Suspected Tornado Cash (Ethereum mixer) developer arrested

[bbc.reporter]

~snip~

This is far different from the case of Ross Ulbricht. Ross created and operated a marketplace where illegal stuff are sold. He may not be the one selling, but it's his website, his store. And he's very much aware of the illicit deals there. He, therefore, facilitated these transactions. He could have regulated it so that only legal goods and services are allowed.

In the case of Tornado Cash, it's just a code that is open and available to everybody. The authorities are, therefore, in a quandary as to how to deal with the developer. He didn't facilitate money laundering. It's very possible he was never even aware of it. So how should he be blamed for it. But I guess the authorities just want heads to roll, whoever they may be. It can't be left unattended. Somebody has to fall and suffer to instill fear. The problem, however, is that unlike the Silk Road, the code can't actually be shut down.

Agreed that they are very different cases, howver, I was only implying that the government, the court, the judge might treat this similar to Ross Ulbricht's case. This case will only be a show to try and make everyone afraid. They will take this case and make it an example of what might happen to someone if they develop mixing protocols. But also similar to the darknet's large growth since the imprisonment of Ross, it will show everyone that the government's tactics will not work hehehe.

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[Darker45]

~snip~

This is far different from the case of Ross Ulbricht. Ross created and operated a marketplace where illegal stuff are sold. He may not be the one selling, but it's his website, his store. And he's very much aware of the illicit deals there. He, therefore, facilitated these transactions. He could have regulated it so that only legal goods and services are allowed.

In the case of Tornado Cash, it's just a code that is open and available to everybody. The authorities are, therefore, in a quandary as to how to deal with the developer. He didn't facilitate money laundering. It's very possible he was never even aware of it. So how should he be blamed for it. But I guess the authorities just want heads to roll, whoever they may be. It can't be left unattended. Somebody has to fall and suffer to instill fear. The problem, however, is that unlike the Silk Road, the code can't actually be shut down.

Agreed that they are very different cases, howver, I was only implying that the government, the court, the judge might treat this similar to Ross Ulbricht's case. This case will only be a show to try and make everyone afraid. They will take this case and make it an example of what might happen to someone if they develop mixing protocols. But also similar to the darknet's large growth since the imprisonment of Ross, it will show everyone that the government's tactics will not work hehehe.

Yeah, but at least in the case of Ulbricht the government knows what it is doing. They know where they are coming from. They were up against something that is clearly illegal as per the letters of the law. This is not the case with Tornado Cash. Money laundering, of course, is illegal but the one who wrote the code is not the one that is laundering money. The one who wrote the code didn't have anything to do with the laundering itself. Moreover, writing codes isn't a crime, either. So the dots simply don't connect. This case has a lot of gray areas as compared to Ross' case.

[DaveF]

Yeah, but at least in the case of Ulbricht the government knows what it is doing. They know where they are coming from. They were up against something that is clearly illegal as per the letters of the law. This is not the case with Tornado Cash. Money laundering, of course, is illegal but the one who wrote the code is not the one that is laundering money. The one who wrote the code didn't have anything to do with the laundering itself. Moreover, writing codes isn't a crime, either. So the dots simply don't connect. This case has a lot of gray areas as compared to Ross' case.

Playing devils advocate here, but until it goes to trial we don't know everything. I *think* that there is more to it then we are seeing but that is just a personal guess from other cases. Writing the software to launder money is not illegal by itself. Getting paid to do it is if you know that it will be used for illegal reasons. Running the software may or may not be legal depending on a bunch of things. Getting paid / taking money to do it is.

It's a fuzzy line, and where you cross it can not always be obvious.

-Dave

[Darker45]

Yeah, but at least in the case of Ulbricht the government knows what it is doing. They know where they are coming from. They were up against something that is clearly illegal as per the letters of the law. This is not the case with Tornado Cash. Money laundering, of course, is illegal but the one who wrote the code is not the one that is laundering money. The one who wrote the code didn't have anything to do with the laundering itself. Moreover, writing codes isn't a crime, either. So the dots simply don't connect. This case has a lot of gray areas as compared to Ross' case.

Playing devils advocate here, but until it goes to trial we don't know everything. I *think* that there is more to it then we are seeing but that is just a personal guess from other cases. Writing the software to launder money is not illegal by itself. Getting paid to do it is if you know that it will be used for illegal reasons. Running the software may or may not be legal depending on a bunch of things. Getting paid / taking money to do it is.

It's a fuzzy line, and where you cross it can not always be obvious.

-Dave

Yeah, we're speculating here. The trial must be interesting to follow considering that this might be the first. Surely, there hasn't been a jurisprudence on this. There is, therefore, also a need to monitor developments as this case might set a really bad legal precedent.

As a matter of fact, that code is considered speech and is therefore protected by the First Amendment is still a legal issue and hasn't been settled with finality.

Anyway, the code that we're talking about here wasn't written to launder money. And whether the one who wrote it was fully aware that it could be used for illegal reasons, he shouldn't take the blame when the actual crime takes place.

[bbc.reporter]

@PrimeNumber7. The developer of Tornado Cash is the person being held in a prison for charges the government are not quite certain what. This might end in something similar to Ross Ulbricht where it was possible that the judge, the jury and everyone working in the court knew already what type of sentence was going to be given.

In any case, have these type of sanctions gone to the extreme? Clearly yes.

It also appears that Ethereum users will need an application to know if certain coins came from Tornado Cash hehehehe.



On Wednesday, David Hoffman, a crypto evangelist and host of the popular industry podcast Bankless, filed suit against the Treasury Department over sanctions it issued earlier this year against Tornado Cash, a tool that anonymizes cryptocurrency transactions. (Coin Center, a think tank for the industry, joined him in the suit.) According to the Treasury’s Office of Foreign Assets Control, the department’s sanctioning arm, the blacklisting is a response to the Lazarus Group, the North Korean hacking army it claims has stolen and laundered some $500 million. The problem, though, is that Tornado Cash isn’t a company or a person — it’s code that lives on the ethereum blockchain, and there’s no way for anyone to control or destroy the protocol. Since Tornado Cash isn’t an entity, it can’t appeal. It’s up to people like Hoffman, who claims he may be forced to affirm every year that he’s not a criminal — not because he has used it or has some connection to North Korea, but because he once had someone send him money using Tornado Cash.

Source https://nymag.com/intelligencer/2022/10/have-u-s-crypto-sanctions-gone-too-far.html

If sanctions are being placed on an entity that does not exist, it is a statutory defect.

There are many cases in which the outcome is clear to most involved in the case because the evidence is clear. The evidence against Ulbright was strong, and there is additionally evidence that Ulbright knew what he was doing was going to result in a long prison sentence if he was caught. I think the law is less clear in the case of Tornado Cash.

My argument was more about the treatment of the government on the defendant. I would speculate that if a mixing protocol developer would become very popular the treatment would be something similar to Wikileaks founder Julian Assange.

In any case, what is the government of Netherlands demanding from the Tornado Cash developer? Do they want him to publish a statement and condemn his own project? There was a mixer before that did this hehehehe.

[logfiles]

Update:

According to some news sources, the Court has ruled that the Tornado Cash Developer be released, but he will be under house arrest.

- From next week he will continue to be monitored and under home arrest.

- A court panel in the Netherlands had previously rejected the bail.

The developer of Tornado Cash reportedly received some kind of redress from a Dutch court. From the beginning of next week on, he will continue to be monitored and under home arrest. No official accusations have been brought against Alexey Pertsev, who has been in pre-trial custody since August.

I am still trying to wrap my head around the fact that these guys had all the guts to arrest the Dev. Dick move IMO.

[Darker45]

Update:

According to some news sources, the Court has ruled that the Tornado Cash Developer be released, but he will be under house arrest.

- From next week he will continue to be monitored and under home arrest.

- A court panel in the Netherlands had previously rejected the bail.

The developer of Tornado Cash reportedly received some kind of redress from a Dutch court. From the beginning of next week on, he will continue to be monitored and under home arrest. No official accusations have been brought against Alexey Pertsev, who has been in pre-trial custody since August.

I am still trying to wrap my head around the fact that these guys had all the guts to arrest the Dev. Dick move IMO.

Dick move, of course, but at least the developments are seemingly in his favor. Little victories are seen. A house arrest is a lot better than being jailed, and only for pre-trial. If a house arrest, even bail, is afforded to the fraud Sam Bankman-Fried, I guess it is the more reasonable that it is also granted to Alexey Pertsev. After all, Alexey Pertsev just wrote a code that is open for everybody to use. Unlike Sam Bankman-Fried, Pertsev is not directly running a fraudulent company himself.

[PrimeNumber7]

I am still trying to wrap my head around the fact that these guys had all the guts to arrest the Dev. Dick move IMO.

I don't agree with the conclusion, but if the government concludes someone has broken the law, and if the crime is sufficiently serious, the person who broke the law will be arrested and charged with the crime in question.

[logfiles]

I don't agree with the conclusion, but if the government concludes someone has broken the law, and if the crime is sufficiently serious, the person who broke the law will be arrested and charged with the crime in question.

Government is not always right. It also always makes wrong/malicious decisions to wrongfully arrest and incarcerate individuals because they want to make them silent, discourage them from raising awareness to the masses or even try to scare the masses that they might be the next to be arrested.

The dev committed no crime.

For example, How many billions of dollars have been "Laundered" through Ethereum? We know who the Devs are. Why aren't they being charged by the SEC or whatever Law enforcement agency is out there?

[bbc.reporter]

Update:

According to some news sources, the Court has ruled that the Tornado Cash Developer be released, but he will be under house arrest.

- From next week he will continue to be monitored and under home arrest.

- A court panel in the Netherlands had previously rejected the bail.

The developer of Tornado Cash reportedly received some kind of redress from a Dutch court. From the beginning of next week on, he will continue to be monitored and under home arrest. No official accusations have been brought against Alexey Pertsev, who has been in pre-trial custody since August.

I am still trying to wrap my head around the fact that these guys had all the guts to arrest the Dev. Dick move IMO.

They arrested him to send a message very much similar how the mafia sends a message to create fear. They did not need a reason or a legal case, there was really no real case behind the arrest. However, this will certainly only cause some developers to be more anonymous and to develop better tools to help maintain everyone's anonymity in everything we do online.