cairo

do not comply, sue the state

money for nothing

palm is one of the most interesting things in crypto right now

@PalmUSD excellent @LordoftheRum

The dollar isn't the problem. The plumbing is. PUSD fixes the plumbing.

@KLeuthardt @xjehmz agreed

@MichaelCairoFL @xjehmz Actually, tax efficiency might be still something issuer want to achieve (that's what CYI, BVI, CH et al. can offer). I understand that neither Clarity nor Parity entails any provisions for this.

Clarity's Reg Crypto framework is materially more complex in practice than many appreciate. Confirmed across 24 hours of conversations with crypto lawyers and clients. While complexity is usually oxygen for lawyers (and CO2 for most everyone else), the tradeoff here is that the complexity will unlock immense GTM optionality for teams and governance. TGE pathing alone will require sequencing decisions across three dimensions: distribution method (gratuitous vs. non-gratuitous), issuer path (ancillary asset originator vs. DGS as authorizing entity with no statutory originator), and the resulting token classification (at least 3 distinct outcomes, before you reach tokenized securities or digital commodities that don't qualify as network tokens). Each combination preserves US retail access. Each carries different disclosure, certification, and timing requirements. Full decision tree and exemption-practice guide to follow once we have certainty on the final bill.

there’s a lot here we disagree that TC was a business storm made his money from his token allocation, and never made a cent from any transactions run through TC. expert testimony at trial showed that peppersec’s profits were zero and that TC generated no revenue. no evidence was introduced to show that TC volume had any impact on the price of the TORN token what kind of business is incapable of being owned, isn’t proprietary, doesn’t charge any fees, has no assets, can’t be changed no matter what, and requires zero human intervention to function 24/7/365 indefinitely? a hammer provides a “service” of driving a nail into a piece of wood, but that doesn’t make a hammer a business. by the doj’s analogy in its memo of law, a frying pan is neither a heat transmission service, nor a business this is why the 5th circuit opinion matters here: because your 2-4 above rests upon TC being a business or a service. the 5th circuit held that the smart contracts are not a service, and cannot be owned. so even if the 5th didn’t analyze 1960, i agree with storm’s counsel, and disagree with judge faila, that the 5th’s conclusion is relevant for 1960 purposes even if its decision focused on ieepa most of the things i am saying in our exchange aren’t even my arguments. storm’s counsel and amici laid all of them out cogently in their motions for reconsideration and acquittal and elsewhere. i happen to find their arguments more compelling than the government’s. surely you can appreciate that this is not a black and white case, and its facts do not map neatly to the other (b)(1)(c) cases you cite because of the nature of each defendant’s involvement—control or custody of funds—in the transmission thereof

@MichaelCairoFL @theragetech 1c. But the court did say was that the smart contracts “are tools used in providing a service of pooling and mixing the deposited Ether” So to the extent any if that dicta is relevant, the 5th would agree that Tornado Cash provided a service.

At the appeal hearing for Roman Sterlingov, who was convicted of operating the early bitcoin mixer Bitcoin Fog. This hearing is live streamed: Listen along via the link below. Updates will be posted in this thread.

good morning, james 1. never said banks are msbs, the statute i was referring to was the patriot act which i understand added (b)(1)(c) to 1960 2. how can one can transmit something that one does not at least indirectly control or at least constructively possess? murgio’s mixing company took possession of the fund at issue. the murgio court even said whether coin.mx handled funds is a key inquiry for 1960. he did. hawaladars in your other example exercised some form of direct or indirect control of funds in moving them from point A to point B even without physically touching the money. TC devs did not and could not handle funds. as far as i know, storm is the first case in which the alleged transmitter did not exercise custody or control over funds, which is why it’s been argued exhaustively here 3-4. you’re missing the point—i’m not saying RS should be acquitted because other are more guilty. i am highlighting the policy argument that motivated the bcra’s drafting according to its proponents because this broad reading of (b)(1)(c) could expand criminal liability to conduct beyond this case if you take it to its logical conclusion. each TC user transmits its own funds. ISPs are engaged in the business of providing a service that enables the public to transfer $ from point A to point B and they know that some of the money being transferred with their tools is illegal. i’m not the only one who has raised this. 5. can’t do italics in replies on mobile so went with caps for emphasis because that distinction is material. the TC devs published software that bad people used without their permission or knowledge before the $ touched the software, took no action to facilitate that transaction, and could take no action to stop it once they learned of it. hawaladars and ML operators could have stopped their affirmative or complicit acts at any time. even faila honed in on this point with the prosecutor

@MichaelCairoFL @theragetech 5a. That was enacted bc Cong wanted an easier charge (with lower sentence) so that the leaders (owners/operators) who were facilitating ML no longer had the “I never touched the dirty $” and “I never spoke w/ crim whose funds being laundered” arguments under std ML statutes.

if “mixer” means a company that affirmatively allows itself to come into possession of someone else’s crypto and obfuscates how it gets somewhere else for a fee, then sure, mixers fall under 1960 and you got me on imprecise nomenclature on twitter. i was referring to protocols like tornadocash, which, according to the fifth circuit (and not me) is not a service and is not capable of being owned and therefore isn’t a business. this is well-articulated in storm’s motion for acquittal by his counsel who disagree with what the doj and sdny think the law is

@MichaelCairoFL @theragetech But my view is that if lawyers are making statements, they need to differentiate between what the current state of the law is, and what they think the law should be / wish it to be.

@Farrell1969 @theragetech forgive me for initial shorthand—centralized mixing services are different than noncustodial immutable protocols that achieve a similar result i’m not ignoring faila, i’m contesting it

@MichaelCairoFL @theragetech 1. You said that mixers have never been within 1960(b)(1)(C). That’s wrong. You then said “decentralized” or “noncustodial” were excluded. I asked for precedent for your position that they are excluded. You ignore the only decision on point (Failla motion to dismiss).

if storm is criminally liable under b(1)(c), then why aren’t ethereum validator operators also liable? they actually run a business for profit and they know illegal funds exist on ethereum, which—by passively running code—they cause to move from point a to point b why can’t ISPs, browser software developers, and hardware manufacturers be liable under the same theory? they run businesses, and know illegal money gets transmitted on the internet using their businesses’ tools. is it simply prosecutorial discretion? or is it because it would be a ridiculous and overbroad interpretation of a statute meant to regulate banks, payment processors, and CUSTODIAL financial intermediaries?

going in order: precedent on noncustodial software - SW and LR defendants took plea deals which have zero precedential value. pleading out because you can’t afford to fight the state isn’t an admission of guilt or a concession that the doj’s position is correct, as you know. the closest thing to binding authority on this issue is van loon where the fifth circuit held that the tornadocash smart contracts are neither “property” nor are they a “service.” i don’t know of any money services business incapable of being owned that also function without any human intervention. the fundamental issue here is that the words “accept” and “transmit” in the bsa have meaning. LR, hawala, etc. had a choice as to whether or not to take possession of illicit funds—acceptance necessarily implies a propensity to disallow. the doj and the lower court are wrong that custody/control of funds is not necessary for (b)(1)(c). that (b)(1)(c) had to be added post 9/11 to capture edge cases supports the idea that existing law isn’t always broad enough to give the doj what it wants, like in this case. “business” - decentralization is irrelevant. my argument is that, consistent with van loon, businesses are capable of being owned and require human intervention to function. the tornadocash protocol is not a business for those reasons and because it never charged fees. the development company’s only business was minting and selling a memecoin that bore the same name as the immutable contracts, and none of that vc money that bought tokens was illegal. besides, vcs yeet $ into stupid nonexistent shit all the time—look at how much vc capital ended up invested in nfts…

@Farrell1969 @theragetech LR and other illegal mixers were centralized msbs that controlled users funds i know you know the difference man, come on

@MichaelCairoFL @theragetech By "never" do you mean "never before 2013?" justice.gov/usao-sdny/vide…

@Farrell1969 @theragetech that’s it—unhosted wallets, mixers, smart contracts, blockchains and validators have never been included in the definitions of financial institutions or financial services providers are wallets, browsers, PCs, ISPs, etc. willfully blind to internet financial crimes?

@MichaelCairoFL @theragetech 1. Unknown by choice = willful blindness = #3. 2. What other providers of financial services are not subject to these same rules?

@Farrell1969 @theragetech the problem is: 4. operate mixer used for illicit purposes by unknown third party = illegal is fundamentally unfair and out of line with every other provider of neutral internet-based tools

@theragetech 3 things can be true: 1. Using mixer = legal 2. Operating mixer = legal 3. Operating mixer + being involved in mixing funds you know to be illicit = illegal.

Does your lawyer also build & play guitars? 🎸

@brianlong 🤘🏼😎🤘🏼

first cigar box guitar build: > astral grand reserve vintage selection 1992 mahogany box > oak neck and fretboard > mother of pearl inlays > lace matchbook alumitone pickup in bridge position > 250k tone and volume pots > vintage fender machineheads > fender bridge

@valkenburgh @theblockprof @BitcoinStripper why compromise on this? if there’s any hill to die on, it’s this one, no?

@theblockprof @BitcoinStripper You're not wrong. I know you know this already, but other folks need to know how bad the existing legal risk is to understand why this is acceptable. That, too, is why we still support CLARITY.

The new CLARITY draft has a small change to the BRCA. It preserves the ability to charge 1960 ONLY in cases where a person acts with specific intent and knowledge to help someone else move criminal funds. Respond to an email w/ support to launder funds & you are not safe. 1/

@charcoded putting height anywhere below 6’1” on dating apps is the most avoidable own goal a single guy could possibly do

what’s stopping you from being 6’4 on hinge?

the funniest part of this is that banks would have to offer only modest interest to compete with stablecoins also this whole debate is really about dumping inflation on the third world, the bank lobby is just treasury’s proxy