Tornado Cash dev ruled liable for all illicit use, despite no ability to prevent it โผ๏ธ
We'll break down both the ruling itself and the craziness of the precedent set here by the case against Alex Pertsev, a developer and co-founder of the
@TornadoCash
project ๐งต
Buying and using Monero, privately
With the crackdown on Bitcoin privacy in the last week, many in the space are unsure of what other options are out there.
In this post we breakdown how to first acquire Monero, our top wallets, and general tips and tricks for using Monero ๐งต
DoJ sets its sights on Bitcoin privacy
The DoJ has pivoted from its attack against the founders of Tornado Cash to waging war against Bitcoin privacy tools, indicting the founders of
@SamouraiWallet
and arresting both.
All you need to know in this thread ๐งต
Migrate from
@SamouraiWallet
to
@SparrowWallet
in 6 steps
For those of you directly affected by the indictment of the Samourai Wallet founders and seizure of their servers, we wanted to help simplify the process of migrating your funds to a new wallet as much as possible.
A ๐งต
FinCEN is trying to bring the PATRIOT Act to cryptocurrency โผ๏ธ
We broke the proposal down in detail, answered all your questions, and laid out what it means for each of us.
A special thank you to
@L0laL33tz
for very insightful comments!
Read here ๐
Welcome to , a global hub championing Bitcoin builders, open-source developers, educators, and privacy tech pioneers.
Join the freedom tech movement today and learn how we can use technology in the fight for human flourishing and freedom.
Learn more ๐
Conclusion
In a complete victory for the Dutch government, Alex Pertsev was given the longest possible sentence, despite his complete inability to prevent illicit usage on Tornado Cash. In doing so, the Dutch court system has set a heinous precedent, declaring that any developer
Privacy is not a crime โผ๏ธ
"Without the right to privacy, you have no freedom; financial or otherwise. The promise of Bitcoin is that of a 'peer to peer, electronic cash system...' [and] true financial sovereignty."
Our latest from
@kudzaikutukwa
๐
Thankfully this is only an indictment, and both founders are technically considered innocent until proven guilty, and we at
@freedomtech
and
@FOUNDATIONdvcs
will be doing our best to raise public awareness on this issue and fight for our right to privacy.
3,500 words going live tomorrow on FinCEN's attempts to bring the PATRIOT Act to cryptocurrency โผ๏ธ
Follow us here or join us at to be the first to read ๐
We're thrilled to see the launch of the
@HRF
CBDC Tracker today, and have covered the launch in our latest post:
Thanks to the HRF, we can watch the watchers and spread the word on the dangers to human freedom that CBDCs pose.
Building decentralized, unstoppable tools makes you liable in perpetuity
In a crazy, absurd twist, the Dutch court rules that the conscious choice of the Tornado Cash founders to create an unstoppable, decentralized tool means that they should be held liable for it's usage
Note that the Tornado Cash founders:
- Had no ability to edit the smart contract
- Never had custody over any user funds
- Did not directly profit
- Operated the main web UI
The Tornado Cash smart contract has continued to function despite sanctions and indictments.
Did you know that Satoshi used email aliases? ๐
As bitcoiners ourselves, thereโs a lot we can learn from how Satoshi navigated the internet, and more importantly, why they were so keen on privacy tools like email aliases.
Learn the ins and outs from
@bradytc_
๐งต
The technical function of Samourai as a self-custodial wallet would traditionally be enough to absolve them of any responsibility to register as a money transmission business.
But the DoJ is rapidly changing the law through trial instead of legislature.
Knowledge that your tool could be used for illicit means counts as intent
This just in! Bad guys can use good tools for bad things! What doesn't shock any logical person seems to shock the Dutch government, as they are somehow able to find intent to commit money laundering in
Why use cryptocurrency payments at all?
@jurbed
breaks down the need for tools like Bitcoin + Monero in this chapter from his most recent book๐
Love what you read? Enter to win your own copy by liking + re-sharing this post and following
@freedomtech
!
We'll select 6 winners
Criminals using your code makes you a criminal
One of the most shocking segments of the ruling happens when the court makes it clear that if an illicit user is using your open-source, decentralized tool to gain privacy for themselves, their criminal liability is fully
As a privacy advocate
If you care deeply about privacy and want to help support the cause, keep talking about this case and its implications. The moment we are silent and let the DoJ prosecute Samourai Wallet in the dark, we have lost.
You have a unique platform, use it!
In an unprecedented court case, Alex Pertsev, a key developer of an Ethereum-based privacy tool called Tornado Cash was sentenced today to over five years in prison as a result of his work on the project.
The sentence handed down was the maximum requested by the prosecutors.
To better understand how incredibly illogical this prosecution is, we have to first explain briefly how Samourai Wallet worked.
Samourai Wallet, unlike the other Bitcoin mixers previously prosecuted by the DoJ, had one vital difference โ they never took custody of user's funds.
Trocador
Next up is
@TrocadorApp
, an aggregator of instant exchangers that makes it easier to quickly swap between Bitcoin (and other cryptocurrencies) and Monero. They do research on every listed exchanger and help you find not only the best price, but the safest choice.
Note
CBDCs: Anti-freedom tech
We talked to
@gladstein
for one of our first blog posts to the topic of CBDCs, as they pose an inflection point in financial freedoms across the globe.
Learn what a CBDC is, where they're at, and how we can fight back with Bitcoin.
Read it all on X๐
There are two vital things to understand about Whirlpool and how it functions:
1. Samourai Wallet never has custody of funds nor say in where funds are sent.
2. Samourai Wallet merely helps each of the 5 users communicate their intent and talk to each other.
Bisq
@bisq_network
is a decentralized, peer-to-peer exchange built on the
@torproject
network that utilizes the Bitcoin blockchain for trade escrow and arbitration. While a bit harder to use, it can be an excellent place to swap Bitcoin for Monero with great anonymity.
Note: As
Everyone must build in compliance measures, not just those legally obligated to comply โ๏ธ
Even though Alex and the other founders of Tornado Cash sought legal guidance and (rightly) determined that Tornado Cash was not subject to FinCEN guidance (and thus required to implement
Implementing all possible compliance measures doesn't matter
One thing that is often forgotten in this case is that the Tornado Cash founders did actually implement two compliance tools. One tool allowed users to voluntarily reveal the source of funds to a third-party, while the
The court acknowledges Tornado Cash is unstoppable
One of the key aspects of the defense in this case and Roman Storm's is that they are entirely unable to prevent illicit usage of Tornado Cash, no matter what precautions they implement due to Tornado Cash's decentralized
Tornado Cash refresher
If you're new to Tornado Cash, it is a decentralized privacy tool for Ethereum that uses Zcash-style tech to provide strong privacy to its users.
It allows users to generate a Tornado Cash-specific private key (called a "secret note"), deposit their funds
The core privacy tool in focus here from the DoJ was called "Whirlpool," and provided users with the ability to gain forward-looking privacy and disconnect their previous transaction history from future activity.
Use Monero for spending, keep using Bitcoin for savings
Yes, this isn't Bitcoin, but its by far the most used and most practical privacy coin out there with strong (and growing) ways to swap in/out of it without a centralized, KYC exchange. My recommendation is buying enough to
Ricochet, another tool that Samourai Wallet implemented, simply allowed users to put distance on-chain between them and a previous transaction, giving more plausible deniability to their activity.
Improving privacy tools implicates you
In the court's intermediate conclusion, they make sure to hammer home the point that Alex continued to improve the privacy protocol of Tornado Cash up until the day he was arrested.
Of course they don't mention that the overwhelming
Monero is a decentralized, privacy-preserving cryptocurrency that has been iterating and improving its default privacy guarantees since 2014.
Its core focus is to provide digital cash to anyone, no matter their interest in privacy, technical acumen, or background.
Custody is not required for money laundering
The matter of custody has long been the key factor for understanding if a tool is or is not liable for money laundering through their tool (and thus responsible for implementing KYC/KYT measures into their app). Between the recent DoJ
Samourai Wallet was an entirely self-custodial wallet, requiring users to save their seed phrase and passphrase in order to restore funds.
Users simply connected to Samourai's servers to sync their balance and to coordinate Whirlpool mixes.
A Ricochet user would use Samourai Wallet to create a set of pre-signed Bitcoin transactions, send them to Samourai Wallet's server, and Samourai would merely broadcast them at different intervals for the end user.
Samourai Wallet never has custody of funds here!
Tornado Cash indictment shows desperation
Learn how the recent indictment of Tornado Cash founders is not only an immense government overreach, but one that shows that governments are getting desperate to stop privacy tools.
Read the full post below to dispel the fog of war ๐
LocalMonero
First up is a personal favorite,
@LocalMoneroCo
, a centralized peer-to-peer exchange that focuses on helping users find other real people to trade fiat or cryptocurrency for Monero (or vice versa).
It's easy to use, straightforward, with a great reputation system.
Lastly, as Samourai's servers have been seized, you can no longer use Samourai Wallet to send or receive Bitcoin.
We wrote up a guide on migrating from
@SamouraiWallet
to
@SparrowWallet
with the help of
@_k3tan
and
@BitcoinQ_A
:
While this is merely an introduction to Monero and how to acquire and use it, keep an eye out for future pieces that go into more depth!
Monero is a valuable tool for everyone to explore adding into their toolkit, and is worth the time to try it out and see how it works for you.
Where to get Monero
Thanks to the global fiat regime's crackdown on centralized exchanges, Monero has been forced to build and improve decentralized and peer-to-peer exchanges.
Please note that all of the options below are available via the
@torproject
network natively!
Taking a page out of their latest playbook, the DoJ has indicted the founders of
@SamouraiWallet
on two charges, conspiracy to commit money laundering (20y maximum sentence) and conspiracy to operate an unlicensed money transmitting business (5y maximum sentence).
This has been an incredibly sad day in the history of Bitcoin, and in the history of freedom tech, but not all hope is lost.
Together we will keep fighting.
Onwards โ
For the full blog post, read on below:
The fantastic
@BitcoinQ_A
has taken the time to create a screen-recorded video guide for this entire process, which can greatly help simplify things as you can see the process play out in real time, pause when needed, and follow along.
If you want a deeper dive into the two charges against Samourai Wallet and how asinine they are, you can read more from our post on the Tornado Cash indictment as it bears many similarities:
Next steps for privacy
If you (like me) relied on Samourai Wallet for privacy on Bitcoin, it is sadly time to look elsewhere. As of today I have two recommendations:
- Use
@monero
for spending, keep using Bitcoin for savings
- Use
@jamapporg
for JoinMarket
Because of its effectiveness, however, governments have seen fit to make it harder and harder each year to acquire Monero directly from standard, centralized exchanges as a way to prevent the average person from gaining financial privacy.
Wallets for Monero
Thankfully there are fantastic options for Monero wallets out there, with our favorite mobile wallets being
@cakewallet
(or their Monero-only
@MoneroCom
wallet) and
@monerujowallet
, all of which are open-source and easy to use.
Monero has two general types of addresses, "main" addresses that start with a 4, and "sub-addresses" that start with an 8.
While not as vital as avoiding address re-use in Bitcoin, it's a best-practice in Monero to avoid sharing the same address with every entity you transact
You don't have to be a shadowy super coder to fight for privacy ๐
Read more in a guest post from
@the_privacy_dad
on how a dad is fighting for his child's privacy in Danish schools:
๐กAll quotes are derived from Dutch -> English translations performed by DeepL and spot-checked with Google Translate. Unfortunately no English-native documents have been released at this time.
Thrilled to have another incredible guest contributor in
@kudzaikutukwa
๐งก
Read his first piece for
@freedomtech
where he breaks down the origins of financial surveillance and how the latest anti-privacy and anti-Bitcoin regulations flow from that.
As a Samourai Wallet user (no Dojo)
Unfortunately, the architecture of Samourai Wallet meant that your xpub (a master public key, allowing anyone holding it to derive all your Bitcoin addresses) was at some point in time held by Samourai, and could now possibly be in the hands
Protecting the sender
When you send Monero, unlike Bitcoin there is no way to tell when looking at a standard transaction what inputs are being spent. Instead of plainly revealing the true spend, Monero uses something called "ring signatures" to provide plausible deniability,
Monero wallets are "full" wallets, and connect to full nodes directly.
While this is made necessary by the use of stealth addresses and ensures excellent privacy, it can make wallet sync quite slow compared to something like a Bitcoin light wallet.
1. If you don't spend
Use JoinMarket
JoinMarket is a decentralized Coinjoin protocol that brings together peers to mix funds together, gaining strong privacy without relying on a central coordinator, without giving fees to a central entity, etc.
The best way to get started today is using the new UI
We always want to leave you with actionable next steps, and with the shutdown of Samourai Wallet there are hundreds of thousands of people looking for where to turn.
So let's get actionable.
In addition, I would recommend migrating funds to a new seed phrase to prevent anyone holding the xpub from seeing all future received/spent funds.
You should also disable automatic updates in the Play Store or F-Droid (if used) to ensure no malicious updates are pushed.
But what separates Monero from the crowd is that every sender and receiver gains strong privacy from outside observers in three key ways.
Monero protects the sender, receiver, and amounts in every transaction, no matter your chosen wallet or technical ability.
On desktop, we highly recommend the fantastic
@FeatherWallet
, a wallet built from the ground up to protect your network-level privacy more easily and exposing power-user features as you get more comfortable with Monero.
There is also a great "official" desktop wallet available
How does Monero work?
While you don't have to grasp Monero's functionality to gain privacy, it's helpful when deciding if you want to start using it for saving or spending.
is back ๐
We're kicking off a 5 post week with an insightful and actionable piece from a new contributor, Brady Noah, helping you make sense of the browser privacy landscape.
Let's break it down in a thread ๐งต
Protecting the receiver
Now onto the last major aspect of transactional privacy โ the receiver. In Monero, all addresses used are known as "stealth addresses" or "reusable payment codes," and allow any person to share an address publicly without revealing any past, present, or
As a Sparrow Wallet user
The worst case scenario for you is that your previous mixes may not have the full anonymity set you expected if non-Dojo/Sparrow users xpubs were compromised.
Sparrow Wallet itself is still a fantastic tool, and there is no need to migrate funds etc.
Protecting the amounts
n most cryptocurrencies, the amounts involved in every transaction can be viewed by anyone with access to an internet connection and a web browser, but not so with Monero.
Every transaction in Monero uses something called "confidential transactions" to
Though it's a worst-case scenario, you should assume that your xpub was compromised, and thus all previous mixes you have done have been unwound and are now traceable.
As a Samourai Wallet user (using your own Dojo)
Thankfully your xpub was never shared with Samourai servers, so you are at much less risk. However, you should still migrate to a wallet like Sparrow Wallet when possible and disable automatic updates in the Play Store or F-Droid.
Tips and tricks for using Monero
There are some key differences to be aware of when using Monero, especially if you're used to the standard Bitcoin wallet approach to sync and spending. Here are some quick tips to be aware of ๐
FinCEN is trying to bring the PATRIOT Act to cryptocurrency โผ๏ธ
We broke the proposal down in detail, answered all your questions, and laid out what it means for each of us.
A special thank you to
@L0laL33tz
for very insightful comments!
Read here ๐
When spending Monero, change outputs are unspendable for 10 confirmations.
Another necessary protection for privacy that complicates the user experience a bit, this downside is only impactful if you don't spend Monero often and have a single, large output.
Note that
Last but not least is a fork of Firefox,
@LibreWolf_Brows
.
LibreWolf is a pre-hardened fork of Firefox that adds additional protection and aggressive defaults to provide stronger privacy than Firefox does out of the box.
Excellent post by
@JWVerret
:
This latest regulatory push is just another stepping stone from the attacks against Tornado Cash that we detailed on
@freedomtech
last week:
New post incoming ๐
@athena_alpha_
@TornadoCash
A terrifying possibility, as they make it crystal clear his inability doesn't matter.
Perhaps they'd let him be if he doesn't profit and doesn't work on it? Hard to know in this crazy world.
Want to learn more? Read the entire article on
@freedomtech
today:
Enjoyed this thread? Be sure to follow us here on X, on Nostr, subscribe via email or RSS, or join the conversation on
@SimpleXChat
!
@Navcoin
Getting the word out in ways that connect and get the risks across are key to pushing back on this government agenda.
Thanks for doing your part and sharing it out ๐ค
Just an update:
โ Covenants blog post is a WIP, so much info to break down!
โ Podcasts are being spun up with initial guest invites going out this week
โ Podcasts will be video + audio and available on YouTube and all podcasting platforms
Have a person or project building
Apologies for our silence, has been a busy month and we have a lot in the works!
Looking forward to the new year with so much in the works, including:
๐๏ธ TWO new podcasts
โ๏ธ A new blog post covering making Bitcoin better freedom money via covenants
Merry Christmas, all ๐
A huge thank you to
@_k3tan
who wrote up the first thread on this and gave us permission to leverage the bulk of it for our own guide and thread.
Read his original below:
IMPORT YOUR EXISTING SAMOURAI WALLET INTO SPARROW WALLET
Read entire post before attempting at home!
You will need:
1. Your Samourai Wallet seed phrase (12 words)
2. Your passphrase
3. Sparrow Wallet downloaded and installed on to your computer. ()
@SamouraiWallet
@jurbed
Apologies, they were closed by accident!
I've sent you a Twitter and Telegram DM so we can chat more.
To be clear this is an excerpt from a book by Juraj Bednar that has two very brief mentions of Wasabi, and Wasabi is not the subject matter in any way.
Note: if you choose to use Firefox, we highly recommend "hardening" it with the Arkenfox projects tooling:
You can learn more on how to do that in this tutorial video:
Enter email aliasing
Email aliasing isn't a new technology, but has seen a revival with fantastic tools like
@SimpleLogin
and
@addy_io
gaining adoption.
Quite simply, an email alias is just a redirect from a unique email address to a normal email inbox.
1 - Configure your server
The first step in setting up Sparrow Wallet is to configure which server you want to connect to.
If you run your own Electrum/Fulcrum server or run a local instance of Bitcoin Core, it's best to connect to your own node here!
Now letโs say just one of these services experiences a data breach.
Now that your email is compromised, the attacker can target you and link that email to all of your other accounts, giving them a much greater chance of breaching into one of them.
Now for the text walk-through โ๏ธ
Before starting, you will need the following:
1โฃ Your Samourai Wallet seed phrase (12 words)
2โฃ Your passphrase
3โฃ Sparrow Wallet downloaded + installed on to your computer ()
BE SURE TO DOWNLOAD FROM THE URL ABOVE ONLY!
Apologies for our silence, has been a busy month and we have a lot in the works!
Looking forward to the new year with so much in the works, including:
๐๏ธ TWO new podcasts
โ๏ธ A new blog post covering making Bitcoin better freedom money via covenants
Merry Christmas, all ๐
Email in today's world is fraught with spam, fraud, targeted phishing, and countless other threats. Itโs thus critically important that we adopt similar privacy standards for ourselves that cypherpunks like Satoshi did โ especially if weโre active in the Bitcoin community.
According to the Journal of Financial Crime 25(2),ย AML laws are "almost completely ineffective in disrupting illicit finances and serious crime,โ as they only manage to seize a paltry 0.1% of illicit funds.
Just a note: using an email alias doesn't guarantee total privacy, as email itself is unfortunately still a transparent protocol.
But it's a vital steps towards protecting yourself and pairs beautifully with using a privacy-preserving browser, email provider, etc.
Second is Mullvad browser, a collaboration between
@mullvadnet
and
@torproject
to bring the best of both together into a more "every day carry" browser.
Mullvad provides similar fingerprinting protection to Tor browser, and is built to use with a trustworthy VPN.
Fourth up is one of the most widely used browsers in the world,
@firefox
.
While it's been around since long before the privacy-browser scene started, Firefox has done a good job caring about the end-users privacy along the way. Firefox has a good blend of usability and privacy.
For example, you could structure your aliases with a category and company name, like:
category-companyname
@aliasservice
.com
This makes it incredibly easier to filter emails into folders or tag them accordingly to make your email life so much easier.
3 - Import your Samourai Wallet seed and passphrase
On the dropdown menu besides the Mnemonic Words (BIP39) section, select "Use 12 words." Type your seed into the fields displayed in the correct order from 1 to 12.
Check the "Use passphrase?" option.