Tether Chooses to ‘OFAC Around and Find Out’

The Breakdown

Blockworks

Investing, Business

4.8 • 786 Ratings

🗓️ 27 August 2022

⏱️ 19 minutes

🔗️ Recording | iTunes | RSS

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Summary

This episode is sponsored by Nexo.io, Chainalysis and FTX US. On today’s episode, NLW looks at the latest news on Tornado Cash sanctions. Specifically, he looks at Tether’s announcement this week that the stablecoin issuer would not blacklist addresses from Tornado Cash unless U.S. law enforcement specifically asked it to do so. - Nexo is a security-first platform where you can buy, exchange and borrow against your crypto. The company safeguards your crypto by relying on five key fundamentals including real-time auditing and insurance on custodial assets. Learn more at nexo.io. - Chainalysis is the blockchain data platform. We provide data, software, services and research to government agencies, exchanges, financial institutions and insurance and cybersecurity companies. Our data powers investigation, compliance and market intelligence software that has been used to solve some of the world’s most high-profile criminal cases. For more information, visit www.chainalysis.com. - FTX US is the safe, regulated way to buy Bitcoin, ETH, SOL and other digital assets. Trade crypto with up to 85% lower fees than top competitors and trade ETH and SOL NFTs with no gas fees and subsidized gas on withdrawals. Sign up at FTX.US today. - I.D.E.A.S. 2022 by CoinDesk facilitates capital flow and market growth by connecting the digital economy with traditional finance through the presenter’s mainstage, capital allocation meeting rooms and sponsor expo floor. Use code BREAKDOWN20 for 20% off the General Pass. Learn more and register at coindesk.com/ideas. - “The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell and research by Scott Hill. Jared Schwartz is our executive producer and our theme music is “Countdown” by Neon Beach. Music behind our sponsors today is “The Now” by Aaron Sprinkle and “The Life We Had” by Moments. Image credit: sesame/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.

Transcript

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0:00.0	Welcome back to The Breakdown with me, NLW.
0:09.2	It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:14.8	The breakdown is sponsored by nexo.io, chain aliasis, and FtX, and produced and distributed by CoinDesk.
0:22.8	What's going on, guys? It is Thursday, August 25th, and today we are talking about the latest
0:28.2	in OFAC sanctions around Tornado Cash. Before we get into that, however, if you are enjoying the
0:33.5	breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive
0:37.6	deeper into the conversation, come find us on the Breakers Discord. You can find a link in the show
0:41.9	notes or go to bit.ly slash breakdown pod. Also, a disclosure as always, in addition to them
0:47.2	being a sponsor of the show, I also work with FTX. So today, we're discussing the continued
0:52.5	fallout and response to sanctions of Tornado Cash. And specifically, we're discussing the continued fallout and response to sanctions of tornado cash.
0:55.7	And specifically, we're looking at how different companies are handling them.
0:59.8	In the hours following the announcement, Jeremy Aller from Circle wrote a thread about his company's response.
1:05.8	Yesterday, U.S. Treasury designated for sanctions, ETH addresses associated with tornado cash.
1:12.0	As a U.S. regulated financial institutions subject to Bank Secrecy Act requirements, Circle, together with our partner
1:16.5	Coinbase, restricted the movements of U.S.D.C. funds in these sanctioned addresses.
1:21.1	It is likely that near all responsible registered virtual asset service providers also took
1:25.1	steps to block customers from transacting with these addresses or face charges of willfully avoiding U.S. sanctions compliance obligations, which can bring
1:32.3	up to 30 years in prison. The regulatory intervention in this case crossed a major threshold in
1:37.2	the history of the Internet and the history of open blockchain finance, with a major government
1:41.2	obliging parties to outright block or limit the functioning of open-source software on the internet. It raises extraordinary questions about privacy and
1:48.4	security on the internet and the future of public internet digital currency. We have noted
1:52.7	the tension between privacy and security as a policy matter. Yesterday, this stopped being an
	...

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