Tornado Cash Sanctions Overturned By US Appeals Court (coindesk.com) 35
A U.S. federal appeals court ruled that sanctions against Tornado Cash, a crypto transaction anonymization service, must be abandoned, stating that its immutable smart contracts do not constitute "property" under U.S. law and that the Treasury overstepped its authority. The ruling is available here (PDF). CoinDesk reports: The decision answers a controversial privacy debate on whether the government -- via a sanctions list maintained by the U.S. Treasury Department -- has a right to target the technology because it's associated with criminals. The ruling reversed a district court's August ruling that had sided with the government's pursuit of what it had characterized as a "notorious" crypto-mixing service.
OFAC had sanctioned Tornado Cash last year, contending that it was a vital tool used by bad actors including North Korea's Lazarus Group to launder crypto tokens pilfered from platforms and games such as Axie Infinity. Coinbase (COIN) and others had sued the government, claiming it had overreached. Paul Grewal, chief legal officer of crypto exchange Coinbase, cheered the ruling in a Tuesday post on X, calling it a "historic win for crypto." "These smart contracts must now be removed from the sanctions list and U.S. persons will once again be allowed to use this privacy-protecting protocol," Grewal wrote. "Put another way, the government's overreach will not stand." "We readily recognize the real-world downsides of certain uncontrollable technology falling outside of OFAC's sanctioning authority," the judges said, referencing the ineffectiveness of a law that was established well before the world moved online. "But we must uphold the statutory bargain struck (or mis-struck) by Congress, not tinker with it."
Tornado Cash's TORN token has since rallied 500%, passing the $20 mark.
OFAC had sanctioned Tornado Cash last year, contending that it was a vital tool used by bad actors including North Korea's Lazarus Group to launder crypto tokens pilfered from platforms and games such as Axie Infinity. Coinbase (COIN) and others had sued the government, claiming it had overreached. Paul Grewal, chief legal officer of crypto exchange Coinbase, cheered the ruling in a Tuesday post on X, calling it a "historic win for crypto." "These smart contracts must now be removed from the sanctions list and U.S. persons will once again be allowed to use this privacy-protecting protocol," Grewal wrote. "Put another way, the government's overreach will not stand." "We readily recognize the real-world downsides of certain uncontrollable technology falling outside of OFAC's sanctioning authority," the judges said, referencing the ineffectiveness of a law that was established well before the world moved online. "But we must uphold the statutory bargain struck (or mis-struck) by Congress, not tinker with it."
Tornado Cash's TORN token has since rallied 500%, passing the $20 mark.
Re: Let's hear it progressives (Score:2, Informative)
Let's hear it conservatives.
Tell us again how any fetters on the free market are communism and government's role is only to enact and enforce laws that favour robber barons.
Disclaimer: I don't side with either the right or the left. I'm merely providing an equal and opposite ridiculous retort here.
I think you're both a bunch of shitclowns.
Re: (Score:2)
Let's hear it conservatives.
Because if you bash progressives, surely you're a conservative, amirite? No such thing as liberal, libertarian, independent, so on and so forth.
Disclaimer: I don't side with either the right or the left. I'm merely providing an equal and opposite ridiculous retort here.
I think you're both a bunch of shitclowns.
Sounds like you gave yourself a choice of only one or the other. So which of the shitclowns are you then?
Re: (Score:2)
Conservatives? More like libertarians.
Re:Let's hear it progressives (Score:5, Insightful)
Except that no one gets paid in shitcoins. You'll still ultimately have to deal with the traditional banking industry to move any money in and out of cryptocurrency. There's no way the average person gets any of that "privacy" you're talking about out of this.
If you want to prevent what happened in Canada with those truckers, you need laws to prevent it, not magic internet money that isn't even spendable until you first sell it to the next sucker. That's like for all Musk's yammering about cryptocurrency, you still can't use it to pay for some juice on Tesla's Supercharger network. That's kind of telling.
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What's the path from "better than the very worst currencies" to "something lots of people would want to use"?
Re: (Score:1)
Isnâ(TM)t all money finding the next person to take your imaginary numbers.
Basically. Anything you trade is only worth whatever you think it's worth. Especially if it isn't valuable for some other activity that somebody might want to use it for, such as eating it or using it to administer a sedative to rsilvergun.
Re: Let's hear it progressives (Score:2)
Makes sense, and banks can withhold your money if there are suspicions about it coming from criminal activities. That's about all money that can't be traced, like bitcoin.
Re: (Score:2)
Bitcoin can be traced.
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Except that no one gets paid in shitcoins.
How do you mean nobody gets paid in them? Like ransomware? Like drugs on silk road? Like mining them?
You'll still ultimately have to deal with the traditional banking industry to move any money in and out of cryptocurrency. There's no way the average person gets any of that "privacy" you're talking about out of this.
Not necessarily. Trading goods for shitcoins is a thing. Far less common, sure, but still a thing.
If you want to prevent what happened in Canada with those truckers
Can you be more specific?
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The truckers were debanked for protesting.
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The truckers committed a crime. If you gave them money you helped facilitate said crime. I thought you liked politicians who were tough on crime?
Re: Let's hear it progressives (Score:3)
Re: (Score:2)
Paid protesters operate in the open all over Canada and the United States. They often foment violence and cause property destruction, even in communities where they don't live. Do they get debanked? No. Many of them face no jail time.
Some truckers peacefully protested by clogging up traffic. Instead of just towing the offending vehicles and issuing fines, the Trudeau morons left them in place and instead started harassing financial institutions into taking away access to banking/payment systems from sai
Andreessen talks about this on JRE (Score:2)
https://x.com/i/status/1861638... [x.com]
The government can ruin your life or business because you are competing with an existing, protected big financial institution.
Hell no to JRE! (Score:2)
You can take your Java Runtime Environment and shove it! If anything is ruining lives and businesses, it's Java! ;)
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You just made angle of sphere really sad. Now he's going to go build something with linkedlist logs in java until he's happy again.
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Nah, it's more along the lines of that if you create something which facilities making crime profitable (or appears to facilitate making crime profitable), Uncle Sam might be less than pleased about it.
Also, actually competing with the established financial institutions would entail providing services which are functionally equivalent, which cryptocurrency is not. It's like how if you were going to start a fast food restaurant, you'd serve cooked ready-to-eat food, not inedible certificates that can only b
Re: (Score:2)
You should have listened to GP and watched the Andresson interview.
He'll be testifying under oath in a couple montha about the crimes he's witnessed.
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The Netscape guy or the guy who hosted a tv show where people ate gross things?
Money laundering (Score:3)
The only thing this does is put the onus on OFAC to place sanctions on all the exchanges that enable the use of this protocol. Money laundering as a protocol is still money laundering. This is a victory in name only and this could simply lead to a crackdown of all users of the protocol.
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The thing with protocols is you can print them in a book or print them on a shirt, which gives them first amendment protection, which ultimately means you can't prevent their distribution or use. Same reason the clinton administration ultimately couldn't outlaw the export of pgp. The courts have ever since held that code is a form of speech protected by the first amendment.
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The problem was never the protocol itself, it's the use of said protocol. It's the difference between information about the chemistry of an explosive and actually making it.
Re: Money laundering (Score:3)
Unlike chemistry, use of the protocol is itself speech. The protocol just describes the rules for how you do it, and the code is the implementation of the protocol. To actually prevent its use, you have to put limits on what messages people can send and receive over the communication medium, be that the Internet, pen and paper, or just plain ol speech.
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Unlike chemistry, use of the protocol is itself speech.
It's also financial transactions with the intent of hiding the origin of the currency. Money laundering is still illegal.
Re: Money laundering (Score:2)
Which part are you saying is illegal? The actual published set of rules? The software that generates and decodes messages within said rules? Or actually sending and receiving messages that comply with said rules?
If none of the above, then what is your proposal?
I can help you out a little here, but this ultimately doesn't go anywhere: Talking about committing a crime is legal UNLESS it can be proven that you and the other party were actually conspiring to do so, then they can charge you with conspiracy and p
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If you know it can be used for money laundering but do not shut it down or take any measure to prevent money laundering then that is intent to promote unlawful activity. Your ideas about the law are not grounded in reality.
https://www.law.cornell.edu/us... [cornell.edu]
Re: Money laundering (Score:2)
Your ideas about the law are not grounded in reality.
/facepalm
You don't even understand the meaning of what you cited. It doesn't say "intent to promote unlawful activity" or words to that effect. Read it again.
You're arguing that the act of using a communication protocol can be illegal because it's possible for criminal activity to take place using it. Not only is this not what the law specifies, but not once has it occurred to you that they're currently working under the dubious legal theory that contracts are property, which is what the law you mentioned s
Re:Money laundering (Score:4, Insightful)
I'm unsure it even does that. It's just more nonsense from the fifth circuit as far as I can tell. Putting Tornado Cash on the list was mainly meant to forbid US entities from performing transactions with the relevant decentralized autonomous organization (DAO). It's not clear that the ruling even properly addresses the issues at hand. Getting mired in some crazy theories about whether or not the agency involved is allowed to designate what is or is not "property" in some odd circumstance. When really that doesn't matter at all since the point was to forbid transactions with the relevant DAOs. The judges appear to by trying to claim that when you transfer ETH into a pool and then withdraw it later, that is somehow magically not a transaction because it isn't "property". Makes no sense and it isn't supposed to. (It seems like it would be pretty easy to make simple bookmaking impossible to make illegal with similar logic.)
These judges are just trying to audition for higher judgeships in which they want to try to hamstring administrative agencies in the current conservative project to attempt to destroy the U.S. government as we know it. This will eventually lead to the IRS being unable to enforce any tax laws because they aren't allowed to interpret the meaning of any statutes related to taxes, even when congress expressly grants them the ability to do so. This is all literally a scheme by oligarchs in the U.S. to take control of the state. i.e. get judges in place that will just interpret the law in favor of the rich, and while doing so say that only judges know the true meaning of the law, even when it contradicts the laws actually passed by the legislature. Just a raw power grab.
Not what I was thinking when I saw âoeTornado (Score:2)
This might be a victory for the common sense (Score:4, Insightful)
immutable smart contracts do not constitute "property" under U.S. law
, said the court. If crypto isn't property, and crypto exchange operations aren't considered trade, then "crypto investments" aren't really investments by law, and then pension funds can't gamble your money on such "investments", and banks can't arrange a replay of the 2008 crisis by doing the same. I hope my reasoning is sound.