The major developments of both the tornado cash and Samourai wallet trials held earlier this month could set dangerous precedents for the Bitcoin and the crypto industry as a whole. The two defendants who developed Samourai Wallet, a popular Bitcoin privacy app, have entered into a plea deal that accepts the fees of being an unlicensed money service business, but Roman Storm, the developer of Ethereum Smart Contracts, which unlocks the financial privacy of users, felt guilty about being one of three claims and being an uncertified money service business.
Irony? Both of these companies were launched after Fincen, a US agency that regulates senders, gave clear guidance that services that do not control user funds are not subject to regulation. Neither Samourai’s wallet nor Tornado Cash controlled the user fund. Both acted as non-custodial technologies. This means that users are interactive protocols and do not trust developers to which Bitcoin or ether is being transferred.
It’s similar to the VPN (virtual private network) that millions of people use regularly, protecting basic user data and privacy from hackers and third parties on the internet, and has been found guilty of running a radio station. Yes, that doesn’t make sense.
The Sovereign Southern District of New York’s DOJ has proceeded with the charges anyway, despite clarifying guidance, as Roma Storm’s attorney revealed in a tornado cash trial.
The verdicts are mixed, and while the industry has expressed some easing about the outcome (as the worst fears of these trials have threatened to land all the developers involved in prison for decades), the five-year period expected in the accused’s sentence will be affected. The legal implications not only for cryptography, but for other developers across the computer science world, are still not understood or fleshed out.
If Roman could guilty of the behavior of users of his smart contract apps – he was not capable of shutting down or imposing basic filters – what is the responsibility of being exposed to current regular software developers?
All the strange thing is silence from the Trump administration, where Trump explicitly campaigned for protecting self-control and setting up a table for the US to become the crypto capital of the world. How do they expect it to happen now? Why didn’t they do anything more to stop this government overreach, launched by Biden’s DOJ? Does doj not control SDNY politically?
But one thing the administration did was publish the White House Digital Assets Report, a blueprint from President Trump’s working group on the digital asset market. It outlines more than 100 legislative and regulatory recommendations to “promote US blockchain innovation.”
The Pearl of Slight Hope of the Week is that this document has extensively cited Nakamoto at as the creator of Bitcoin, and is said to lay the basis for the passage of clear acts by experts. The law nowadays includes languages that protect technologies that provide self-management and privacy of crypto at the legislative level.
Getting more explicit statements from the Trump administration, perhaps, with software developers across the industry should start to consider their options, will be a great relief for the industry to get more explicit statements, such as getting solid lawyers until legal dust settles.
Source: https://bitcoinmagazine.com/takes/trump-admin-silent-tornado-cash-privacy
