Author: Daoshuo Blockchain

Two years ago, Ethereum was also the most well-known in the entire crypto ecosystem Privacy app Tornado Cash was sanctioned by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).

The reason for the sanctions is the accusation that Tornado Cash is used for money laundering and illegal transactions. The specific measures are to declare the contract address of Tornado Cash illegal, and there are transactions with the contract address. Some addresses have also been blacklisted.

At that time, this incident caused an uproar in the circle. Some warriors, including Vitalik, boldly stood up and expressed their strong opinions against this barbaric approach of the United States. dissatisfaction.

Of course, there are also some top DeFi projects that immediately followed the US measures and took the initiative to quickly cut off sanctioned addresses.

At that time, there were still some users with ulterior motives who sent small transactions from blacklisted addresses to a large number of innocent addresses to attract more innocent people through deliberate poisoning. Take the blame together.

I specifically shared this matter in an article.

When I think that this is a decision made by the United States, I feel that the possibility of a subsequent comeback should be very small. Therefore, I feel that this sanction is a huge blow to privacy protection.

Unexpectedly, this matter has now turned around. Thanks to the efforts of a group of activists, including Coinbase’s legal department and Ethereum core developers, the U.S. Fifth Circuit Court recently declared the Treasury Department’s sanctions to be illegal.

ChainFeeds has a very good article analyzing this matter, and a link to the article is attached at the end of the article.

There are several key points in the court's ruling:

"The court believes that these smart phones Contracts are decentralized, self-running and uncontrollable code and should not be targeted for sanctions.” At the same time, the court pointed out that despite the technology. may beAbuse, but administrative agencies do not have the power to expand the scope of sanctions beyond the provisions of the law. ”

As to why the Ministry of Finance’s sanctions exceeded its authority, the court held that:

"Because These immutable smart contracts do not constitute "property" either in the ordinary and popular sense or under OFAC's definition. Therefore, the court held that "OFAC exceeded its legal authority."

In my opinion, the court’s ruling recognized the neutrality of technology to a certain extent and distinguished the technology itself from illegal activities.

Such a ruling clearly reflects the protection of technological innovation.

The most direct benefit of this matter is probably the Tornado Cash token, but I think it is even more important. The far-reaching impact also lies in reopening the door to the development of privacy technology.

I remember reading Vitalik’s plan for the future of Ethereum a few years ago, and a very important part of it was (the use of zero Knowledge proof related technology) to protect privacy

On the one hand, the original intention of this plan is to better protect personal privacy; on the other hand, it is hoped that Ethereum can play a greater role in the commercial field, so that both parties to the transaction will not leak commercial information due to transparent chain information. Confidential.

I have always had great expectations for this plan.

But this plan. It seems that it has rarely been mentioned in recent years. I don’t know if it is because of the United States. Have the sanctions interfered with the implementation of the plan?

I really hope that this plan can be taken seriously again and be promoted in a substantial way.

In the judgment, the court repeatedly mentioned the non-tamperable nature of smart contracts, which further highlights the importance of decentralization of the blockchain as the lowest infrastructure. p>

This reminds me again of what Vitalik envisioned in the design when planning Ethereum 2.0. Ethereum should be able to withstand attacks from and be able to withstand the destruction of World War III.

Without such grand ideas and ultimate pursuit, Ethereum would not be able to make the human legal system recognize the "non-tampering" of smart contracts.

This judgment also objectively pushes the United States to the forefront of encryption ecological privacy protection.

This judgment can be said to have shown great goodwill to privacy technology. Others If similar problems are encountered, the most relaxed regulatory measures that can be taken are estimated to be this. And once other regulations are too strict and exceed those in the United States, the relevant companies and teams will definitely move to the United States.

In short, this judgment is of great significance to the development of privacy technology in the encryption ecosystem, but it is not only a technical victory, but also a victory for human beings in their pursuit of freedom and privacy. victory.

Of course, it is also a victory for the legal system.