Watched the MIT Bitcoin Expo discussion about the Samourai Wallet and Tornado Cash prosecutions, and there seem to have been some misconceptions.
First, it is not "clear" that North Korea used Tornado Cash, as there appears to be ambiguity on how these funds are attributed. The reliability of said attributions has previously been a topic of debate in the criminal prosecution of Roman Storm.
We cover this here: https://www.therage.co/tornado-cash-trial-blockchain-surveillance-reliability/
Second, of course sanctions enforcement plays a role in the crackdown on privacy services, as a fully private financial system would make sanctions unenforceable, relieving the US of its most powerful economic warfare tool – some scholars may even go as far as arguing that sanctions enforcement is the main reason for AML frameworks to exist.
The idea that large transactions, such as for oil trade, would remain identifiable on chain despite mixer use is additionally completely incorrect, as Bitcoin mixers break down large UTXOs into various smaller UTXOs. If a large transaction remained identifiable through mixers, mixers would be useless.
I cover sanctions enforcement in my latest Bitcoin Magazine print article, which you can purchase here: https://store.bitcoinmagazine.com/collections/magazines/products/bitcoin-magazine-annual-subscription
Third, institutions like EFF have of course gotten involved in these cases, namely by filing an amicus brief on behalf of Roman Storm in the beginning of this year, addressing the impacts of Storm's prosecution on privacy software development in general.
We cover EFF's amicus brief here: https://www.therage.co/eff-tornado-cash/
Fourth, and this one is crucial, of course there have been actions brought against the individuals and groups that used the software services for illicit activity.
Money laundering is the only crime that can only exist if another crime has previously been identified. If the DOJ was not pursuing crimes related to Tornado Cash or Samourai Wallet, no charges of conspiracy to commit money laundering could exist against the developers.
The notion that criminal funds cannot be attributed when mixers are utilized is incorrect, as mixers, like any privacy tool, can only provide forward-facing privacy. The source of funds will always be identifiable.
As nostr:nprofile1qyxhwumn8ghj7mn0wvhxcmmvqyv8wumn8ghj7mn0wd68ytnnwpex7an0daehgtnwdsqzpp59a0hkv5ecm45nrckvmu7pnk0sukssvly33u3wwzquy4v037hcsgt75r correctly points out, what arguably brought on the prosecution of Tornado Cash developers was the alleged use of the service through North Korea.
Both cases feature additional criminal activity that the DOJ is pursuing, such as hacks on "cryptocurrency-exchange-01" and "cryptocurrency-exchange-02" in the case of Tornado Cash, as well as Silk Road and Hydra Market proceeds in the case of Samourai Wallet.
Last but not least, calling on the public to educate lawmakers on the use of privacy services is obviously a good idea, but for those who want to become active to protect developers, advocating for the House to pass the Blockchain Regulatory Certainty Act, which was introduced in 2023, may be the most fruitful endeavor.
As a sidenote, nostr:nprofile1qyv8wumn8ghj7urjv4kkjatd9ec8y6tdv9kzumn9wsqzqmxyyf0hjux9dw0559uy4pwah00fwkv7xed63jry5nv3qk2zku3zxr2wva , painting yourself as "the only journalist" who is covering the Samourai Wallet prosecution in depth is not just wrong, but also an asshole move.
Grateful that MIT Bitcoin Club is bringing these topics up – if you are new to these cases, the panel talk is a good place to start despite my eternal nitpicking.
Full reporting: https://www.therage.co/privacy-on-trial-mit-bitcoin-expo/
Perhaps the defense conceded too much territory, but from what I remember in the Dutch trial, the only dispute was whether North Korea used the UI. We'll see what happens on appeal and in the US trial.
I think the context of Franks remark was the number of journalists physically in the court room, half a dozen in The Netherlands including three "mainstream" media, vs one in the US.
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oh interesting, that's a detail that I actually missed re the UI – do you have a link or know when/where this was discussed? would like to include that in the article.
The defense attempted to challenge the attributions over the last few weeks as Chainalysis corrected its statements re NK – I think it might be plausible that these attributions will be challenged during trial, but unconfirmed.
Re being the journalists physically in the court room, if he was the only one, I wonder what I've spent thousands of Dollars on since the indictment 🤔 I don't think we missed a hearing, but might be that we just attended 3 out of 4. Honestly just disappointing to see your work discredited like that, especially when the more coverage we have the better. I saw his post addressing it, which I appreciate.
ah you mean the UI was disputed in the Dutch case – that's really interesting. I'm not aware that this was disputed in SDNY but may have missed it – will check. thanks for pointing this out
