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.