🕵🏼Coinbase Is Funding A Lawsuit Against US Treasury Department
Not long ago, we wrote an article about Tornado Cash. Here is the link to the article so you can better understand the situation and what’s happening.
For those of you who are feeling lazy reading another article, I will do a quick summary for you. 🤙🏼
Tornado Cash is a smart contract which serves as a privacy tool, meaning that although blockchain is all about transparency, there might be times when you would want to transfer your ETH to different wallets in a way that no one can trace your or without your neighbor actually understanding how much is your net worth.
However, the issue with Tornado Cash is that it has been mostly used for money laundering services. At least that is what U.S. Department of Treasury thinks about it. Which is the reason why they sanctioned using Tornado Cash from U.S. persons.
Of course, this was not well accepted from the crypto enthusiasts and supporters.
Btw, let us know what do you think about the decision from US Department of Treasury to sanction Tornado Cash.
So what has this to do with Coinbase?
Well, Coinbase is helping with the funding of a lawsuit which is brought by six people who are challenging US Treasury Department’s sanctions of Tornado Cash. The reason why they are helping is because Coinbase has “been fighting illicit activity since the very beginning, and while we share Treasury’s commitment to fighting crime, they believe this action harms innocent people and threatens the future of decentralized finance (DeFi) and web3 specifically.” and also specified that “Sanctions Should Target Bad Actors. Not Technology”.
Here’s my opinion on it. Overall, we are not fans of Coinbase and their services. Leaving that aside, their reasoning on why they are helping with the funding of this lawsuit is reasonable and totally understandable.
Just think about it. US Treasury of Department is making it completely illegal as a technology, which definitely hurts the chances of making that technology mainstream. Instead of figuring out those bad actors and punishing them, they are prohibiting the technology which is really useful if used properly.
It is like banning people using money ($), because there are bad actors there who use it for illicit activities.
Who are those people who are suing US Treasury Department?
Plaintiffs are: Joseph Van Loon, Tyler Almeida, Alexander Fisher, Preston Van Loon, Kevin Vitale, and Nate Welch.
One of them used Tornado Cash to donate money anonymously to Ukraine. His rationale was that he wanted to avoid any sort of attacks against his personal accounts. Instead, he use Tornado Cash as a service to make it anonymousness so no one can trace it where it is coming from. Also, he has money locked in Tornado Cash and no way to get it back.
Alex, who apparently is popular and an early adopter used Tornado Cash for security reasons while transactions. He got funds that are locked in Tornado Cash too.
Another person had a business around Ethereum staking. Apparently, a stranger came to him and asked him how much money was making. So he started using Tornado Cash to protect his assets.
Two of those people involved in this are Coinbase employees.
If you are being nosy and feel like you want to read the entire Complaint filed against US Treasury Department, you can read it entirely here.
We can go back and forth on this, arguing that it might be a really important privacy tool but at the same time without putting any restrictions to it or have some sort of KYC (Know your customer) compliance procedure, it will be misused from criminals. It will be interesting to see how it plays out in the end!!
Cheers!