Privacy Pools | The Tornado Cash Court case, Fighting for Open Source developement - Ameen Soleimani

[music] Uh, moving on. Uh, Eleanor mentioned about the tornado cash and um, yeah, Alexi being in prison for what he did. Um, I would like to welcome to the stage Amin who is the founder of um, yeah, privacy pools and if I'm not mistaken, Oxbow as well. Is that still the case? Okay, brilliant.

Um, yeah, big round of applause is going to talk about that case and what it means to build open source and yeah, justice for that. All right. Good morning. Um, how's everyone doing today? That was a great panel.

Uh, I enjoyed that. I liked all the crypto anarchists. I like the politician who said that politics is not the answer. [snorts] That was interesting. It's like, okay, I'm still waiting or it's not working at all.

Okay, you can keep trying. Okay, cool. I'll keep talking. [snorts] Um, so show of hands. Who here has uh heard about tornado cache?

Great everybody. Um before we go on, I actually want to uh thank Eleanor herself for all the work she's done. Uh she was the first one to organize the free Alex uh rally in Amsterdam. Uh and you know, while she was pregnant, uh we like hobbled our way to the court case uh to support him. Uh so give Eleanor a round of applause.

and and more than that also giving uh Alex all the keynote speaking slots at Crypto Canal the ETH dam and uh just uh making sure that he always was uh had opportunities to represent uh his case and uh help build the uh public support for it uh means a lot. So uh today I'm going to talk about the court case. How many of you all have seen one of my talks on this subject before? Okay, about 70% of you. Cool.

Okay, so some of this stuff is going to be review uh for those of you who've seen it. I might go through the old stuff faster. [snorts] Uh I asked Chashib to make a slide. I'm sorry, Alex. You have died for our sins.

Um, I feel like this sometimes, you know, because we all get this benefit of like, oh, privacy is cool and, you know, we're doing it and then like meanwhile like Alex's court case is still ongoing and and most developers are like, bro, still it's been like four years, man. Who cares, right? And like yet it still matters. His his, you know, there's still an ongoing court case. It's not resolved.

Uh, he was charged and now it's pending appeal and [snorts] um, yeah, it's uh, not fair.

[clears throat]

uh and and this is what the trial is uh going for. It's like on the one side you have people saying that privacy is only for money laundering and crime uh and sin. Uh meanwhile the rest of us are saying that privacy is has the mandate of heaven and is a human right and we'll build a better world. Uh, and you know, it's uh, interesting because the stakes are pretty high um, in all of this. I hope in my lifetime to live in a society that upholds the right of individuals to use private financial systems uh, in the same way that the cipher punks of yesterday, you know, 20s, 30 years ago, uh, won the right to have access to encryption technologies.

uh and I do believe that this will be decided in courts uh as we and and and uh legislation as we uh make a better case for why privacy can lead to better outcomes. Um so uh this isn't just ideological for me it's also personal. Uh I was there you know Mikda funded the development. Uh I met Alex and Roman uh both Romans at you know a hackathon and they were like we got we just want a hackathon for privacy stuff. We want to work on it.

It's cool. Uh I was like yeah let's do it. We uh basically asked them to build it and then uh picked a different team to get the grant uh for building the first like version of this and they got so pissed off that they built the whole thing in three weeks uh after they were rejected for a grant. But uh since then we funded all of the open source grant. I wrote every grant proposal and so it's personal you know you give people a mission and you support them and then you want to see it through to the end.

Uh because then when something happens you you can't just leave them hanging. So what does victory look like? I think is important. And for me victory looks like Alex goes free, Roman goes free. Uh Roman beats the all of the charges.

Uh, and then Roman Semanov gets unsanctioned by the US government. That's still a thing, right? Like Roman Seavov is still sanctioned by the US government, considered a terrorist, [snorts] which is insane. Um, and so yeah, uh, and and and then you know, privacy devs don't live in fear. So this was the hack.

I'll go through this pretty quick. You guys all know, you know, Axi Infinity was hacked for $600 million. Hackers deposited hundreds of millions of dollars into Tornado. Um, Alex had his trial. Uh, he was charged with laundering over 500,000 ether, which he should have suspected was of criminal origin, which Alexi denied.

And in May of 2024, he was given a guilty verdict with uh 64 months. [snorts] And um, a lot of us got pretty upset about how the trial went uh because of some of the quotes in the, you know, proceedings. Uh, and so this was about the judges knowing that they couldn't change the UI in order to make it inaccessible. Um, because uh, you can't take tornado offline ever and that Alexi didn't have any power over the funds. He couldn't move the funds.

It was properly non-custodial system. [snorts] Uh and so uh they claim that because it was foreseeable from the beginning that ether derived from crime would be deposited in tornado cache uh that therefore he's guilty of all crimes using tornado cash forever. Uh and so they say it functions in the way that they developed it. Uh the operation is completely their responsibility. If the defendant had wanted to have the possibility to take action against the abuse, he should have built it in.

But he did not. uh tornado cash does not pose any barrier for people with criminal assets who want to launder them. And that is why the court regards the defendant guilty of moneyaundering activities. It's as if Alexi personally, you know, was in cahoots with North Korea trying to launder the funds, which is not the case. Um, and then a lot of us were uh angry about this, just like quoting the uh outcomes of the court and and talking about how uh crazy it was from for the court to make these decisions.

[snorts] Uh, [clears throat] this is another one like the bottom of this says tornado cash works as it was conceived in the court's opinion. The defendant can therefore be classified as a perpetrator of the moneyaundering acts uh because it was you know unstoppable. So uh the scary thing is that this can be extended to like Ethereum itself, right? Uh if you for example say that you know you designed Ethereum to be uh censorship resistant uh why did you design it to be censorship resistant? Did you not know that people were going to commit crimes that we should be able to censor?

Well, that's exactly where this uh road of logic leads you.

[clears throat]

Um, [snorts] this is the first free Alex uh march that was held in Amsterdam. Uh, recognize some of the people in here. Still going. [snorts] Uh, that was 202023. Yeah.

Um, one of the astonishing things about this case is that actual terrorists got less time than Alex did. Like this was in the Netherlands. There was uh Like I don't know people tied to ISIS got like three years for terrorism. [clears throat] Yeah. Alex got five more five and a half something like that.

So current status is he is out of prison no more anklet but unable to leave the Netherlands. We all like talking about freedom. Uh I think you know we all take our freedom to move around for granted uh until it's taken away from us. and his appeal for retrial is still pending and it looks like it will be extended until sometime in 2027. So, please continue to support Alex and you know uh there's a Twitter link at the end you know free Alexi Roman check out he has a link to his uh fundraiser on his Twitter as well.

[snorts] Um, show of hands. Uh, who wants to talk more? Well, who's up to date on the Roman storm proceedings? Nobody. Okay.

Sorry. Uh, we'll actually go through some of this. Um, this was how it started. So, on August 23rd, uh, 2023, Roman Storm was arrested at his home at gunpoint in front of his three-year-old daughter, which was insane. Um, because he was cooperating with the investigation the whole time.

they could have just called him in to the police station. Uh, and at the time the FBI director announced like today's announcement should remind criminal organizations everywhere in the world that they are neither untraceable nor anonymous. You can't hide from us behind a keyboard whether you're a hacker or facilitator. And he was they were neither. They [snorts] were they were like publishing code on GitHub, you know, like send a pull request if you didn't like it.

So Roman was charged with uh three things. One was uh one count of conspiracy to commit money laundering for 20 years. Uh another count for violating US sanctions for 20 years. Uh and a conspiracy to operate an unlicensed money transmitting business. Uh his jury only convicted him on the unlicensed money service business charge, which carries a 5-year penalty.

He is also currently out of prison pending his appeal. And there were some pretty funny shenanigans that occurred regarding his appeal. So, uh, the court wanted to retry the two 20-year charges that were that jury was hung on. And so, they have to there's this like time thing. I was reading about this the other day, uh, because Roman had posted about it.

there's this like 70 day retrial clock and if you submit your uh you know you basically have to keep extending this timeline and the court in April uh of this year when they extended it to they they set the retrial date to October 26 they forgot to extend the timeline

[snorts]

uh and so then last week uh they tried to change the tri trial date the retrial date from October of this year to April of next year and then they extended the timeline line correctly and then like two days later they were like oh and also we have submitted a uh retroactive extension four months ago uh to extend the timeline from then to now. Uh and so Roman's legal team like two days ago sent a letter to uh might have been yesterday to the court saying, "Hey, actually, you can't do that. Uh you ran the you know, you forgot to extend the clock, so it's over. Uh please dismiss these charges." Which would be a hilarious and excellent outcome.

[snorts] Um so that would be, you know, uh charges dismissed with prejudice, uh if that works, which means no more retrial of those charges. And so now Now it's on Roman simply to appeal the remaining, you know, five-year uh charge that he was convicted of. [snorts] [clears throat] Um there there's some other stuff. Uh this was Peter Van Vulcanberg talking about parts of uh the ruling and you know this was before uh the outcome of Roman's case. Um and so saying that you know he was hoping that Roman would have first amendment protections.

[snorts] Um there was also amicus briefs filed in this. Uh this has become a thing you know uh initially it was very scary when the sanctions happened. Nobody really knew what to do. People were kind of afraid to stick their heads out. you know what if what if like I I remember I don't know Infura Meta Mask like all sorts of Ethereum infrastructure immediately abandoned Tornado Cache and you know even like the day it happened we we were in uh it was at Zecon and I remember August 7th I was going around talking to people about how awesome Tornado Cash was.

Uh and then August 8th they announced the sanctions on Tornado Cash and we all realized how we were. Um and then Zcash released a statement how uh Zcash has never been used for crime. Uh and so they were kind of circling the wagons to protect themselves, which I understand. But um you know uh since then people have made a lot of progress into talking to politicians and uh legislators about the benefits of privacy. Uh and so we're in a bit of a different place than we were back then.

Um, and also, uh, I'm kind of optimistic, like generally speaking, because, uh, like in August of 2022, SPF was still at large. Uh, like I think he hung out with the Clintons like in April of that year on that like panel where he did in the Bahamas or whatever. [snorts] And and so I think at that time the governments uh were more uh let's say thinking that everything was crime. Uh and now they've realized that actually SPF was in fact crime but maybe the uh tornado cash developers uh were not. Um, and [clears throat] so thanks to amicus briefs like this one from Coin Center, uh, and this one from the blockchain association, uh, and this one from the DeFi Education Fund.

Uh, you guys can't read all this that fast, but, uh, there were three different ones. Um, and these were basically on each of the charges. So, this one was saying that, uh, basically developers shouldn't be held liable for the crimes of their users. This one's that um [snorts] uh if you don't have custody over the funds, you shouldn't be able to support unlicensed money transmitter. Uh and this one is that uh they never had control over the um the the money.

So they shouldn't have been charged with money laundering. [snorts] Uh and so yeah, skip this. This is one of my favorite slides. Uh, this is the TVL. Uh, and it shows how the tornado cache TVL goes straight down after the sanctions and then starts crawling back up.

Uh, you put the devs in jail and you still couldn't stop the protocol. What does that tell you? So uh you know there was US sanctions on the protocol. The devs were arrested. The DAO is hacked by a malicious government uh governance proposal and the UI was compromised by the Dow hacker and all of that.

Uh still resulted in protocol growth. It's like a pretty good system. Uh it's going to exist. Like have you ever woken up and like realized you have you might have like a legacy and with with these things it's kind of beautiful. Like somebody asked me what my favorite art was in my house and I have the entire tornado cache code like printed out and framed [snorts] and uh that's you know clearly art and it's like why?

It's like this thing is going to exist like long after I'm dead. You know I'm going to die and like it's still going to be accepting deposits and processing withdrawals and [snorts] uh that's the beauty of building on uh Ethereum and even the compromised torn governance couldn't shut it down. [snorts] This is their inflows going back up. Uh [clears throat] so uh let me go through these. So yeah, see I consider them essentially like Prometheus but the ETH in Prometheus.

Uh zero knowledge proofs are beautiful. I think Vitalik was quoted as saying something like zero knowledge proofs might actually be more important than blockchains a couple months ago. Um, and I find myself potentially agreeing with that. Uh, and it's important to remember that tornado cache was essentially the first zero knowledge deployment on Ethereum ever uh, in production. Uh, and it was the second zero knowledge proof deployment on a blockchain in history because Zcash was the first because we were jealous of of Zcash.

So [snorts] uh they essentially destroyed our prototype uh and then you know had this chilling effect and [clears throat] uh there was a wave where people got shut down and you know a lot of projects wrapped up. Uh you know there was different privacy projects that were you know had in various stages of development had raised funding had uh you know built some products at like the Aztec money system. I think they were the first one uh you know they shut it down. Everybody was afraid. Um and since then people have started talking about how privacy can be beneficial and uh despite the legal action against Alexi and Roman there hasn't been uh well besides the Bitcoin uh fog and the other Roman uh additional legal action against uh privacy developers um which is nice.

uh Roman Storm uh you should follow his Twitter account because he points out some funny hypocrisies of the US government because like he talks about how at the same time like it was about two weeks after he got charged with the unlicensed money services business that the government said that we will no longer charge people for unlicensed money services businesses if you don't have custody. And so he's sitting there scratching his head like why am I still here? Uh can you guys please do something? And it's like, [snorts] you know, maybe the Ethereum folks should have donated as much as the Bitcoin folks did to the Trump administration to, you know, get Ross free, but weren't [snorts and clears throat] as interested, but trying to, you know, make the real politic work. But [snorts] yeah, uh, we have seen some success in, you know, rail gun and Zcash.

I was freaking out about rail gun. Thought that they were going to, you know, get charged and um, you know, they essentially moved around the world in order to hedge uh the jurisdictional liability. Um, and I'm kind of glad that they didn't listen to me and shut down because uh, it's gone very well. Andrew Tate was tweeting about it last year. I don't know if you guys saw that.

It was pretty funny.

[snorts]

And uh Zcash, you know, has obviously done very well and uh created a lot of institutional interest. And so now there's institutional champions for privacy and private blockchains and private transactions and self-custody at various levels. And that's very important. Um, and so I'm optimistic that Alex will win, Roman will win, and um, you know, we will get the privacy future that we deserve where all of our, you know, uh, the developers won't have to live in fear and also that users will be able to access the private money in our lifetime. And I think that's worth fighting for and I think we should all see it through to the end.

Thanks,