Understanding Compliance in DeFi: The Role of Data Providers

Ari Redbord, Head of Legal and Government Affairs at TRM Labs, talks about the sanctions on Tornado Cash, and the role of blockchain analytics tools in crypto. 

Show highlights:

• Ari’s background as a federal prosecutor and his work for the US Treasury
• why regulators sanctioned Tornado Cash, according to Ari
• why the Ronin hack was important for regulators to start taking DeFi hacks more seriously
• the fact that for the first time the Treasury Department sanctioned software
• whether the Office of Foreign Assets Control (OFAC) messed up
• whether regulators understood the impact on regular users
• the role of TRM and blockchain analytics tools in mitigating risk
• how decentralized applications use tools like the ones provided by TRM to comply with regulations and to block addresses
• why, if Ari were a regulator, he would focus on regulation guidance
• whether the sanctions on Tornado Cash are unconstitutional
• what the future of privacy in crypto looks like and whether the government is going after privacy technologies

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Ari

Twitter: https://twitter.com/ARedbord

Tornado Cash

• Treasury Press release: 
• https://home.treasury.gov/news/press-releases/jy0916#:~:text=WASHINGTON%20%E2%80%93%20Today%2C%20the%20U.S.%20Department,since%20its%20creation%20in%202019
• Tornado Cash Sanctioned: https://www.coindesk.com/policy/2022/08/08/crypto-mixing-service-tornado-cash-blacklisted-by-us-treasury/
• Developer arrested: https://www.fiod.nl/arrest-of-suspected-developer-of-tornado-cash/
• TRM Labs blog post: 
• https://www.trmlabs.com/post/how-defi-platforms-are-using-data-from-trm-labs-to-respond-to-tornado-cash-sanctions
• Tornado Cash post on compliance: https://tornado-cash.medium.com/tornado-cash-compliance-9abbf254a370
• Coin Center’s article authored by Jerry Brito and Peter Van Valkenburgh: https://www.coincenter.org/u-s-treasury-sanction-of-privacy-tools-places-sweeping-restrictions-on-all-americans/
• Second Coin Center article authored by Jerry Brito and Peter Van Valkenburgh: https://www.coincenter.org/analysis-what-is-and-what-is-not-a-sanctionable-entity-in-the-tornado-cash-case/
• Coin Center may challenge the US Treasury's decision to sanction Tornado Cash: https://decrypt.co/107475/coin-center-tornado-cash-ban-court
• Circle freezes USDC in sanctioned wallets: https://www.theblock.co/post/162172/circle-freezes-usdc-funds-in-tornado-cashs-us-treasury-sanctioned-wallets 
• Crypto exchange dYdX blocked accounts that received funds from Tornado Cash: https://www.coindesk.com/business/2022/08/11/crypto-exchange-dydx-blocked-accounts-that-received-even-small-amounts-from-tornado-cash/
• The possibility of forking Tornado Cash: https://www.coindesk.com/tech/2022/08/10/cloning-tornado-cash-would-be-easy-but-risky/
• What the sanctions mean for privacy coins: https://www.coindesk.com/layer2/2022/08/09/what-the-tornado-cash-sanction-means-for-privacy-coins/
• Tornado Cash laundered $1.5 billion, according to Elliptic: https://hub.elliptic.co/analysis/tornado-cash-mixer-sanctioned-after-laundering-over-1-5-billion/
• Celebrities get Dusted: https://decrypt.co/es/107090/tornado-cash-dusts-public-wallets-jimmy-fallon-brian-armstrong-steve-aoki-logan-paul
• Previous Coverage of Unchained:
• Tornado Cash Sanctioned. Did the Government Overstep Its Bounds?: https://unchainedpodcast.com/tornado-cash-sanctioned-did-the-government-overstep-its-bounds-ep-384/
• The Chopping Block: Did OFAC Overstep by Sanctioning Tornado Cash?: https://unchainedpodcast.com/the-chopping-block-did-ofac-overstep-by-sanctioning-tornado-cash-ep-386/

 ** For more episode links and details visit the Unchained website **

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