Bitcoin Forum

This is scary news for those of us who value our privacy.  The developers of the Ethereum mixer Tonado.cash have were arrested by Dutch police early today.  The police state are frightened by (y)our privacy, and are now showing how they are the real threat to democracy.  This isn't isolated to one country, this is a global concern.

It started with news of the USA sanctioning the crypto mixer, which broke yesterday.  Guard your privacy, people.  If you are crypto user, you are a threat to them.

USA Sanctions Tornado.Cash: https://www.wsj.com/articles/tornado-cashs-sanctions-show-shift-in-crypto-regulatory-focus-11660336224
Dutch Police Arrest Developers: https://www.msn.com/en-us/news/world/dutch-cops-arrest-dev-behind-sanctioned-crypto-mixer-tornado-cash/ar-AA10B44f

Sorry for posting this in the bitcoin section.  Even though it's related to an altcoin mixer I think it's more broadly about all crypto currencies.  If I'm wrong, moderator please more where appropriate.

Nowadays your safety is at the will of the US government. They alone can decide who to arrest, who to sanction. It's best not to arouse the beast in vain.

And don't think it's Biden doing the whole thing, there's a whole network of administrators working on this that ends at the secretary of state.

P.S. "Administrators" - haven't we come up with a better word for what most other countries would call ministers?

The guys running Tonado.cash who supposedly provides anonymity for his clients is pretty much exposed and is now in custody. On the other news, it says Suspected developer of crypto mixer Tornado Cash/ Alleged Tornado Cash developer arrested in Amsterdam. So he isn't confirmed whether it's him or not. It'd be scarier if they are also going after the users of Tornado Cash.

when cryptocurrencies were defined by fiat law as currency. (circa 2014-5) instead of remaining as a digital product/good. things changed

yep it may have made some think it legitimised bitcoin, but it also allowed an entrance by regulators to start putting rules on businesses that interact with cryptocurrencies

the guys at tornado were not arrested for just being a mixer. it was that they were caught allowing PEP (politically exposed people) from russia, who are currently banned from trying to move value out of russia

..
side note
mixers no matter who uses it, no matter the source of funds. no matter the destination of funds, are treated as a suspicious activity by regulators where businesses that are regulated have to red flag anyone that uses a mixer no matter the reason or purpose someone has for using a mixer.

the same applies to coins/tokens with privacy enhanced features
this is things like monero, liquid, and others

the same applies to sidechains, subnets/altnets bridging to main net blockchains, where such side/sub/layered networks are advertised as privacy networks
this is things like LN,

this is not to say that mixers are illegal. but they are categorised as services that put users of service under suspicion and put on a watch list.

..
some people think that mixers are not regulated and not meant to cause mixer users to be put on watchlists. and these people will try the foolish hardest to try to get everyone to use a mixer pretending it hides users.. yet by using a mixer actually puts a big neon arrow on users and makes them get watched far more.
yep the regulation for businesses to watch users of mixers, creates a scenario where mixers then do not protect privacy. because now people are put on a watch list due to using a mixer.

in short
if there was 2 people waling down a street. one guy walking normally. no one cares, he isnt doing anything suspicious.
and the other guy told to jump in a black box. where its closed off and several black boxes are thrown into the street so that for a 20 yard stretch you cant tell which one is the one with the guy in it.. is 'privacy'.. however when the guy gets out. he is then watched for every movement he does afterwards and also by seeing him get into the box, they can back trace his actions before getting in the box, and that is watched too..

suddenly even if he never done a crime. all of his actions before and after using a mixer is now on a highlighted watchlist.

thus defeating the point of a mixer.

in fact they ARE going after users too from what I hear.

This is entirely unconstitutional and it's because we're not doing enough to make our voices heard in discontent that they're getting away with this. It's insanity. The USA is becoming the most evil totalitarian dystopia on the planet.

At least the DPRK was always consistent with its totalitarianism.

nothing to do with USA
it was the dutch.. so constitution does not apply

Crypto will lose its anonymity if it wants a mass adoption. When the developed countries start regulating crypto, they won’t let you stay anonymous. They’ll want to know who you are and what you do. That’s how governments work. Mass adoption won’t happen for free. It will come with a price. The price is your freedom.

this is not a reason to now scare people into thinking everyone is on some watch list where government agents are watching you 24/7(like certain people in another topic are trying to elude to to pretend bitcoin is not fit for purpose)

the government (simple logic and research) do not have the capability to watch everyone.

instead the government ask BUSINESSES to watch a particular set of people. people that do suspicious things. like using privacy tools.

so not everyone is being "watched"
but if you are using a privacy tool. then expect you are on a watch list and expect the chances of your details being passed onto the government is higher than someone who does not use privacy tools

I am not surprised.

States have an unlimited voracity for revenue and a hunger for control of the same magnitude.

We have recently learned that the IRS will be increasing its staff. (https://www.cnbc.com/2022/08/09/with-new-agents-heres-who-the-irs-may-target-for-audits.html)

At best, Bitcoin privacy in the future will be like privacy with cash: most people will only be able to have it with small amounts.

Remember that legislation is underway in the EU to KYC all transactions, of any amount.

Be careful what you do, guys.


You are right. It will happen a bit like with the internet, in its origins there was more privacy than now, although there are still spaces of privacy for those who care.

^ When the internet first came out, you were free to say whatever you want. The internet was freedom. The wildest form of freedom. Now there is a hidden auto control mechanism in everybody that prevents him/her from saying silly stuff. (Even 4chan ain’t free imo) Especially in where I live, you can’t even criticize certain people because the gov lap dogs will report you in a second.

The internet is not free anymore. It is not as interesting as it used to be neither.

Crypto will probably follow the same path.

I stopped watching TV 20 years ago and started doing the internet thing but now the internet is the new TV.

Still… God bless adblock/ublock origin

Nobody wants to see developers arrested (for the most part) but this idea being pushed that “code is speech” is ridiculous. Anyone who has been involved in the FreeRoss movement can tell you that there are definite consequences for writing code that can be used for illegal purposes. What we’re seeing here is the beginning of the end of the Wild West in crypto.

They must have left the users for "dessert" and will deal with them later if there is such activity started. If the fight against the supporters of privacy and anonymity has started openly, then they are unlikely to leave users using mixers without their attention. Apparently, a new era in the history of cryptocurrency begins. But one should not be discouraged by such unpleasant news, because it can result in positive changes for the community. You're not ready to give up your privacy so easily, are you. So, the search for new opportunities will begin.

This is scary news but also understandable since your business can very easily be connected with money from criminal sources. This is always a bad situation, but also it is not for shure that you go to jail for it. In my opinion the fee for the mixer is basically to cover for that risk.

bitcoin 2009-2014 got away with many things because those good old days, it was treated as a product/good (like trading pokemon cards) thus currency laws did not apply

but when it got mainstreamed and legally recognised as a currency.. yep currency laws then applied
and so willingly and knowingly working for a criminal, makes you a person aiding and abetting a criminal

In the article about the Tornado, I think I've seen an example of a reasonable usage of a crypto mixer for something other than money laundering and over-obsession with privacy: it's in the part where Buterin says he used Tornado to anonymously financially support Ukrainian troops. That actually makes sense as a case where one would want to remain anonymous but isn't doing anything illegal per se (unless funding an army of a foreign country is illegal somewhere, which it might be, but I'm not aware of that). Of course, plenty of people crowdfund for weapons for Ukraine nowadays without anonymity, but I understand why some wouldn't want to risk it. But also, it does seem like the idea that mixers are largely used for illicit activities is more than a speculation, and profiting from a service that is used for money laundering is a crime...

Crypto mixers are always at the mercy of law enforcement agencies.

The fact that your service can literally help criminals launder their money even without your knowledge is what the law enforcement uses as a justification of their actions against mixers. They don't need to get even the slightest bit of evidence that the mixing service is catering money launderers, they just have to have 'reasonable suspicions' to raise the alarms and perform their "duty."

https://www.fiod.nl/arrest-of-suspected-developer-of-tornado-cash/

aka aiding and abetting criminal activity.. a currency law that existed years before cryptocurrency existed.

using crypto does not make currency laws obsolete.
what you find is that pre 2014 crypto was not considered a currency by law enforcement and thus crypto didnt apply to currency laws. but now mainstreaming of crypto now classes crypto as currency. currency laws also apply to crypto

pre 2014.
a mixer would have not been classed as a laundering service or a 'money mule' but instead classed in similar respects as a pokemon card shuffler tool. where by it has nothing to do with money.

but now crypto are defined as 'money' by many countries. those laws and definitions of AML apply to crypto services

That’s really bad news because considering bitcoin as pseudo anonymous in nature does not give us full privacy. Coin mixers were the one who added extra layer of security. In fact it is necessity due to the fact that whenever I am getting money from foreign land, let’s say USA then I am not sure if the sender had it bought through legal ways or not? Or whether he is buying with illegal money and stuff like that. To avoid getting linked with such activities I would be more reluctant to use coin mixer services and pay extra for the same. Yes it’s use might be done for the laundering but it’s everywhere in the fiat too but can’t restrict for the normal users right? That’s why it’s bad news. I think Services like chipmixer need to be more prompt now while providing their services.

From what I understand from the articles published on the Internet about what happened to the two developers, the suspension was not due to the fact that they developed a crypto-mixer, but because the activity of their service was related to users from Russia. Of course, this presents the forms from a new angle, which is the extent of the credibility of the service that they are developing. If they were unable to hide their identities, were they really able to hide the identities of the users of their platform .

I also think this issue has something to do with the situation of Russia and Ukraine, but certainly not limited to other issues that may involve this service being accused of being a service that facilitates illegal acts including money laundering and the like. The increase in crime especially regarding illegal money transaction has prompted the government to act to take precautionary measures, but I'm not really sure how the government will rate mixer services (altcoin or bitcoin).

I haven't read the full news (would love to do that now) but for now that's my assumption about the situation.

The point of a mixer is to break the connection of the funds, and that's what it successfully does. But, you're a brilliant example of a useful idiot.

Um, so everything can have similar consequences? Writing code that involves cryptography from mixers and entire cryptocurrency projects to securing protocols of message transfer such as https, can and are used for illegal purposes. Definitely it's the developers' fault that their software is used by criminals, and not the actual criminals'.  ::)

and your proof of a person that lives in idealisms, idolism and fantasy..
rather then looking at the facts..

it does not matter in the end if it cuts the connection to funds. you stil end up on a watchlist which means any information about you gets shared.
yep when you use a mixer.. it flags both your stuff you done before the mixer.. and the coins coming out of a mixer. where both are highlighted and watched and scrutinised more than random bitcoin transactions


EG
say you used coinbase to buy bitcoin and wanted to snap the connection so you then used a mixer and then with different set of coins deposited to buy a giftcard at gifts thinking that coinbase will never know that you bought a giftcard..

well.
guess what
by the very fact of using a mixer. your coinbase coins get highlighted on a chain analysis list as suspect just for using a mixer, which then triggers coinbase to see your withdrawal is a suspect use of funds due to entering a mixer. thus they flag you and send info to their sister company(gyft)
.. and chain analysis also passes ALL sets of funds received from mixers. which triggers gyfts deposit of coins to be on a suspect watch list. and then when they see your delivery address and name and the coinbase details. .. boom they have linked you. and they pass that back to coinbase that you purchased a giftcard

thus defeating the point of using the mixer, because it was the mixer that ended up triggering you being on a suspect watch list where they are actively watching you and passing your info around and sent as a sar to the government

now imagine you used coinbase and withdrew and then deposited to gift without the mixer.
well you are not on an active watchlist and your details of you using coinbase+gyfts is not sent as a SAR to the government

see the point..
one is where you are put on a SARS report (government see you) and one where government do not

dont blame the blockchain.. blame the services you use.

Of course, it can't be generalized that code is speech. Neither can it be generalized that speech is protected. In which case, even if code is considered speech, it doesn't immediately follow that it is to be guaranteed full protection under the First Amendment.

However, it is one thing to write a code that purposely harms like a malware and quite another to write a code that could be used for illegal purposes. I think it is rather unfair to punish the latter. Because if it is justified, then Ethereum itself could also be penalized because Tornado Cash is operating on its blockchain. And that doesn't seem right.

If we go down that road, why isn't Bill Gates in jail? And Linus Torvalds and every software developer on the planet?

Code in general can be used for good and evil. Just like guns. Or cars. Or virtually any other product. I don't think we should hold software developers to a higher standard than gun manufacturers.

But, you can only know my outputs, not the inputs I used prior mixing. Ending up on a watchlist is a situation I assume it happens on every address, as the ledger is public. Less mixing means more surveillance from chain analysis companies, whereas more mixing means they can do their job less effectively and efficiently.

Coinbase can enforce completely arbitrarily rules to their clients, as you said they might (I haven't ever read they do this, but they might) check the destination of my funds, after I withdrew them from the exchange, and act accordingly to their policy. Solution: Don't use Coinbase, because they don't treat their clients properly. Mixing is privacy, and privacy is a fundamental human right.

Note that both Coinbase and the gift card company cannot still link my funds, which wouldn't be the case if I had just send them directly from Coinbase to the gift card company.

They can't do this, for if they did, mixers would have no point. They can't break the connection of either ChipMixed or CoinJoined funds. No matter how many watchlists, pointless analysis, timestamp considerations they make, they can never be 100% certain that I have a connection with my mixed funds. Unless of course both Coinbase and the gift card store require KYC.

Same thing happens if you don't mix. If you've handed over your personal data, these companies will send everything their government request about you. Whether you're a criminal or not. Because, being surveilled is non-related with being a criminal. Again, solution: Don't use services wherein you're forced to hand over KYC.

Because, being added to a watchlist requires to have your privacy preserved. Giving up with privacy, means they can put their nose on your personal life more easily.

False. I'm either a suspect or a civilian who's opened up to full scrutiny. I prefer the former, thanks.

Ethereum did have a shady start and some people thinks it's should be a security because tokens got sold by Vitalik and his buddies for Bitcoin.
However, I wouldn't arrest anyone for creating Ethereum, but we have examples of people being arrested for creating digital currencies in pre-Bitcoin era, for example E-Gold.

Good question.
If you look some of the older deposition videos in case United States v. Microsoft you would see that Bill Gates was not very far from getting arrested.
Apparently, something changed and he converted to philanthropist who donated millions of dollars to media organizations and important people to smooth everything out.
To me Bill Gates doesn't look like a normal innocent human being in deposition videos:
https://www.youtube.com/watch?v=wFzHgvGqlb4

Ethereum may or may not be a security, but there are some questionable things about it's future.  The main issue I have with ETH has is that it's a shitty protocol, and the more experienced and astute crypto enthusiasts will eventually grow weary of it.  I believe that's why the vast majority of it's nodes are hosted on centralized server-providers such as AWS, and I also believe those nodes are very likely maintained by the wales still holding ETH.  They're the ones with the most to lose.

Once one realizes that ETH relies heavily on corporate VPS providers it starts too look more and more like a centralized protocol.  If the US government decided to sanction ETH, Amazon, Google, and MS would have no choice but to shut those nodes down.  You think gas fees are high now?  What do you think would happen if 60% of the nodes disappeared over night?



Lol, dkbit98, are you telling me you're not a fan of Bill Gates?  I know you and I have butted heads about Microsoft's products in the past, so it may surprise you to learn that I too am not a fan.  There are plenty of reasons to deride Bill Gates, but this is not one of them, in my opinion.

The US government has been trying to maintain it's monopoly on the world's currency for generations, and all of it's efforts are unconstitutional.  The US government is actually in violation of it's own laws, which is why they fight so hard to maintain their grip on the power provided by the USD.

Charging software developers for writing code that might, maybe, could possibly be used for criminal activity is a stretch, even for the most corrupt governments.  If they truly cared about the potential for software to be used in criminal activity there are plenty of developers who would be shaking in their boots right now, like those who wright gambling scripts.  Up until recently the US banned any online gambling, but I can't recall a single incident where the US government sanctioned writers of online casino code.  Because that doesn't threaten their power.

I thought this shit is going to be world computer with everything put on the blockchain  :P
This never gets old:

https://i.imgur.com/U6Xsg74.jpg

Can you or somebody else show me any real code that mister Bill Gates actually wrote, not including stuff he stole from other people?
He is not a developer, and on that videos he certainly looks like a lunatic and mentally unstable person, only thing I like about that is cake in his face :)
That doesn't mean that I am supporting US (or any other) government for arresting code developers, but it's not anything new... remember e-gold or read more about it.
If you go further in history you would see how governments even arrested people who own gold, or walk on the same ide of street with people of different skin color.
It's irony that people who created United States did that because of high British Empire taxes, and now they live in the land with highest taxes ever  :P
Now they are arresting developers, tomorrow they could arrest anyone for anything, or maybe they already can do that.