This is very alarming and a very overreaching thing by the government. These men wrote an open source protocol (smart contract) which was used by random folks to "also" launder money. Its like arresting Tor developers because people host illegal content on it. Leaving this here for more details and reference:
If you start a company and take investment and rake in money without AML controls then you're going to have a bad time.
Don't want to be arrested? Pretty simple: Either live in Russia or don't start a company to make money off of money laundering. Or just build the open-source software without trying to make money off of it.
What if you could create a smart contract / protocol / service whatever it was. That's not a company. It's just software, anybody can use it for any reason. It could be possible that people use it to launder money, or they could not. But when people use it you get paid. Like a creators skim from every transaction. But you don't really have any control over who uses it or whatnot.
Huh? They were running tornado cash which existed for the sole purpose of laundering money. This isn't at all reaching, if your bank down the street started shredding records for deposits in order to transact with drug dealers, they would also be arrested.
No they wouldn't, how naive are you? they'd get fined a small fraction of the amounts they likely earned for the crime. [1,2,3] + 10 others from one bing search.
Different laws come into play when your platform targets monetary transactions as opposed to general purpose data transactions. Tor operates in an entirely different legal landscape.
At one point, when the founders suggested they create a version of the service that would adhere to federal anti-money-laundering and know-your-customer rules, the investors at the venture capital fund “dismissed the idea,” the indictment says. One of them allegedly wrote “it would be unlikely that as a fund we’d use a ‘compliant mixer.’”
> Authorities allege that Storm and Semenov knowingly allowed the Lazarus Group to launder money on behalf of the North Korean government in the spring of 2022.
Hard to have any positive viewpoint on these guys if this turns out to be true.
the 'knowingly allowed' wording suggests LG literally asked them for permission to launder money on behalf of NK and these guys were like of course sure here you go, we've enabled money laundering for your account. pretty hard to believe by my standards.
it's more likely LG simply used Tornado Cash just like any other user.
Previously: Tornado Cash Founders Charges with Money Laundering[0](5pts, 0 comments, 1 day ago), Tornado Cash devs charged with laundering more than $1B[1](110pts, 113 comments, 1 day ago), Tornado Cash founders charged with laundering more than $1B[2](2pts, 0 comments, 12 hours ago), U.S. Charges Two Alleged Founders of Tornado Cash with Money Laundering[3](1pt, 0 comments, 5 hours ago)
The WaPo's title is deceptive. It should be "Men charged with laundering more than $1B using cryptocurrency."
Honestly that would not have caused me to read the article. I clicked because I didn't really know what laundering cryptocurrency itself would involve, except a "washing machine" site (which is of course this is). I was hoping to learn something new.
The way to win with a washing machine is to run one, and then when the volume gets high enough just take all the crypto for yourself -- by definition you'd be untraceable, just as your customers wanted.
Readit News
https://rnikhil.com/2022/08/09/tornado-cash-block.html
If you start a company and take investment and rake in money without AML controls then you're going to have a bad time.
Don't want to be arrested? Pretty simple: Either live in Russia or don't start a company to make money off of money laundering. Or just build the open-source software without trying to make money off of it.
Funny because real estate agencies across the western world rake it in without fear.
No they wouldn't, how naive are you? they'd get fined a small fraction of the amounts they likely earned for the crime. [1,2,3] + 10 others from one bing search.
[1]https://www.theguardian.com/world/2012/jul/21/drug-cartels-b...
[2]https://www.theguardian.com/world/2011/apr/03/us-bank-mexico...
[3]https://money.cnn.com/2018/02/08/news/rabobank-mexico-drug-m...
At one point, when the founders suggested they create a version of the service that would adhere to federal anti-money-laundering and know-your-customer rules, the investors at the venture capital fund “dismissed the idea,” the indictment says. One of them allegedly wrote “it would be unlikely that as a fund we’d use a ‘compliant mixer.’”
Hard to have any positive viewpoint on these guys if this turns out to be true.
it's more likely LG simply used Tornado Cash just like any other user.
[0]: https://news.ycombinator.com/item?id=37240901 [1]: https://news.ycombinator.com/item?id=37242043 [2]: https://news.ycombinator.com/item?id=37247966 [3]: https://news.ycombinator.com/item?id=37253522
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Honestly that would not have caused me to read the article. I clicked because I didn't really know what laundering cryptocurrency itself would involve, except a "washing machine" site (which is of course this is). I was hoping to learn something new.
The way to win with a washing machine is to run one, and then when the volume gets high enough just take all the crypto for yourself -- by definition you'd be untraceable, just as your customers wanted.
The investment being referred to seems to have been into the "Peppersec Inc" entity.
They're anonymized this way in the indictment and online listings don't seem to list this mystery funder.
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