![]() ![]() But, why is the fact that software is code a problem? Well, according to both computer science and linguistics, data is language. The issue arises when you consider the fact that software is not an entity or a person but rather code, as many developers have pointed out. The power and integrity of OFAC sanctions derive from OFAC’s ability to designate and add persons to the SDN List The US Department of the Treasury’s press release is quite straightforward in its wording: It is a decentralized protocol open-source software. The news shook the crypto world as many major crypto markets and services moved to enforce the new rules.Īlthough this was not the first crypto mixer to be targeted by the US government, the difference lies in that, as opposed to the Bitcoin Fog case, Tornado Cash is not centrally run. On August 8, 2022, the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) added Tornado Cash, one of the biggest cryptocurrency mixers, to the Specially Designated Nationals and Blocked Persons (SDN) list, making the use of the open-source protocol illegal. After the process, no one can tell who got what or where it came from. The CoinJoin protocol allows for a group of users to pool an amount of bitcoin together and then redistribute it so that everyone gets the same amount of bitcoin back. CoinJoin is basically an anonymization strategy used to add a layer of privacy to an otherwise public blockchain. The problem is that the company could be compelled to publicize such records or hand them over to a third party.ĭecentralized bitcoin mixers, on the other hand, make use of blockchain protocols such as CoinJoin, to obscure the provenance of funds. The company will still manage a record of who got which bitcoin and where it came from. These, however, still present a privacy challenge. These companies offer a simple solution to mixing your bitcoin. There are two main ways to mix your bitcoin: a centralized bitcoin mixer or a decentralized bitcoin mixer.Ĭentralized bitcoin mixers are actually companies that are willing to take your bitcoin and exchange it for other bitcoin for a service fee.
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