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Defending Privacy in Crypto

• rdl 4y ago
  It's great that they're supporting the lawsuit (and the plaintiffs seem very well selected). There's also a coincenter lawsuit on purely constitutional grounds (https://www.coincenter.org/analysis-what-is-and-what-is-not-a-sanctionable-entity-in-the-tornado-cash-case/ https://www.coincenter.org/analysis-what-is-and-what-is-not-...).
  • highwaylights 4y ago
    I think it’s wasted money. Infinite public money will be spent to bat down these lawsuits until it’s set in stone. Widespread privacy in crypto == end of civilisation. This sounds ridiculous but logically one has to follow the other in a few very short steps.
    • yata69420 4y ago
      > Widespread privacy in crypto == end of civilisation. This sounds ridiculous but logically one has to follow the other in a few very short steps. That does sound ridiculous. What are the steps?
      • stavros 4y ago
        Privacy in crypto -> fewer taxes being paid -> less money to develop an anti-meteor shield -> large meteorite destroys civilization.
        • imtringued 4y ago
          Money laundering is harder than not declaring taxes. You're not going to be able to run your business in perfect privacy.
        • deleted 4y ago
          [deleted]
      • highwaylights 4y ago
        People won't have to pay their taxes if all transactions are untraceable, and therefore will stop doing so. Without taxation you can't have: Law enforcement, schools, hospitals, fire departments, roads, road servicing, running water, public transport, welfare, electricity or sanitation. More directly, you can't have drugs laws, child protection laws or prevent human trafficking, as there's no way to stop the money supply to the perpetrators. I mean you can probably still get Starlink access for even more astronomical rates, but that's OK because Cryptbros love them some Elon and think all forms of government are encroaching on dem derr freedums.
• smithcoin 4y ago
  I think we should sanction using cash, it can be used untraceably and anonymously. Tornado Cash did $7 Billion in transactions. According to the US Treasury $300 Billion was laundered in US dollars last year. I think we are going after the wrong target.
  • mrep 4y ago
    It effectively already is. You cannot cross the border with more than $10,000 in cash without declaring it.
• deleted 4y ago
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• gjs278 4y ago
• can16358p 4y ago
  Good (and TBH unexpected) move by Coinbase. If we lose the foundations of privacy at this stage, the future of crypto would be severely affected. Crypto and digital assets should be free from regulation, even if it brings side effects (e.g. laundering). The moment we centralize crypto by state, we lose the war against corrupted states and centralization. While I don't support bad actors that use crypto in any way, I still believe having them is a side effect that we need to accept for a better world without government survelliance. The upside still outweighs the downsides.
  • nl 4y ago
    > Crypto and digital assets should be free from regulation, even if it brings side effects (e.g. laundering). It's far from clear to me why on earth crypto should be free from regulation at all.
    • anon9001 4y ago
      I think this case is a pretty clear example of why. The regulators are supposed to be protecting who from what exactly? And at whose expense? So far I've seen two lines of reasoning: 1) Regulators are needed to protect me from myself. I can't assess if these dog-coins have long-term investment potential or not, so I want the government in the loop somehow. If I can purchase something on the internet, I assume it's safe, or the government wouldn't let it be sold. 2) Regulators need to protect the government from the effects of money laundering. I must give up privacy for the greater good, as the money laundered by North Korean hackers will be used against my country. Giving up all privacy in exchange for a small reduction in the funding of our enemies is always a good trade. Even if I buy one of these arguments wholeheartedly, the practical matter is that we're trying to prevent math from being done here, and it's just not going to work. It's sort of like preventing piracy. But public sentiment has become very anti-crypto, so I suspect we'll land in a war-on-drugs type situation where the crypto never really goes away and you can still transact it anonymously, but we mostly just don't talk about it except for the occasional bust to ensure more enforcement budget next year.
      • 4y ago
• sunshinekitty 4y ago
  Thanks for standing up for users rights to privacy Brian. What will be the largest hurdles here with challenging the US Treasury? Why stand on this issue, vs privacy based coins previously removed from cb? What options are there if this proves unsuccessful?
• bprasanna 4y ago
  First coinbase should provide basic features to users before stepping up the Privacy. There is no way for a user to delete coinbase account. Looking around the web I realised its a dark pattern in their design.
  • hbbio 4y ago
    Coinbase respects KYC/AML regulations, which prevent deleting accounts. They have to do that and it is a good thing, like standing up against overreaching regulations in this case. If it would not be "crypto", HN would stand unanimously with the privacy fight. Banning open source software which has legitimate use cases, such as anonimizing donations to Ukraine in fear of retaliations, paying for abortion in States in the US where it is legally restricted, etc. is a no brainer to me as it sets a grave precedent.
• Loic 4y ago
  It is interesting that I have strictly no empathy for the people defending "privacy" in crypto. I have it fully for the ability to pay in cash for our every day stuff. Privacy in crypto is basically reallowing tax havens in the "digital" world where we spent years to try to curtain them in the "real" world. A good friend of us happens to be working at a high level at the EU commission. Discussing about Bitcoin/Crypto, his answer was simple: "We will ban all crypto as soon as we consider it to create problems with taxes". Coinbase would win the case, it would be one more step in the direction of a ban in the EU.
  • nlitened 4y ago
    > “We will ban all crypto as soon as we consider it to create problems with taxes” Surely you were not discussing those things with the Great Dictator of EU, not accountable in their decisions to citizens and courts?
    • imtringued 4y ago
      The EU parliament has elections and the politicians you can vote for are your own elected national politicians... The only questionable thing here is that you cannot vote for politicians of other EU nations and that there is literally only one EU wide party called Volt.
      • frozencell 4y ago
        Genuine question. What do you know about the U.S. law and mode of operation?
  • LtWorf 4y ago
    If a ban in EU would make people in bars stop trying to convince me to buy in their favourite cryptocurrency, I'm all for it!
    • highwaylights 4y ago
      A meteor strike directly on top of the bar wouldn’t stop this from happening.
• nappy 4y ago
  Nowhere in this blog post: any discussion of money laundering, sending funds to terrorist groups, rogue states. Without mention of any of the legitimate reasons the US government is sanctioning Tornado Cash, this is merely propaganda from a financially interested party.
  • ricochet11 4y ago
    We should not have our rights removed because other people who break the law might also benefit from. We cannot have a free society if every decision is "Wont somebody think of the children" or "but the terrorists". Liberty or death: it is not death of the individual but death of society. The resilience of our social structure is dependent on our freedoms. I cant say how saddening it is to have lived through the crypto wars in the 90s that were so well defended by tech workers, to now see HACKER news commentators fine with massive government overreach in the name of "safety". lol.
    • pudo 4y ago
      When you say "might" - you're aware Tornado was actually used for these things to the tune of at least half a billion dollars? Basically, the case you're making is: they might have actively aided and abetted nuclear proliferation - but they're technologists, so their actions are sacrosanct and cannot be subject to the usual penalities because we've been ultra smart and managed to create an industry where free speech and money laundering can be switched out at will like in a shell game.
      • smithcoin 4y ago
        HSBC laundered $881 million for the Sinaloa cartel. How much of that ended up causing human suffering and the loss of life? The solution must be to ban all banks and cash as they are the instruments that facilitated these transactions.
      • ricochet11 4y ago
        I am saying the rights of my sister and brothers, friends and colleagues are far more important to me than clamping down on north korean hackers. I would much rather live in a world where we are free to use tornado cash and maintain our privacy in these networks, than live in a world where code can be overnight made suddenly illegal, everyones accounts historically associated with that code blacklisted, the developers then sit in jail for a month with 0 charges against them. The large majority users of tornado weren't criminals. Tornado devs had worked on compliance tools to aid governments, doesnt matter they get locked up anyway. The treasury has historically only sanctioned people, doesnt matter apparently they can make themselves new powers and sanction the use of code too.
• FabHK 4y ago
  I strongly support the right to privacy in messaging, ie encrypted communication. However, I am much more hesitant with privacy in money transfers. It is not obvious to me at all that we should have unlimited unregulated money transfers. In fact, I fear that unreflected support for the latter might erode the (already tenuous) support for the former: Currently, we might still be in a position to regulate and disrupt cryptocurrencies (for example, Bitcoin needs on- and off-ramps tied to tradFi, and Bitcoin traffic is unencrypted and can be detected (and censored), AFAIK). If that whole ecosystem were to succeed in ensuring encryption and anonymity in money transfers, we might get to a point where there is overwhelming political pressure to prohibit any encrypted communication, even more so than already. TL;DR: Cryptocurrencies might jeopardise Signal et al. Yet another reason to oppose Crypto: to protect encryption.
  • nappy 4y ago
    Pure privacy, without limitation, in money transfers would be catastrophic. Despite the consternation of hyperextreme libertarians sitting in their armchairs, the ability for the government to collect tax revenue is a pretty good thing and has broad societal benefits. Also allowing free flow of funds to terrorist groups is bad.
    • ajvs 4y ago
      North Korea already funds it's nuclear program with crypto so it's a bit late for that. Also despite crypto allowing for pure privacy already with coins like Monero, this hasn't stopped tax revenue. It's not a black-or-white issue, because only a tiny fraction of people will utilise this privacy due to technical hurdles and other limitations compared to paying with cash or card.
      • nappy 4y ago
        There's a reason Monero doesn't show up on exchanges that comply with US KYC rules.
        • TimeBearingDown 4y ago
• gerikson 4y ago
  This is going to be very interesting to watch. I hope to be able to read the lawsuit when it is filed.
• rax0m 4y ago
  Very unexpected that this comes from Coinbase. But kudos where kudos are due! I hope this goes the way
• 5350-uiop-1130 4y ago
  I don't think you can defend this kind of privacy in a court. They are not impartial. This is not really about crypto, or tornado cash. I think it's more about ownership and surveillance. The only solution is to innovate in the area of evasion. Since there is no middle ground amenable to the ones who make the laws in their own interests. We can just look at wikileaks, panama papers and so on. Money laundering and embezzlement is much more pervasive and rapaciously damaging in the highest levels of "power". Wealth "inequality" is an oligopoly of concentrated power and wealth.
  • shoulderfake 4y ago
  • null_object 4y ago
    > This is not really about crypto, or tornado cash. I think it's more about ownership and surveillance. The only solution is to innovate in the area of evasion. Since there is no middle ground amenable to the ones who make the laws in their own interests. I’m genuinely unsure what your point is? Are you saying that because the rich and powerful are destroying society by evading taxes and weakening the fundamental infrastructure of our civilization, the rest of us should have crypto so we can be in on the loot?
  • EdwardDiego 4y ago
    > I don't think you can defend this kind of privacy in a court. They are not impartial. Big claim there.
  • anon9001 4y ago
    I think this is exactly the kind of privacy you can defend in court. The reason we don't have privacy is because technology has been centralized and it's easy to pressure providers to give up user's privacy. The idea that parties have financial privacy between each other is actually the default. I can hand you physical cash. This is normal. That's not because of some special provision that "allows" for cash to be private. That's just how it's always been done. If you do work for me, and I hand you a gold coin, you don't have to do something special to make sure the government can track the item of value. You just mark it down on your taxes as income. This is how things had been done until maybe the last 20 years or so, when 9/11 greatly expanded the government surveillance requirements on financial businesses. There's a mountain of law to support private property transfer.
• manholio 4y ago
  What I would like to see is reversible and auditable privacy in crypto: to participate I need to disclose my real identity to a broker I trust that follows all KYC compliance rules in the jurisdiction it operates, and my financial identity and transactions are private until law enforcement performs an unblinding transaction that is auditable on the blockchain, (in the vein of Chaum blind signatures), yielding my broker identity and unique customer ID, which the broker can associate with its records. This way, I would have guaranteed and auditable privacy that the government cannot surreptitiously break, but there is an route to find identifying information with a noisy and court approved process. This would involve both a technological side and an organizational one - brokers would have to setup some type of clearing house that processes legal documents and requests for unblinding, approve new brokers and terminate those that do not follow relevant KYC practices, etc. A middle option between banks (no privacy, 100% agents of the government) and crypto (anonymous brokers, untraceable in competent hands, excellent for money laundry). We cannot continue to pretend that the current crypto crop "is just like cash". I most certainly cannot teleport 1 billion dollars in cash across borders, completely untraceable. If you cannot see a problem with this feature of crypto and the bad types of people it would attract and enable, then you might be suffering from a case of sociopathy.
  • EdwardDiego 4y ago
    No way in hell is law enforcement going to participate in your Merkle Tree to, you know, enforce laws.
    • manholio 4y ago
      Law enforcement needs to have an entity to subpoena and which can produce transaction and identifying information when the legal case might be. Law enforcement is subject to laws too, there is no problem with having laws and enforcing them, unless you live in North Korea. What we should object to is extra-legal surveillance, not court orders.
  • searchableguy 4y ago
    Great idea. Tornado cash already implemented it years ago. :p https://tornado-cash.medium.com/tornado-cash-compliance-9abbf254a370 https://tornado-cash.medium.com/tornado-cash-compliance-9abb...
• UtopiaFans 4y ago