What is regulations turning into

[_act_]

https://blog.coinbase.com/defending-privacy-in-crypto-e09db33dece8
https://www.alphastox.com/2022/09/coinbase-is-fighting-back-as-the-sec-closes-in-on-tornado-cash/
https://cointelegraph.com/news/coinbase-is-fighting-back-as-the-sec-closes-in-on-tornado-cash

Tornado Cash was sanctioned by the Office of Foreign Assets Control in August, claiming that the smart contract the mixer is using has helped to launder over $7 billion in crypto since when it was created.

Tornado Cash was sanctioned by the Office of Foreign Assets Control (OFAC) back in August. OFAC claimed the smart contract mixer has helped to launder more than $7 billion worth of cryptocurrency since its creation in 2019, including over $455 million stolen by the North Korean-linked hackers Lazarus Group.

When the mixer was sanctioned, it affect innocent people that wants privacy, even though if truly it is used for the illegal activities, but how about the innocent people. I have read in the past that stable coin company, Circle even freezed the coins of Tornado Cash users.

Coinbase is in lawsuit United States Treasury Department about the sanction on Tornado cash. Why?
Read it in full:  https://blog.coinbase.com/defending-privacy-in-crypto-e09db33dece8

And according to what I saw on the news:

Coinbase CEO Brian Armstrong said in a statement that Treasury went too far, taking “the unprecedented step of sanctioning an entire technology instead of specific individuals.” In addition to claiming the sanctions exceeded the department’s authority, Coinbase argued the measures:

Remove privacy and security for crypto users;
Harm innocent people; and
Stifle innovation.

Are regulators not overdoing?
Is USDC company, Circles right about freezing of Coins linked to Tornado cash users when not requested?

Stables coins like USDT and USDC can be frozen on noncustodial wallet.

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[The Sceptical Chymist]

I have read in the past that stable coin company, Circle even freezed the coins of Tornado Cash users.

Any of you remember when Circle used to be a company that made it incredibly easy to buy bitcoin at a reasonable price using fiat?  Man, the new Circle sure ain't the old Circle--but I've known that for years.

And yes, regulators are overdoing it in this case.  But as much as I hate Coinbase as a company, I give them much respect for not just caving in to the Treasury Department, which is probably what a lot of other exchanges/services would do.  I think fair regulation can only come about by challenging regulators in court when they start forming opinions that might just affect thousands, if not millions, of people. 

Also, the US government (or any government for that matter) doesn't want anybody's financial transactions to be private.  They'd love it if they had access to every single bit of information on every citizen in the country, constitutional rights be damned.  There have been recent examples of that with Edward Snowden's ordeal and many in the past, including J. Edgar Hoover's reign of the FBI and his hunt for communists. 

Fight, Coinbase, fight!!

[Apocollapse]

It's also a bullshit by Coinbase talking about privacy stuff where they're very strict about KYC and mostly they will ask KYC to every customers that using their exchange. To enjoy privacy Coinbase should stop asking KYC to any users and enable Tor network to access their exchange, also don't store anything to their database including the log session etc.

Although I hate what Circle was done, but Coinbase isn't the one who's right here.

[davis196]

Coinbase CEO Brian Armstrong said in a statement that Treasury went too far, taking “the unprecedented step of sanctioning an entire technology instead of specific individuals.” In addition to claiming the sanctions exceeded the department’s authority, Coinbase argued the measures:

I'm not a fan of Coinbase, but the Coinbase CEO is right about this.
Everyone is innocent until proven guilty. This is supposed to be the foundation of the judicial system in every normal country around the world.
The US Treasury Department acts as if everyone using BTC mixers is guilty by default. And yes, the Treasury Department is acting as some kind of Gestapo and exceeding it's own authority.
The innocent people, who are damaged by the Tornado Cash shutdown will have to sue the American government for compensation of their financial loses and probably for defamation as well.

It's also a bullshit by Coinbase talking about privacy stuff where they're very strict about KYC and mostly they will ask KYC to every customers that using their exchange. To enjoy privacy Coinbase should stop asking KYC to any users and enable Tor network to access their exchange, also don't store anything to their database including the log session etc.

Although I hate what Circle was done, but Coinbase isn't the one who's right here.

Coinbase, like any other legit company, are required by the law to impose KYC. They didn't impose KYC because they want to.

[Jody.Drummer]

It's also a bullshit by Coinbase talking about privacy stuff where they're very strict about KYC and mostly they will ask KYC to every customers that using their exchange. To enjoy privacy Coinbase should stop asking KYC to any users and enable Tor network to access their exchange, also don't store anything to their database including the log session etc.

Although I hate what Circle was done, but Coinbase isn't the one who's right here.

When Coinbase officially implemented KYC, from that moment on I stopped being a user of the exchange, and luckily my assets were withdrawn before that happened. Tornado Cash's privacy-conscious nature would be irrelevant to Coinbase'current policy. Here Tornado Cash suffered a loss due to this policy. The United States Treasury has now gone even more horrific and disadvantaged one party for its policies. It's not just money laundering that they might consider a hotbed of mixing. But more than not having a large share of the achievements that Tornado Cash has achieved.

[_act_]

It's also a bullshit by Coinbase talking about privacy stuff where they're very strict about KYC and mostly they will ask KYC to every customers that using their exchange. To enjoy privacy Coinbase should stop asking KYC to any users and enable Tor network to access their exchange, also don't store anything to their database including the log session etc.

Although I hate what Circle was done, but Coinbase isn't the one who's right here.

When Coinbase officially implemented KYC, from that moment on I stopped being a user of the exchange, and luckily my assets were withdrawn before that happened. Tornado Cash's privacy-conscious nature would be irrelevant to Coinbase'current policy. Here Tornado Cash suffered a loss due to this policy. The United States Treasury has now gone even more horrific and disadvantaged one party for its policies. It's not just money laundering that they might consider a hotbed of mixing. But more than not having a large share of the achievements that Tornado Cash has achieved.

Are you using bank at all? If you are having bank account, then why blaming Coinbase? If you do not use bank for fiat transactions, if it just by cash, then you can be more anonymous. Banks requires KYC. Other organizations require KYC too.

Centralized exchanges that is in a country that works like other stock and forex brokers might not have options than to make KYC compulsory because of the threat from regulators. Centralized exchanges are different from mixers. This thread is about how regulators are appearing to be too strict by sanctioning a mixer which they supposed not to be sanctioned in a way they are becoming threat even to good people that want privacy.

Regarding centralized exchanges, there are more options you can go for like decentralized exchanges.

[kryptqnick]

I wonder what's in it for Coinbase to finance a lawsuit that is unrelated to them... Playing the good guy who cares about privacy while actually being a centralized service that requires KYC? I get it that they must do KYC, but still.
This lawsuit will be interesting because it's not just about Tornado Cash. Given that it's a crypto mixer, it is likely to set a precedent for treating other crypto mixers as well. It does seem to me that crypto mixers literally do what's called money laundering (the mechanism is that of money laundering), so even if some use it for noble causes, it might reasonably be outlawed, but I am not sure and I'd love to see what the court decides.

[Darker45]

For this, Coinbase got my respect. Although they are not really the ones who brought the treasury department to the court, at least they are putting their money where their mouth is by funding the case. And they're really brave to stand and spend for what they believe in.

There are not a few personalities and other entities who have openly voiced out their disapproval of the blanket ban. And yet rather than opposing or resisting a powerful government agency for what is obviously an unfair decision, many have acquiesced. As a matter of fact, a number of them have voluntarily taken steps in support of the OFAC's decision.

Coinbase's decision is worth appreciating! I hope this encourages others, especially huge and influential crypto-related institutions, to also stand up for what is fair and right.

[Lucius]

I have nothing against if this company wants to defend some rights, in this particular case referring to the right to privacy. However, isn't it hypocritical to defend privacy, and on the other hand, not to support those who fight for the truth about Bitcoin, which is ultimately responsible for the fact that this company made a lot of money?

For those who don't know, I'm referring to @hodlonaut's public appeal on Twitter to Coinbase and their CEO, which as far as I know has not received any response - which is even more strange considering that Faketoshi sued them too. However it ends, I have no excessive sympathy for this company, because I do not believe that they sincerely believe in what they are doing. Reputation takes a long time to build, but it is lost very quickly.

Coinbase the most anti-Bitcoin organisation. Make #DeleteCoinbase great again

[Leviathan.007]

Talking about regulations is a bit scary whenever the government is talking about it because in the end what they want from the bitcoin regulations is more like getting everyone under control without expecting their privacy usually from what can see on the news, regulation from the government side means everyone should clarify how much bitcoin they have and where they are going to send it, which can be good reduce the crime and abusing bitcoin for dirty activities. Still, at the same time, this will reduce the privacy of bitcoiners.

[mk4]

Are regulators not overdoing?

Thing is, they almost always overdo it. With them sanctioning Tornado Cash, it means that now a lot of retail cant use this service, while the technically-literate criminals can still use it because of it being a smart contract live on Ethereum. Hence actually affecting the innocent masses negatively, instead of the actual criminals.

[crwth]

With everything that has happened, there are a lot of drawbacks with everyone being affected, with just people wanting privacy, but the challenge is that it would be hard to prove that knowing how it works, you know.

I'm concerned about the sanctions being on the open source software that it's the people who use it with bad intentions and not the software that has done the wrong deeds.

[Fortify]

Tornado Cash was sanctioned by the Office of Foreign Assets Control in August, claiming that the smart contract the mixer is using has helped to launder over $7 billion in crypto since when it was created.

Tornado Cash was sanctioned by the Office of Foreign Assets Control (OFAC) back in August. OFAC claimed the smart contract mixer has helped to launder more than $7 billion worth of cryptocurrency since its creation in 2019, including over $455 million stolen by the North Korean-linked hackers Lazarus Group.

When the mixer was sanctioned, it affect innocent people that wants privacy, even though if truly it is used for the illegal activities, but how about the innocent people. I have read in the past that stable coin company, Circle even freezed the coins of Tornado Cash users.

Coinbase is in lawsuit United States Treasury Department about the sanction on Tornado cash. Why?
Read it in full:  https://blog.coinbase.com/defending-privacy-in-crypto-e09db33dece8

And according to what I saw on the news:

Coinbase CEO Brian Armstrong said in a statement that Treasury went too far, taking “the unprecedented step of sanctioning an entire technology instead of specific individuals.” In addition to claiming the sanctions exceeded the department’s authority, Coinbase argued the measures:

Remove privacy and security for crypto users;
Harm innocent people; and
Stifle innovation.

Are regulators not overdoing?
Is USDC company, Circles right about freezing of Coins linked to Tornado cash users when not requested?

Stables coins like USDT and USDC can be frozen on noncustodial wallet.

In reality, these regulators have access to much more information than you or I. Criminals are always looking for ways to move money about and trying to clean it after whatever method they've used to acquire it. It's a very real threat that any responsible government should be investigating and trying to take steps to minimize. It is how fraudsters get away with millions each year, how violent gangs are able to stay out of banks and how other nefarious activities are able to take place. As long as laws are designed in a fair and reasonable way, nobody should fear them. The people who make the biggest stink are sometimes those who are trying to avoid things like paying taxes which is a necessity to live in a developed society.

[Kakmakr]

You highlighted one of the most important aspects of Crypto currencies and that is centralized weak points. The moment when regulators can identify a central authority, they will close down on that entity like a bunch of sharks.

Satoshi Nakamoto removed himself as a centralized authority at the very beginning of Bitcoin, because he knew that centralized entities would be the target for regulators. These days people are hunting for fame and fortune and Alt coin developers are putting a target on their backs, by publicly announcing their link to the coin they launched. (Also linking those coins to centralized Exchanges, expose their real identities) 

[Upgrade00]

Coinbase the most anti-Bitcoin organisation. Make #DeleteCoinbase great again

I was thinking about this thread while reading this one, and it's obvious that coinbasw has shown to be very aversed to privacy of freedom over the years, from strict KYC policy, to selling users data and everything in between.

Moves like this one and creating a "perceived" non custodian wallet seems just like another way to whitewash their public image and attract more users to their platform. Coinbase are not pro Bitcoin or privacy.

[_act_]

I wonder what's in it for Coinbase to finance a lawsuit that is unrelated to them... Playing the good guy who cares about privacy while actually being a centralized service that requires KYC? I get it that they must do KYC, but still.

You know mixers are kind of connected to exchanges. Many people that are using exchanges that values privacy still make use of mixers too. Even most mixing coins are from exchanges. Maybe they are concerned because of that.

Moves like this one and creating a "perceived" non custodian wallet seems just like another way to whitewash their public image and attract more users to their platform. Coinbase are not pro Bitcoin or privacy.

Centralized exchanges that are located in USA are subjected to pressure from regulators in USA. Centralized exchanges are created in a way that they will later request for KYC even if they do not start with it.

[blue_hurricanger]

Although we hate it, the real truth is there was no real decentralization or privacy practice either from exchanges or online wallet services like coinbase. Yes, there are full of regulations on the crypto space and it was the same in real life. Anyone of you here, can you buy alcohol without giving your driver's license in the US? Small details like that showed that both on-chain or off-chain, are still full of regulations and at some parts, we have to show our ID or KYC to get anywhere over the process.
When I saw Tornado Cash got sanctioned by the US, no surprise here.

[Ucy]

Part of the problem is with those using or encouraging the use of cryptocurrency technologies that do not fully adhere to the principles and rules of decentralized cryptocurrency technology.
If you don't follow the principles/rules, then you should absolutely expect disaster in the future. It is either you are centralized and regulated by traditional governments or you are truly decentralized and regulated by the whole community (not by some in the community).
Your cryptocurrency technology must adhere to these Golden Principles/Rules: decentralization, immutability, community-consensus, transparency, anonymity/privacy-friendly, reputation/merit-based, censorship resistance etc
By the way, how is it possible to seize people coins if its truely decentralized and censorship resistance? I have always warn of allowing scam on any cryptocurrency network but they seem to find them hard to resist

[Moneyprism]

Are regulators not overdoing?

the problem is that we live in a world where politicians who have little or no understanding of cryptocurrencies are trying to regulate cryptocurrencies..i think it's very funny when they try to make cryptocurrencies more "less" private because in some cases these politicians mention that the sender and receiver of cryptocurrency should include their identity.. in my opinion this is too much because humans also need privacy regardless of what the purpose of their transaction is

[justdimin]

Although we hate it, the real truth is there was no real decentralization or privacy practice either from exchanges or online wallet services like coinbase. Yes, there are full of regulations on the crypto space and it was the same in real life. Anyone of you here, can you buy alcohol without giving your driver's license in the US? Small details like that showed that both on-chain or off-chain, are still full of regulations and at some parts, we have to show our ID or KYC to get anywhere over the process.
When I saw Tornado Cash got sanctioned by the US, no surprise here.

Decentralization is not with you, it is with the coins. What you do with coins will never be decentralized, exchanges, wallets, trading, they are all under supervision of the government and so forth, which means that you shouldn't really be worried about it but that is how life is going to be like.

However, bitcoin itself is decentralized for example, it can't be controlled by anyone, in fact ETH is decentralized too, maybe we merged into another fork and another chain now, but that was decided all together, if we decided not to then it would have been a trouble. All in all we should be happy with what we have, not more.