We at Tails Wallet are big freedom and privacy advocates and therefore we like to support others who advocate for privacy and freedom too. Coin Center is one such organization that we recommend everyone add to their donate list. The recent battle that is being fought by Coin Center are the OFAC sanctions against Tornado Cash.

What is Tornado Cash and what are the OFAC sanctions?

Tornado Cash is a decentralized, on-chain smart contract that uses Zero-Knowledge Proofs in order break the links between transactions. The technology is the same used by ZCash and Pirate Chain. Unlike Monero transactions on the Ethereum Blockchain are fully transparent. This means that when Alex sends coins to Tom who sends them to Jessica that Jessica could, if she had enough knowledge, know the coins originated from Alex. This is because each step as the coins move from one person to another is fully transparent and recorded. If a user sends coins first to Tornado Cash, then this linkage between transactions is broken and thus the user gains privacy.

OFAC sanctions are the US Governments attempt to make it illegal for US citizens and residents to interact with this smart contract. The end result is that the US government is attempting to make privacy illegal for US citizens. The non-democratic institution making these sanction rulings is the Office of Foreign Assets Control. The institution asserts by making the sanction rules that it has been granted legal authority by Congress to regulate the interaction that Americans can have with the Tornado Cash smart contract. Coin Center is arguing that the limited regulatory authority granted to OFAC is not sufficient to regulate the smart contract.

Why is this court case important for privacy advocates?

Sanctioning OFAC has had a chilling effect on privacy. Exercising privacy should be something that can be done without worry of reprisal. Many innocent people were using Tornado Cash without any malicious purpose other to retain their human right to privacy. Many of them effectively had their finances affected as their ability to convert Torando Cash linked coins to products and goods was reduced. Any legislation that impacts privacy negatively or discourages privacy should be fought against and since Coin Center is fighting this battle for the benefit of everyone hope people will donate to Coin Center.

Privacy rights cannot be won through technical innovation alone. It also must be one culturally, legally, and politically in each country worldwide.