miracle2k

> they were just hoping to reach “too big to fail” status before attracting the attention of prosecutors.

Are saying that although this is evil, evil money laundering, if they just get a chance to do more of it, US prosecutors will leave them alone? They failed, so now they have acdha explain to them how they should have known better?

This is nonsense - they didn't hope to get "too big to fail". If you are looking for a reason why Roman Storm felt confident to operate out of and stay in the US it is because:

- there were many questions about whether KYC applied. - these questions remain today.

If you personally want the law to criminalize what the TC founders did, feel free to argue as such, but be prepared to explain what exactly that is, because there are a whole bunch of other people wondering if you'd want to seem them jailed for their particular work on financial vehicles.

> You can - by not being inside the US, doing proper KYC and rejecting US customers.

Looking forward to doing KYC on my Signal account then.

> Ethereum is somewhat akin (not identical) to USD, and Tornado somewhat akin to a bank operating with USD outside of the law.

Many people are arguing that Ethereum node operators should be on the hook when they facilitate Tornado Cash transactions through their participation on the network. I'm glad we can count on your support should such arguments ever be pursued legally. Thank you.

> They didn't "just" send a PR or "just" write some code, they made a financial tool which earned them millions while ignoring regulations for these type of financial tools. No one who sent a PR was arrested or even investigated: just the people running Tornado. This has been pointed out time and time again.

Since TC is still running with both guys in jail, they clearly weren't "running it" - but the Ethereum node operators are. Should they be arrested? Are you answering this question as a laywer, or as citizen engaged in the democratic process telling me what you feel the law should be?

> They're still out there running right now, and nobody could shut them down if they wanted to.

No, but the US could start arresting validators on AML charges, and no doubt, many people here would support this too.

> They might have hosted some user interface code; I don't know.

That's just a static website though talking only to your wallet app. Somewhat similar to the fight around whether the piratebay is culpable for copyright violations. Many geeks used to support the piratebay.

The TC interface is hosted on IPFS. Can IPFS gateway operators not blocking the content be arrested on AML charges?

> I would be surprised if they didn’t have specific example of them clearly being aware of that information and choosing not to act.

Yeah, I'm sure the FBI needed to bring out their top detectives to find "evidence" that the Tornado Cash devs where not aware that criminals used their service. I guess they never googled themselves or talked to anyone ever.

This case isn't a dispute about the facts. It's a fight about if existing AML legislation can be stretched to include new types of financial actors on blockchains.

Most people here simply have no idea how Tornado Cash operated, don't care to ask themselves what the underlying principles should be, what kinds of obligations should be in miners, and would probably support the arrest of Vitalik Buterin on money laundering charges.

Which is, and certainly should be, entirely legal.

What does "leaving a jurisdiction" mean? Can Tornado Cash "leave the US jurisdiction" as well and will then be left alone?

Will you support the UK if they ask for the extradition of Signal developers, on the basis that say Signal will continue to have UK users accessing their service?

Where are your values?

> not something expressly designed to violate KYC/AML laws.

Tornado Cash was not designed to violate laws as per intent of the authors. Maybe it is your judgement of the design itself.

Whether or not it in fact does is something we may possibly find out (if the US plea-deal system doesn't prevent it). Even then, a guilty verdict might hinge on technicalities around the TORN token.

It's from the indictment: https://twitter.com/matthew_d_green/status/16944144228049965...

> If the police just needs to take interest in you to find something to jail you because you are breaking hundreds of laws everyday anyway, this is a police state.

Is it still a police state if you are breaking three laws every day?

https://www.amazon.co.uk/Three-Felonies-Day-Target-Innocent/...

I like that officers in the UK are unarmed. I'm sure there are other distinct differences in how the UK does policing from other countries that are worth pointing out that make a meaningful difference.

But every democratic country is operating on the principal that the police work on behalf of the people, and has mechanisms in place that are supposed to ensure that this is the case. The government works on behalf of and with the consent of the people too! When you get sent to prison for an insult on social media, it's all done in the name of (some of) your fellow citizens.

Much of this is about individual freedom vs the oppression of the collective. The operators who are tasked to enforce the collective's norms have personal decision making power, and power invariably corrupts.

> you have to be consciously right up in their faces to cause such an aberration.

What does this mean? That they are personally vindictive? That acting legally but in a way that is annoying to an officer should get me arrested?

These links are weak evidence that this is a wide-spread problem. Indeed, they arguably lack evidence for even the existence of human trafficking.

> https://www.fbi.gov/contact-us/field-offices/atlanta/news/pr...

48 of the 71 individuals identified (and having their names published online) are female adult sex workers. No claims are being made that any were victimized.

10 are crimes related to children, of those, 7 are "enticement", which may be LE setups. Certainly, no one being trafficked into motel rooms here.

We don't have details on the "11 juveniles recovered", but they are more like a 17y at risk of homelessness than what one would traditionally imagine to be "child sex slavery". It's also unclear if they are being helped by this recovery, or if you'll find their name appear on the arrest list for prostitution by next year's "human trafficking operation".

> https://www.fox5atlanta.com/news/31-arrested-in-georgia-as-p...

What this article actually describes are people arrested for possession of CSAM. No claim is made that any victim was found during any motel raids. There is this:

> Seven of those arrested in Georgia traveled for the purpose of meeting and having sex with a minor.

But the phrasing makes it pretty reasonable to assume they were meetings setup by law enforcement.

It would of course be possible to regulate OceanGate out of business, and I sympathize with the desire to make sure people are sufficiently informed about the risks, which is hard.

But I agree with GP: there is something off about the calls for regulation here. Fundamentally, people should have the right to risk their lives in crazy expeditions to the bottom of the sea or the top of a mountain, and charging someone else money to be taken along does not change that.

> This controller is a metaphor for something that needs to immediately be regulated so that people like this can never get away with it again.

There is something to be said for protecting people who would sign up for such an experience while misjudging the risk, or assuming that some government agency does provide oversight. Though, customers seem to have been informed that this is not the case: https://twitter.com/FridaGhitis/status/1671120043126423553

But apart from that, if someone wants to build a lego submarine and use it to dive to the Titanic, they should have every right to do so. It is their risk to take. Asking others to pay to join does not change this moral calculus. And yes, the people left on the surface have an ethical responsibility to not unreasonably refuse to rescue them when things to awry.

Your duty as a citizen is to have an opinion on the limits of power of investigators without being one.

> And investigations obviously take time.

Maybe the SEC will be able to lay out in court that they have been very busy with their investigation since 2019 (the date they are alleging is the latest Coinbase started trading securities).

I doubt it - but even if so, that's just not good enough.

Crypto sceptics generally agree that the SEC has been asleep at the wheel. What they aren't willing to acknowledge is that there are basic, non-crypto-related due process concerns with a regulator who lets a company operate, very publically and thus with its tacit approval, for basically a decade (that is how hold this debate around securities law is) - before then deciding they don't like it after all.

> Who is this addressed at?

People who want to ridicule complaints of a lack of 'regulatory clarity'. You can hold the view that crypto should have been aggressively regulated against much earlier, while also recognizing that regulators / the state have a due process obligations.

The state should not be allowed to take away your residency permit even if it was issued incorrectly 10y ago due to an oversight on their part. Similarly, it is reasonable to argue that the state should not be allowed to punish a business for behaviour it has tacitly approved of by doing nothing for a decode. It's not like Coinbase was doing this under the radar and the SEC just noticed recently.

> In spite of your attempts to cut off opposition, there are a lot of very well-reasoned arguments for the SEC's approach.

Which ones do you find convincing?

> You made a good comment and then absolutely ruined it with your last sentence. Blanket statements like that are not only disrespectful but they’re useless. This isn’t Fox News…it is Hacker News.

I appreciate this feedback. I like how another commenter put it: "I think there is very little room for this sequence of events to be considered fine" - from a non-crypto-partisan, rule-of-law perspective.

> Second, you’re arguing they were involved in illegal activities since before going public. How do you know that for sure?

Because that is what the SEC is alleging in their lawsuit.

When approving the S-1, the SEC was asked to review a business, not one selling filtration technology, but one selling illegal securities, well within their area of expertise.

I think Americans should fairly expect their regulators to be clear enough about the rules that the very securities regulator, whose job in large part it is to protect retail investors, not allow a company who is in the business of selling illegal securities to go public, and then take multiple years to file suit.

Any crypto sceptic who does not see a problem with this is tainted by their priors.

> Crypto has always been a subset of tech's goals, and is even framed that way 99% of the time in presentations/etc.

GP is simply saying that making a permissionless financial network a key element of the way value is exchanged across the world is a much more ambitious goal than selling books online.

Easily.

The number is actually 30% now (and seemingly more like 20% since yesterday's Shanghai for some reason):

https://www.mevwatch.info/

> And the government interprets sanctions law extraterritorially so you're not safe in other countries either.

It does not; these sanctions only apply to US Persons. Secondary sanctions mean that the Treasury can additional designate non US-Persons for breaches of the primary sanctions, but that is a heavy-handed tool and unlikely to happen to people who merely use Tornado Cash; regardless, no law was broken by such a person.

> However, actually running the code to facilitate North Korean hackers launder money and personally profiting off of it?

Who is "running" the code?

The US government, to this date, has not made an argument that the developers of Tornado Cash, who have deployed the code to the Network, have committed a crime; at least one of them seems to be living in the US.

Nor has the government made an argument that operators of Ethereum nodes are committing a crime; they might also be considered to be running the code.

What the government has done is, through sanctions, instituted restrictions on Americans interacting financially with the smart contract. This has nothing to do with "running code"; this is operating under the assumption that the Tornado Cash smart contracts are an entity that is party to financial transactions.

Whether they have the power to sanctions non-entities like a smart contract is what the suit intends to find out.

There are all kinds of governance models, as there should be.

> a multi-sig wallet controlled by a “DAO Committee” to enact those off-chain decisions

DAOs may empower a multi-sig with certain allocated funds to spend according to a mandate. This is ok. It's like saying America is not a democracy because regulators can make new rules that congress is not voting on.

It also possible to have off-chain voting, but still enforce those results on-chain using a fraud-proof like system, and some do this. Lots of design space to play with.

> One data point I can provide is: $900,000,000.00 — which is the cost for a bank for NOT doing this.

(It's not at all clear that this fine is due to a lack of regexes.)

If the argument is "banks have to do this because of non-sensical and unjust regulations" - fine, that's one for the lawyers and maybe risk managers.

I understood your position as defending the regulations itself.

> Unfortunately, I do not know of a better solution than "match transaction data on this list of regexes" that would scale for the millions of daily payments that banks are processing.

I think it would be reasonable to ask you, and other supporters of this, to provide emperical data of the positive law-enforcement impact that grepping transactions for "ALEP" has had, so we can weight it against the human cost (capital and time spent across all sides, including legal departments in financial institutions, Google Docs written, impact on affected customers).

Because the default assumption of a normal person is, of course, that this is ridiculous.

Where does it say customers are not allowed to be notified? For example:

> 41. Should an institution tell its customer that it blocked their funds, and, if so, how does the institution explain it to them? > An institution may notify its customer that it has blocked funds in accordance with OFAC's instructions. The customer has the right to apply for the unblocking and release of the funds.

https://home.treasury.gov/policy-issues/financial-sanctions/...