1/ New detailed factual explanation of how Tornado Cash works. Huge thanks to @wadeAlexC and @LewellenMichael for this unbiased description of exactly how the contracts function. It confirms a level of decentralization that was surprising, even to me. coincenter.org/education/adva…
2/ None of the core Tornado Cash contracts that provide privacy tools to users can be upgraded, changed, or altered. The privacy that users get from these contracts is guaranteed with math and software that is as immutable as the Ethereum blockchain itself.
3/ To the extent that any of the OFAC-sanctioned addresses retain a human operator role, they are either mere donation addresses to support software development, ancillary services that never control user tokens, or defunct/never used addresses.
4/ The explainer we published today comes complete with an appendix that lists every contract, what it does, and the degree that it has (or once had) any human control in its operation.
5/ Additionally, our explainer makes clear that Tornado Cash is not in any factual sense a "mixer." Thanks to zero knowledge proofs privacy is assured even though users can only ever deposit or withdraw their own specific tokens.
6/ From these facts we can begin to build stronger legal arguments that OFAC overstepped its statutory authority in sanctioning Tornado Cash. I have an update here: coincenter.substack.com/p/how-does-tor…
7/ The argument has four main parts:
1. The contracts themselves and the software that controls their operation are not foreign nationals or their property and therefore cannot be the target of sanctions.
8/
2. to the extent anyone has property in those addresses, it is because they’ve sought the privacy provided by those software tools. That property is their own and no one else has any meaningful control or ownership rights to that property.
9/
If its an American's property or a law-abiding person who is not sanctioned, then that property is also not properly the subject of sanctions. Moreover, that property is not mixed, commingled, or under any shared control with any sanctioned person's property.
10/
3. When a person uses the Tornado Cash contracts to protect their privacy, they arguably are not even engaged in the kinds of activities that IEEPA empowers the President to block. It's more like they are moving valuables from a drawer in their house to a safe in their house.
11/
4. If some Tornado Cash users *are* sanctioned persons, and they have property at those contract addresses, then that property is legitimately the target of sanctions. BUT...
12/
In that case the address of the smart contract itself is not an appropriate alias for that entity or property because, like the name John Smith, it wrongly subjects many more persons to sanctions scrutiny than sanctions laws intend or allow.
13/ Again you can read my full analysis here: coincenter.substack.com/p/how-does-tor…
And you can read our strictly factual Tornado cash explainer here: coincenter.org/education/adva…
14/ Finally thank you to all the experts who made this work possible, in addition to @wadeAlexC and @LewellenMichael we got a huge hand from:
@sbetamc
@badcryptobitch
@bantg
@wavey0x
@hudsonjameson
@kirushik
@mikedotwaves
@mmaller
@PopcornandWhiskey
and Milo Murphy
Share this Scrolly Tale with your friends.
A Scrolly Tale is a new way to read Twitter threads with a more visually immersive experience.
Discover more beautiful Scrolly Tales like this.