Readit NewsCouldn't you just deposit ETH in an exchange and then send it to a fresh address? Seems like a hassle to use TC for that specific use case.
Technically? Yes. But you run the risk of getting your account closed for this kind of thing.
For someone who isn't in the know of this case, can you share some legitimate uses for Tornado Cash?
Sure, I used to use it. I won't explain the strategy, but I have a crypto trading bot that sometimes profits at the expense of other bots. The owners of these bots got so annoyed at this that they would blacklist the address at which my bot was, and would then track any addresses that I sent funds to from there and blacklist those in advance. TC broke this ownership chain, so they could no longer preemptively blacklist the addresses my bot operated from.
[Casinos] don't have the intent to aid in these activities though, which is why they are allowed to operate.
Casinos are allowed to operate because not only do they not have the intent to aid these activities, they happily track and report everything they're required which is just as much as a bank is required. They aren't the hotbed of money laundering you seem to think they are.
https://www.fincen.gov/resources/statutes-regulations/guidan...
They aren't the hotbed of money laundering you seem to think they are.
I spent a fair amount of time in the gaming business, and I can tell you that this statement is patently false. Very little of it gets caught, because the people involved in such schemes know what the rules are and simply work around them. Casinos themselves also sometimes turn a blind eye to such activity when it is especially profitable for them. Example [1]. That occurred even with the reporting requirements.
[1] https://www.justice.gov/usao-cdca/pr/operator-venetian-resor...
(B)(ii) does not require specific intent. It requires knowledge that the transaction fails to meet reporting requirements.
The intent in question is manifested in Tornado Cash's design, which doesn't pass the malfeasance smell test: you can't absolve yourself of illegality by automating the illegality.
The intent in question is manifested in Tornado Cash's design, which doesn't pass the malfeasance smell test: you can't absolve yourself of illegality by automating the illegality.
Given that it also has legitimate uses, I think that's a very difficult case to make. Also, with very limited exceptions, nearly all crimes in the US require intent and/or knowing participation. It's a fundamental tenet of our system. There is a reason that they aren't being prosecuted in the US, and those reasons are outlined above. Perhaps Dutch law is different enough to allow a conviction; time will tell.
I'd also point out that Apple's device encryption scheme was specifically designed so that Apple itself cannot unlock devices, which thwarts law enforcement subpoenas for assistance. They can legitimately throw their hands up in the air and say "we have no ability to help you" - and that's by design. It is not illegal to design systems in this way. It just shifts the legal liability for misuse onto the users, where it should be.
You're addressing 18 USC 1956 (a)(1)(A)(i) and (a)(1)(B)(i).
I'm concerned with (a)(1)(B)(ii), which concerns reporting requirements. The kind of financial transactions that Tornado Cash enables are fundamentally incompatible with the US's Federal reporting requirements.
My understanding of the Dutch criminal code (which is not great!) is that their standard is even weaker: it is sufficient to demonstrate mere concealment, not a failure to meet particular reporting requirements.
At least under US law, intent is still required. Meaning that while some users of TC may have violated this law, the devs did not, nor did they knowingly aid in it or have any provable intent to do so.
I don't know what Dutch law says with regard to intent/knowing participation, but I suspect that any system of laws in a civilized country would generally require it for criminal convictions.
Money laundering requires a "predicate offense"
Structuring is one of the most common methods of facilitating money laundering.
No predicate offense required. It’s illegal all on its own.
Yes, but the same intent provisions still apply to the entity that enabled the structuring. Tornado Cash has legitimate use cases - I had one prior to the OFAC issue (hiding the source of funds to an address in order to prevent certain bots from reacting to it). So the devs cannot have formed intent to aid in any of the crimes that TC may have unwittingly enabled.
Casinos are used as vehicles for structuring and money laundering every minute of every day - on a much larger scale than anything Tornado Cash could ever have achieved. They don't have the intent to aid in these activities though, which is why they are allowed to operate.
"Might be used for illegal purposes" is a significant understatement. The chief selling point of Tornado Cash is money laundering, which is in and of itself a crime in both the US and Netherlands.
Normally, there'd be an aspect of plausible deniability: torrent index operators can, for example, rightfully claim that they're facilitating legal filesharing, or that they're entirely agnostic to the content being shared (if all they're doing is sharing URLs). What's key in this case is that law enforcement claims that Pertsev was aware of the crimes his service was being used for. Whether or not that's actually true is up to a court to decide.
"The chief selling point of Tornado Cash is money laundering, which is in and of itself a crime in both the US and Netherlands."
You have a fundamental misunderstanding of US law with regard to money laundering. Obfuscating the source of funds, by itself, is not money laundering. Money laundering requires a "predicate offense" - the money that is being laundered must be proven to have had an illicit source. Further, the entity accused of doing the "laundering" also must know that the source of funds is illicit before doing it. Intent to promote the carrying on of "specified unlawful activity" must also be proven in order for a money laundering conviction to occur. You can read the entire statute here [1].
Therefore, the "chief selling point" cannot be money laundering, at least under US law, because the contracts were deployed with no prior knowledge of how or by whom they would be used. One cannot form intent without prior knowledge. The chief selling point was anonymity, not money laundering, which has a highly specific legal meaning.
downandout commented on Learning from Las Vegas: Sustainable vs. Susceptible granolashotgun.com/granol... · Posted by u/jeffreyrogers
You're not the first one to point out that Southern California is a desert, and has to import water from elsewhere just to exist, e.g. "Chinatown."
However, the weather is way better than Vegas, and I'm not just talking about summer. A cold ocean has its advantages.
However, the weather is way better than Vegas, and I'm not just talking about summer. A cold ocean has its advantages.
I grew up inland San Diego, and I can tell you that our summer days there routinely topped 100 degrees. I agree that if you are fortunate enough to live very close to the water, you do have some weather advantages over Vegas. For me, it's certainly not enough to warrant putting up with the other, man-made issues in California, even if I had a place right on the beach. But I agree that for some people, the (slightly) nicer weather is worth all of the expense and putting up with the nonsense.
You're not addressing the point about "(a)(1)(B)(ii), which concerns reporting requirements".
If they cannot meet US law for reporting requirements, then they are breaking the law, right?