U.S. authorities have banned Tornado Cash’s ethereum mix service Tornado Cash. This has caused a commotion in the crypto world. A large number of crypto and privacy advocates have spoken out against the actions the government has taken so far, and the nonprofit advocacy group Fight for the Future calls the ban “a threat to the future of financial privacy.”
Advocacy Group Fight for the Future Says US Government Threatens Financial Privacy — ‘There Are Many Legitimate Reasons to Seek Anonymity in Financial Transactions’
On August 8, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned virtual currency mixer Tornado Cash. The U.S. government claims that the application was used to allegedly “launder more than $7 billion worth of virtual currency since its creation in 2019.” Following the ban, Github contributors were suspended from the software repository platform and on August 12, the Tornado Cash Discord server was deleted.
You can always add @discord to the shame list too since apparently they decided to go *far* above and beyond and ban the community run/operated discord server. God forbid people even *discuss* the thing that was unjustly sanctioned…
— Micah Zoltu (@MicahZoltu) August 12, 2022
A Dutch police force also revealed on the same day that the Fiscal Information and Investigation Service, (FIOD), had arrested a unidentified 29-year old man who is being accused of creating Tornado Cash. A report stemming from The Block Crypto’s Yogita Khatri says that the unknown developer is Alexey Pertsev, according to statements his wife made after the arrest. “My husband didn’t do anything illegal,” the suspect’s wife told the reporterOn Friday. Meanwhile, the entire crypto community and privacy advocates are upset with the U.S. government’s actions.
“Welcome to the war on code,” podcast host Cobie said on Friday.
The nonprofit advocacy group Fight for the Future published a statement about the U.S. government’s actions against Tornado Cash. “Already, the Internet is feeling the chilling effects of this choice: the open source code used to run Tornado.cash has been taken down from Github. And unfortunately, it seems that such an effect is exactly what the U.S. government was seeking,” Fight for the Future’s blog post about the subject explains. Fight for the Future also adds:
Anonymity does not constitute a crime. There are legitimate reasons why you might want anonymity for financial transactions. In authoritarian countries, where disclosure of financial information can lead to imprisonment or execution, privacy tools may be important for activists.
‘Same War, Different Battle’
A crypto developer, and co-founder at Aragon Luis Cuende said: “I’m short of words. I’m short of breath. Because he wrote code, he was taken into custody. He wrote code. These terrorist organizations called traditional nations must be dismantled.” The Tornado Cash conversation struck a nerve with nearly every vocal member of the crypto community. “Let’s remember that the export/use across borders of encryption itself was illegal in the United States until 1996,” Shapeshift founder Erik Voorhees said. “Same war, different battle,” he added.
An awful lot of projects seem to be going way above and beyond the *actual* requirements of the sanctions.
— nick.eth (@nicksdjohnson) August 11, 2022
Many others mocked US government’s decision to ban Tornado Cash. While many financial institutions have been accused in the past of laundering money, none have been arrested. “Thankfully I have never used Tornado Cash to launder money,” one Twitter user remarked in jest. “I use Deutsche Bank like a normal person,” the individual added.
The attorney Jake Chervinsky told his followers that everyone should be “closely watching the situation in Amsterdam, where a Tornado Cash developer has been detained. It’s unclear if there are allegations of illicit conduct unrelated to writing code. If not, this threatens to be the start of Crypto Wars II,” Chervinsky wrote.
Larry Cermak Asks: ‘Why Is Only Tornado Cash Affected?’
The Tornado Cash topic has become a hot topic on social media in the past 24 hours. “Tornado Cash developer being arrested by Netherland’s FIOD is concerning news,” podcast host Stephan Livera wroteThis Friday. “Imagine if road builders were being arrested ‘because criminals use them?’ Or home curtain installers? Wanting privacy should not be considered a crime.”
They detained the creator of tornado cash. 🚨
Recall: A man was arrested because he wrote code to allow people online privacy protection.
A man was put in prison for using his open source code by bad people.
It is impossible for this to be true in a society that’s free.
— RYAN SΞAN ADAMS – rsa.eth 🦇🔊 (@RyanSAdams) August 12, 2022
The Block Crypto’s VP of research Larry Cermak wondered why other crypto privacy techniques have not been targets of the U.S. government. “I think an interesting question to ask now is why is only Tornado Cash affected and other privacy projects like Coinjoin, Monero, and even Zcash are still fine?” Cermak tweeted. “Is that just because Tornado was used the most recently or are there some other factors playing a role here? Just odd.” The crypto researcher added:
However, open-source code writing is a skill that can be acquired by anyone. [the]The most fundamental principles of crypto are privacy and anonymity for the average user. It is our responsibility to ensure the security of those developers who put their safety at risk.
Fight for the Future explains that people who don’t want their financial history “surveilled by governments, corporations, stalkers, or other bad actors is a legitimate reason to seek privacy-preserving technologies online.” The advocacy group’s blog post concludes by stating:
We ask that the Treasury focus more carefully on targeting bad actors — rather than attempting to criminalize building and using privacy tools or the simple act of writing or running open source software code.
How do you feel about community reaction to recent Sanctions against Tornado Cash, and enforcement against tools and developers? Please comment below to let us know your thoughts on this topic.
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