Software’s not nefarious. People are.
The sanctions placed on Tornado Cash remind me of the Justice Department's attempt to prosecute Jitesh Thakkar because the software he developed was used by legendary "flash crash” trader Navinder Sarao.
If you’re unaware of the case, look it up as it is an interesting read. Navinder pocketed millions of dollars trading the CME’s E-mini market by quickly placing and deleting huge orders while using proprietary software developed by Jitesh. Was it the intent of the developer to spoof the market? No. The intent of the user was was to spoof the market. 10 of the 12 jurors had voted to acquit Jitesh before a hung jury was declared.
If you’re not aware of Tornado Cash, it’s software that may be used to obscure the transparency of crypto regulations. It’s believed Lazarus Group, a well-known North Korean government-backed hacking group, has laundered hundreds of millions of dollars in stolen crypto through Tornado Cash. They’re not alone…Tornado Cash appears to be a honeypot for money launderers. Yahoo reported that Tornado Cash has been used to launder $7 billion worth of cryptocurrencies.
Crypto fans have shouted for years now that crypto and blockchain tech is not a useful tool for criminals because all transactions on the chain are recorded and traceable. Software like Tornado Cash throws a wrench in that argument. There are other firms offering the same or similar service…Blender.io was previously knocked for allegedly allowing Russian-tied ransomware groups to use their service to cover their tracks. What’s the legitimate use case?
I get the whole cryptocurrency argument of taking power back away from governments. Governments should not have the sole authority to distribute and trash our currency, but where does it stop? I’m not blaming the software, but what are the legitimate use cases for software that “hides” you? What are you hiding from and why? If privacy is important, and Bitcoin is such a magnificent thing, why wasn’t it part of the original construct?
Crypto’s in a weird spot when it comes to privacy. They shout privacy or die, and that’s fine because “we’re not hiding anything,” but if that’s the case, what’s the need for privacy? An ethos that you seem willing to go a long way to protect. Now with more moving into DeFi and running from the world of KYC/AML, what's the fear? Taxes? You’re not willing to pay taxes? What are you hiding?
Is the secrecy just a push to keep the government out of everything? A complete lack of control? Don’t forget, even the residents of Galt’s Gultch had to sign an oath. Society needs borders to maintain some order.
Not sure If I’m totally for or against the sanctions on Tornado Cash and anxiously await others to share their thoughts.