Tornado cash founders charged with money laundering/sanctions violations

[OmegaStarScream]

So you probably have heard that one of Tornado's Cash developers was arrested last year by the Dutch authorities[1] and was later released (under surveillance) while waiting for his trial.[2]

Today, two of the founders of the same mixer have been charged (one arrested) by the U.S department of justice with:

In a Wednesday indictment, the feds alleged that Roman Storm and Roman Semenov laundered more than $1 billion in criminal proceeds, and charged them with conspiracy to commit money laundering, sanctions violations, and conspiracy to operate an unlicensed money-transmitting business.

[1] https://cointelegraph.com/news/dutch-authorities-arrest-suspected-tornado-cash-developer
[2] https://cointelegraph.com/news/tornado-cash-dev-alex-pertsev-set-to-be-released-from-prison-under-surveillance

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[cryptoaddictchie]

Yes this is trending as of today in every social media. It says that they knew that a notorius Lazarus group one of the hackers who stole a lot of virtual funds are using their services and yet they didnt do anything to stop or hold it means they allowed a crime.

Im not sure what would others say about using mixers. Yes its for usign crypto for privacy, but we cant deny the fact that aside from this particular reason. Scammers arw gonna use it tp hide their scent or crime by using mixers. Cant blame the DOJ on this one. So other mixers might be in trouble too. In relation tok this big case being done on Tornado.

Even new or small mixers might get in trouble too as for sure scammers are already using those. Does owners of mixers can ban wallets or known scammers address for usage? Maybe this can help to make them free from charges like this and avoid incident like what happened to the Tornado founders.

[Darker45]

Im not sure what would others say about using mixers. Yes its for usign crypto for privacy, but we cant deny the fact that aside from this particular reason. Scammers arw gonna use it tp hide their scent or crime by using mixers. Cant blame the DOJ on this one. So other mixers might be in trouble too. In relation tok this big case being done on Tornado.

I don't agree. Why can't we blame the DOJ? This is unfair. If there's money laundering, they should pursue the launderers. If there's money involved in a crime, they should seize the money and arrest the criminals. Why arrest those who simply wrote open-source software? We don't arrest central bankers for creating money which is used in all kinds of crimes. We don't arrest the Toyota CEO or president for having their cars used by ISIS and other terrorists.

If "knowingly" is the key word, do they know it? How about the fact that the ledger involved is public? Transactions are open for anybody to know. How about the fact that Tornado Cash was decentralized? The code was publicly available, free for anybody to use in whichever manner they see fit.

When security hackers transferred almost $1 billion from Bangladesh Bank's Federal Reserve Bank of New York account and laundered almost $100 million in a Philippine bank, the bank wasn't penalized. The bank's particular branch itself which facilitated the laundry wasn't penalized. The one who was arrested was the very person who did the laundry herself.

[bbc.reporter]

Yes this is trending as of today in every social media. It says that they knew that a notorius Lazarus group one of the hackers who stole a lot of virtual funds are using their services and yet they didnt do anything to stop or hold it means they allowed a crime.

Im not sure what would others say about using mixers. Yes its for usign crypto for privacy, but we cant deny the fact that aside from this particular reason. Scammers arw gonna use it tp hide their scent or crime by using mixers. Cant blame the DOJ on this one. So other mixers might be in trouble too. In relation tok this big case being done on Tornado.

Even new or small mixers might get in trouble too as for sure scammers are already using those. Does owners of mixers can ban wallets or known scammers address for usage? Maybe this can help to make them free from charges like this and avoid incident like what happened to the Tornado founders.

My apologies, however, the type of attitude similar to your reply should never be accepted in the cryptospace. Is wanting more privacy really a crime?

Using your argument, does the government have the right to indict all of the Monero developers only because they developed a cryptocoin for more anonymity?

[cryptoaddictchie]

I don't agree. Why can't we blame the DOJ? This is unfair. If there's money laundering, they should pursue the launderers. If there's money involved in a crime, they should seize the money and arrest the criminals. Why arrest those who simply wrote open-source software?

Well thats something we live off up to today isnt it. We all knew Government is unfair but who can stop that? We all want the decentralized space we can work on without any restrictions. But remember there are people who got affected by those scams. Maybe mixer should make a way on how to ban those potential scammers cause their are the one making it happen. I think they are having a hard time to catch those who did without linkage on mixers cause definitelt on the platform we will see who do those crimes. Its not the mixer fault, that scammers go to them but the idea of how the mixers work? I think they love that. Government are angry maybe because they thought Tornado are tolerating this kind of activity.

I love using crypto! But how can we fight a system of the government that only favors to them? Im pretty sure those developers of Tornado are pretty mad about this case but the heck decentralized will always be opposed by the government even though we knew that they are the one doing the inside job using banks.

My apologies, however, the type of attitude similar to your reply should never be accepted in the cryptospace. Is wanting more privacy really a crime?

I didnt say its a crime dude. Everyone wanted their privacy remains and anonymity. But the case on mxiers they are being mix with those scammers and taking advantage of that. Im not sure if you are aware how government works. They will literally do anything to fight scams and incident like especially we dont havee specific regulations on something like this.

Using your argument, does the government have the right to indict all of the Monero developers only because they developed a cryptocoin for more anonymity?

Im referring to the scams activity being done on the platform. Monero didnt do any? Why would they do that.

[Darker45]

I don't agree. Why can't we blame the DOJ? This is unfair. If there's money laundering, they should pursue the launderers. If there's money involved in a crime, they should seize the money and arrest the criminals. Why arrest those who simply wrote open-source software?

Well thats something we live off up to today isnt it. We all knew Government is unfair but who can stop that? We all want the decentralized space we can work on without any restrictions. But remember there are people who got affected by those scams. Maybe mixer should make a way on how to ban those potential scammers cause their are the one making it happen. I think they are having a hard time to catch those who did without linkage on mixers cause definitelt on the platform we will see who do those crimes. Its not the mixer fault, that scammers go to them but the idea of how the mixers work? I think they love that. Government are angry maybe because they thought Tornado are tolerating this kind of activity.

Mixers aren't creating scammers. Mixers aren't producing hackers. Mixers aren't law enforcers. While they have responsibilities, they aren't built and designed to catch criminals and seize dirty money. Privacy-loving individuals love them. Criminals may love them as well. Mixers aren't created for them, however.

Gambling lords, drug lords, corrupt local politicians, and other criminals love cash. They often avoid bank accounts. They have their own vaults at home. Should we hold cash and vault makers responsible? These two are perfect tools for their kind of life, but they aren't created for them. If Boko Haram loves Toyota Land Cruiser more than any other vehicle because it's perfect for their kind of operations, should we hold liable the car designer? If a mixer fits the needs of a money launderer, container vans are also tailor fit for the needs of human traffickers. Should we make container vans illegal?

My point is that this is obviously selective. In other words, this is repression against crypto innovations. They're obviously suppressing the technologies that promote privacy and independence.

[cryptoaddictchie]

Mixers aren't creating scammers. Mixers aren't producing hackers. Mixers aren't law enforcers. While they have responsibilities, they aren't built and designed to catch criminals and seize dirty money. Privacy-loving individuals love them.

This is right. However mixers attract those money laundering due tho this concept as I explained earlier and since it is decentralized, even mixers are dragged to it. They arent built for hunting down criminals but they are the platform at the middle we all knew Government would love handy things and evidence on the table already. Thats why this incident happened. I feel bad for the developers but with our current state they should expect something like this since their platform was used like scene of the crime.

My point is that this is obviously selective. In other words, this is repression against crypto innovations. They're obviously suppressing the technologies that promote privacy and independence.

Yeah kinda get you mate but the question is how can we change that. See what happened to those developers even they arent ar fault here they take the charges due to that fact. This is really a crazy mixed up. So Im not sure the debate on centralized vs decentralized would ever be coincide in the future. Hoping one day it is.

[mk4]

Tornado Cash, mixers, and coinjoin software are tools — and tools in general will be used both for good purposes and bad purposes.

I guess we should also arrest Bill Gates and whoever founded AndroidOS because money launderers are using their software for illegal purposes. And while we're at it, let's criminalize who invented the hammer and wrench because their inventions are being used to mug people.

[o_e_l_e_o]

However mixers attract those money laundering due tho this concept as I explained earlier and since it is decentralized, even mixers are dragged to it.

Encryption attracts criminals since they can hide their communications. That doesn't mean the government should be able to read all your emails and private messages. The internet attracts scammers since they can use it to target their victims. That doesn't mean we should ban the internet. What about phones? Scammers use phones all the time! Better ban those too!

Making such things illegal or attempting to shut them down does not stop scammers or other criminals from using them, it only criminalizes the average Joe who uses them just because he doesn't want his government spying on his entire life. Not to mention that all the evidence we have shows that a tiny portion of coins being mixed are linked to illegal activity, just as a tiny portion of all internet traffic is linked to illegal activity.

Yeah kinda get you mate but the question is how can we change that.

Stop acquiescing to your government's ever more ridiculous demands. When it comes to bitcoin - refuse to be spied on. Refuse to complete KYC. Refuse to let them monitor all your activities via centralized exchanges. Run your own node. Trade peer to peer. Mix/coinjoin freely. Spend bitcoin directly with appropriate merchants. Opt out of their global surveillance. Encourage others to do the same.

[cryptoaddictchie]

Stop acquiescing to your government's ever more ridiculous demands. When it comes to bitcoin - refuse to be spied on. Refuse to complete KYC. Refuse to let them monitor all your activities via centralized exchanges. Run your own node. Trade peer to peer. Mix/coinjoin freely. Spend bitcoin directly with appropriate merchants. Opt out of their global surveillance. Encourage others to do the same.

I wanted too but its kinda hard to do p2p manually which I could get fiat easily. I am also trading altcoins which cant be done via peer to peer using an easy and convenient sell order or stop loss options, so Im really using cex for that matter. Its not like I like the KYC system, but since its required for that especially when doing p2p which is totally direct to our local remittance easily, I dont have much choice. I rarely find p2p for our local that can be transact that easily when I needed the funds immediately. I think mostly here on forum I bet, are using binance p2p even on our locals.

[mk4]

I am also trading altcoins which cant be done via peer to peer using an easy and convenient sell order or stop loss options, so Im really using cex for that matter.

Just a heads up: A crap ton of decent DEXs had this feature for a good while now.

GMX, Gains, dYdX, Hyperliquid, Level Finance, MUX, Kwenta, Perpetual Protocol, — the list of available options are HUGE. And I've used most of these DEXs without any problem at all; you just need to pick depending on available coins/tokens and available liquidity.

[cryptoaddictchie]

GMX, Gains, dYdX, Hyperliquid, Level Finance, MUX, Kwenta, Perpetual Protocol, — the list of available options are HUGE. And I've used most of these DEXs without any problem at all; you just need to pick depending on available coins/tokens and available liquidity.

Thanks for the suggestions, Ive been using some of these too especially dydx. But in the end I still used or send funds Ive gained on this through a trusted p2p service for me which is Binance p2p to cash out directly to our remittance and become php(currency). We cant do this easily being an anon here or somewhere out there especially without any trust and its not that easily to say avoid cex, Atleast for me. ( Ive bet Im not the only one using Binance p2p here Im pretty sure of that)

Maybe for some other guys here they can and manage to do that without relying on cex conveniently then props to them.

Actually maybe thats a good point, maybe we can survey whose users here dont have binance or zero cex account online and how they manage efficiently to trade p2p their tokens or coins for fiat. I'll be delighted to hear how they do that and even get some tips.

[bitmover]

However mixers attract those money laundering due tho this concept as I explained earlier and since it is decentralized, even mixers are dragged to it.

Encryption attracts criminals since they can hide their communications. That doesn't mean the government should be able to read all your emails and private messages. The internet attracts scammers since they can use it to target their victims. That doesn't mean we should ban the internet. What about phones? Scammers use phones all the time! Better ban those too!

Making such things illegal or attempting to shut them down does not stop scammers or other criminals from using them, it only criminalizes the average Joe who uses them just because he doesn't want his government spying on his entire life. Not to mention that all the evidence we have shows that a tiny portion of coins being mixed are linked to illegal activity, just as a tiny portion of all internet traffic is linked to illegal activity.

I agree 100% o_e_l_e_o

I was recently thinking about this. Not all mixers are getting banned and shut down, and not all developers are getting arrested either.
Gmaxwell created coinjoin and AFAIK he is not having legal problems.

This might be the case tornado cash team did something more than just crrating the software. The accusation said that they "knowingly
allowed" money laundering.

“As stated in the indictment, the defendants’ cryptocurrency service facilitated more than $1 billion in illicit transactions and they knowingly allowed a globally sanctioned cybercrime group to launder hundreds of millions of dollars on behalf of the North Korean regime,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division.

[bbc.reporter]

My apologies, however, the type of attitude similar to your reply should never be accepted in the cryptospace. Is wanting more privacy really a crime?

I didnt say its a crime dude. Everyone wanted their privacy remains and anonymity. But the case on mxiers they are being mix with those scammers and taking advantage of that. Im not sure if you are aware how government works. They will literally do anything to fight scams and incident like especially we dont havee specific regulations on something like this.

Using your argument, does the government have the right to indict all of the Monero developers only because they developed a cryptocoin for more anonymity?

Im referring to the scams activity being done on the platform. Monero didnt do any? Why would they do that.

However, how can you have an attitude that you cannot blame the DOJ on this one. Similar to what some people have said already, Tornanado Cash is a neutral tool and very much like all neutral tools, it can be used by bad people. It does not make the people who created them criminals.

Smartphones are used for many crimes by many criminals, does it make the creator of the software and the hardware of the smartphone involved in those crimes? What the DOJ did was really make a bad precendent.

[cryptoaddictchie]

However, how can you have an attitude that you cannot blame the DOJ on this one. Similar to what some people have said already, Tornanado Cash is a neutral tool and very much like all neutral tools, it can be used by bad people. It does not make the people who created them criminals.

My bad for saying that didnt mean to offend anyone but maybe the developer who got allegledy arrested (who created the tool wasnt just created it but explicitly knew or allowed the mixing of more than $7billion fund from hackers). Im sure those authorities do a solid investigation on this one and not blindly arrested anyone without a firm evidence cause that might be injustice. Im just reading the articles, and knowing the Government you think they sit and do nothing about it especially a $7billion fund was stolen and process somewhere. Surely the guy will be investigated and interrogated but if his clear he will be out right away. Im just saying that Government constantly doing the arrest thing as usual to pick up dust of info to have lead to those real criminals. Sorry for the developer cause he needed to experience this kind of norm which we knew happenign everywhere.

Maybe they arent perfect and bias all the time but someone will take action for that. Just like @bitmover said the team not just created the software but probably "knowingly allowed" anyways just my point of view on this that there must be a reason for this. Its not like I favored to the Government respond at all.

[o_e_l_e_o]

The accusation said that they "knowingly allowed" money laundering.

Which is just as equally bullshit. Banks not only "knowingly allow" money laundering, but indeed actively assist and perform money laundering, and make huge profits from doing so. Open source code developers get arrested, where as these fiat banks get a slap on the wrist and a fine which equates to a tiny fraction of the profits they make from laundering said money, and is less than a single day of their profits.

Im just reading the articles, and knowing the Government you think they sit and do nothing about it especially a $7billion fund was stolen and process somewhere.

$7 billion is absolutely nothing. Danske bank laundered $230 billion in Estonia. Wachovia bank laundered $390 billion for drug cartels. Standard Chartered laundered $265 billion for Iran. Fiat banks collectively launder trillions of dollars. Has a single bank CEO been arrested?

Don't be fooled for a second in to thinking this is anything other than the government trying to control you. The government are absolutely fine with trillions of dollars being laundered when it's their buddies in the fiat system who are doing it. But they will use any excuse to crack down on tools and services which prevent them from spying on and controlling their populace.

[cryptoaddictchie]

Don't be fooled for a second in to thinking this is anything other than the government trying to control you. The government are absolutely fine with trillions of dollars being laundered when it's their buddies in the fiat system who are doing it. But they will use any excuse to crack down on tools and services which prevent them from spying on and controlling their populace.

Yes I know this pretty well but whose job it is to nullified these kind of activity on their part? Still its the Government and how this things could turn? If everybody used decentralized approach isnt it. But when this gonna occur? A massive boycott on Government does it ever happened before? Anyone who tried to defy are being comprehended accordingly. The truth hurts I know. If there is someone could change that without being fearful and got supports(literally do it not by words but action) I be willing to follow him.

Crypto is being destroyed slowly they know its threat thats why this kind things happened. So they are showcasing their powers now until it can be stopped yet. Damn rough world.

[PX-Z]

I was recently thinking about this. Not all mixers are getting banned and shut down, and not all developers are getting arrested either.
Gmaxwell created coinjoin and AFAIK he is not having legal problems.

Not yet, it always happens when an exchange was hacked and some analysis reports happens^[1][2] that the hacked funds were mix on some specific mixers, then authorities will find its way to crack and find those responsible later on.

[1] https://www.coindesk.com/business/2022/09/09/cash-from-2021-dao-maker-crypto-hack-being-mixed-through-tornado-cash/
[2] https://cointelegraph.com/news/binance-hackers-bombard-chipmixer-to-launder-at-least-4-836-btc

[bbc.reporter]

Don't be fooled for a second in to thinking this is anything other than the government trying to control you. The government are absolutely fine with trillions of dollars being laundered when it's their buddies in the fiat system who are doing it. But they will use any excuse to crack down on tools and services which prevent them from spying on and controlling their populace.

Yes I know this pretty well but whose job it is to nullified these kind of activity on their part? Still its the Government and how this things could turn? If everybody used decentralized approach isnt it. But when this gonna occur? A massive boycott on Government does it ever happened before? Anyone who tried to defy are being comprehended accordingly. The truth hurts I know. If there is someone could change that without being fearful and got supports(literally do it not by words but action) I be willing to follow him.

Crypto is being destroyed slowly they know its threat thats why this kind things happened. So they are showcasing their powers now until it can be stopped yet. Damn rough world.

Yes, it is their job. We are not questioning this. We are questioning if it was right for the government to imprison people who had no connection to the crimes that are happening through the software that they only created.

Also, how is crypto being destroyed? Is it you reckon because criminals use it? Is the car industy or the cellphone industry being destroyed because criminals use them also? These are neutral tools. The government only wants more control over you. They do not care about you, they only care about money and power and they want more for themselves and less for you. This is the reality. But the cryptospace is giving some of this power back to the people. The government does not want this.

In any case, if you want the government to control the whole cryptospace so that criminals cannot use it then we should demand for more centralization of our favorite projects and demand for more invasive regulations.

[cryptoaddictchie]

Yes, it is their job. We are not questioning this. We are questioning if it was right for the government to imprison people who had no connection to the crimes that are happening through the software that they only created.

I assume the developer got arrested but that doesnt mean he was already imprisoned. I believe he is just investigated as per protocols and probably out by now. We know how things work, since they dont have a conclusive proof of allegations made.

But the cryptospace is giving some of this power back to the people. The government does not want this.

Did I say I didnt believe that? I am here on forum and of course also a fan of decentralized approach but we live mixed up with the Government isnt it? there are protocols that we should also followed as part of being its citizen. Im just in the middle.

In any case, if you want the government to control the whole cryptospace so that criminals cannot use it then we should demand for more centralization of our favorite projects and demand for more invasive regulations.

The hell I can be control by them. Not even work for the government eversince why I let them control me? Surely they acted like that due to the incidents happening on crypto. If theres no hack then surely they will shut their freakin mouth. The problem here is the composition of Government which mixed up with the sharks who wanted power.

[DaveF]

What it comes down to is what the developers knew and when they knew it.

IF and this is an IF. The government can prove that they knew that the Lazarus people were running money through their service then it's a different story then if the Lazarus people happened to use their service.

Did the government find or have an email / SMS / whatever discussion between them? That is a lot more damning then having an address on a list of 'known bad addresses' Was there communication between the developers that the government has that has them discussing that possibly they should not allow these addresses though the service, but they decided to let them so they could make their cut of the mixing. Both of these things are a lot worse then their service being used to move the money because 'it was there'

We don't know, what we don't know and all we can do here is speculate.

-Dave

[hugeblack]

Does anyone know the reason for the arrest? Because as far as I know, the operation of the mixer is not of interest, and money laundering is often linked to financial services that are provided without verifying identity, but in the case of the mixer, they do not deal in US dollars, so it is most likely that the reason is related to something else.

I'll read the details of what's going on but maybe this arrest explains why the recent bitcoin mixing service went missing scamming.

[DaveF]

Does anyone know the reason for the arrest? Because as far as I know, the operation of the mixer is not of interest, and money laundering is often linked to financial services that are provided without verifying identity, but in the case of the mixer, they do not deal in US dollars, so it is most likely that the reason is related to something else.

I'll read the details of what's going on but maybe this arrest explains why the recent bitcoin mixing service went missing scamming.

Did you read the link in the 1st post?

In a Wednesday indictment, the feds alleged that Roman Storm and Roman Semenov laundered more than $1 billion in criminal proceeds, and charged them with conspiracy to commit money laundering, sanctions violations, and conspiracy to operate an unlicensed money-transmitting business.

The conspiracy charge as a rule TENDS TO but not always show that they knew what they were taking and moving from people / organizations they KNEW they were not supposed to.

If you buy something on craigslist that is stolen you can be charged with receiving stolen property. You did not have to know it was stolen. And usually you have to have some other fuckups for the government to really go after you. If you an a regular basis buy things from someone on craigslist for 10% of the value that still has store security tags on it. Then they will probably charge you with the conspiracy to receive stolen property.

-Dave

[hugeblack]

Did you read the link in the 1st post?
-Dave

I explored sources directly, which did not contain the reason for the accusation, but the above text is quoted from a different source, which is^[1].

I do not think that the problem is running a mixing service or helping others hide their identity, but it is related to North Korea. It seems that the developer has a connection with an active group from North Korea that launders money for the government, so you find the charges include money laundering, and violating sanctions, which are OFAC sanctions.

It is also noted that there are accusations vs signatures that they wear that they are also a front for that North Korean group.

Generally, let's see how he will defend himself and whether these accusations are true, but it is better for privacy services developers to keep themselves anonymous.

“These included funds stolen through hacks by a group believed to be associated with North Korea. Tornado Cash started in 2019 and according to FACT it has since achieved a turnover of at least seven billion dollars,” the announcement notes.

[1] https://decrypt.co/153481/tornado-cash-money-laundering-charges-arrest-justice-department




Off-topic: I have always wondered why your name is written at the end of each reply. Was the account managed by more than one user? Or is there a story behind it?

-Dave

[DaveF]

Off-topic: I have always wondered why your name is written at the end of each reply. Was the account managed by more than one user? Or is there a story behind it?

-Dave

Can't speak for anyone else who does it but I do it because I'm old and nerdy and have been online for over 40 years. Back before the internet, back before dialing into services like AOL back before a lot.... You had places like CompuServe: https://en.wikipedia.org/wiki/CompuServe And BBSs that you dialed directly into:
https://en.wikipedia.org/wiki/Bulletin_board_system

With CompuServe your ID was a 5 digit number a comma and a 3 digit number like this 12345,123
Many (most?) of the early BBSs your ID was your user number so here I would not be DaveF but #300014

So many of us just got in the habit of putting -YourName the end so people knew who you were.
Four decades later, it's just pure habit.

-Dave

[bbc.reporter]

Yes, it is their job. We are not questioning this. We are questioning if it was right for the government to imprison people who had no connection to the crimes that are happening through the software that they only created.

I assume the developer got arrested but that doesnt mean he was already imprisoned. I believe he is just investigated as per protocols and probably out by now. We know how things work, since they dont have a conclusive proof of allegations made.

But the cryptospace is giving some of this power back to the people. The government does not want this.

Did I say I didnt believe that? I am here on forum and of course also a fan of decentralized approach but we live mixed up with the Government isnt it? there are protocols that we should also followed as part of being its citizen. Im just in the middle.

In any case, if you want the government to control the whole cryptospace so that criminals cannot use it then we should demand for more centralization of our favorite projects and demand for more invasive regulations.

The hell I can be control by them. Not even work for the government eversince why I let them control me? Surely they acted like that due to the incidents happening on crypto. If theres no hack then surely they will shut their freakin mouth. The problem here is the composition of Government which mixed up with the sharks who wanted power.

The government has no right to arrest anyone who did not do any crime. This is a violation of basic human rights.

Yes, we are in the middle and sometimes we cannot do anything, however, what we should have is critical thinking. This is another thing that the owners of the world do not want, people who are thinking and talking about how they are being scammed and fooled by the government and by the corporations.

Also, we are always being controlled and being manipulated by them. They tell us what to buy, what to think, how to act, what our politics should be, everything in our lives is based on everything that they have built, own and control.

[yhiaali3]

I don't know why this accident reminds me of a stupid law here in my country. The law says (with what it means) that if someone falls from the top of a balcony onto a car that was parked below in the street, the owner of the car is considered the cause of death and he will be charged and imprisoned for trial.

This is not a joke, it's a law that already exists here, can you believe this? What is the relationship of the owner of the car? This person was going to die anyway whether there was a car on the street or not?

My point of this is the ability of governments to invent wondrous laws that suit them perfectly and facilitate reaching their goals, regardless of whether these laws seem reasonable or not. So, is it possible for a person to use the mixer to launder money, and then the government arrests the mixer because it was unable to arrest this person? Long live intelligence.

[o_e_l_e_o]

Stumbled across this post on Reddit, where the OP nicely expresses the same sentiments I expressed earlier in this thread:

The so-called "anti-money laundering" movement that pushed for this indictment is a fascist mass-surveillance ideology wrapped up in euphemisms. It's reminiscient of the surveillance state ideology espoused by the CCP in China.

This doesn't just apply to mixers, but to everything that is pushed in the name of "AML". They'll go after mixers, after peer to peer trades, after DEXs, after the stupidly named "self hosted" wallets (which just means holding your own keys), after any and all services which don't collect KYC data. They can't stand a form of money which they do not have absolute control over. It weakness their control, weakness their grip on your life. Their ultimate goal is that all bitcoin is bought and paid for only on regulated KYC platforms, and it never leaves those regulated KYC platforms. The only thing you will be allowed to do with it is send it from one regulated KYC platform to another, using a list which they will create of "approved" platforms. Owning your own keys won't be allowed. Making your own transactions won't be allowed.

Unless people stop acquiescing to the ever more intense and invasive demands of centralized exchanges, then this is the future we are sleep walking in to.

[Agbe]

Im not sure what would others say about using mixers. Yes its for usign crypto for privacy, but we cant deny the fact that aside from this particular reason. Scammers arw gonna use it tp hide their scent or crime by using mixers. Cant blame the DOJ on this one. So other mixers might be in trouble too. In relation tok this big case being done on Tornado.

Even new or small mixers might get in trouble too as for sure scammers are already using those. Does owners of mixers can ban wallets or known scammers address for usage? Maybe this can help to make them free from charges like this and avoid incident like what happened to the Tornado founders.

One man sin does not affect the other man or his neighbor. Everyone carry their load. When CM management was found guilty of his crime other mixers were not affect. Criminality is not only found in mixers but all spare of life. One thing that caused criminality in this companies are greedy and corruption. And mixer management that is not greedy and not corrupt that mixing company is good. And that doesn't mean that criminals will not come and use the mixer again, they must surely use it but it the hands of the MD is clean then there is nothing to fear. We should blame other mixers because one mixer is found guilty. Mixers are own by human and not all humans are bad. Everyone carry their own cross.

[NotATether]

Im not sure what would others say about using mixers. Yes its for usign crypto for privacy, but we cant deny the fact that aside from this particular reason. Scammers arw gonna use it tp hide their scent or crime by using mixers. Cant blame the DOJ on this one. So other mixers might be in trouble too. In relation tok this big case being done on Tornado.

Even new or small mixers might get in trouble too as for sure scammers are already using those. Does owners of mixers can ban wallets or known scammers address for usage? Maybe this can help to make them free from charges like this and avoid incident like what happened to the Tornado founders.

One man sin does not affect the other man or his neighbor. Everyone carry their load. When CM management was found guilty of his crime other mixers were not affect. Criminality is not only found in mixers but all spare of life. One thing that caused criminality in this companies are greedy and corruption. And mixer management that is not greedy and not corrupt that mixing company is good. And that doesn't mean that criminals will not come and use the mixer again, they must surely use it but it the hands of the MD is clean then there is nothing to fear. We should blame other mixers because one mixer is found guilty. Mixers are own by human and not all humans are bad. Everyone carry their own cross.

Bad actors will abuse any service or industry they can find to accomplish their own agenda. But most people in positions of power and governments are too gullible to believe in any other resolution than the immediate destruction of any service that is not controlled by some regulated entity.

It's classic "more power to the few, at the expense of the many" event.

[dkbit98]

This doesn't just apply to mixers, but to everything that is pushed in the name of "AML". They'll go after mixers, after peer to peer trades, after DEXs, after the stupidly named "self hosted" wallets (which just means holding your own keys), after any and all services which don't collect KYC data.

I think they even have plans to expand AML crap to social media and to the whole internet, just look what that fool Elon Musk is doing with twitter aka X, wanting to turn it up into all-in-one app and add KYC verification  
If people comply with all this upcoming crazy stuff than they can say goodbye to any freedom in their life, but everything will be masked for their ''safety''.
New laws are applied in Europe and maybe we are going to see crazy autumn on social media (and in forums) this year, so better watch out what you write in public.
What's next? Thought Police maybe?  

[bbc.reporter]

Stumbled across this post on Reddit, where the OP nicely expresses the same sentiments I expressed earlier in this thread:

The so-called "anti-money laundering" movement that pushed for this indictment is a fascist mass-surveillance ideology wrapped up in euphemisms. It's reminiscient of the surveillance state ideology espoused by the CCP in China.

This doesn't just apply to mixers, but to everything that is pushed in the name of "AML". They'll go after mixers, after peer to peer trades, after DEXs, after the stupidly named "self hosted" wallets (which just means holding your own keys), after any and all services which don't collect KYC data. They can't stand a form of money which they do not have absolute control over. It weakness their control, weakness their grip on your life. Their ultimate goal is that all bitcoin is bought and paid for only on regulated KYC platforms, and it never leaves those regulated KYC platforms. The only thing you will be allowed to do with it is send it from one regulated KYC platform to another, using a list which they will create of "approved" platforms. Owning your own keys won't be allowed. Making your own transactions won't be allowed.

Unless people stop acquiescing to the ever more intense and invasive demands of centralized exchanges, then this is the future we are sleep walking in to.

I very much agree. On the case of the Tornado Cash founders, the DOJ used fud by implying that the Lazarus group might be using Tornado Cash to mix their funds. I reckon none of this is connected to the Lazarus group because their funds are being tracked already. It is speculated that the Lazarus group storyline was only a fear tactic or a distraction used to force the amendment and the creation of more executive orders to use against the cryptospace.



OFAC sanctioned the Lazarus Group on September 13, 2019, pursuant to Executive Order (E.O.) 13722, and identified it as an agency, instrumentality, or controlled entity of the Government of North Korea. The Lazarus Group has operated for more than 10 years and is believed to have stolen over $2 billion worth of digital assets across multiple thefts. Due to the pressure of robust U.S. and United Nations sanctions, the DPRK has resorted to using illicit tactics, such as cyber-enabled heists perpetrated by the Lazarus Group, to generate revenue for its unlawful weapons of mass destruction and ballistic missile programs.

Semenov is being designated pursuant to E.O. 13694, as amended by E.O. 13757, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any activity described in subsections (a)(ii) or (a)(iii)(A) of E.O. 13694, as amended, or any person whose property and interests in property are blocked pursuant to E.O. 13694, as amended; and pursuant to E.O. 13722 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the Government of North Korea, a person whose property and interests in property are blocked pursuant to E.O. 13722.

Source https://home.treasury.gov/news/press-releases/jy1702

[o_e_l_e_o]

-snip-

I'm sure the DoJ will be equally punitive against any fiat banks caught to be laundering money for North Korea though, right!?

Like when JPMorgan Chase laundered $89 million for 11 companies which they knew were linked to North Korea and were previously flagged as being suspicious? Or when BNY Mellon laundered $86 million in transactions which had "no clear commercial reason" for individuals which had talked openly in the media about "conducting business with North Korea"? I'm sure the DoJ will soon be handing out some punishments soon, right!?

Oh no, those documents came out 3 years ago and literally nothing happened: https://www.nbcnews.com/news/world/secret-documents-show-how-north-korea-launders-money-through-u-n1240329

As I said above, this has absolutely nothing to do with money laundering, and has everything to do with the government losing its grip on your lives. They don't care about money being laundered at all, as long as it is the right people doing the laundering.

[examplens]

As I said above, this has absolutely nothing to do with money laundering, and has everything to do with the government losing its grip on your lives. They don't care about money being laundered at all, as long as it is the right people doing the laundering.

I completely agree with this statement, but does the "selective" ban of the service, according to the AML excuse, in addition to attempts to control the sphere of bitcoins and cryptocurrencies, perhaps lead to an attempt of a final ban on crypto?

I didn't really follow the whole issue much, but what is done with seized funds from services that were closed due to money laundering? CM for example, or what is done with the money that someone has determined came from the Lazarus group or similar? Does he return to the original victims?

[bbc.reporter]

-snip-

I'm sure the DoJ will be equally punitive against any fiat banks caught to be laundering money for North Korea though, right!?

Like when JPMorgan Chase laundered $89 million for 11 companies which they knew were linked to North Korea and were previously flagged as being suspicious? Or when BNY Mellon laundered $86 million in transactions which had "no clear commercial reason" for individuals which had talked openly in the media about "conducting business with North Korea"? I'm sure the DoJ will soon be handing out some punishments soon, right!?

Oh no, those documents came out 3 years ago and literally nothing happened: https://www.nbcnews.com/news/world/secret-documents-show-how-north-korea-launders-money-through-u-n1240329

As I said above, this has absolutely nothing to do with money laundering, and has everything to do with the government losing its grip on your lives. They don't care about money being laundered at all, as long as it is the right people doing the laundering.

What the Tornado Cash founders appear to have done wrong is if they wanted to develop opensource software that might be cracked down by the government, they should have done this more anonymously similar to what Satoshi has done when he began developing bitcoin. This is not only good for security, it will also encourage more developers to contribute to the project anonymously.

The other reason that they should have been more anonymous is because the founders hold governance tokens and they are making profit from the usage of this opensource mixer. The government does not want to encourage the creation of a decentralized organization the profits from criminal activity because presently it is easy to create by using smart contracts, blockchain and DeFi.

[o_e_l_e_o]

perhaps lead to an attempt of a final ban on crypto?

I don't think the US government at least will go down the route of an outright crypto ban. It is much more lucrative for them, both in terms of taxation and data harvesting, to instead pass the most ridiculous regulations which require all bitcoin to be fully KYCed. First it will be banning non-KYC trading, then it will be mandating that all withdrawal addresses from exchanges are linked to KYC data (such as the AOPP proposal), and then it will be mandating that all bitcoin is only stored on regulated KYC exchanges and you are not allowed to withdrawal it at all. I'm sure I don't need to point out how we should fight back against this nonsense as strongly as possible.

Does he return to the original victims?

Ha! Suggesting the government might actually care about the victims! Good one! No, the government simply keep it for themselves or auction it off.

What the Tornado Cash founders appear to have done wrong is if they wanted to develop opensource software that might be cracked down by the government, they should have done this more anonymously similar to what Satoshi has done when he began developing bitcoin.

Or they should have bought out our politicians like the fiat banks do. That gives them a free pass to launder trillions.

[dkbit98]

What the Tornado Cash founders appear to have done wrong is if they wanted to develop opensource software that might be cracked down by the government, they should have done this more anonymously similar to what Satoshi has done when he began developing bitcoin. This is not only good for security, it will also encourage more developers to contribute to the project anonymously.

Developers that work on shitcoins like ethereum usually never care much about privacy, that is strange thing to do especially if you are creating something that improves privacy.
I never hard of any large central bank being accused of money laundering, and this was not invented yesterday, that is why there are constant wars around the world, and everyone knows that.

[DaveF]

What the Tornado Cash founders appear to have done wrong is if they wanted to develop opensource software that might be cracked down by the government, they should have done this more anonymously similar to what Satoshi has done when he began developing bitcoin. This is not only good for security, it will also encourage more developers to contribute to the project anonymously.

Developers that work on shitcoins like ethereum usually never care much about privacy, that is strange thing to do especially if you are creating something that improves privacy.
I never hard of any large central bank being accused of money laundering, and this was not invented yesterday, that is why there are constant wars around the world, and everyone knows that.

Central banks, not many. Commercial banks there have been a bunch over the years.

https://sanctionscanner.com/blog/the-five-biggest-money-laundering-scandals-317

The problem comes back to big banks have 1000s if not 10s of 1000s of employees. You can find that this one or that one is doing something wrong. But proving who knew what and when they knew it is difficult.
If an order comes down that says we need to make these numbers in revenue and people panic about their jobs and look the other way is one thing.
Having an order come down that says we need to make these numbers in revenue and do whatever it takes to do it, is another.
And most people that high up know not to say do whatever it takes in any way that could come back to them.
The government can harass a corporation, it can fine a corporation, it can even shut it down. But you can't lock it up.

People you can lock up. So when you have a small target, like 2 people, then you can go after them.

-Dave

[bbc.reporter]

On the news about the Lazarus Group and how the American government is using this for fud and fear tactics, It appears we have another one. The FBI identified that it was the Lazarus Group that hacked stake.com. I shake my head. I am not implying that this is fake news, however, anything can be blamed on North Korea.



The FBI is issuing this release to warn the public regarding the theft of approximately $41 million in virtual currency from Stake.com, an online casino and betting platform. The FBI has confirmed that this theft took place on or about September 4, 2023, and attributes it to the Lazarus Group (also known as APT38) which is comprised of DPRK cyber actors. 

Source https://www.fbi.gov/news/press-releases/fbi-identifies-lazarus-group-cyber-actors-as-responsible-for-theft-of-41-million-from-stakecom



There are also other articles that say these hacked cryptocoins are being used for funding North Korea's nuclear missile program.

[bbc.reporter]

Privacy is not a crime. However, it appears that if a person uses a mixer or a something similar to Tornado Cash, the government can call it moneylaundering even if you only want to hide your cryptocoins in a personal private wallet. I wish the Dutch prosecutors will lose in this trial.

The trial will begin on March 26.



Alexey Pertsev, the Tornado Cash developer who has become a symbol of state overreach on crypto crime, laundered more than $1.2 billion in dirty money, according to an indictment by Dutch prosecutors obtained by DL News.

Pertsev, who is scheduled to stand trial in the Dutch city of ‘s-Hertogenbosch beginning March 26, “made a habit of committing money laundering,” according to the three-page document, which was written in Dutch and was revealed Tuesday.

Pertsev has denied he violated money laundering laws ever since he was arrested in August 2022.

“Prosecutors are suspecting Pertsev of money laundering and they have described it in a general way, but they don’t specify which exact acts he has committed to take part in the criminal offence,” Keith Cheng, Pertsev’s lawyer, told DL News Tuesday

Read in full https://www.dlnews.com/articles/people-culture/alexey-pertsev-accused-of-laundering-1bn-at-tornado-cash/

[SickDayIn]

Privacy is not a crime. However, it appears that if a person uses a mixer or a something similar to Tornado Cash, the government can call it moneylaundering even if you only want to hide your cryptocoins in a personal private wallet. I wish the Dutch prosecutors will lose in this trial.

This is very true - Privacy is not a crime.

The problem is, if the Government can't track it or tax you on it, they won't let you have it. Perfect example is the banning of Monero and other privacy-based blockchains and coins by certain governments in the world.

Tornado Cash was used by North Korea / Lazarus Group to hide their stolen coins so they could cash it out. I don't believe the developers of Tornado Cash should be punished due to this though.

It's like saying, if Chase Bank has been used by international drug gangs to proceed fiat from crime, does that mean Chase Bank executives should be sanctioned?

[The Cryptovator]

So it's pretty clear that governments don't want to allow crypto mixers anymore. I met Tornado Cash a few days ago. One of my clients sent me funds, and his wallet was related to Tornado Cash. Unfortunately, I received the funds on Binance, and they suspended my account temporarily. Yet it hasn't been solved and is under investigation. After that, this news pops up. So I don't know whether Binance will restore my account. However, it seems pretty risky to use any kind of mixer. Either the government or centralised exchanges will catch up. 

[JeromeTash]

So it's pretty clear that governments don't want to allow crypto mixers anymore. I met Tornado Cash a few days ago. One of my clients sent me funds, and his wallet was related to Tornado Cash. Unfortunately, I received the funds on Binance, and they suspended my account temporarily. Yet it hasn't been solved and is under investigation. After that, this news pops up. So I don't know whether Binance will restore my account. However, it seems pretty risky to use any kind of mixer. Either the government or centralised exchanges will catch up. 

It's a sanctioned mixer, which means any funds associated with it will be flagged by pretty much any centralized exchange around. Binance has had its own troubles in the past with the US regulators, so I don't think they would want to go sown the same road again.

Have they asked you anything yet regarding the funds you sent there?

[Darker45]

So it's pretty clear that governments don't want to allow crypto mixers anymore. I met Tornado Cash a few days ago. One of my clients sent me funds, and his wallet was related to Tornado Cash. Unfortunately, I received the funds on Binance, and they suspended my account temporarily. Yet it hasn't been solved and is under investigation. After that, this news pops up. So I don't know whether Binance will restore my account. However, it seems pretty risky to use any kind of mixer. Either the government or centralised exchanges will catch up.

It's expected that Binance is going to be stricter now more than ever. Now that they've been slapped with huge fines and even had its founder and former CEO held in the US for his sentencing, they must already be walking on eggshells right now.

I hope they would allow you to at least make a withdrawal though. If that transaction would cost you your account, at least you can have your money back first.

It's unfortunate, but it seems that at this point in time, funds coming from mixers shouldn't anymore cross paths with centralized exchanges. They'll most likely be frozen.

[hugeblack]

So I don't know whether Binance will restore my account. However, it seems pretty risky to use any kind of mixer. Either the government or centralised exchanges will catch up. 

They cannot know that the money comes from the mixer, but their verification algorithms will try to freeze any account they suspect, especially if the mixers are of the Tornado Cash type, where there is a Contract Address. Therefore, if you want to enhance your privacy, it is better to use Bitcoin mixers, or at least exchange Bitcoin to Monero and then Back again to Bitcoin.

Contact Binance. They will ask you for the source of the funds. If you are able to prove their source, the account will be restored.

[The Cryptovator]

So I don't know whether Binance will restore my account. However, it seems pretty risky to use any kind of mixer. Either the government or centralised exchanges will catch up. 

They cannot know that the money comes from the mixer, but their verification algorithms will try to freeze any account they suspect, especially if the mixers are of the Tornado Cash type, where there is a Contract Address. Therefore, if you want to enhance your privacy, it is better to use Bitcoin mixers, or at least exchange Bitcoin to Monero and then Back again to Bitcoin.

Contact Binance. They will ask you for the source of the funds. If you are able to prove their source, the account will be restored.

I have contacted them. Though they haven't asked for anything yet, the account has frozen. They need 30 working days, according to them, to make a full investigation. After that, they will let me know what the next step is. I have provided proof that I received those funds for marketing through their live support. But it doesn't help unlock my account immediately. A few days remain to reach 30 working days. I will make a post after their decision. Usually I don't store funds for exchange, but those funds are there for daily trading. Still, they allow trades but disable withdrawals. 

[examplens]

Usually I don't store funds for exchange, but those funds are there for daily trading. Still, they allow trades but disable withdrawals. 

Did I understand correctly, the funds you are talking about were sent directly ^{from Tornado source} to Binance?
I know of earlier cases where Binance requested verification for funds deposited directly from the mixer, while it was not the case for mixer -> wallet -> Binance. It is the same starting address where the funds came from.

[logfiles]

They cannot know that the money comes from the mixer, but their verification algorithms will try to freeze any account they suspect, especially if the mixers are of the Tornado Cash type, where there is a Contract Address. Therefore, if you want to enhance your privacy, it is better to use Bitcoin mixers, or at least exchange Bitcoin to Monero and then Back again to Bitcoin.

Contact Binance. They will ask you for the source of the funds. If you are able to prove their source, the account will be restored.

To completely enhance privacy and avoid getting funds blocked and asked for KYC verification in order to have one's funds back, I think it's best to completely avoid centralized exchanges like Binance.

Imagine exchanging Bitcoin to Monero and then back to bitcoin and then sending it to Binance only to be asked about the source of the funds if you want your funds back 

[bbc.reporter]

So I don't know whether Binance will restore my account. However, it seems pretty risky to use any kind of mixer. Either the government or centralised exchanges will catch up. 

They cannot know that the money comes from the mixer, but their verification algorithms will try to freeze any account they suspect, especially if the mixers are of the Tornado Cash type, where there is a Contract Address. Therefore, if you want to enhance your privacy, it is better to use Bitcoin mixers, or at least exchange Bitcoin to Monero and then Back again to Bitcoin.

Contact Binance. They will ask you for the source of the funds. If you are able to prove their source, the account will be restored.

I very much disagree that they cannot know if the money comes from the mixer. Do not use a mixer if your exchange is Binance! Different regulators from different jurisdictions have been pressuring Binance already after CZ was forced to admit that there was moneylaundering that have occured in the exchange. They will certainly be much stricter this time. If you assume that they do not know your coins went through a mixer, prepare to have your accounts and funds frozen.

[Z-tight]

Imagine exchanging Bitcoin to Monero and then back to bitcoin and then sending it to Binance only to be asked about the source of the funds if you want your funds back  

I agree with you, that is the risk with centralized exchanges, and it makes no sense using it if your goal is privacy. If you use mixers, CoinJoin or BTC->XMR->BTC, then don't use centralized exchanges. Binance and any centralized exchange can confiscate customers' funds at anytime, so better to choose p2p exchanges if you don't want to find yourself in such situation.

It's unfortunate, but it seems that at this point in time, funds coming from mixers shouldn't anymore cross paths with centralized exchanges. They'll most likely be frozen.

Yeah, and i believe it has always been that way, there is always a tendency that if your funds is coming directly from a mixer or any privacy solution, it might be frozen.

[The Cryptovator]

Usually I don't store funds for exchange, but those funds are there for daily trading. Still, they allow trades but disable withdrawals. 

Did I understand correctly, the funds you are talking about were sent directly ^{from Tornado source} to Binance?
I know of earlier cases where Binance requested verification for funds deposited directly from the mixer, while it was not the case for mixer -> wallet -> Binance. It is the same starting address where the funds came from.

No, it wasn't directly from the mixer. My clients mixed and received his address. Then he sent it to my Binance. I have provided a screenshot where I talked about sending funds to my clients. So the fund was from my client's address, not from Mixer. But still, I haven't received any resolution from Binance. My account is still under investigation. I am waiting for their response before making an accusation thread. 

[FinneysTrueVision]

Sanctioning Tornado Cash and arresting one of their developers sets a terrible precedent. Tornado Cash isn’t custodial like traditional mixers and its developers have no control over how users decide to use this service.

When the sanctions were first announced, there were some in the Monero community who were almost celebrating the news.
https://www.reddit.com/r/Monero/comments/wkgs4u/people_are_making_the_wrong_generalizations/
Now we are seeing that governments’ strong opposition to privacy has negatively impacted Monero as well. If you give regulators an inch, they will take a mile. Shutting down or severely hampering this one mixer is only the start of increasingly stricter compliance measures and restrictions on users seeking financial privacy.

[Z-tight]

No, it wasn't directly from the mixer. My clients mixed and received his address. Then he sent it to my Binance. I have provided a screenshot where I talked about sending funds to my clients. So the fund was from my client's address, not from Mixer.

That is surprising, as far as i know or thought i did, centralized exchanges wouldn't ask for verification on the source of funds if after mixing you go through a few hops before depositing it into their platform. In this case it was from tornado cash -> wallet -> binance, i would think that would have been enough, but maybe the client should have gone through a few more hops. However, goodluck and i hope you get a good resolution with binance.

[The Cryptovator]

No, it wasn't directly from the mixer. My clients mixed and received his address. Then he sent it to my Binance. I have provided a screenshot where I talked about sending funds to my clients. So the fund was from my client's address, not from Mixer.

That is surprising, as far as i know or thought i did, centralized exchanges wouldn't ask for verification on the source of funds if after mixing you go through a few hops before depositing it into their platform. In this case it was from tornado cash -> wallet -> binance, i would think that would have been enough, but maybe the client should have gone through a few more hops. However, goodluck and i hope you get a good resolution with binance.

Today I received mail that Binance enabled my withdrawal for cryptocurrency. But they are temporarily restricted from using their platforms for trading and p2p trading. However I am happy that at least they allowed me to withdraw my funds from there. It doesn't matter if they don't want to allow me to use their platform. I still have hope since I haven't made any mistakes there. They need more than 15 days to let me know their final decision about account restrictions. I am going to withdraw all the funds into a hardware wallet and unlikely trade in centralised exchanges. 

[Z-tight]

Today I received mail that Binance enabled my withdrawal for cryptocurrency. But they are temporarily restricted from using their platforms for trading and p2p trading.

That is good news for you, i am sure they didn't find a way to 'steal' your coins from their investigations, and this is why they have released it to you. Since they allowed you to withdraw your coins, i believe they would also remove the restriction on your account after sometime, but they may keep a close eye on your account from now on.

I am going to withdraw all the funds into a hardware wallet

Much better, nothing's better that being in control of your funds, safely in an offline device. Though if you are an active trader, you still need to trade on centralized exchanges, but you would only move small amounts into their platform for trading.