Vitalik Buterin reacts to the Tornado Cash case. The Tornado Cash funds anonymization protocol is at the heart of the turmoil. Site out of service, funds frozen, the service is now in the sights of the American authorities. The founder of Ethereum wanted to react to this news!
The benefits of Tornado Cash according to Vitalik
Following the sanctions collected by the protocol, Vitalik Buterin wished to react in a tweet. According to him, Tornado Cash is not only an application at the service of hackers and thefts of funds on the blockchain. Indeed, this protocol can also be used for a good cause as it perfectly illustrates.
The founder of Ethereum reveals in particular that he recently used Tornado Cash in the context of donations to Ukraine. Far from criminal activities, he reminds us that the protocol is not in itself responsible for the use made of it...
As we wrote yesterday, Tornado Cash has been at the heart of crypto news for the past few days. This protocol is called a crypto mixer. It allows its users to anonymize their transactions. This is why the US Treasury Department placed Tornado Cash on its “Speciality Designated Nationals” on August 8th.
This list includes different people or companies targeted for economic sanctions. For the US Treasury, the protocol participates in money laundering and many criminal activities. The latter declares:
"Tornado Group has been used to launder over $7 billion in digital assets since its inception in 2019."
Difficult to hold it against him when we remember for example that the 100 million of the recent Harmony hack. The service is also accused of helping the North Korean hacker group Lazarus Group anonymize more than $455 million in stolen funds.
Yesterday, many industry players like Circle, the USDC issuing company, took on the protocol. The latter blocks addresses that have used the protocol. Similarly, blockchain node infrastructure providers on Ethereum, Infura, and Alchemy have blacklisted Tornado Cash.
These services are essential for accessing the Ethereum blockchain and therefore appear to comply with the position of the US Treasury. A decision criticized by some defenders of decentralization who point to the impossibility of having a protocol without a trusted third party and “permissionless ” under these conditions.
Tornado Cash co-founder Roman Semenov's Github has also been suspended along with many protocol resources that have been blocked.
Tornado Cash revives many debates!
The first debate revived by this case is pointed out by Jerry Brito, the executive director of Coin Center, a non-profit organization working on political issues related to the crypto industry.
He highlighted one of the problems that protocols like Tornado face. Indeed, it is a tool with a neutral character so it can be used for good things but also for bad things.
This is inherent to any technology and it is a debate that has often come up in history, especially recently with the advent of the internet and the infinite possibilities offered by technology.
For him, we are attacking the tool but not the people responsible for the hacks.
The second debate is at the foundations of the crypto industry, it is that of decentralization. By nature, the blockchain is decentralized and was born to fight against the omnipresence of centralized actors and the power concentrated in the hands of a few actors which results from this centralization.
Jake Chervinsky a crypto attorney and chief policy officer for the Blockchain Association sums up this thought:
"While the association supports the US Treasury's mission to combat illicit activity in cryptos, they are also concerned that the blender ban crosses a line that the government has always toed and should continue to uphold as what a good policy. This decision to sanction a decentralized protocol threatens this intelligent and balanced approach to cryptos previously championed."
This case, as well as the recurring debates on crypto-currencies like Monero, therefore puts the use of these tools, by nature neutral but which can be used by many hackers as we observe regularly, at the heart of the debates. Moreover, if we can never really prohibit a decentralized protocol, we can see that other methods make it possible to block it and prevent its use.
We, therefore, observe once again an ideological battle between the partisans of decentralization, of total freedom, and the defenders of a more pragmatic approach to regulation which therefore frees itself from blockchain ideals.
Tornado Cash will certainly not be the last protocol of this type in the sights of the authorities and we will carefully observe the consequences of this affair.
0 Comments