Tornado Cash and collateral damage

Posted Aug 19, 2022 14:04 UTC (Fri) by Cyberax (✭ supporter ✭, #52523)
In reply to: Tornado Cash and collateral damage by paulj
Parent article: Tornado Cash and collateral damage

> You know, maybe, just maybe, it's possible to deal with crime and have a well functioning society *without* giving the state the ability to monitor every single financial transaction between citizens - and gate-keep access to the ability to do financial transactions.

You know that the KYC laws were first passed to combat the organized crimes? We're not talking about monitoring everything, we're talking about ability of the government given appropriate court warrants to trace money back to criminals.

Tornado Cash and collateral damage

Posted Aug 19, 2022 14:45 UTC (Fri) by paulj (subscriber, #341) [Link]

That's not how the AML laws work though. The AML laws flip the onus completely. Financial institutions will bar you merely for /suspicion/ that you /might/ be doing something shady. Based on information they will not disclose to you. With no courts, or methods of appeal. Further, they are required - in many jurisdictions (no coincidence, because this comes out of recommendations from the international Financial Action Task Force) they are also required to _proactively_ report those suspicions to authorities.

So your model of AML working like traditional law enforcement, with judicial oversight and approval, is _incorrect_.

If it _were_ like that, I would have a lot _less_ concerns!

Additionally, state entities have put pressure on financial networks to have access to those networks denied to entities they dislike - *extra-judicially*! Some countries have used laws to bar access to financial networks, based on political activity.

Further, a number of central banks, including the ECB in Europe, are busy formulating plans to centralise digital transactions onto state specified platforms, so as to give real-time (or near-RT) visibility of transactions to authorities. I.e., various mooted "Central Bank Digital Currency" (CBDC) proposals. Even greater control of financial transactions is an explicit goal.