[downandout]

"The chief selling point of Tornado Cash is money laundering, which is in and of itself a crime in both the US and Netherlands."

You have a fundamental misunderstanding of US law with regard to money laundering. Obfuscating the source of funds, by itself, is not money laundering. Money laundering requires a "predicate offense" - the money that is being laundered must be proven to have had an illicit source. Further, the entity accused of doing the "laundering" also must know that the source of funds is illicit before doing it. Intent to promote the carrying on of "specified unlawful activity" must also be proven in order for a money laundering conviction to occur. You can read the entire statute here [1].

Therefore, the "chief selling point" cannot be money laundering, at least under US law, because the contracts were deployed with no prior knowledge of how or by whom they would be used. One cannot form intent without prior knowledge. The chief selling point was anonymity, not money laundering, which has a highly specific legal meaning.

[1] https://www.law.cornell.edu/uscode/text/18/1956

[woodruffw]

You're addressing 18 USC 1956 (a)(1)(A)(i) and (a)(1)(B)(i).

I'm concerned with (a)(1)(B)(ii), which concerns reporting requirements. The kind of financial transactions that Tornado Cash enables are fundamentally incompatible with the US's Federal reporting requirements.

My understanding of the Dutch criminal code (which is not great!) is that their standard is even weaker: it is sufficient to demonstrate mere concealment, not a failure to meet particular reporting requirements.

[downandout]

At least under US law, intent is still required. Meaning that while some users of TC may have violated this law, the devs did not, nor did they knowingly aid in it or have any provable intent to do so.

I don't know what Dutch law says with regard to intent/knowing participation, but I suspect that any system of laws in a civilized country would generally require it for criminal convictions.

[300bps]

Money laundering requires a "predicate offense"

Structuring is one of the most common methods of facilitating money laundering.

No predicate offense required. It’s illegal all on its own.

https://bsaaml.ffiec.gov/manual/Appendices/08

[TacticalCoder]

Structuring though is one of the dumbest, laziest and most arbitrary law ever. If you say that the limit is, say, max 100 K USD for something but plan to attack for structuring the person who did 5 times 100 K USD, then simply make the law clearer: make the law say 100 K USD max and, say, max 200 K USD over five years. But don't come after people who did respect the numbers written in the law for "structuring".

It's another crazy concept of overreaching states and IRSes enjoying way too much power. They can arbitrarily decided what's structuring and what is not. Arbitrary decisions aren't how a democracy should work.

You want to prevent people doing these kind of transfers? Make it clear what the limits are. Don't come after people doing precisely what the limit allows several times: precise it can only be done once or x times over a certain time period.

That's by the way, how some laws do work. For example in France you're allowed to give your kids up to 150 K EUR of real estate (or something), tax and inheritance tax free, once every 15 years. After 15 years you're free to do it once again.

But putting limits and then attacking people respecting the limits? To me it's the sign of something deeply rotten in the state and that such laws exists isn't something that should be cheered.

[downandout]

Yes, but the same intent provisions still apply to the entity that enabled the structuring. Tornado Cash has legitimate use cases - I had one prior to the OFAC issue (hiding the source of funds to an address in order to prevent certain bots from reacting to it). So the devs cannot have formed intent to aid in any of the crimes that TC may have unwittingly enabled.

Casinos are used as vehicles for structuring and money laundering every minute of every day - on a much larger scale than anything Tornado Cash could ever have achieved. They don't have the intent to aid in these activities though, which is why they are allowed to operate.