On Monday, the US Treasury Department added Tornado Cash to its blacklist, banning US citizens from using the crypto-mingling site, because it “has been used to launder more than $7 billion in virtual currency since its creation in 2019.” Separately, on Tuesday, at Decrypt woke up to find that our newsletter provider Mailchimp had disabled our account without any warning – and our reporting revealed that it had done the same to a number of other crypto publishers over the past couple of weeks, including Messari and Edge Wallet.
These two events vary greatly in scale, obviously. The Tornado Cash sanction is huge news that has rocked the crypto industry, while our newsletter situation is of little interest to anyone outside of other crypto media – and shame on us for using Mailchimp in the first place, as the company had done this before, banning a number of crypto accounts back in 2018.
But they are part of a wider anti-crypto movement, from government to corporations – and it will soon extend to open-minded norms if it does not reverse.
People with power really hate crypto.
And the current brutal bear market—specifically, the collapses of Terra, Celsius, and other rogue, irresponsible projects or companies that people in crypto know shouldn’t be taken as representative of the entire industry—has given crypto-haters a number of events to point to. as proof that the entire industry is a scam, a scam, a Ponzi, a joke.
The government’s conclusion appears to be even worse: Crypto is a tool for criminals. Never mind that there are a number of legitimate privacy-oriented reasons to use a crypto mixer like Tornado Cash.
– you’re worried they might not let you join the super secret chat if they know your fortune came from entering $ASSROCKET69
– you have been doxxed and are being harassed online
Now the Tornado Cash sanction is becoming a litmus test for whether projects and companies want to fall in line immediately or fight through non-compliance. It’s a test that, from the perspective of real degenerates and crypto OGs, many projects fail.
It should come as no surprise to anyone that code repository GitHub suspended the account of a Tornado Cash founder and removed Tornado Cash’s source code; GitHub is owned by Microsoft. And Mailchimp is owned by Intuit. Many large Web 1.0 companies are deciding that they want nothing to do with crypto (even while, in contrast, some big luxury brands like Tiffany’s and Gucci are going crypto).
Nor would it be very surprising if OpenSea does. NFT people on Twitter have claimed that their account was suspended and they believe it was due to using Tornado Cash, but OpenSea has not confirmed it, only saying Decrypt in a statement: “We comply with US sanctions law. Our Terms of Service explicitly prohibit sanctioned individuals, countries or services from using OpenSea.”
What is surprising is the decentralized exchange dYdX blocking wallets linked to Tornado Cash. What happens next will cause many to question the real meaning of “decentralization” and which projects should be allowed to use the label.
What ordinary people need to understand about all of this, besides the fact that crypto privacy tools aren’t just for criminals, is that anyone can send tokens to someone’s crypto wallet if they have the public address. That’s why it is excessive and draconian for services to ban wallets containing crypto from Tornado Cash, as one sly degen demonstrated by “dusting” a bunch of celebrity crypto wallets with small amounts of ETH that have been through Tornado Cash.
Still, most Web3 builders don’t want the company to be shut down (or worse: go to jail) to prove a point about how wrong the authorities are with crypto. Fair enough.
God, I want to be real. I think what I’m working on is cool and important, but not “go to jail” important… a relaxing impact on the space is going to be real
As many crypto advocates have pointed out, the government is now not just going after individuals or the companies they create, but the code itself. As for Mailchimp, I don’t think it’s an exaggeration to say that banning crypto content publishers en masse is a form of censorship.
We are seeing the start of a war against crypto.
What should be done? I’ve been writing about Bitcoin since 2011 and have always said that the only thing that will convert skeptics and haters is real everyday use. And we’re clearly still not there, although many in crypto might disagree.
Sam Bankman-Fried agrees: in the latest episode of our gm podcast, Sam said that the current crypto winter will only really end when we start using crypto for everyday purposes, and the use cases so far “are not in reality yet. Live use cases .”
“I don’t think ‘live use cases applied to vital parts of the world’ is the right way to describe most of crypto today,” he continued. “Well, that’s not to say it’s never going to be. I think in many ways we might not be too far away from that change, we might not be too far away from a world where crypto actually sees a ton of adoption and use. And I think a lot of good mapping has been done.”
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