone jailed or executed. Anonymity, particularly financial, may soon become essential for pregnant people seeking abortions in the US, as well as supporters in states that criminalize donations to that could be made about cash. But as Politico reports "The Biden administration wants cryptocurrency companies to voluntarily adopt internationally agreed-upon technologies for combating money laundering, including collecting all usersā personal information. The senior Treasury official said the sanctions on Tornado Cash would send a strong message to companies that still havenāt done this." (Bolded emphasis is our own.) Anonymity is not a crime, and there are many legitimate reasons to seek anonymity in financial transactions. Privacy tools are important to, for example, activists in authoritarian states where revealing financial information could get someone jailed or executed. Anonymity, particularly financial, may soon become essential for pregnant people seeking abortions in the US, as well as supporters in states that criminalize donations to abortion funds or Planned Parenthood. Simply not wanting your financial history surveilled by governments, corporations, stalkers, or other bad actors is a legitimate reason to seek privacy-preserving technologies online. We ask that the Treasury focus more carefully on targeting bad actorsārather than attempting to criminalize building and using privacy tools or the simple act of writing or running open source software code.ā
Lawfare... https://jwverret.substack.com/p/blockprof-be6 https://twitter.com/JWVerret/status/1559470517941329920 I bite OFAC in the nose over their vague sanction of "Tornado Cash." I applied to OFAC for a license in a way that would either obviate the harm they did, or give my non-profit The Crypto Freedom Lab standing to sue if the deny my license.
Too many Profiteers and Maxi's pumping centralized nonprivacy stacks, too few (and too many retired) principled AnCaps, Anarcho's, Libertarians, Voluntaryists, Agorists, Austro-Hayek's, etc speaking, risks crypto's downfall... Is Ethereum's Censorship-Resistance Under Attack: A Recap Of The Biggest Crypto News In The 2nd Week Of August https://newsletter.banklesshq.com/p/crypto-censorship-ethereum-tornado-cash https://twitter.com/TimBeiko/status/1560349253435662336 The recent sanction of Tornado Cash from the U.S. treasury has had a windfall of effects on crypto. A developer was arrested and a string of ādecentralizedā applications have banned wallets that have touched Tornado Cash. People are afraid of OFAC. These guys are nothing to mess with. If you donāt comply with their demands, thereās a really good chance you go to jail. This collective fear and action from OFAC are sparking debate among the community. On one hand, protocol teams are worried. For most, prison time is not an option to consider (understandably). Companies will comply if threatened with jail time. At the very least, if these companies are working in the best interest of crypto, theyāll fight it in the legal system. But that will take years and millions (and millions and millions) of dollars. On the other hand, crypto is about open, unstoppable access to money and finance. The idea that āDeFiā apps are banning access because certain wallets directly (or indirectly) used a sanctioned code goes against the ethos and mission of crypto. Satoshi would be pissed. This isnāt what weāre here for. Regardless, this looming threat becomes a serious issue when looking at Ethereumās validator set. Start with the big, current one. Currently it looks like over 66% of the beacon chain validators will adhere to OFAC regulations, @LidoFinance @coinbase @krakenfx @stakedus @BitcoinSuisseAG pic.twitter.com/qyq23tPnqV ā eylonverse X š“ (@TheEylon) August 14, 2022 A handful of companies are responsible for operating a majority of the validators on Ethereum. What happens if OFAC starts demanding these companies to censor specific transactions via their validators (or go to jail)? Will they bend the knee? Will they shut down their staking services? Will validators accept it and get slashed by the network, losing user deposits? This is a big unknown right now, but any of these outcomes are possible. Before you say āEthereum would never support censorshipā, there are a lot of nuances behind this, primarily with Flashbots and block building, that go above my head. Regardless, this was a major discussion on the Ethereum Core Devs meeting this week, and thereās a lot to unpack here. I recommend listening to the discussion and reading Tim Beikoās thread on the topic to get the full rundown. Starts at 18:11. Is Ethereumās censorship resistance under attack? The honest answer is that itās not entirely clear right now. The Best Monetary Asset Four weeks from now, Ethereum will be in a post-merge world. Issuance will be reduced by 90% and net inflation will virtually become neutral, if not negative. This creates a compelling case for ETH as a monetary asset in an increasingly inflationary world. Fiat is currently inflating at 12.8% per year. Gold sits at 1.79% After the next Bitcoin halving in 2024, BTCās inflation rate will be 0.88%. Post-Ethereum Merge? ETH issuance falls to 0.18% based on current demand levels where it could potentially go negative if demand recovers to same the levels as a few months ago. Most people looking at this graph might respond āBut Apple is sitting at -3.78%! Thatās the better store of value.ā Trueāsort of. But Apple stock is not a monetary asset. You canāt instantly transfer it to anyone in the world. You canāt buy anything with it. You donāt have global access to lending, borrowing, trading, or earning yield. Apple stock has no credible neutrality. Thereās no decentralization. Itās not a Medium of Exchange or a Unit of Account. Issuance is just one part of it. But when you factor in all of it, ETH becomes a highly favorable monetary asset in the current landscape. Other News Celsius owes $6.7 billion in crypto tokens and only holds $3.8 billion; Genesis CEO quits amidst job layoffs; Mailchimp cracks down on crypto newsletters; The SEC sues Dragonchain; Canada lays new crypto regulations; The NFT market faces a potential liquidity crisis?
Lawfare... https://jwverret.substack.com/p/blockprof-be6 https://twitter.com/JWVerret/status/1559470517941329920 I bite OFAC in the nose over their vague sanction of "Tornado Cash." I applied to OFAC for a license in a way that would either obviate the harm they did, or give my non-profit The Crypto Freedom Lab standing to sue if the deny my license.
Shaq to remain free, while you and Ross all serve double-life plus 40... Shaquille O'Neal's Crypto-Mixer Move Just Crossed The Line... https://bombthrower.com/illegal-transaction-big-sexys-crypto-mixer-move-just... https://etherscan.io/address/0xc135026969aa9765055eae9da120491a1df649b8 https://www.coindesk.com/policy/2022/08/08/us-secretary-of-state-tweets-dele... https://www.coindesk.com/policy/2022/08/08/us-secretary-of-state-tweets-dele... https://cointelegraph.com/news/circle-freezes-blacklisted-tornado-cash-smart... https://twitter.com/BotTornado/status/1557076770183995393 https://www.cato.org/blog/treasurys-tornado-warning https://www.fightforthefuture.org/news/2022-08-09-statement-treasurys-clumsy... https://blog.chainalysis.com/reports/tornado-cash-ofac-designation-sanctions... https://twitter.com/VitalikButerin/status/1556925602233569280 https://twitter.com/petejkim/status/1556761054323122178 https://twitter.com/jerallaire/status/1557004767930499072 https://www.theblock.co/post/162465/crypto-notables-are-being-sent-eth-from-... Basketball Entrepreneur, Shaquille āBig Sexyā OāNeal just crossed the line. Hereās the Etherscan page for Shaqās NFT project showing the sanctioned, illegal transaction. The US Treasury announced sanctions applied to Tornado Cash transactions beginning last Monday. Iām not suggesting that Shaqās done anything wrong, but this is an example of why the Treasuryās attack on Crypto mixing services via sanctions is unworkable. Who Gets Invited To The Crypto Mixers? Mixers are tools within the Cryptocurrency ecosystem that allow users to deposit tokens, combine them with other peopleās tokens, and then withdraw to an unrelated wallet. They can be used simply for privacy reasons, or it can be used to hide the tracks of illicit funds. The US Treasury was obviously focused on the latter when it sanctioned Tornado Cash, with an estimated $455M washed through Tornado over the last few years by North Korean hacker group Lazarus. Iām not defending the ability to hack and launder money, but you can walk the line if one can actually be laid down. Lazarus has been a scourge on the Crypto industry since at least 2017 and I would love nothing better than to see them dealt with effectively and severely. But thatās the problemā¦ The solution to Crypto hacks needs to be effective or thereās no point. According to Chainalysisā research on the topic, for every criminal use of crypto mixers, there appears to be a legitimate use. So a large part of the pushback on this round of sanctions is to do with preserving privacy tools in an increasingly aggressive surveillance state that jeopardizes citizensā legitimate need for privacy in everyday life. Privacy is normal and needs to be defended. Among notable legitimate and extremely necessary uses of privacy tools that have come out since the sanctions announcement are Ethereum founder Vitalik Buterin using Tornado Cash to donate money to Ukrainians. This reduced their risk. Blockchain developers can also use untraceable funds to seed new projects without exposing their entire net worth. However, this article isnāt about privacy. Thereās plenty written about that elsewhere. Iām talking about why sanctions arenāt the right tool for this problem. Sanctions Didnāt Stop Party Crasher Lazarus This isnāt the first mixer the US has sanctioned. In May, the Treasury sanctioned Blender.io, another mixing service that had also been used extensively by Lazarus group. In that case, the sanctions worked well to shut down the service. They had no meaningful effect on the Lazarus group who simply kept hacking and moved to the next mixer. Blender.io was a custodial mixer. Users deposited funds into a centralized custodian who would then mix your funds and return them. The people running the service were targeted by sanctions and shut down. Tornado Cash is structured differently. Rather than having a centralized custodian making decisions itās simply a smart contract hosted on the Ethereum blockchain which holds funds prior to mixing and withdrawal. Itās just a piece of code that will continue running indefinitely and doing what it was designed to do. No one that can take it down. It is an immutable smart contract. Tornado Cash is Bitcoinesque. It cannot be changed. It cannot be removed. The Treasury seems to not really be aware of this distinction. The actual text of the sanctions has identified a range of wallet addresses associated with the smart contract as being prohibited to transact with. Treasury hasnāt identified any specific people or organizations, other than a website that hosts a front end for accessing the service. That makes this the first time the Treasury has sanctioned code, rather than people or corporations. Enforcement: āBuzzkillā US Treasury Just Doesnāt Get It How will this be enforced? No one really knows, but so far Circle has frozen USDC currently held in the smart contract awaiting withdrawal. Circleās CEO doesnāt seem very happy about being forced to do this. There are also significant amounts of Ethereum and Wrapped Bitcoin also held in the smart contract. BitGo, the issuer of Wrapped Bitcoin canāt freeze their tokens and Ethereum also canāt be frozen at the protocol layer. The only logical way that US based companies like Coinbase can comply with sanctions is to prevent tokens that have been through Tornado Cash from being deposited onto their platforms. Which raises a huge issue. Because tokens canāt be frozen on the protocol layer, these tokens are free to move around in the Ethereum DeFi ecosystem prior to deposit on Coinbase. Regular users will have a very hard time knowing whether or not tokens that they receive are going to be accepted with major US based companies. We donāt have any guidance from the Treasury on how this is supposed to be dealt with, but I imagine there are currently extremely frustrated calls between Crypto exchanges and the Treasury department trying to sort out this issue without breaking Ethereum. The Treasury department might have just accidentally broken Ethereum fungibility. Do I think that is the likely outcome here? No, not at all. But it does speak to how recklessly uniformed and uncaring the US Treasury is becoming regarding the collateral damage of using sanctions to solve every problem. There doesnāt appear to have been any consultation with major Washington based Crypto education groups like Coin Center and the DeFi Education Fund. Will the US Treasury be educated enough to make restrictions and reform possible. We donāt yet know how strict the Treasury will instruct US corporations to be about blocking deposits from Tornado Cash. Using blockchain records, itās perfectly possible to trace Tornado Cash use through several transactions. Itās less possible to do the same through a DeFi system which inherently mixes up funds so that their origin canāt be ascertained. The maximum enforcement would be to block all deposits from DeFi because some deposits would have touched Tornado Cash at some point in time. This highlights how useless sanctioning a medium of exchange really is. Usually transactions with a particular party are the sanctioned activity. This is what it means to have effective measures against cybercrime. These sanctions wonāt shut down Tornado Cash and they wonāt stop Lazarus Group. They have the potential to cripple Ethereum, if theyāre applied strictly. Itās fundamentally a losing game. The USTreasury is playing whack-a-mole with privacy tools. So what happens when a government enacts an absurd law that canāt be enforced and doesnāt really make any sense? People immediately break the law. Guilty By Association: Shaq, Fallon And Others Get Dusted Numerous celebrities and notable Crypto figures including Shaq, Jimmy Fallon, Brian Armstrong the CEO of Coinbase, Crypto Exchange cold wallets and numerous others got dusted by Tornado Cash transactions. Dust attacks arenāt new, theyāve been around as long as Iāve been in Crypto. They describe when a wallet gets sent useless or harmful tokens without their consent. There is no need to accept Crypto transactions, they just show up when someone sends them to your wallet. Someone with a balance held in Tornado Cash started sending small Ethereum transactions to a range of known celebrity wallet addresses without their approval or knowledge. On the first day of sanctions over Tornado Cash. Did Shaq violated sanctions? Arguably yes. Sanctions violations are strict liability offenses. There doesnāt need to be any intention to perform a transaction with the sanctioned party. There doesnāt have to be any benefit gained by transaction. All that needs to be shown is that a transaction occurred. There is a defense that best efforts were taken to comply with sanctions. The prosecuting body will look at what steps were taken to avoid breaching sanctions, that will affect their likelihood to prosecute and the severity of the punishment. But what could Shaq have done to avoid breaching sanctions? There is nothing that anyone could have done to avoid breaching sanctions by receiving unsolicited Tornado Cash transactions. Obviously Shaq and Jimmy Fallon are not going to get prosecuted for sanctions violation because someone else sent them some Ethereum, but the fact that these celebrities will need to be excused for something that is arguably a breach of US sanctions according to the letter of the law is a big problem. If The Rules Are A Bluff, What Happens Next? The sanctions are at best ineffective. Tornado Cash is the second mixer that has been sanctioned because it was used by Lazarus. The first set of sanctions just meant that Lazarus moved to using Tornado Cash instead of Blender.io. I imagine that due to the lack of enforceability of this round of sanctions, they wonāt even stop Lazarus from using Tornado Cash as their mixer of choice. Will it change how Crypto exchanges treat mixed funds? Unlikely. Major US exchanges already had a responsibility to refuse shady deposits under existing anti-money laundering provisions. There were already reports earlier this year of Coinbase refusing to credit deposits directly from mixers or funds that had recently been through a mixer. What is the point of sanctioning Tornado cash if it doesnāt shut down the service or slow down Lazarus group? Well it will likely prevent law abiding US citizens from accessing a financial privacy tool for non-criminal purposes. Fight for the Future compared the sanctions to banning email because it can be used for phishing scams. The Cato Institute noted that āPunishing every American by going after technology is not the solution for dealing with criminalsā. Banning mixers to stop cyber crime is like digging up roads to prevent carjackings. Iām much more concerned about the big picture problems with this style of enforcement. The demonstrated lack of basic understanding of how this technology works and what they are doing at the Treasury department is frankly terrifying. Itās one thing to deliberately destroy Crypto ecosystems with regulation. Itās an entirely different thing to do it by accident. The Ethereum blockchain is open and readable. There are numerous firms and hobbyists who monitor transactions. All eyes will be on Tornado Cash to see if it continues to operate or if the sanctions shut it down. In the day after the sanctions came into effect almost $3M moved through Tornado Cash. Sanctions are a powerful tool, but they are completely unsuited to dealing with decentralized or ungoverned entities like Tornado Cash. There is no one for the government to threaten here. Thereās just users accessing open source code to assert their privacy. If the US Government is going to bluff, Iād prefer it if the entire world couldnāt see that bluff fail in real-time.
https://twitter.com/DylanLeClair_/status/1592719571529580544 Over 74% and growing of the ETH PoS stake is now fully OFAC and censorship compliant. Only FreeSpeech L1's that cannot see inside the private transactions will survive the distrust that arbitrary censorship brings.
Alex Pertsev, the Tornado Cash dev, has been wrongly imprisoned for over 100 days... https://decrypt.co/videos/live-events/PEhewv2h/edward-snowden-talks-tornado-...
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