The US government banning the Ethereum mixing service Tornado Cash and the app that followed has the crypto community in an uproar over the event. A number of crypto and privacy advocates have spoken out against the government’s actions so far, with the non-profit advocacy group Fight for the Future calling 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 Office of Foreign Assets Control (OFAC) of the US Department of the Treasury sanctioned the virtual currency mixer Tornado Cash. The US government claims that the app was allegedly used to “launder over $7 billion in virtual currency since its inception in 2019.” Following the ban, Github contributors were suspended from the software repository platform, and on August 12, the Tornado Cash Discord server was erased.
We can add @discord also on the list of shame as apparently they decided to go *much* further and ban the community run/operated discord server. God forbid people even *discuss* what was unjustly punished….
— Micah Zoltu (@MicahZoltu) August 12, 2022
On the same day, Dutch law enforcement revealed that the Fiscal Information and Investigation Service (FIOD) arrested an unidentified 29-year-old person accused of developing Tornado Cash. A report coming from The Block Crypto’s Yogita Khatri says the unknown developer is Alexey Pertsev, according to statements made by his wife after the arrest. “My husband didn’t do anything illegal,” the suspect’s wife told reporters Friday. Meanwhile, the entire crypto community and privacy advocates are upset with the actions of the US government.
“Welcome to the War on Code,” podcast host Cobie said Friday.
The non-profit advocacy group Fight for the future released a statement about the US government’s actions against Tornado Cash. “The internet is already feeling the chilling effects of this election: the open source code used to run Tornado.cash has been pulled from Github. And unfortunately, this effect appears to be exactly what the US government, “Fight for the Future’s blog entry explains about the subject. Fight for the Future adds:
Anonymity is not a crime, and there are many legitimate reasons to seek anonymity in financial transactions. Privacy tools are important, for example, to activists in authoritarian states where disclosing financial information could get someone jailed or executed.
“Same War, Different Battle”
Crypto developer and co-founder of Aragon Luis Cuende said: “I lack words. I’m out of breath He was arrested for writing code. Writing code. These terrorist organizations called traditional nations must be dismantled.” Tornado Cash’s conversation struck a chord with almost every vocal member of the crypto community. “Remember that export/use across borders of crypto was illegal in the United States until 1996,” said Erik Voorhees, founder of Shapeshift. said. “Same war, different battle,” he added.
A lot of projects seem to go well beyond the *real* requirements of the sanctions.
— nick.eth (@nicksdjohnson) August 11, 2022
Others mocked the US government for banning Tornado Cash, as numerous financial giants have been accused of aiding money laundering, but no bank CEOs have been arrested. “Thankfully, I’ve never used Tornado Cash to launder money,” said one Twitter user he remarked just kidding “I use Deutsche Bank like a normal person,” the individual added.
Attorney Jake Chervinsky told his followers that everyone should be “closely watching the situation in Amsterdam, where a Tornado Cash developer has been arrested. It’s unclear if there are allegations of wrongdoing unrelated to writing the code. If not, this threatens to be the start of Crypto Wars II,” Chervinsky he wrote.
Larry Cermak asks, “Why does it only affect Tornado Cash?”
Over the past 24 hours, the Tornado Cash topic has been a hot topic of conversation spreading across social media. “Tornado Cash developer being arrested by Dutch FIOD is worrying news,” podcast host Stephan Livera he wrote Friday. “Imagine if road builders were being arrested ‘because criminals use them?’ Or home curtain fitters? Wanting privacy shouldn’t be considered a crime.”
They arrested the cash tornado promoter. 🚨
I repeat: a man was arrested for writing code that served as a public good for people to maintain their privacy online.
They put a man in jail because bad people were using their open source code.
This cannot be tolerated in any free society.
— RYAN SΞAN ADAMS – rsa.eth 🦇🔊 (@RyanSAdams) August 12, 2022
Block Crypto’s vice president of research, Larry Cermak, questioned why other crypto privacy techniques haven’t been targeted by the US 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 he tweeted. “Is it just because Tornado was used more recently or are there other factors at play here? Just weird.” The crypto researcher added:
Regardless, the ability to write open source code and [the] The average user having privacy is among the most important principles of cryptography. We must do everything we can to protect developers who put your security at risk.
Fight for the Future explains that people who don’t want their financial history “monitored by governments, corporations, stalkers or other bad actors is a legitimate reason to seek technologies that preserve online privacy.” The defense group blog entry concludes by stating:
We urge Treasury to focus more on targeting bad actors, rather than trying to criminalize building and using privacy tools or simply writing or running open source software code.
Tags in this story
Alexey Pertsev, Anonymity, Aragon co-founder, cobie, Discord Server, Dutch law enforcement, encryption, Erik Voorhees, Fight for the Future, financial privacy, FIOD, github, Github Repo, Jake Chervinsky, Larry Cermak, Luis Cuende, OFAC , OFAC Sanctions , podcast host , privacy , Shapeshift Founder , Stephan Livera , Tornado cash , Treasury , Treasury Department , US Government , Yogita Khatri
What do you think of the community response to the recent sanctions against Tornado Cash and the app against developers and tools? Let us know what you think about this topic in the comments section below.
Jamie Redman is the head of news for Bitcoin.com News and a financial technology journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He is passionate about Bitcoin, open source code and decentralized applications. Since September 2015, Redman has written over 5,700 articles for Bitcoin.com News on the disruptive protocols emerging today.
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