So after reading about Tornado Cash getting Banned etc. I am wondering how this will affect Spinner Cash?, and if Spinner Cash, doesn’t do anything about it, or change/adapt. Will this not result in a bad future for IC?.
Share your thoughts, and idea’s. To make it clear, im not here to spread FUD, im here, to learn and hear your thoughts to make better decisions and understand how things like this can impact other projects etc.
Just to give some context to those who aren’t aware of what happened: Tornado Cash a popular mixer service on ETH has been banned in the US, all addresses have been put on a blacklist, funds in USDC frozen, the Git repo has been deleted and contributors banned, the contract is still there and usable though.
The way I see it if IC can’t run a similar dApp then it has no place in Web 3 and hasn’t much reasons to exist, if it can’t even handle a bit of heat then it’s not a decentralized world computer but just AWS with extra steps.
Exactly. ICP is an open global protocol and mixers should have no worries of being blocked on the IC. If not, there is no point for its existence like you say. These issues will stress if the IC has any Decentralization bone in its body.
Now if spinner team doesn’t want to launch the service that’s understandable.
Tornado Cash is is a decentralized mixer. It is autonomous code running on Ethereum with no developer that can control it. The fact that it is now illegal to receive funds from autonomous smart contracts throw into question how Web3 will interact develop and interact with the law. I am not sure. Check out this tweet and video below from Zooko, founder of Z Cash.
What can Spinner do about it? Like Tornado, they have created a haven for money launderers. Governments are going to come for Spinner Cash as soon as enough hackers run their coins through it. They will not be able to stop the programme itself from working, of course, but once it is outlawed they can go after anybody putting money into it. Those people are obviously traceable otherwise they wouldn’t be using Spinner or Tornado in the first place.
I don’t think the government would be able to stop the smart on the IC without assistance from the NNS if the contract is on a large enough subnet that is well distributed. Plus what’s stopping the dev from redeploying the dapp over and over, sort of like the spam issue. Am Ithinking about this right?
The US government has authority in many countries across the world, they can subpoena providers in most first world countries and order them to shut down the canister, which they obviously can’t do. Their only option is to shut down the node, which translates in loss of capacity for the whole network and loss of trust on node providers end cause they lost money on an investment.
The dev can keep spamming the contract, but at that point he’d have lost pretty much all users cause who wants to keep liquidity in a canister that might disappear in a matter of days?
I need to take some time and ponder over this a bit more. I support privacy but there has to be room for some way to implement privacy while complying with KYC policies. Money laundering is a huge problem and Tornado has been the main facilator of it in crypto. It might be time to reframe the problem decentralization is trying to fix. Rather than bypassing sensible regulations, perhaps it should be removing disproprotional power from corporation to users.
Imo we shouldn’t focus too much on this specific case, regardless on what you think about Tornado cash, if a 3rd party has the ability to impact a decentralized system without partaking in the consensus mechanism, then the system isn’t that decentralized.
If a centralized entity has authority over what’s allowed then you’re gambling your views will always align with theirs and the day this stops being the case, you’re in for a rough awakening.
Also as a rule of thumb if the government is trying to take away your privacy and freedom using: terrorism, CP or nazis as an excuse they’re most likely fooling you.
The system itself has not been impacted. The US government has forbidden Americans from interacting with specific addresses associated with Tornado Cash. Since I am not an American, I can still interact with Tornado without fear of punishment.
Governments will always be able to forbid citizens from transacting with specified entities, irrespective of the technical capabilities of that entity. It does not matter how decentralised that organisation is. Of course, in case of organisations that are insufficiently decentralised, a government can do much more than criminalise interactions with it, it can shut the thing down.
The idea that crypto will be able to act as a means of widespread tax evasion without government sanction is a pipe dream. Besides, unless one believes that taxation is a form of theft or slavery (I do not), many government sanctions are legitimate rather than being attempts to fool the public. If North Korea sponsored hackers are going to target networks like the Ronin network and then spirit away the money through Tornado, it creates a vector of attack for unfree states to undermine relatively free ones. Of course, I would love to anonymise my crypto holdings completely, who wouldn’t, but if it also enables really bad actors to do really bad things I would factor in the price of that anonymity.
Yep and that is what should happen, regulate on the app level instead of the protocol, but from past experience I doubt this is what would have happened if Tornado cash were run on the IC.
Let’s not kid ourselves bad actors have so many ways to do their shady business, they barely give a damn about cryptos, I’d rather have privacy coin so that people living under dictatorships have more freedom than ban them completely so I can have a false sense of security.
It’s not easy to move millions of dollars around without being traced. The percentages lost in evading sanctions are quite large. As more people understand what is possible with mixers, the amount of money laundered through them will only grow if left unchecked. Also, helping North Korea make money from hacks (estimated at a billion dollars thus far, not small change) only bolsters and stabilises one of the worst dictatorships on earth. I am not a fan of promoting shady business with the excuse that shady people will manage to do shady things anyway.
Like it or not blockchain is the wild west of the internet and IC like any other authentic blockchain project should just give the middle finger to the US just like it would give the middle finger to Russia, China or Iran.
What sort of jurisdiction does the US govt have with switzerland? I’m under the impression they could come at Dom and he could give them an eloquently articulated “fuck you”, and they could not do anything about it.
Yeah and then they’d send a subpoena to all the nodes in countries under US jurisdiction (a lot) and have node provider shut down, effectively reducing the network’s decentralization and making running a node a very risky investment.
The smart contract from Tornado Cash still exists! Gov. cannot take it down. So it just says you cannot use it.
Ethereum does not allow folks to reject incoming transfers to your wallet! So if you are ever annoyed you should send some eth to your enemies through Tornado Cash! There’s nothing they can do about it and it’ll immediately make them targets of the US gov lol.
I agree with a lot of the stuff further up. We need to find a middle ground to comply with KYC and maintain privacy. I have no answers!
Is this true? So web3 means there’s no compliance with laws or regulation at all and if there is it isn’t web3? I don’t know if that’s true. I think web3 means that the token holders of the network get to decide what dapps are regulated and not just 1 person or entity (as is the case with AWS).