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Tuesday, September 27, 2022

Tornado Cash – US Treasury ‘exceeds its authority’

The Tornado Cash case is one of those that allows us to historically distinguish between before and after. But also two different and opposing camps in which every organization and investor will have to choose how to position themselves. Because the blow delivered by the Office of Foreign Assets Control (OFAC) of the US Treasury did not end in a chain reaction. With borders to be protected, respect for privacy and personal freedom at the center of the cryptocurrency ecosystem. And decentralization, which is not a simple detail, because it may well make this official procedure completely illegal. Explanation…

Decentralization makes many new investors in the cryptocurrency sector smile or indifference. Particularly when he is faced with certain restrictions or procedures very clearly on a razor’s edge. However, it is the only real defense against censorship and government interference. (among others). Just look at what is happening now with the Tornado Cash case, which has already become a cult.

Indeed, this decentralized protocol is blacklisted by the US Office of Foreign Assets Control (OFAC) services. With major repercussions, Circle’s blocking – more zealous than mandatory – of certain addresses holding USDC stablecoins. And most recently, the arrest of the alleged developer of this cryptocurrency mixer in the Netherlands. However, according to the American cryptocurrency industry advocacy group Coin Center, this procedure “goes beyond the statutory powers of OFAC.”.

Ethereum

Tornado Cash – blacklisted by the US Treasury, so what?

Hugh B. – August 09, 2022 – 09:00 AM

Monitoring and control of the cryptocurrency sector is also a chimera

Tornado Cash – an illegal procedure?

It is always interesting to look at the legitimacy of official proceedings, especially when they are brought against the cryptocurrency industry. A reality that can even be described as the only Ripple (XRP) project that has been at war with the SEC for years. But without any concrete conclusions from this increasingly embarrassing file for the Securities and Exchange Commission. Because the reproachable limits are very often crossed over by regulators too keen to break decentralization (this is not the case of Ripple). But this is not having the necessary weapons for this, according to an analysis compiled by the Coin Center structure. By asking this simple question: “What is and is not the subject of sanctions in the Tornado Cash case?” You have two hours…

We believe that OFAC exceeded its legal authority by adding certain Tornado Cash smart contract addresses to the SDN list, that this action potentially violates due process and free speech rights, and that OFAC failed to take adequate action to mitigate the foreseeable consequences of its actions. eat on innocent americans

coin center

Because, according to Coin Center Executive Director Jerry Brito and Research Director Peter Van Valkenburg, this observation is simple and unconvincing. OFAC’s services very clearly “overstepped their legal mandate” in the Tornado Cash case.. This was done by including a cryptocurrency mixer and 44 associated wallet addresses on the Specially Designated Nationals (SDN) list on August 8th. Because there is clearly a bit of confusion in this procedure, which is tantamount to “treating autonomous code as a person.” That is, “an organization that is ultimately under the control of certain individuals.” But this is definitely not the case for Tornado Cash, as the group behind its development “does not control the app today.” End of discussion!

Tornado Cash – the difference between “human” and “software”

Indeed, as Jerry Brito and Peter Van Valkenburgh point out, the Tornado Cash case has nothing to do with the Blender.io cryptocurrency mixer case initiated in May last year. Because the latter was very clearly associated with the identified individuals who were “responsible” for his work. That is, with possible control over the choice of transactions or their effective execution. And this is absolutely not the case with Tornado Cash, whose code has been the only master on board since then. destruction (burning) of access codes to smart contracts that control their operation. And from this simple fact, “it cannot be said that Tornado Cash is a person subject to sanctions.”

The Tornado Cash organization, which allegedly deployed the Tornado Cash app, has no control over it today. Unlike Blender, it cannot choose whether Tornado Cash App participates in the mix, and cannot choose which “clients” to accept and which to reject. In the case of Blender, entity and application are one and the same, and in the case of Tornado Cash, they are two completely different things. This is a subtle but important difference that OFAC fails to recognize by treating them as the same (as in Blender) and adding them to the SDN list as one.. »

coin center

A distinction already made by the Financial Crimes Enforcement Network (FinCEN), another US Treasury Department in charge of money laundering. It’s between “mixers that are people and mixers that aren’t people, just software”. But also “users” who can use it for their account “without the involvement of a third party.” A distinction between humans and software, which therefore must be brought to the attention of OFAC so that it can check its copy in this case. Because it’s obvious it goes far beyond the legal framework within which it is supposed to impose and enforce its sanctions..

World Nation News Desk
World Nation News Deskhttps://worldnationnews.com/
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