German hosting stored in NATO bunker confronts TornadoCash-like verdict [Monero mentioned][Anonymous Hosting]

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This case, alongside the proceedings against the TornadoCash developers, highlights how digital service providers and software developers are being increasingly targeted by law enforcement for offering products and services with potential for misuse despite not being directly involved in said misuse.

The Tornado Cash mixer, an Ethereum-based tool designed to conceal cryptocurrency transactions, has been in legal trouble. The founders of Tornado Cash, Roman Storm, and Roman Semenov, have been indicted on charges including money laundering and potentially face up to 20 years in prison.

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The sanctions imposed by OFAC freeze any assets held in Tornado Cash and prohibit transactions to or from the service. However, effectively shutting down the service is challenging. Despite the ban, Tornado Cash continues to be used, with reports of it being leveraged for laundering unlawfully acquired crypto assets.

Those kinds of lawsuits set precedents dangerous for those involved with offering services and developing software meant to ensure privacy, anonymity, and permissionlessness — the core tenets of the cypherpunk movement that Bitcoin (BTC) was born in. Many in the crypto community raise concerns that it may lead to prosecutions against encrypted messaging services, privacy-centric cryptocurrencies, such as Monero (XMR), and web hosting services that do not snoop on their customers.

This kind of pressure may render the development of a cryptocurrency ecosystem free from control as originally envisioned much harder in a world where political dissidents, journalists, and many other vulnerable categories rely on them.

The Tornado Cash incident occurred in August, 2022, just around Monero HF. In Tornado Cash Civil Decision Limits the Reach of the Treasury Department’s Actions while Skirting a Full First Amendment Analysis dated August 25, 2023, EFF says: “A District Court recently considered a civil claim that the Treasury Department overstepped when it listed Tornado Cash on the U.S. sanctions list. This claim took some steps, if not enough, to address EFF’s concerns about coders rights.”