Tornado cash founders charged with money laundering/sanctions violations

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Quote from: The Cryptovator on April 21, 2024, 03:32:06 PM

Today I received mail that Binance enabled my withdrawal for cryptocurrency. But they are temporarily restricted from using their platforms for trading and p2p trading.

That is good news for you, i am sure they didn't find a way to 'steal' your coins from their investigations, and this is why they have released it to you. Since they allowed you to withdraw your coins, i believe they would also remove the restriction on your account after sometime, but they may keep a close eye on your account from now on.

Quote from: The Cryptovator on April 21, 2024, 03:32:06 PM

I am going to withdraw all the funds into a hardware wallet

Much better, nothing's better that being in control of your funds, safely in an offline device. Though if you are an active trader, you still need to trade on centralized exchanges, but you would only move small amounts into their platform for trading.

The Cryptovator

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Quote from: Z-tight on April 21, 2024, 03:49:55 AM

Quote from: The Cryptovator on April 20, 2024, 04:43:34 PM

No, it wasn't directly from the mixer. My clients mixed and received his address. Then he sent it to my Binance. I have provided a screenshot where I talked about sending funds to my clients. So the fund was from my client's address, not from Mixer.

That is surprising, as far as i know or thought i did, centralized exchanges wouldn't ask for verification on the source of funds if after mixing you go through a few hops before depositing it into their platform. In this case it was from tornado cash -> wallet -> binance, i would think that would have been enough, but maybe the client should have gone through a few more hops. However, goodluck and i hope you get a good resolution with binance.

Today I received mail that Binance enabled my withdrawal for cryptocurrency. But they are temporarily restricted from using their platforms for trading and p2p trading. However I am happy that at least they allowed me to withdraw my funds from there. It doesn't matter if they don't want to allow me to use their platform. I still have hope since I haven't made any mistakes there. They need more than 15 days to let me know their final decision about account restrictions. I am going to withdraw all the funds into a hardware wallet and unlikely trade in centralised exchanges.

Z-tight

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Quote from: The Cryptovator on April 20, 2024, 04:43:34 PM

No, it wasn't directly from the mixer. My clients mixed and received his address. Then he sent it to my Binance. I have provided a screenshot where I talked about sending funds to my clients. So the fund was from my client's address, not from Mixer.

That is surprising, as far as i know or thought i did, centralized exchanges wouldn't ask for verification on the source of funds if after mixing you go through a few hops before depositing it into their platform. In this case it was from tornado cash -> wallet -> binance, i would think that would have been enough, but maybe the client should have gone through a few more hops. However, goodluck and i hope you get a good resolution with binance.

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Sanctioning Tornado Cash and arresting one of their developers sets a terrible precedent. Tornado Cash isn’t custodial like traditional mixers and its developers have no control over how users decide to use this service.

When the sanctions were first announced, there were some in the Monero community who were almost celebrating the news.
https://www.reddit.com/r/Monero/comments/wkgs4u/people_are_making_the_wrong_generalizations/
Now we are seeing that governments’ strong opposition to privacy has negatively impacted Monero as well. If you give regulators an inch, they will take a mile. Shutting down or severely hampering this one mixer is only the start of increasingly stricter compliance measures and restrictions on users seeking financial privacy.

The Cryptovator

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Quote from: examplens on April 04, 2024, 06:26:46 PM

Quote from: The Cryptovator on April 04, 2024, 04:46:46 PM

Usually I don't store funds for exchange, but those funds are there for daily trading. Still, they allow trades but disable withdrawals.

Did I understand correctly, the funds you are talking about were sent directly ^{from Tornado source} to Binance?
I know of earlier cases where Binance requested verification for funds deposited directly from the mixer, while it was not the case for mixer -> wallet -> Binance. It is the same starting address where the funds came from.

No, it wasn't directly from the mixer. My clients mixed and received his address. Then he sent it to my Binance. I have provided a screenshot where I talked about sending funds to my clients. So the fund was from my client's address, not from Mixer. But still, I haven't received any resolution from Binance. My account is still under investigation. I am waiting for their response before making an accusation thread.

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Quote from: logfiles on April 04, 2024, 06:53:43 PM

Imagine exchanging Bitcoin to Monero and then back to bitcoin and then sending it to Binance only to be asked about the source of the funds if you want your funds back Grin

I agree with you, that is the risk with centralized exchanges, and it makes no sense using it if your goal is privacy. If you use mixers, CoinJoin or BTC->XMR->BTC, then don't use centralized exchanges. Binance and any centralized exchange can confiscate customers' funds at anytime, so better to choose p2p exchanges if you don't want to find yourself in such situation.

Quote from: Darker45 on April 03, 2024, 10:21:26 PM

It's unfortunate, but it seems that at this point in time, funds coming from mixers shouldn't anymore cross paths with centralized exchanges. They'll most likely be frozen.

Yeah, and i believe it has always been that way, there is always a tendency that if your funds is coming directly from a mixer or any privacy solution, it might be frozen.

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Quote from: hugeblack on April 03, 2024, 11:48:21 PM

Quote from: The Cryptovator on April 03, 2024, 05:03:49 PM

So I don't know whether Binance will restore my account. However, it seems pretty risky to use any kind of mixer. Either the government or centralised exchanges will catch up.

They cannot know that the money comes from the mixer, but their verification algorithms will try to freeze any account they suspect, especially if the mixers are of the Tornado Cash type, where there is a Contract Address. Therefore, if you want to enhance your privacy, it is better to use Bitcoin mixers, or at least exchange Bitcoin to Monero and then Back again to Bitcoin.

Contact Binance. They will ask you for the source of the funds. If you are able to prove their source, the account will be restored.

I very much disagree that they cannot know if the money comes from the mixer. Do not use a mixer if your exchange is Binance! Different regulators from different jurisdictions have been pressuring Binance already after CZ was forced to admit that there was moneylaundering that have occured in the exchange. They will certainly be much stricter this time. If you assume that they do not know your coins went through a mixer, prepare to have your accounts and funds frozen.

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Quote from: hugeblack on April 03, 2024, 11:48:21 PM

They cannot know that the money comes from the mixer, but their verification algorithms will try to freeze any account they suspect, especially if the mixers are of the Tornado Cash type, where there is a Contract Address. Therefore, if you want to enhance your privacy, it is better to use Bitcoin mixers, or at least exchange Bitcoin to Monero and then Back again to Bitcoin.

Contact Binance. They will ask you for the source of the funds. If you are able to prove their source, the account will be restored.

To completely enhance privacy and avoid getting funds blocked and asked for KYC verification in order to have one's funds back, I think it's best to completely avoid centralized exchanges like Binance.

Imagine exchanging Bitcoin to Monero and then back to bitcoin and then sending it to Binance only to be asked about the source of the funds if you want your funds back Grin

examplens

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Quote from: The Cryptovator on April 04, 2024, 04:46:46 PM

Usually I don't store funds for exchange, but those funds are there for daily trading. Still, they allow trades but disable withdrawals.

Did I understand correctly, the funds you are talking about were sent directly ^{from Tornado source} to Binance?
I know of earlier cases where Binance requested verification for funds deposited directly from the mixer, while it was not the case for mixer -> wallet -> Binance. It is the same starting address where the funds came from.

The Cryptovator

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Quote from: hugeblack on April 03, 2024, 11:48:21 PM

Quote from: The Cryptovator on April 03, 2024, 05:03:49 PM

So I don't know whether Binance will restore my account. However, it seems pretty risky to use any kind of mixer. Either the government or centralised exchanges will catch up.

They cannot know that the money comes from the mixer, but their verification algorithms will try to freeze any account they suspect, especially if the mixers are of the Tornado Cash type, where there is a Contract Address. Therefore, if you want to enhance your privacy, it is better to use Bitcoin mixers, or at least exchange Bitcoin to Monero and then Back again to Bitcoin.

Contact Binance. They will ask you for the source of the funds. If you are able to prove their source, the account will be restored.

I have contacted them. Though they haven't asked for anything yet, the account has frozen. They need 30 working days, according to them, to make a full investigation. After that, they will let me know what the next step is. I have provided proof that I received those funds for marketing through their live support. But it doesn't help unlock my account immediately. A few days remain to reach 30 working days. I will make a post after their decision. Usually I don't store funds for exchange, but those funds are there for daily trading. Still, they allow trades but disable withdrawals.

hugeblack

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Quote from: The Cryptovator on April 03, 2024, 05:03:49 PM

So I don't know whether Binance will restore my account. However, it seems pretty risky to use any kind of mixer. Either the government or centralised exchanges will catch up.

They cannot know that the money comes from the mixer, but their verification algorithms will try to freeze any account they suspect, especially if the mixers are of the Tornado Cash type, where there is a Contract Address. Therefore, if you want to enhance your privacy, it is better to use Bitcoin mixers, or at least exchange Bitcoin to Monero and then Back again to Bitcoin.

Contact Binance. They will ask you for the source of the funds. If you are able to prove their source, the account will be restored.

Darker45

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Quote from: The Cryptovator on April 03, 2024, 05:03:49 PM

So it's pretty clear that governments don't want to allow crypto mixers anymore. I met Tornado Cash a few days ago. One of my clients sent me funds, and his wallet was related to Tornado Cash. Unfortunately, I received the funds on Binance, and they suspended my account temporarily. Yet it hasn't been solved and is under investigation. After that, this news pops up. So I don't know whether Binance will restore my account. However, it seems pretty risky to use any kind of mixer. Either the government or centralised exchanges will catch up.

It's expected that Binance is going to be stricter now more than ever. Now that they've been slapped with huge fines and even had its founder and former CEO held in the US for his sentencing, they must already be walking on eggshells right now.

I hope they would allow you to at least make a withdrawal though. If that transaction would cost you your account, at least you can have your money back first.

It's unfortunate, but it seems that at this point in time, funds coming from mixers shouldn't anymore cross paths with centralized exchanges. They'll most likely be frozen.

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Quote from: The Cryptovator on April 03, 2024, 05:03:49 PM

So it's pretty clear that governments don't want to allow crypto mixers anymore. I met Tornado Cash a few days ago. One of my clients sent me funds, and his wallet was related to Tornado Cash. Unfortunately, I received the funds on Binance, and they suspended my account temporarily. Yet it hasn't been solved and is under investigation. After that, this news pops up. So I don't know whether Binance will restore my account. However, it seems pretty risky to use any kind of mixer. Either the government or centralised exchanges will catch up.

It's a sanctioned mixer, which means any funds associated with it will be flagged by pretty much any centralized exchange around. Binance has had its own troubles in the past with the US regulators, so I don't think they would want to go sown the same road again.

Have they asked you anything yet regarding the funds you sent there?

The Cryptovator

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So it's pretty clear that governments don't want to allow crypto mixers anymore. I met Tornado Cash a few days ago. One of my clients sent me funds, and his wallet was related to Tornado Cash. Unfortunately, I received the funds on Binance, and they suspended my account temporarily. Yet it hasn't been solved and is under investigation. After that, this news pops up. So I don't know whether Binance will restore my account. However, it seems pretty risky to use any kind of mixer. Either the government or centralised exchanges will catch up.

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Quote from: bbc.reporter on March 19, 2024, 11:46:02 PM

Privacy is not a crime. However, it appears that if a person uses a mixer or a something similar to Tornado Cash, the government can call it moneylaundering even if you only want to hide your cryptocoins in a personal private wallet. I wish the Dutch prosecutors will lose in this trial.

This is very true - Privacy is not a crime.

The problem is, if the Government can't track it or tax you on it, they won't let you have it. Perfect example is the banning of Monero and other privacy-based blockchains and coins by certain governments in the world.

Tornado Cash was used by North Korea / Lazarus Group to hide their stolen coins so they could cash it out. I don't believe the developers of Tornado Cash should be punished due to this though.

It's like saying, if Chase Bank has been used by international drug gangs to proceed fiat from crime, does that mean Chase Bank executives should be sanctioned?

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Privacy is not a crime. However, it appears that if a person uses a mixer or a something similar to Tornado Cash, the government can call it moneylaundering even if you only want to hide your cryptocoins in a personal private wallet. I wish the Dutch prosecutors will lose in this trial.

The trial will begin on March 26.

Alexey Pertsev, the Tornado Cash developer who has become a symbol of state overreach on crypto crime, laundered more than $1.2 billion in dirty money, according to an indictment by Dutch prosecutors obtained by DL News.

Pertsev, who is scheduled to stand trial in the Dutch city of ‘s-Hertogenbosch beginning March 26, “made a habit of committing money laundering,” according to the three-page document, which was written in Dutch and was revealed Tuesday.

Pertsev has denied he violated money laundering laws ever since he was arrested in August 2022.

“Prosecutors are suspecting Pertsev of money laundering and they have described it in a general way, but they don’t specify which exact acts he has committed to take part in the criminal offence,” Keith Cheng, Pertsev’s lawyer, told DL News Tuesday

Read in full https://www.dlnews.com/articles/people-culture/alexey-pertsev-accused-of-laundering-1bn-at-tornado-cash/

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On the news about the Lazarus Group and how the American government is using this for fud and fear tactics, It appears we have another one. The FBI identified that it was the Lazarus Group that hacked stake.com. I shake my head. I am not implying that this is fake news, however, anything can be blamed on North Korea.

The FBI is issuing this release to warn the public regarding the theft of approximately $41 million in virtual currency from Stake.com, an online casino and betting platform. The FBI has confirmed that this theft took place on or about September 4, 2023, and attributes it to the Lazarus Group (also known as APT38) which is comprised of DPRK cyber actors. 

Source https://www.fbi.gov/news/press-releases/fbi-identifies-lazarus-group-cyber-actors-as-responsible-for-theft-of-41-million-from-stakecom

There are also other articles that say these hacked cryptocoins are being used for funding North Korea's nuclear missile program.

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Quote from: dkbit98 on September 02, 2023, 04:28:33 PM

Quote from: bbc.reporter on August 30, 2023, 11:07:04 PM

What the Tornado Cash founders appear to have done wrong is if they wanted to develop opensource software that might be cracked down by the government, they should have done this more anonymously similar to what Satoshi has done when he began developing bitcoin. This is not only good for security, it will also encourage more developers to contribute to the project anonymously.

Developers that work on shitcoins like ethereum usually never care much about privacy, that is strange thing to do especially if you are creating something that improves privacy.
I never hard of any large central bank being accused of money laundering, and this was not invented yesterday, that is why there are constant wars around the world, and everyone knows that.

Central banks, not many. Commercial banks there have been a bunch over the years.

https://sanctionscanner.com/blog/the-five-biggest-money-laundering-scandals-317

The problem comes back to big banks have 1000s if not 10s of 1000s of employees. You can find that this one or that one is doing something wrong. But proving who knew what and when they knew it is difficult.
If an order comes down that says we need to make these numbers in revenue and people panic about their jobs and look the other way is one thing.
Having an order come down that says we need to make these numbers in revenue and do whatever it takes to do it, is another.
And most people that high up know not to say do whatever it takes in any way that could come back to them.
The government can harass a corporation, it can fine a corporation, it can even shut it down. But you can't lock it up.

People you can lock up. So when you have a small target, like 2 people, then you can go after them.

-Dave

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Quote from: bbc.reporter on August 30, 2023, 11:07:04 PM

What the Tornado Cash founders appear to have done wrong is if they wanted to develop opensource software that might be cracked down by the government, they should have done this more anonymously similar to what Satoshi has done when he began developing bitcoin. This is not only good for security, it will also encourage more developers to contribute to the project anonymously.

Developers that work on shitcoins like ethereum usually never care much about privacy, that is strange thing to do especially if you are creating something that improves privacy.
I never hard of any large central bank being accused of money laundering, and this was not invented yesterday, that is why there are constant wars around the world, and everyone knows that.

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Quote from: examplens on August 30, 2023, 06:22:51 AM

perhaps lead to an attempt of a final ban on crypto?

I don't think the US government at least will go down the route of an outright crypto ban. It is much more lucrative for them, both in terms of taxation and data harvesting, to instead pass the most ridiculous regulations which require all bitcoin to be fully KYCed. First it will be banning non-KYC trading, then it will be mandating that all withdrawal addresses from exchanges are linked to KYC data (such as the AOPP proposal), and then it will be mandating that all bitcoin is only stored on regulated KYC exchanges and you are not allowed to withdrawal it at all. I'm sure I don't need to point out how we should fight back against this nonsense as strongly as possible.

Quote from: examplens on August 30, 2023, 06:22:51 AM

Does he return to the original victims?

Ha! Suggesting the government might actually care about the victims! Good one! Tongue

No, the government simply keep it for themselves or auction it off.

Quote from: bbc.reporter on August 30, 2023, 11:07:04 PM

What the Tornado Cash founders appear to have done wrong is if they wanted to develop opensource software that might be cracked down by the government, they should have done this more anonymously similar to what Satoshi has done when he began developing bitcoin.

Or they should have bought out our politicians like the fiat banks do. That gives them a free pass to launder trillions.

Topic: Tornado cash founders charged with money laundering/sanctions violations (Read 856 times)