On Monday, the US Treasury Department added Tornado Cash to its blacklist, barring US citizens from using the crypto mixing site because it “has been used to launder more than $7 billion in virtual currency since its inception in 2019. “. Separately, on Tuesday, we at Decrypt I woke up to find that our newsletter provider Mailchimp had deactivated our account without warning – and our reports found that Mailchimp had done the same with a host of other crypto publishers over the past two weeks, including Messari and Edge Wallet.
Both of these events vary greatly in scale, obviously. The Tornado Cash sanction is huge news that has rocked the crypto industry, while the fate of our newsletter is of little interest to anyone outside of the crypto media. (And shame on us for using Mailchimp in the first place, since the company had done it before, banning a slew of crypto accounts in 2018.)
But they are an integral part of a broader anti-crypto movement, from government to business, and the backlash will soon spread to open-minded standards if that doesn’t change.
People in power really, really hate crypto.
The current brutal bear market – especially the collapses of Terra, Celsius and other junky projects and companies that crypto folks know shouldn’t be considered representative of the entire industry – has gave crypto haters a series of events they can cite as proof that the whole industry is a fraud, a scam, a ponzi, a joke.
The government’s conclusion seems even worse: cryptography is a tool for criminals. Never mind that there are a range of legitimate privacy-focused reasons for using a crypto mixer like Tornado Cash.
– you’re worried they won’t let you join this super secret chat if they know your wealth came from the monkey in $ASSROCKET69
Now, the Tornado Cash sanction becomes a litmus test of whether projects and companies want to immediately align or fight non-compliance. It’s a test that, from the point of view of real degens and crypto OGs, many projects fail.
It should come as no surprise that the GitHub code repository suspended a Tornado Cash founder’s account and removed the Tornado Cash source code; GitHub is owned by Microsoft. And Mailchimp is owned by Intuit. Many big Web 1.0 companies decide they want nothing to do with crypto (although, on the other hand, some big luxury brands like Tiffany’s and Gucci are turning to crypto).
What is surprising is the decentralized exchange dYdX blocking wallets associated with Tornado Cash.
What happens next will cause many to rightly question the true meaning of “decentralization” and which projects should use the label.
What everyday people need to understand about all of this, in addition to the fact that crypto privacy tools aren’t just for criminals, is that anyone can send tokens to someone’s crypto wallet. has the public address. That’s why it’s overkill and draconian for services to ban all wallets holding Tornado Cash cryptos, as one sneaky degen demonstrated by “dusting” a bunch of celebrity crypto wallets with small amounts of crypto. ETH that passed through Tornado Cash.
Still, most Web3 builders don’t want their company shut down (or worse: go to jail) for proving how wrong the government is about crypto. Fair enough.
Holy shit I’ll be real I think what I’m working on is cool and important but not “going to jail” important… the chilling effect is on space is gonna be real
As many crypto advocates have pointed out, the government is now going after not just individuals or the companies they create, but coding itself. As for Mailchimp, I don’t think it’s hyperbole to say that the mass banning of publishers of crypto content is a form of censorship.
We are witnessing the start of a war on crypto.
What to do ? I’ve been writing about Bitcoin since 2011 and have always said that the only thing that will convert skeptics and haters are real everyday use cases. We’re clearly not there yet, although a lot of crypto might disagree.
Sam Bankman-Fried agrees: On the latest episode of our gm podcast, Sam said the current crypto winter will only truly end when we start using crypto for everyday purposes, and use cases. so far “are not yet really in the realm of being live use cases.”
“I don’t think ‘live use cases currently in use for vital parts of the world’ is the right way to describe most crypto today,” he continued. “Now that’s not to say it’s never going to be. I think in a lot of ways we might not be that far away from that change, we might not be that far away from a world that crypto is actually seeing a ton of adoption and usage in. And I think a lot of good mappings have been done.
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