so I'm Peter van valkenberg and I am a
lawyer in Washington DC I'm the director
of research at coin Center coin Center
among many other things is suing the US
Department of Treasury for their tornado
cash
sanctions but before we talk thank
you before we talk about the law I want
to tell you all a bedtime story a story
about
clearville the land of glass
houses for as long as anyone could think
of the town of cille had only one
building material to speak of
glass cars made of glass shops stores
and Halls why even the homes had glass
roofs and glass walls now the glass of
clearville was unusually strong so
nobody worried about glass built too
long or breaks shattered bits or cuts
from the shards they only did worry
about looks from The Yards you see the
town folk of cille were very polite they
were watched from morning through night
they were also a little bit dull an
entire town in a creative lull because
people who are always watched seldom do
anything worth watching they're just too
afraid to be judged for the things they
might be botching but one day a stranger
came to town in a terrifically tall
truck of instant Renown the size of the
truck was one for the books but even
stranger was its very new looks you see
the truck wasn't made of glass not at
all it was positively opaque a monstrous
wall and once they got to thinking about
it even more alarming was that because
of the truck's sheer
opacity no no one could see what might
be inside its
capacity they'd soon find out for the
stranger went by the name of shade and
shade had just one goal sell Shades and
get paid curtains blinds why even
frosted glass and sell them he did right
from the truck he sold his lot to the
last you see the cleair vilans were
pretty darn sick of always looking over
their shoulders even in the relative
privacy of their glass people holders a
few said well I've nothing to hide but
even those folks admitted a curtain or
two in the bathroom was good for their
pride soon every house in clearville was
positively swathed with
Shades and shade he didn't only have
strange wees to sell he had some tall
taals to tell he talked of his friends
back in the land of Uncle why there was
paint wood and stone even vinyl veneer
now markets science and Trends they tend
to move faster than the state
comprehends so it was with a shock that
the mayor of cville awoke one morning to
a Dark Dark
Room the sun's gone out he said with a
start
oh no it's just the wall that the
neighbors have curtained in part but
mayor clear's mourning was about to get
worse still not out of bed he heard
cleair vilans chanting in verse peeking
out of his windows he saw them outside
they'd come to complain from near far
and wide not about shade but of other
intrusions from the chief of police
Constable I and his inapt conclusion
it seems I had been bothering them all
banging on doors whenever he'd call this
was something new to the town it once
was the case that I would simply walk by
and well spy to be sure there was
nothing so Sly going on in the houses of
cille but now well now he had no way to
tell what Troubles of foot all that
glass was as see-through as soot he had
particular suspicions about houses too
sick six and nine of whose inhabitants
there wasn't a sign were they in there
how many and what were they doing he
swore if he listened he heard improper
coing yes I was near certain that the
folks in house 9ine behind a red curtain
were paying for favors
Sublime my eye said mayor clear I trust
you I do and forgive me my sneer but you
can't just barge into a house that's
suspicious You' you got to have evidence
your hunch is propitious I have a better
plan sir I said with a
stir we'll simply go raid the truck of
that despicable
shade and so to shade's truck they
went
sorry to shad's truck they went to learn
of the curtains he lent to houses 96 and
two to charge him with Crimes of the
rest of that crew I just gave them some
shade he said for the money I made just
what they might do even inside of my
view was none of my business or trade so
you saw what they did and it's that
which you hid what a very fine Tale Now
will take you to jail and of this
Troublesome Truck will be rid and that
my friends is the end of our clearville
charade gone was the source of the
infamous shade pay you no mind to the
many Loose Ends like what of the new
materials from all of shade's friends
should they sell in cille I guess it
depends and what have cair vilians still
fully ensconced in the Velvet velour
shade already had launched are they
allowed to keep drawing those blinds no
or yes but only if they have no crimes
in their
minds so clearville
is
Bitcoin and ethereum for it inherited
all of the transparency of bitcoin's
blockchain and the lesson here is that
we shouldn't assume that the particular
transparency of existing technology is
some kind of moral or ethical imperative
rather than a mere technological
accident or a temporary
limitation shade is tornado
cache or really its development ERS
tornado cach is the bolts of new fabric
that people can put up in their glass
houses and the lesson here is we should
not assume that the inventors of
incremental improvements are inherently
doing something wrong nor should we
assume that these inventors are one-offs
or frauds who can be ignored in many
ways this technology is inevitable if
not tornado cache then there are
countless other projects and potential
protocols which will continually improve
bringing privacy I think not just to
ethereum but ultimately to any and all
Global
transactions now there's also an
ambiguity in the story shade might only
be selling curtains but he might also
have installed them and while installing
them while providing these tools he
might have seen some things in houses 2
six and nine he might have even seen
them committing crimes and so the
question here
is at what point is someone doing more
than sharing tools for General usage at
what point are they conspiring
criminally perhaps to further some crime
by providing those tools if they've no
personal interaction with those
potential criminal users Beyond
publishing a smart contract and a
website that criminals use along with
others are they somehow now culpable for
the
crimes if they are not culpable at that
point
then are they culpable if they Continue
to update the software on the website
after it becomes apparent that some of
the users of the website are committing
crimes so really the question
is when should shade have stopped
installing the
curtains when he noticed some funny
business happening in a back room when
he was told explicitly that they wanted
the curtains to hide criminal activity
should he demand identification and
Criminal background checks before
installing curtains in people's
houses and also what fraction of users
should be suspected criminals before the
service is deemed a de facto criminal
service and that mere fact is somehow
Prima fascia evidence of a criminal
conspiracy for which the developer of
the service can be held
culpable so you know a very reasonable
estimate suggests that Swift the global
international bank settlement
Network May facilitate the movement of
approximately 800 billion to 2.8
trillion in illicit funds
annually that's a whole hell of a lot
more than tornado
cach in absolute terms now in relative
terms as far as the share of the elicit
fractions size relative to Total flows
it is smaller and so my question here is
simply should we pick a number should we
pick a
percentage and
finally is there something about money
and money laundry that makes it
different from my Parable we don't
obligate home security installers to
actively identify and Report their
customers crimes to the police we don't
hold the developers of encrypted
messaging services responsible for their
users crimes that are discussed on their
platforms at least we haven't in the
past it may be changing now is money
somehow special
why and what of our story's very
unsatisfying ending the one with all
those loose ends shade is in jail his
truck was impounded what good does this
do so even if we arrest and incarcerate
all the inventors of these tools the
tools and ideas they remain in the world
they can't be uninvented and can only be
universally confiscated through extreme
tax itics and the invasion of many
innocent person's rights so the question
is can we ever get cville back in this
manner my story is actually far less
extreme than reality it would take only
a handful of night raids by the infamous
Constable eye to pull down all the red
curtains and restore the town to its
prior
transparency but with digital tools on
the internet well those tools are
infinitely rep applicable they can be
copied shared spread they can be made
immutable and it's likely a Fool's
errand to try and forbid anyone from
using these privacy tools
online and the other question here is
can we or should we ban the legitimate
users of these tools alongside the
criminal
users I think not I think it's important
that people remain free to anonymously
donate to nonprofits that are advocating
for political change coin Center
accepted a handful of donations through
tornado cash before the sanctions were
announced I think it's very good that
our donors could use that tool to
protect their privacy when they were
exercising their First Amendment right
to assemble and petition the
government I think it's very good that
our John Doe co-plaintiff in our lawsuit
challenging the sanctions can privately
send money to support the defense of
Ukraine without immediately drawing the
scrutiny of the Russian intelligence
services so if we don't want to just
ban the legitimate privacy users uses of
the tech what can we do can we can we
pre-screen the legitimate uses can we
filter out the bad does that kind of
prior restraint
scale is it fair constitutional and who
decides which uses are good and which
are forbidden the US government the
European Union
Thailand B uh Berlin Bangkok who
finally there's another reason that
tornado cash
matters and it's this even if we
disagree about the Privacy security
balance that we'd like to see in the
world and even if we disagree about how
many eggs we'd like to break to get
there there's still a procedural and
rule of law question who should decide
to craft this policy in our system the
courts presidents Prime Ministers
Regulators should it be elected
officials or mere
appointees because right now for Roman
that policy was not made clear by the
legislature in advance of his arrest
it's being made on the Fly by the
unelected prosecutors who are
interpreting existing laws for money
transmission Licensing in fact their
interpretation is antithetical to the
interpretation of the federal regulator
finsen and I see a glaring rule of law
issue here and that perhaps is the
biggest reason why the persecution of
the tornado cach developers Alexi and
Romans is
unjust so please support their
defense this is Alexis's defense fund
this is Roman's defense fund and please
support our civil claim to find that the
sanctions against tornado cach exceed
the statutory Authority and should be
thrown
out in
conclusion I don't want to live in cille
I don't think you can force me to live
in clearville if I've not committed
other crimes I don't think you can
arrest the people who give me tools for
privacy in my entirely legal day-to-day
Affairs merely because someone else who
got the benefit of that privacy wanted
to break the
law and even if I have to live in
clearville I would expect the Dignity of
there being a public debate amongst my
elected officials a vote a signature
from the president or a prime minister
before they pull down my curtains and
stare through my walls
simply claiming that the existing laws
already gives them the power to do that
is the opposite of Law and Order so
thank you for listening to my story and
come find me if you want to offer your
support
[Applause]