When one thing gets screwed once in the crypto world, and causes trouble for everyone, that never gets back up ever again. Look at the history of crypto and you will see that people will never reinvest in big amounts to something that screwed the market once before.
Look at Luna as the nearest thing, they created LUNC, how much investment did that got? Of course nearly nothing, why? Because people got burned once from it, and they decided never to follow that ever again because of this. I believe that the same will happen over and over again. This tornado situation will be exactly the same, they can do whatever they want, but people will avoid it in the end.
Topic: Tornado Cash dev says ‘sequel’ to crypto mixer aims to be regulator-friendly (Read 61 times)
March 09, 2023, 12:53:39 PM
March 07, 2023, 12:05:06 PM
Decentralized Crypto addresses should simply be color coded, label or tagged according to immoral/illegal things they are used for. A proper mixer can just reject those that are coded red. Users of the mixing site can decide whether to mix with those below red, but they really still have to be careful with them.
Decentralized transparent and open-source platform should be used for colour coding addresses in evidence-based manner. It's not necessary to tag every address... Just focus more on address used for harmful or dangerous purposes. Everyone should freely and fairly participate, with no immoral merit/ranking system to deprive the best from ranking up and having more influence on the platform. A satanic/evil ranking system will spell doom for the platform. So much power given to organized cyber crooks/gangsters to determine what address is good/evil is dangerous for True Cryptocurrency space.
Records of untagged/neutral addresses can still be held by the right mixers in decentralized/privacy-friendly manner just incase criminals slipped through into a mixer or incase they are needed for investigations using tech like safe Zero Knowledge Proof. A ZKP could be considered safe if there is absolutely no way the information can be deciphered by the unauthorized, or stolen/known by evil AI for example.
Decentralized transparent and open-source platform should be used for colour coding addresses in evidence-based manner. It's not necessary to tag every address... Just focus more on address used for harmful or dangerous purposes. Everyone should freely and fairly participate, with no immoral merit/ranking system to deprive the best from ranking up and having more influence on the platform. A satanic/evil ranking system will spell doom for the platform. So much power given to organized cyber crooks/gangsters to determine what address is good/evil is dangerous for True Cryptocurrency space.
Records of untagged/neutral addresses can still be held by the right mixers in decentralized/privacy-friendly manner just incase criminals slipped through into a mixer or incase they are needed for investigations using tech like safe Zero Knowledge Proof. A ZKP could be considered safe if there is absolutely no way the information can be deciphered by the unauthorized, or stolen/known by evil AI for example.
March 07, 2023, 10:01:33 AM
The Monero cryptocurrency also has a private view key, which allows its owner to track all incoming transactions to each specific address. At the same time, all outgoing transactions remain invisible.
This private view key can be transferred, for example, to a tax inspector. The tax inspector will be able to calculate the income on a cash basis - the total number of coins that was received by the owner of the Monero wallet.
Cryptocurrencies must interact with the outside world, including with the world of regulatory government bodies.
Most importantly, this does not violate the principle of confidentiality and anonymity.
This private view key can be transferred, for example, to a tax inspector. The tax inspector will be able to calculate the income on a cash basis - the total number of coins that was received by the owner of the Monero wallet.
Cryptocurrencies must interact with the outside world, including with the world of regulatory government bodies.
Most importantly, this does not violate the principle of confidentiality and anonymity.
March 07, 2023, 06:30:05 AM
It seems to include greater transparency. Along with improved implementation and coordination of whitelist versus blacklist networking to better isolate legitimate transactions from illegitimate ones.
Given the nature of the internet to offer anonymizing services through proxies, VPNs and TOR. Could an anonymizing service offer better proof of authentication through not allowing end users to conduct tornado cash transactions through anonymizing services like proxy/VPN/TOR? Rather than allow anonymizing services, the end user IP address and region could be confirmed as not being anonymized before being one way hashed or obfuscated in some way. In this way, it could be easier to separate legitimate funds from illegitimate ones.
Given the nature of the internet to offer anonymizing services through proxies, VPNs and TOR. Could an anonymizing service offer better proof of authentication through not allowing end users to conduct tornado cash transactions through anonymizing services like proxy/VPN/TOR? Rather than allow anonymizing services, the end user IP address and region could be confirmed as not being anonymized before being one way hashed or obfuscated in some way. In this way, it could be easier to separate legitimate funds from illegitimate ones.
What do you mean by whitelist/blacklist networking? The improved feature is the option to choose a subset of specific coins that do not comes from illegal funds.
Unless I miss some part of it, That kind of idea seems terrible, there is no point in deobfuscation within the Tor network, I can't think it would work to have a PoA of network path that the client or server able to filter which ones are the good or bad IPs.
Back to Privacy Pools, it is truly promising, though, as noted above, would AML policies support this kind of tool? Does the regulator satisfied with this kind of mechanism? I guess time will tell.
Also, it requires community support as follows.
For this to work, we need data providers like @chainalysis
and @trmlabs
to do tracebacks on deposits, so users don't have to manually create their own subset exclusion lists.
We need UI providers to reference those lists.
and @trmlabs
to do tracebacks on deposits, so users don't have to manually create their own subset exclusion lists.
We need UI providers to reference those lists.
March 07, 2023, 04:46:40 AM
It means Tornado Cash just kill the purpose of mixer where it's used to protect the user privacy without revealing their trace, now they're okay to revealing it to the regulators whenever the regulators ask it. I think Tornado Cash shouldn't be used anymore because it doesn't protect your privacy, because there are few other mixers which is still trusted until now.
It's implemented as a zero-knowledge proof which means the regulators don't know anything except that your coins were not mixed with hacker funds.
The bad news is that in its current design, it enforces the idea of taint. Unfortunately, I don't see the industry giving up on the notion of taint anytime soon. As far as they are concerned, they don't even care about the existence of taint - they just care about seizing the coins from the bad guys.
But I think it's possible to do that without introducing taint, as that only comes into existence when exchanges ban an address for having a connection with some address belonging to a criminal.
Besides, exchanges banning you from sending coins to someone is not only taint-introducing but also ineffective, as you can simply withdraw your coins to your own non-custodial wallet and send it to them.
Exchanges letting you make the deposit, taking the coins, and then serving you an official notice is a different story, however: No addresses or UTXOs are tainted in the process, and the exchange can prove that you sent them proceeds from a crime group that must now be confiscated, without any scam accusations or the like.
But, I don't see exchanges changing their AML policies to accomodate this.
March 07, 2023, 04:32:28 AM
Quote
To see the protocol progress further, Soleimani wants on-chain forensics platforms like Chainlaysis and TRM Labs to conduct tracebacks on deposits so that users of the privacy tool don’t have to manually create their own subset exclusion lists.
Oh, I have a better idea!
You first contact the government cybersecurity unit, you provide them with the source of funds, your id, your fingerprint, and three stool, sperm, and saliva samples, and after a check, they will assign you an address to which you can send the funds you want mixed and an address to which the funds will be delivered.
It will be perfectly ok, it will mean you're secure from getting your coins tainted and no more of those nasty Koreans troubling your dreams.
Quote
Now, users have the option to help regulators isolate illicit funds, without revealing their entire transaction history
Yeah, that's exactly what I was missing, I couldn't sleep at night not knowing how to help in the war against money laundering.
March 07, 2023, 04:07:51 AM
It means Tornado Cash just kill the purpose of mixer where it's used to protect the user privacy without revealing their trace, now they're okay to revealing it to the regulators whenever the regulators ask it. I think Tornado Cash shouldn't be used anymore because it doesn't protect your privacy, because there are few other mixers which is still trusted until now.
Tornado Cash's developer is only aiming to make money and doesn't care if his project is genuine or not, he actually can just create new mixer site.
Tornado Cash's developer is only aiming to make money and doesn't care if his project is genuine or not, he actually can just create new mixer site.
March 07, 2023, 03:25:41 AM
Quote
Soleimani explained that the “critical flaw” with Tornado Cash is that users cannot prove that they’re not associated with a criminal enterprise stealing or laundering crypto funds.
A former Tornado Cash developer claims to be building a new crypto mixing service that aims to solve a “critical flaw” of the sanctioned crypto mixer — which he hopes will convince United States regulators to reconsider its position on privacy mixers.
The code of a new Ethereum-based mixer, “Privacy Pools,” was launched on GitHub on March 5 by its creator, Ameen Soleimani.
In a 22-part Twitter thread, Soleimani explained that the “critical flaw” with Tornado Cash is that users cannot prove that they’re not associated with North Korea’s Lazarus Group or any criminal enterprise for that matter.
Twitter content: https://twitter.com/ameensol/status/1632083054272430080
With Privacy Pools, however, Soleimani says that depositors and withdrawers can opt out of an anonymity set that contains an address associated with stolen or laundered funds.
This feature of Privacy Pools is executed with zero-knowledge (ZK) proofs, meaning that the privacy of the user is preserved:
Soleimani provided a demonstration of how Privacy Pools is used on twitter:
Twitter content: https://twitter.com/ameensol/status/1632089283354845184
The developer hopes the solution will empower “the community to defend against hackers abusing the anonymity sets of honest users without requiring blanket regulation or sacrificing on crypto ideals.”
While Privacy Pools is already live on Optimism, Soleimani noted that the first version of the privacy protocol is still in its “experimental” stage because the code isn’t complete and has not been audited, but he is “pretty close to having this ready.”
To see the protocol progress further, Soleimani wants on-chain forensics platforms like Chainlaysis and TRM Labs to conduct tracebacks on deposits so that users of the privacy tool don’t have to manually create their own subset exclusion lists.
In making the case for on-chain privacy protocols, Soleimani cited what he described as an “excellent” report by the Federal Reserve Bank of St. Louis in Missouri that examined the trade-offs between on-chain privacy and regulation:
The developer hopes this can help “start a conversation” with U.S. regulators on how on-chain privacy can be preserved whilst restricting criminal activity through the use of ZK proofs.
Soleimani’s attempt to create a crypto-friendly on-chain privacy solution comes after the U.S. Office of Foreign Asset Control (OFAC) sanctioned ETH and USDC addresses linked to Tornado Cash on Aug. 8 in response to several alleged thefts by North Korea’s Lazarus Group, who were claimed to have routinely used the privacy mixer to preserve its anonymity.
Shortly after the sanction on Aug. 10, Alexey Pertsev, the creator of Tornado Cash, was arrested by authorities in the Netherlands and is currently facing a series of money laundering charges. He remains behind bars and his next hearing will take place in late April.
https://cointelegraph.com/news/tornado-cash-dev-says-sequel-to-crypto-mixer-aims-to-be-regulator-friendly
A former Tornado Cash developer claims to be building a new crypto mixing service that aims to solve a “critical flaw” of the sanctioned crypto mixer — which he hopes will convince United States regulators to reconsider its position on privacy mixers.
The code of a new Ethereum-based mixer, “Privacy Pools,” was launched on GitHub on March 5 by its creator, Ameen Soleimani.
In a 22-part Twitter thread, Soleimani explained that the “critical flaw” with Tornado Cash is that users cannot prove that they’re not associated with North Korea’s Lazarus Group or any criminal enterprise for that matter.
Twitter content: https://twitter.com/ameensol/status/1632083054272430080
With Privacy Pools, however, Soleimani says that depositors and withdrawers can opt out of an anonymity set that contains an address associated with stolen or laundered funds.
This feature of Privacy Pools is executed with zero-knowledge (ZK) proofs, meaning that the privacy of the user is preserved:
Quote
“Now, users have the option to help regulators isolate illicit funds, without revealing their entire transaction history [...] With privacy pools, just because someone deposits into the same smart contract as you, it doesn't mean they can also force you into sharing an anonymity set with them. It's your choice.”
Soleimani provided a demonstration of how Privacy Pools is used on twitter:
Twitter content: https://twitter.com/ameensol/status/1632089283354845184
The developer hopes the solution will empower “the community to defend against hackers abusing the anonymity sets of honest users without requiring blanket regulation or sacrificing on crypto ideals.”
While Privacy Pools is already live on Optimism, Soleimani noted that the first version of the privacy protocol is still in its “experimental” stage because the code isn’t complete and has not been audited, but he is “pretty close to having this ready.”
To see the protocol progress further, Soleimani wants on-chain forensics platforms like Chainlaysis and TRM Labs to conduct tracebacks on deposits so that users of the privacy tool don’t have to manually create their own subset exclusion lists.
In making the case for on-chain privacy protocols, Soleimani cited what he described as an “excellent” report by the Federal Reserve Bank of St. Louis in Missouri that examined the trade-offs between on-chain privacy and regulation:
Quote
“Their report proposes to achieve effective regulation by having Tornado Cash users provide receipts to an intermediary, thus revealing their entire transaction history to the intermediary, but still being able to have privacy with respect to other public blockchain users.”
The developer hopes this can help “start a conversation” with U.S. regulators on how on-chain privacy can be preserved whilst restricting criminal activity through the use of ZK proofs.
Soleimani’s attempt to create a crypto-friendly on-chain privacy solution comes after the U.S. Office of Foreign Asset Control (OFAC) sanctioned ETH and USDC addresses linked to Tornado Cash on Aug. 8 in response to several alleged thefts by North Korea’s Lazarus Group, who were claimed to have routinely used the privacy mixer to preserve its anonymity.
Shortly after the sanction on Aug. 10, Alexey Pertsev, the creator of Tornado Cash, was arrested by authorities in the Netherlands and is currently facing a series of money laundering charges. He remains behind bars and his next hearing will take place in late April.
https://cointelegraph.com/news/tornado-cash-dev-says-sequel-to-crypto-mixer-aims-to-be-regulator-friendly
....
A redesign and update to tornado cash intended to comply with feedback and criticism from regulators.
It seems to include greater transparency. Along with improved implementation and coordination of whitelist versus blacklist networking to better isolate legitimate transactions from illegitimate ones.
Given the nature of the internet to offer anonymizing services through proxies, VPNs and TOR. Could an anonymizing service offer better proof of authentication through not allowing end users to conduct tornado cash transactions through anonymizing services like proxy/VPN/TOR? Rather than allow anonymizing services, the end user IP address and region could be confirmed as not being anonymized before being one way hashed or obfuscated in some way. In this way, it could be easier to separate legitimate funds from illegitimate ones.
Although given the rise of botnets, there certainly might be no shortage of supply of IP addresses for criminals to utilize towards executing their nefarious plans. Even without resorting to network anonymization.
Perhaps captchas could be used to cut down on potential botnet traffic? Or perhaps my ideas are not the best.
Still, doesn't it seem as if there could be a better way to do this. Jump to: