On April 24th, Ministry of Justice continues its attack on open source developers, arresting Keonne Rodriguez and William Lonergan Hill on money laundering charges. Rodriguez and Hill, who ran the famous Bitcoin application Samurai Wallet, committed a serious crime by writing code.
The Justice Department seized servers located overseas, removed the Samourai website from the domain, and forced Google to remove the app from the Play Store, alleging money laundering.
It's an amazing flashback to the 1990s.”virtual currency war”, the last time federal authorities went after cryptographers and other people who wrote the code.
At the time, government officials argued that manufacturing and sharing encryption technology was tantamount to exporting weapons.Politicians feared these privacy technologies would fall into the “wrong” hands, and President Bill Clinton declared national emergency And Sen. Joe Biden (Democrat – Dell) introduced a bill that would allow the government to Spy on text and voice communications.
Programmer Philip Zimmerman created encryption software called Pretty Good Privacy (PGP) to thwart government snooping activity.role of paul detrick explained for reasonThe software was so good that the Justice Department launched a criminal investigation in 1993. “On the grounds that the release of the software violated the Arms Export Control Act. Zimmerman proves PGP is protected by the First Amendment.[n] I had the source code printed by MIT Press. Book And sell it overseas. ”
The Justice Department dropped the lawsuit.
Around the same time, Berkeley Ph.D. student Daniel Bernstein developed an encryption method called snuffle, based on a one-way hash function. After publishing his analysis and instructions on how to use the code, he reached out to: the state department presents it. Bad move.State Department Required Bernstein “registered as an arms dealer,[n] Mr. Burstein, who represents the Electronic Frontier Foundation, took the government to court and since the landmark ruling, Bernstein v. U.S. Department of Justice; Code is considered audio.
Thirty years later, politicians are now more concerned about the flow of foreign money than about technical data being leaked to foreigners. In the name of preventing terrorism, the government is cracking down on money laundering.
But the main motivation remains the same. Actions that are not monitored by the U.S. government must be questionable and probably illegal.
Rooted in cypherpunk spirit Bitcoin, to which both Zimmerman and Bernstein belonged, includes “code is audio“Verdict of the 90s. Bitcoin is a digital currency based on an elaborate system of cryptographically protected numbers, signed and verified by other numbers, all publicly available. Math. The software that runs a Bitcoin wallet is a string of ones and zeros.They are spoken words and will never be Bitcoin transactions are suspended Become a speech.
The main service where Rodriguez and Hill's Samurai Wallet has run afoul of law enforcement is Whirlpool, a privacy-enhancing feature on the blockchain that is otherwise open and available for anyone to inspect. In a fiat system, my employer cannot spy on my bank account and I cannot spy on their bank account (but Bank Anyone who has successfully hacked bank records can do so). Grocery stores, car dealers, and insurance companies can't know how much money I have, where that money came from, or who spent it a few steps before it came to me. With Bitcoin, it's all public, which is why services like Whirlpool are so important.
Whirlpool constructs a 5-input, 5-output transaction between an unknown number of people. A similarly sized Bitcoin will go into her 5 units and 5 units will come out at the new address. This obscures the history of individual coins and blinds observers to the flow of coins. publicly available blockchain You will no longer be able to tell which of the five outputs belongs to which input.
In the Justice Department's prudent view, Samurai is a non-custodial wallet, meaning that it technically cannot 'accept' deposits because the operator does not have custody of users' funds.'' The charges amount to laundering and failure to register as a money transmitter. or “perform'' a funds transfer.'' according to to bitcoin magazine.
I occasionally receive payments in Bitcoin from various international customers and employers. I have used his Whirlpool many times and it is just as nefarious and shady as a good old cash transaction. I don't want my employer to know where I've spent my funds.I absolutely I don't want the person I'm sending Bitcoin to to know how much money is in a particular wallet that I'm using. This is all standard hygiene in the modern digital world. We're leaking information about our wealth and spending like crazy, and protecting some of that privacy is only a smart move.
Has anyone been identified as a terrorist or bad guy who has used Samourai's services? Probably so, but the bar is too low for a legal fuss.it is malicious as an argument reasonZach Weissmuller write: “Just as they pointed out that Hamas raised funds in various cryptocurrencies, they used these tools without mentioning that there was a huge amount of money laundering going on in government-issued currencies. will point out that the wrong person is using it.
Officials say terrorists and criminals are using these services. OK, but they also have a much wider range of use US dollars. Perhaps the Justice Department should arrest Jerome Powell and confiscate the Federal Reserve's servers in the meantime.we don't pursue high end leather wallet manufacturers This is because some customers may have notes that may have been used in a crime. We don't check gas station registers for fraudulent dollars. Pursuing the cash register manufacturer itself.
That's the makers of Rodriguez and Hill. They use the code to Created Programs that other people run on their phones or computers. At no point in the process did they control users' funds. That's why all the Justice Department acquired when arresting Rodriguez and Hill were servers and domains. There was no laundered stash of illegal Bitcoin in the alleged perpetrator's basement.
Government protagonists always intervene and circumvent people's rights for seemingly legitimate reasons: terrorism, human trafficking, drugs, bad guys doing normal things.
Those of us who worry about government overreach have always feared a 1990s crypto war. Returning one day. Last week, the Justice Department revived that fight.
