Subnostr

The idea for the token (called TORN) was that relayers can stake it. This increases the chance of their relay being picked. That's represented by the green line on the left going from TORN to the Relayer. They're a buying force.

Then of course there's the founders who received coins in the pre-mine (according to the DoJ). That's the red line on the left.

Now if that was all there's to this, you could perhaps make a (vague) case for profiting from money laundering as follows:

1. Some bad people use the UI and relay system

2. Relay operators pump the token price in order to get business from these bad people

3. Founders take profit by selling tokens

However this does NOT prove the founders profited from North Korean hackers laundering their proceeds. Because they (until proven otherwise) don't use the relay system, so relayers do not buy TORN to get them as a customer, so there's no token pump and no profit to take.

Sjors Provoost 2y ago

But it's more complicated than that. Of course it is, sigh. And that's the green arrow on the right: speculators. These are not people in the business of laundering money. They don't (necessarily) use the Tornado Cash system. They simply buy the token because number go up. Some people might call them degens.

So now when the price goes up and founders sell some tokens, where did those profits originate? From crime or from speculation? The DoJ makes zero effort, at least in what they published, to distinguish this. But will a judge / jury understand that? Or care? We'll find out.

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Sjors Provoost 2y ago

But wait, there's more. What's unique about the founders is that they have control over the hosting. . That's what's represented with the dashed line to the UI. They also put in more work in the form of writing code, marketing, etc.. The DoJ mentions all that in order to argue they're a business.

But what about that DAO? It seems to control rather important stuff like how the relay selection works. Hence the other dotted line from TORN token holders to that DAO and from the DAO to the UI. So this begs the question what the liability is for the other token holders.

Control aside, all token holders make money if the price goes up. So what happens to the VC if they ever decide to take profit?