Thoughts

Short thoughts, notes, links, and musings by Molly White. RSS

It's interesting to me that the Fifth Circuit only considered "control" at the smart contract level, and does not seem to consider the role of validators in their opinion. A substantial portion of ETH blocks are built with relays that censor transactions with OFAC-sanctioned contracts, and it seems to me there is now an open question as to whether validators that use non-censoring relays could be sanctioned directly.

The software codes here—the twenty Tornado Cash addresses for immutable smart contracts—are tools used in providing a service of pooling and mixing the deposited Ether prior to withdrawal. Indeed, the immutable smart contract provides a “service” only when an individual cryptocurrency owner makes the relevant input and withdrawal from the smart contract; at that point, and only at that point, the immutable smart contract mixes deposits, provides the depositor a withdrawal key, and, when provided with that key, sends the specified amount to the designated withdrawal account. In short, the immutable smart contract begins working only when prompted to do so by a deposit or entry of a key for withdrawal. More importantly, Tornado Cash, as defined by OFAC, does not own the services provided by the immutable smart contracts. A homeowner may own the right to trash-removal services and a client may own the right to legal services performed by a lawyer, but neither the homeowner nor the client owns the person performing the trash-removal services or the lawyer—for good reason. Similarly, Tornado Cash as an “entity” does not own the immutable smart contracts, separate and apart from any rights or benefits of the services performed by the immutable smart contracts.76

(Not saying they should, just remarking on the fact that it seems to have gone completely unaddressed.)

Of course this was a concern already, but what with the Treasury focused on the Tornado Cash contracts, it was less central than I suspect it might be soon. This strategy would be somewhat in keeping with legal theories around other "malicious" code, where it's broadly speaking legal to write a devastating computer virus, but a whole lot less legal to run one.

The Fifth Circuit has just opined that the smart contracts that comprise the Tornado Cash cryptocurrency tumbler are "not property because they are not capable of being owned", and thus cannot be sanctioned by OFAC.

The six plaintiffs-appellants are users of Tornado Cash. They argue that Tornado Cash’s inclusion on the SDN list exceeded OFAC’s statutory authority. The district court disagreed, granting summary judgment to the Department and finding Tornado Cash subject to OFAC’s sanctioning authority. Van Loon and the other plaintiffs appealed, making the same principal argument here—that Tornado Cash’s open-source, self-executing software is not sanctionable under the Act (as opposed to the rogue persons and entities who abuse it). OFAC’s concerns with illicit foreign actors laundering funds are undeniably legitimate. Perhaps Congress will update IEEPA, enacted during the Carter Administration, to target modern technologies like crypto-mixing software. Until then, we hold that Tornado Cash’s immutable smart contracts (the lines of privacy-enabling software code) are not the “property” of a foreign national or entity, meaning (1) they cannot be blocked under IEEPA, and (2) OFAC overstepped its congressionally defined authority.

The immutable smart contracts at issue in this appeal are not property because they are not capable of being owned. More than one thousand volunteers participated in a “trusted setup ceremony” to “irrevocably remov[e] the option for anyone to update, remove, or otherwise control those lines of code.” And as a result, no one can “exclude” anyone from using the Tornado Cash pool smart contracts. In fact, because these immutable smart contracts are unchangeable and unremovable, they remain available for anyone to use and “the targeted North Korean wrongdoers are not actually blocked from retrieving their assets,” even under the sanctions regime. Simply put, regardless of OFAC’s designation of Tornado Cash, the immutable

Full opinion

pro tip: name your organization something that sounds terrible to sue

FTX Trading Ltd. et al, Plaintiffs, against Fair Democracy, Defendant

social media platform users are going to link offsite. the only question is how obnoxious the platform will make it for them and everyone else.

Screenshot of an Instagram comments section where every comment just says "Pie"

(For context: Instagram prohibits links in post text. This, plus the incentive to inflate comments, has led to the proliferation of tools where creators instruct their followers to comment with a specific word to receive a link in their DMs — in this case, to a pie crust recipe)

The cryptocurrency industry spent almost $200 million to influence the outcomes of the 2024 United States elections. Let's talk about where the money came from, where it went, the cryptocurrency industry's political goals, and what’s next.

Visualizing cryptocurrency industry super PAC funding

Sankey diagram illustrating funding flowing from Coinbase, Ripple, Andreessen Horowitz, Jump Crypto, and the Winklevosses, primarily into Fairshake, which then funneled money to other super PACs called Defend American Jobs and Protect Progress, as well as spent the money directly. $131.47M was spent in total

people talk about “the media” and “journalists” and they picture the New York Times, Wall Street Journal, or cable news.

and sure, “the media” is the Big Five. but it’s also non-profit newsrooms, independent journalists, international and/or non-US publications, worker-owned media collectives, bloggers, local newsrooms, citizen journalists, podcasters, critics, community radio stations, documentary filmmakers, trade publications, freelancers, fact checkers...

if you applaud attacks and legal intimidation against “the media” and “journalists” because you are picturing the former, remember that it is ultimately the smaller fish who will suffer the most from it.

don’t let the failures of some (major) news outlets disillusion you with media as a whole. and especially don’t let those failures desensitize you to attacks on free expression.

we can criticize media failures while also fiercely defending media freedom.

it is scary to see people responding to trump’s baseless lawsuits against the NYT and others with a shrug because of their complaints about those outlets’ coverage of him.

we can oppose lawfare against media institutions and also hold those institutions properly to account for poor coverage.

allowing authoritarians to target media institutions you don’t like only works until they decide to start targeting the ones you do — often ones with far fewer resources than the NYT and its ilk.

test print. 9x12”

A black and white linocut print of a printing press in the process of printing a newspaper with the words “Defend press freedom”, and a fist holding a pen aloft. The arm of a pressman is visible, and they are holding up a print to inspect.

resting the brain

Molly using a carving tool to remove a strip of linoleum from a linocut block

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