The Chopping Block: Did OFAC Overstep by Sanctioning Tornado Cash? - Ep. 386

Welcome to The Chopping Block! Crypto insiders Haseeb Qureshi, Tom Schmidt, and Tarun Chitra chop it up about the latest news in the digital asset industry. In this episode, Laura Shin, host of Unchained and author of The Cryptopians, also joined the conversation. 
 
Show topics:

What Tornado Cash is and why it got sanctioned by the OFAC

The difference between Tornado Cash and blender.io 

Whether privacy is dead as a category and whether regulators are going after it

How these sanctions have a negative impact on the funding of privacy projects

How people within the industry can have different points of view, even when they understand the technology

Whether the ban of Tornado Cash only means that malicious groups will just go and use other protocols

Why regulation by enforcement sucks

The asymmetry between the government’s sanction and the effort needed to push it back.

What changes after the Merge for ETH in terms of centralization

Whether some MEV solutions make Ethereum more centralized

Why MEV is intrinsic to blockchains and whether it is impossible to get rid of it

Why Proposer-Builder Separation is helpful for the network

Whether MEV is illegal and the plausibility of major exchanges not extracting MEV

Why Facebook has an MEV extraction business model, according to Tarun

How some NFT exchanges are not enforcing royalties

What Sudoswap is and how it works

How the royalties were there to bootstrap the supply side of NFTs

Why Tarun thinks music NFTs will never happen

The economic reasoning around royalties

The differences between NFT marketplaces like OpenSea and Magic Eden

Whether NFTs have a real-world use

How Dragonfly’s acquisition of Metastable brought Laura some old memories

Hosts

Haseeb Qureshi, managing partner at Dragonfly Capital

https://twitter.com/hosseeb

Tom Schmidt, general partner at Dragonfly Capital

https://twitter.com/tomhschmidt

Tarun Chitra, managing partner at Robot Ventures

https://twitter.com/tarunchitra 

 
Laura
Twitter: https://twitter.com/laurashin

Episode Links
 
Tornado Cash
Treasury Press release: 
https://home.treasury.gov/news/press-releases/jy0916#:~:text=WASHINGTON%20%E2%80%93%20Today%2C%20the%20U.S.%20Department,since%20its%20creation%20in%202019
Developer arrested: https://www.fiod.nl/arrest-of-suspected-developer-of-tornado-cash/
Coin Center’s article authored by Jerry Brito and Peter Van Valkenburgh: https://www.coincenter.org/u-s-treasury-sanction-of-privacy-tools-places-sweeping-restrictions-on-all-americans/
Second Coin Center’s article authored by Jerry Brito and Peter Van Valkenburgh: https://www.coincenter.org/analysis-what-is-and-what-is-not-a-sanctionable-entity-in-the-tornado-cash-case/
Coin Center may challenge the US Treasury's decision to sanction Tornado Cash: https://decrypt.co/107475/coin-center-tornado-cash-ban-court
Circle freezes USDC in sanctioned wallets: https://www.theblock.co/post/162172/circle-freezes-usdc-funds-in-tornado-cashs-us-treasury-sanctioned-wallets 
Crypto exchange dYdX blocked accounts that received funds from Tornado Cash: https://www.coindesk.com/business/2022/08/11/crypto-exchange-dydx-blocked-accounts-that-received-even-small-amounts-from-tornado-cash/
The possibility of forking Tornado Cash: https://www.coindesk.com/tech/2022/08/10/cloning-tornado-cash-would-be-easy-but-risky/

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Welcome to The Chopping Block! Crypto insiders Haseeb Qureshi, Tom Schmidt, and Tarun Chitra chop it up about the latest news in the digital asset industry. In this episode, Laura Shin, host of Unchained and author of The Cryptopians, also joined the conversation. 

 

Show topics:

What Tornado Cash is and why it got sanctioned by the OFAC
The difference between Tornado Cash and blender.io 
Whether privacy is dead as a category and whether regulators are going after it
How these sanctions have a negative impact on the funding of privacy projects
How people within the industry can have different points of view, even when they understand the technology
Whether the ban of Tornado Cash only means that malicious groups will just go and use other protocols
Why regulation by enforcement sucks
The asymmetry between the government’s sanction and the effort needed to push it back.
What changes after the Merge for ETH in terms of centralization
Whether some MEV solutions make Ethereum more centralized
Why MEV is intrinsic to blockchains and whether it is impossible to get rid of it
Why Proposer-Builder Separation is helpful for the network
Whether MEV is illegal and the plausibility of major exchanges not extracting MEV
Why Facebook has an MEV extraction business model, according to Tarun
How some NFT exchanges are not enforcing royalties
What Sudoswap is and how it works
How the royalties were there to bootstrap the supply side of NFTs
Why Tarun thinks music NFTs will never happen
The economic reasoning around royalties
The differences between NFT marketplaces like OpenSea and Magic Eden
Whether NFTs have a real-world use
How Dragonfly’s acquisition of Metastable brought Laura some old memories

Hosts

Haseeb Qureshi, managing partner at Dragonfly Capital
https://twitter.com/hosseeb
Tom Schmidt, general partner at Dragonfly Capital
https://twitter.com/tomhschmidt
Tarun Chitra, managing partner at Robot Ventures

https://twitter.com/tarunchitra 

 

Laura

Twitter: https://twitter.com/laurashin

Episode Links

 

Tornado Cash

Treasury Press release: 

https://home.treasury.gov/news/press-releases/jy0916#:~:text=WASHINGTON%20%E2%80%93%20Today%2C%20the%20U.S.%20Department,since%20its%20creation%20in%202019

Developer arrested: https://www.fiod.nl/arrest-of-suspected-developer-of-tornado-cash/

Coin Center’s article authored by Jerry Brito and Peter Van Valkenburgh: https://www.coincenter.org/u-s-treasury-sanction-of-privacy-tools-places-sweeping-restrictions-on-all-americans/

Second Coin Center’s article authored by Jerry Brito and Peter Van Valkenburgh: https://www.coincenter.org/analysis-what-is-and-what-is-not-a-sanctionable-entity-in-the-tornado-cash-case/

Coin Center may challenge the US Treasury's decision to sanction Tornado Cash: https://decrypt.co/107475/coin-center-tornado-cash-ban-court

Circle freezes USDC in sanctioned wallets: https://www.theblock.co/post/162172/circle-freezes-usdc-funds-in-tornado-cashs-us-treasury-sanctioned-wallets 

Crypto exchange dYdX blocked accounts that received funds from Tornado Cash: https://www.coindesk.com/business/2022/08/11/crypto-exchange-dydx-blocked-accounts-that-received-even-small-amounts-from-tornado-cash/

The possibility of forking Tornado Cash: https://www.coindesk.com/tech/2022/08/10/cloning-tornado-cash-would-be-easy-but-risky/

Learn more about your ad choices. Visit megaphone.fm/adchoices