# I'm Torn - Eléonore Blanc | Web3Privacy Now - Channel: [Ethereum Cypherpunk Congress](https://streameth.org/ethereum-cypherpunk-congress) - Date: 2024-10-09 - Duration: 22:28 - Topics: privacy, web3, crypto - Watch: https://streameth.org/watch/yt-6ZMJygb9fe8 - YouTube: https://www.youtube.com/watch?v=6ZMJygb9fe8 ## Description Community 1st - Rome Takeover (5/10/23) | Web3Privacy Now @ ETHRome 2023 I'm Torn by Eléonore Blanc: https://twitter.com/blockblanc | Founder of Cryptocanal: https://www.cryptocanal.org/ Web3privacy Now is a think-and-do tank made by individuals who care about digital privacy and individual rights. Its primary objective is to explore, spotlight, and evaluate privacy-centric goods and services within the web3 domain. Twitter: https://twitter.com/web3privacy Github: https://github.com/web3privacy/web3pr... Recordings powered by Logos: https://logos.co/history Filmed & Edited by BabyBit Production: https://twitter.com/BabyBitProd ## Transcript [Music] hello everyone um my name is Elanor blank I'm the founder of crypto Canal thank you so much PG for the clicker and for having me here today who here has ever used a mixer just raise your hand who is familiar with the tornado cash case okay let's say that this one is for posterity and also for you guys here today I felt a little bit torn obviously going through this this case I lived it pretty personally in short today I'm going to cover what is trado Cash the legal arguments and why I believe that privacy is a public good and that we should not treat our Builders as criminals I'm going to it's going to be like an interesting presentation as I'm trying to resume what's going on and there's a lot of different actors and there's legal implications but basically T cash is a decentralized non- custodian smart contract mixer this was the first we never had a product of such something that worked automatically and gave privacy to to all users depending on how techsavvy they are can directly connect to the UI or directly to the smart contract and you can see that this is a product that was definitely used and needed as over the years and since its Inception uh more than 7 billion worth of eth have gone through tornado cach it also had something so the the platform worked it obviously uh answered a solution and was needed by a lot of people and on top of it it had a token so the torn token um had two purpose it was to be used in the traino cash Dow for government governance purpose and that is something we like to see we like to see tokens that can be used and have utility and the second thing that it was used for was to be able to run Rel layers or let's say that the more you staked the higher the chances that your relayer would be used um while tokens would go through T cach so I know that a lot of you here have either used it or know what it is but just for for the sake of posterity once again torado cache enabled you to basically anonymize your funds and give you privacy once again because this is something that we don't have in crypto right now um of course there's different projects different blockchain but on the ethereum blockchain um you would send your assets from wallet a to wallet b um that's completely to be seen for the rest of the world and if you want to anonymize you could send your assets from wallet a to the pool wait a little bit the longer you would wait the better and then retrieve them a few days later and by therefore for breaking that link between those two wallets and that was that is a very useful feature and you'll see that although today I'm going to talk about the case and the different people that are well currently facing legal battles and in different jurisdictions it's still useful today and it's still running and people can still use it so I know this looks a bit crazy and everybody's going to tell you never make a slide with so much text but there's a lot going on on on the left side you have everything that's happening in the Netherlands so what happened last year and we had to start knowing all these people but the Fiat um which is the fiscal information investigation service and responsible for investigating Financial crimes in the Netherlands charged Alex perv and arrested him for then nine months or 260 days Alexi was in jail with no charges and only three proforma hearings which were yeah bureaucratic nightmares for him for everyone for his for his loved ones as well and basically there was a lot of opacity in the case and we didn't know what was going on and at the same time we kept wondering what's happening in the US at that time when he got arrested the axi infinity Ronin Bridge hat hack which is we get several hacks in crypto but this one was really what was the the one too many I guess for this case happened and ofac sanctioned the tornado cash in the US and the ofac is the office of foreign NASA control and they are the equivalent of the Fiat for the United States and it took them almost a year almost to charge and arrest the other two founders of tornado cash Roman storm and Roman semov Alexi right now is allowed to be in the Netherlands he's not under house arrest um we had the last Pro from my hearing very recently he is under conditional uh arrest and is awaiting trial in the Netherlands um which will happen in on the 26th and 27th of March next year Roman storm was arrested uh two months ago and was arrested uh and is now under house arrest in the USA uh under a 2 million Bond Roman seov was charged with the same uh yeah from the same indictment from Roman storm um but has not been arrested for now and something really interesting to see is that just before Roman storm in Roman semin were charged and storm arrested a coinbase lawsuit uh on the 17th of August that was trying basically to question even the validity of ofac coming after tornado cash was rejected this lawsuit I believe is well this is all I'm just how do you say this I'm not sure of what I'm saying right now but I feel like this had to happen so that they could arrest both of them because this case basically was arguing that ofac could not have any jurisdiction over trinado cash over a smart contract and over a dow this lawsuit has created precedent to say that even though you consider the entity that you're working in as a dow it doesn't protect you it doesn't mean that it's not a legal entity it doesn't mean that they cannot come after you they basically did the shortcut and said well you have a dow fine call yourself a decentralized autonomous organization you're like a you still have some form of stakeholders with your governance with the token that you're using it doesn't protect you and I think this is really important the second thing is that ofac sanctioned not LX or Roman storm ran sov they sanctioned the smart contract the token contract of tornado cash and that was a precedent that coinbase and the other people that were part of this lawsuit were contesting this is you're out of your boundaries this is not something you should be uh let you know pronouncing yourself for or against so as you can see a lot of actors one Dutch side one American side they are they do have connections obviously and I was since I live in the Netherlands and I followed this one and I run a community obviously we were trying to support elexia as much as possible but now we need to connect and make bridges also with what's happening in the United States next slide so what's happening what what is now the case about and keep in mind that for the first nine months of all this happening we didn't really know what the charges were we could only guess but we didn't know exactly especially in the Netherlands where the system is even more opaque than in the US where at least they had to publish an indictment recently so the defense what have we heard what are the arguments the first one was you know code is Free Speech how can you arrest Alexi he's not guilty you we slowly saw that the case was going to be built around something a bit different but indeed software development um has been established and protected as free speech since the 1990s in the United States and these are legal precedents that are really important to defend and protect and I think a lot of you here uh can benefit and we are really the children of these lawsuits that happened in the 90s uh which made sure that basically software development was protected the second thing and these two points I guess were revoked at that uh coinbase lawsuit but smart contracts aren't private property I've turned into cash I heard the lawyer saying this several times were they being they never claimed private property this is open source Etc they are not really listening to that another argument as I mention torado cash is not an entity and cannot be prosecuted by ofac again that point has been dismissed recently and something that Alex's lawyer has been repeating on again and again T cach is a public tool bringing privacy to all this is not um a for-profit uh tool this is something that was for all enabling every user in the world to access the UI and connect and use this mixer they also did Implement a compliance tool this is a pretty important and I'll be going back to it a bit later but this compliance tool means that you as a user if you were to bring your assets from trado cash back to a centralized exchange and they would ask for the source of these funds you could actually have a compliance to a report that you would use yourself and then it would allow you to still go back to a centralized exchange with funds brought from tornado cash uh but this was very Case by case and this is something that all users could use it is not considered a kyc AML tool it's really a ad hoc optionality for users uh that have that need to move funds from T to cash to centralized exchange and finally and you think that this is like the most obvious point but somehow it's also the hardest to make uh you cannot prosecute the makers for the crime of the users and this is something which is getting really muddy where basically they are accusing every bad actor that had used train cash they are now putting that blame onto the makers so in the US you have now three official charges conspiracy to commit moneya laundering they did not have kyc ml conspiracy to operate an unlicensed money transmitting business they were not registered right they were a dow and then conspiracy to violate the international emergency economic Powers Act yeah so this is the part where things got really tricky and this is what really ticked off ofac is when they saw those 600 million that were hacked from axi infinti go straight to tornado cash by the lerus group that was really the moment where and you can see it in the discussions from the CH cash team where they tried kind of En last measures to make sure that those funds would not uh go through tornado cash but it was too little uh too late so in the Netherlands Alexi is charged with laundering money from 36 hacks equivalent to 500,000 worth of ethereum uh in the US it's one billion so they don't really care about the how or the how much or the exact just these big numbers right so imagine the headlines North Korea crypto mixers and it's just poisonous headline um which is really hard to speak about and and and inform people and an educated manner um a few additional elements uh the UI you have to think about this when you're building these tools anything that will attach you to the real world can be used later against you so the UI the the tool that enabled sort of normal users that didn't want to interact directly with a smart contract was paid directly with a pepper sank bank account so now pepp SEC which was working with these developers that they're tracing back the credit cards so if you're if you facilitated this by even buying the domain you are liable for whatever happens on that UI also I know that we see tornado cash as a public good that we see privacy as a human right it was it was a for-profit Enterprise this was a for-profit Enterprise uh they received 900,000 uh worth of funding from a VC that's another point that the prosecution is bringing is this was not just you know open code for the world and given for free this was there was incentives behind it to make money and so in short the prosecution argues that they benefited from the money laundering that the torn token was very important in this whole scheme and this is how the team benefited from the money laundering that went through tornado cash and did not uh take sufficient measures to prevent malicious actors like the lerus group to launder money through tornado cash so I know that I look like a crazy person you know and that I'm making all these connections between the prosecution and what happened in the Netherlands but the next slide is even more chilling you can see in the indictment which you can I don't know if the Cur code is good enough for you all but these are screenshots from the indictment with telegram I think it never says telegram but it's from the encrypted messaging app which I can only assume they're using telegram with their direct communication between the team and that is being used against them today so as they were building the case they got access to all their conversations you can see storm seov asking would you like no it's storm actually asking would you like to install kyc on tornado he's like what are you what are you talking about no I'm not saying you should all Implement KML I'm really more on the other side but you can see that they're using this now for the first count in the charges second we should never even in private chat talks as if we own tornado you can see that they're starting to understand that ownership and who's liable is going to come out what is the biggest problem why are they feeling the heat well we have a UI and we don't [ __ ] block anything in the front anyone and anything could use chain of cash which on some level is great because you don't want to decide who can and who cannot have privacy then you're back to a centralized platform and white listing and it's a whole other pile of mess but what's going to happen is they're going to try to use this as a defense and say well we need to hand over the primary access and then we can yell that the worker is not the owner yeah that didn't really work so as you can see um they knew that something was going to be off that something was going to happen um and basically the the prosecution is using all these private chats which we can also discuss the legality of you know breaking this but once you're indicted in the US I guess away with your privacy and um yeah so we're going to be following the case a bit more in the months to come there's still a lot of question um but in short I think we need financial privac privacy for all we are here at an event and we'll have several discussions today to next slide to discuss privacy what it means oh no I knew that I another slide that I forgot have you used the to cash compliance tool remember I asked before you don't have to do this right away but basically to support Alex's upcoming trial in March we're looking for people that have used the compliance tool that are ready to talk about it have documentation from it and yeah to just basically build a case because the prosecution right now is kind of saying well you had a compliance tool but you know that it was it really useful they're basically questioning if the tool was enough and if a few people would just yeah just share what happened and how they used it and yeah I was I used to Into Cash this was great I didn't want my I don't know you don't even have to explain why you needed that privacy I hate that we're at that part now where we have to justify why we need privacy yeah I don't want my boss to know what I'm doing with my funds at the end of the month whatever but if you use your a cash compliance tool and you're ready to share about it publicly in a court case I know basically dox yourself about using the compliance tool and help Alex P of case that'd be great you can always DM me or reach me out and if you wanted to support the case um cure code is there all right final slide guys I know this was a lot and I know some of you are very familiar with the case but in short Financial privacy if we are to create the financial tools of tomorrow if we are to change how money works we have to be better than cash right we cannot have a we I want it cheap I wanted permissionless I want it I want everything but I also want privacy what type of privacy on what scale with what tools that's up to each individual but privacy is a fundamental human right to cherish and protect and not take for granted I would even add yes the implementation in The Details Matter do I have a perfect recipe now to tell you how to build privacy protocols and tools for tomorrow no obviously the regulations and the way that they are implementing these regulations keeps changing and it creates a lot of uncertainty and doubt but the details do matter and maybe if you don't need a token just don't use it if your if your platform works and you're solving a problem and it it's just just don't add things that you don't need to builders are not Financial criminals I know that sounds like like a crazy statement but I feel like it has to be said I think the the attitude from the outside and I saw it when I was sitting in these court cases and in these Court hearings were the bad people you know they don't understand we're just all weirdos and we're just doing crypto weird things and they don't understand that we're trying to do something different and it doesn't mean that we're criminals but we are changing the system so you know today you're going to hear about rail gun Nim privacy pools I don't think we're going to hear about proof of Innocence but just there's a lot of development still happening in privacy in the crypto industry and I look forward to seeing all of these grow learn and prosper to give privacy really for every user out there and finally I believe strongly in education to counter all this fud created by regulators and media and weird things we need more education and we need more events like this one like eth roome like like web three privacy and all the new events that they're going to be doing and etham this is the only way we can move forward yeah so on that note I would like to have privacy transparency and censorship for all thank you very [Applause] [Music] much