Tornado cash founders charged with money laundering/sanctions violations

[blckhawk]

Here is an update.
Tornado Cash developer Alexey Pertsev has been found guilty of laundering $1.2 billion.
It is really idiotic to punish the developer, while the co-founder was declared not guilty.

Well, the problem is that the developers probably didn't have a good lawyer or they're so bad at answering questions during the court proceedings that could've lead to what happened to them, the Jury system is a really biased system so you'll have to expect that this will happen every time, maybe there's also the fact that the co-founder's got some good friends in high places that could've led to this verdict, I mean that's the only that this could've happened. Or they probably have this argument that the developers were the ones that were responsible for making the service and the code that made it so effective and so in a way they did have a heavier contribution to the money laundering but then again, that's a flimsy argument so the possibility is that Pertsev got some bad lawyers or there's more that's not mentioned on this update or in the news.

[logfiles]

This is idiotic because they blame him on the usage of the people who have used Tornado Cash. This has created a dangerous precedent on anonymous coins, tools and projects in the cryptospace. It also appears that the developer can be charged for the crimes that another person has done. Does this imply that if a terrorist used a Nokia cellphone to detonate bombs, Nokia is also implicit to the crime? A very headshaking argument.

The system is rigged. It's all hell-bent towards criminalizing crypto or anything that respects or encourages user financial privacy and freedom. It's stupid how they use the excuse of anonymous transactions getting used to "finance" terrorism yet the very hypocrites like the US openly finance terrorism under the guise of weapon aid to their allies using tax payers money.

Another lesson to learn is to completely go anonymous when creating tools that anonymize other users or enhance their privacy. It makes no sense if you are to develop a tool that enhances user privacy, yet you are out there in the open known by those Government blood suckers. They will dump all their shame and anger on that one person who created the tool once they land on him/her.

[bbc.reporter]

@logfiles. They might be also conspiring to criminalize the cryptospace users' right to self custody their cryptocoins and tokens anonymously. They will remove you of this right by forcing you to submit your identification and KYC your wallet. I reckon everyone should begin to buy Monero and other anonymous coins.

In any case after Tornado Cash, it is Telegram. The CEO of Telegram Pavel Durov has been arrested in France. The case against him is Telegram is being used for criminality. I shake my head, should the manufacturer of the device where Telegram was installed not also be arrested? The dangerous precedent has begun.

[NotATether]

@logfiles. They might be also conspiring to criminalize the cryptospace users' right to self custody their cryptocoins and tokens anonymously. They will remove you of this right by forcing you to submit your identification and KYC your wallet. I reckon everyone should begin to buy Monero and other anonymous coins.

Buying Monero will help you avoid getting your funds under surveillance, but it is going to be quite harder to buy Monero when they keep picking off the private exchanges one by one under the guise of "countering money laundering".

In any case, you can hardly buy Monero with fiat anywhere anymore, with the exception of a few platforms, so now there's a two-step-process where people buy BTC and then swap it for Monero.

[shield132]

Here is an update.
Tornado Cash developer Alexey Pertsev has been found guilty of laundering $1.2 billion.
It is really idiotic to punish the developer, while the co-founder was declared not guilty.

Well, the problem is that the developers probably didn't have a good lawyer or they're so bad at answering questions during the court proceedings that could've lead to what happened to them, the Jury system is a really biased system so you'll have to expect that this will happen every time, maybe there's also the fact that the co-founder's got some good friends in high places that could've led to this verdict, I mean that's the only that this could've happened. Or they probably have this argument that the developers were the ones that were responsible for making the service and the code that made it so effective and so in a way they did have a heavier contribution to the money laundering but then again, that's a flimsy argument so the possibility is that Pertsev got some bad lawyers or there's more that's not mentioned on this update or in the news.

I don't understand why you need a good lawyer to win the case. If we follow the logic, if you are true and have arguments to prove that, you should win. How can a lawyer who is worth millions of dollars make a person innocent while a lawyer who is worth some thousands - can't? I think that lawyers who are worth millions of dollars, have connections and can make you innocent, as always, money buys everything.

This is idiotic because they blame him on the usage of the people who have used Tornado Cash. This has created a dangerous precedent on anonymous coins, tools and projects in the cryptospace. It also appears that the developer can be charged for the crimes that another person has done. Does this imply that if a terrorist used a Nokia cellphone to detonate bombs, Nokia is also implicit to the crime? A very headshaking argument.

The system is rigged. It's all hell-bent towards criminalizing crypto or anything that respects or encourages user financial privacy and freedom. It's stupid how they use the excuse of anonymous transactions getting used to "finance" terrorism yet the very hypocrites like the US openly finance terrorism under the guise of weapon aid to their allies using tax payers money.

Another lesson to learn is to completely go anonymous when creating tools that anonymize other users or enhance their privacy. It makes no sense if you are to develop a tool that enhances user privacy, yet you are out there in the open known by those Government blood suckers. They will dump all their shame and anger on that one person who created the tool once they land on him/her.

Governments want to control people and these tools that give us freedom, take control away from governments, that's why they label every privacy enhancer tool as a tool that helps terrorism and illegal trading. This is insane, can't governments analyze that they won't be forever in control and they'll be changed by one party or another every 4 years? I don't know why each of them make this decision.

[NotATether]

I don't understand why you need a good lawyer to win the case. If we follow the logic, if you are true and have arguments to prove that, you should win. How can a lawyer who is worth millions of dollars make a person innocent while a lawyer who is worth some thousands - can't? I think that lawyers who are worth millions of dollars, have connections and can make you innocent, as always, money buys everything.

Because most legal codes are written like a clusterfuck and a million-dollar lawyer would be more motivated to turn through every single page of the law in order to find inconsistencies with the case being fought, while the thousand-dollar lawyer is probably burned out from all the other cases they have to handle and won't put in as much effort.

It's not fair, but it can mean the difference between guilty and innocent, sometimes.

[bbc.reporter]

I disagree that the government can make it impossible for a person to run a validator node that can and will validate privacy transactions that are going through Tornado Cash and something similar. However, the government can certainly make you a criminal, or say that you are a terrorist, a drug cartel member and other characters of criminality to cause them to send their swat teams in your house to terrorize an owner of a validator node who believes in onchain privacy hehehehehe.



"Despite sanctions, Tornado Cash has remained online and continues to function as decentralized smart contracts."

They're coming for crypto privacy.

Last wk Dem Congress Reps Letter sent a letter to Treasury demanding blood for Tornado & proposing privacy killing legislation.

If you don't see where this leads let me tell you.

They'll make it illegal/impossible to run validator nodes that validate privacy protocol transactions.

Sources https://x.com/ryansadams/status/1858870504678883527?s=12&t=fx2RmsbaS0qNJTJTdpNu2w

https://casten.house.gov/media/press-releases/casten-foster-sherman-cleaver-introduce-legislation-to-temporarily-prohibit-crypto-mixers

https://casten.house.gov/imo/media/doc/casten_tornado_cash_letter.pdf

https://casten.house.gov/imo/media/doc/blockchain_integrity_act.pdf

[ABCbits]

The Blockchain Integrity Act would place a two-year moratorium to prohibit financial institutions, including cryptocurrency exchanges, virtual asset service providers (VASPs), and other registered money service businesses (MSBs), from accepting incoming funds that have been routed through a mixer, as well as prevent outgoing funds from being withdrawn directly to a known mixer address.

2 years prohibition? Looking at history of Patriot Act, i expect duration this act would be extended with some details changed or even rebrand.

[bbc.reporter]

The Blockchain Integrity Act would place a two-year moratorium to prohibit financial institutions, including cryptocurrency exchanges, virtual asset service providers (VASPs), and other registered money service businesses (MSBs), from accepting incoming funds that have been routed through a mixer, as well as prevent outgoing funds from being withdrawn directly to a known mixer address.

2 years prohibition? Looking at history of Patriot Act, i expect duration this act would be extended with some details changed or even rebrand.

Agreed. This proposal is something similar to the trojan horse meme heheheh. They will introduce a written proposal and when the review on the proposal is positive, I speculate that they will suggest changes or they can impose changes after the implementation of the proposal. In any case, let us hope Trump's chosen people on different positions in government will bring more regulatory clearness and fairness on self custody, privacy and anonymity in the cryptospace.

[bbc.reporter]

It appears that it will not only be the market and the prices of our cryptocoins that might be bullish under the Trump administration. It will also be a positive enforcement of laws without governmental overreach that the Biden administration has been using, also similar to the SEC's regulation through enforcement tactic of uncle Gary heheheh.

I speculate that we might have an unexpected occurrence where regulator clarity will happen under the president that everyone does not like hehehehe.



U.S. sanctions against Tornado Cash, a service that anonymizes crypto transactions, must be abandoned, a federal appeals court ruled Tuesday.

The decision answers a controversial privacy debate on whether the government — via a sanctions list maintained by the U.S. Treasury Department — has a right to target the technology because it's associated with criminals. The ruling reversed a district court's August ruling that had sided with the government's pursuit of what it had characterized as a "notorious" crypto-mixing service.

"Tornado Cash’s immutable smart contracts (the lines of privacy-enabling software code) are not the 'property' of a foreign national or entity," according to a U.S. Court of Appeals for the 5th Circuit ruling, so they can't be blocked under the International Emergency Economic Powers Act, and the Treasury's Office of Foreign Assets Control "overstepped its congressionally defined authority" when it did so.

Coinbase Inc. (COIN) and others had sued the government, claiming it had overreached. Paul Grewal, chief legal officer of crypto exchange Coinbase, cheered the ruling in a Tuesday posting on X, calling it a "historic win for crypto."

"These smart contracts must now be removed from the sanctions list and U.S. persons will once again be allowed to use this privacy-protecting protocol," Grewal wrote. "Put another way, the government’s overreach will not stand."

Read in full https://www.coindesk.com/policy/2024/11/26/tornado-cash-sanctions-overturned-by-u-s-appeals-court

[FinneysTrueVision]

It appears that it will not only be the market and the prices of our cryptocoins that might be bullish under the Trump administration. It will also be a positive enforcement of laws without governmental overreach that the Biden administration has been using, also similar to the SEC's regulation through enforcement tactic of uncle Gary heheheh.

I speculate that we might have an unexpected occurrence where regulator clarity will happen under the president that everyone does not like hehehehe.

This was always going to be a difficult case for the government to win. In their ruling, the court made many of the same statements that opponents of the sanctions have been saying for months. The intention behind sanctioning Tornado Cash was always to have a chilling effect on anyone that is trying to work on privacy and discourage the use of privacy-enhancing tools, and in that regard, they’ve been successful to a certain extent.

[Z-tight]

U.S. sanctions against Tornado Cash, a service that anonymizes crypto transactions, must be abandoned, a federal appeals court ruled Tuesday.

It is truly a big win for crypto and especially for privacy, the government's overreach towards the crypto industry has been going on for sometime now and i hope the industry gets some respite with this incoming admimistration. According to the law, ofac can only regulate property and smart contract is no property, so obviously they were going above their powers and it only makes perfect sense that those sanctions be abandoned immediately.

[dkbit98]

Real question is what is going to happen with TornadoCash developers now.
Alexey Pertsev was arrested in Netherlands back in August 2022, and this month they prolonged his detention.
That is years of his life wasted in prison for nothing. 

[JeromeTash]

Real question is what is going to happen with TornadoCash developers now.
Alexey Pertsev was arrested in Netherlands back in August 2022, and this month they prolonged his detention.
That is years of his life wasted in prison for nothing. 

Probably a pardon and maybe compensation.

But anyway, that's how the justice system is unfair world over, especially when it comes to anything to do with advocacy for freedom. When I look at this case, I can't stop thinking about the likes of Ross Ulbricht and Julian Assange

[bbc.reporter]

It appears that it will not only be the market and the prices of our cryptocoins that might be bullish under the Trump administration. It will also be a positive enforcement of laws without governmental overreach that the Biden administration has been using, also similar to the SEC's regulation through enforcement tactic of uncle Gary heheheh.

I speculate that we might have an unexpected occurrence where regulator clarity will happen under the president that everyone does not like hehehehe.

This was always going to be a difficult case for the government to win. In their ruling, the court made many of the same statements that opponents of the sanctions have been saying for months. The intention behind sanctioning Tornado Cash was always to have a chilling effect on anyone that is trying to work on privacy and discourage the use of privacy-enhancing tools, and in that regard, they’ve been successful to a certain extent.

I am not arguing on the difficulty. I am telling everyone the differences on each administration's policies on how to impose the law on the cryptospace. Under the Biden administration, the government does not respect the rights of the developers and they also do not follow their own rules. They will consider someone a criminal and imprison him because he created an onchain privacy tool in the cryptospace. Development of a privacy tool is not a crime.

However, it appears that this will change on Trump's administration. They will respect the rule of law and they will not oppress developers in the cryptospace wrongfully.

[NotATether]

Real question is what is going to happen with TornadoCash developers now.
Alexey Pertsev was arrested in Netherlands back in August 2022, and this month they prolonged his detention.
That is years of his life wasted in prison for nothing. 

This ruling is for the US court system and if I recall correctly, I don't think it applies to any other government.

So he probably remains locked up pending Dutch charges still, and that's to say nothing about all the online services who banned him.

[TravelMug]

Real question is what is going to happen with TornadoCash developers now.
Alexey Pertsev was arrested in Netherlands back in August 2022, and this month they prolonged his detention.
That is years of his life wasted in prison for nothing. 

Probably a pardon and maybe compensation.

But anyway, that's how the justice system is unfair world over, especially when it comes to anything to do with advocacy for freedom. When I look at this case, I can't stop thinking about the likes of Ross Ulbricht and Julian Assange

Yeah, happy for Tornado Cash, I think he will be out of jail and could be pardon, but I do not see him being compensated. Maybe the best thing for him and for us is to bring back Tornado Cash once again so that we can used it.

So I guess this is one of the great news that we had since November besides Trump winning. And I would say that 1 year is not a waste of time. There are those who have been exonerated, been jailed for more than 20 years, until finally they are being released, now that is the real definition of wasting your time in jail, when you are innocent.

[DaveF]

Real question is what is going to happen with TornadoCash developers now.
Alexey Pertsev was arrested in Netherlands back in August 2022, and this month they prolonged his detention.
That is years of his life wasted in prison for nothing. 

This ruling is for the US court system and if I recall correctly, I don't think it applies to any other government.

So he probably remains locked up pending Dutch charges still, and that's to say nothing about all the online services who banned him.

Yep, and IIRC a couple of other countries had also brought charges against him so even if some charges are dropped others will still be out there waiting.

It's not like it was about 1 small law broken in one country.

-Dave

[dkbit98]

But anyway, that's how the justice system is unfair world over, especially when it comes to anything to do with advocacy for freedom. When I look at this case, I can't stop thinking about the likes of Ross Ulbricht and Julian Assange

All of them are victims of this system, and they only served as examples for other people who dare to do something similar.
I hope Ross Ulbricht and Pertsev finally gets released like Assange, but I won't believe it until I see it.
And let's not forgewr Roger Ver, I think he is still not able to leave Spain...

Yep, and IIRC a couple of other countries had also brought charges against him so even if some charges are dropped others will still be out there waiting.

I think he is in US custody and other countries have no control over US citizens.

[bbc.reporter]

Real question is what is going to happen with TornadoCash developers now.
Alexey Pertsev was arrested in Netherlands back in August 2022, and this month they prolonged his detention.
That is years of his life wasted in prison for nothing.  

This ruling is for the US court system and if I recall correctly, I don't think it applies to any other government.

So he probably remains locked up pending Dutch charges still, and that's to say nothing about all the online services who banned him.

Yep, and IIRC a couple of other countries had also brought charges against him so even if some charges are dropped others will still be out there waiting.

It's not like it was about 1 small law broken in one country.

-Dave

However, on what law did the Tornado cash developers has done, there is nothing. They created a privacy tool for the cryptospace. Is this a crime? Does this also imply that Monero developers are criminals or Samourai and Wasabi wallets' developers? Creating and developing these tools is certainly not a crime. If they are being used by criminals, this does not cause the developers to become criminals also. If this will the argument then I also argue that Nokia and Casio creators are also criminals because there products are being used by terrorists as timers for their bombings hehehe.