https://twitter.com/SDNYnews/status/1783208803707621828
- SDNYnews
https://twitter.com/SDNYnews/status/1783208803707621828
- SDNYnewsIn an unsurprising turn of events...
Samurai Wallet has been raided and seized. This is a service that allows users to mix and tumble their Bitcoin using a smart contract called CoinJoin. CoinJoin allows users to merge their assets together and then shuffle them in a way that breaks tracking algorithms. The news about this has been booming since it happened yesterday. It's a huge hit to Bitcoin privacy.
https://twitter.com/parachutesBTC/status/1783314948170342735
- parachutesBTC
Clown World loves a dark comedy
In the wake of this raid on our constitutional right to privacy comes the joke that the government has just legally declared Bitcoin a currency. After all if one is going to use the literal terms "money laundering" and "money transmitting business" in relation to Bitcoin then surely Bitcoin must be money according to USA. Something tells me that argument wouldn't hold up in court.
Others still have made memes like this to show that the government just arbitrarily defines cryptocurrency in whatever way suits them within the current context. Bitcoin is a commodity? Better pay the correct amount of taxes. Bitcoin is money? Oh you better have a permit for that. It is indeed nonsense and the logic is crashing down around the regulators to comic effect.
https://twitter.com/_whitneywebb/status/1783238857359503576
- _whitneywebb
Hostile takeover vibes?
An attack like this against Bitcoin has seemingly ruffled some feathers within this short timespan. Does this political pushback have any legs or momentum to it, or are these simply complaining armchair virtue-signaling slacktivists? Personally I'd bet on this enragement farming fizzling out in a couple days or so because an event like this affects so few people on aggregate. There are also other options for privacy and all the code is open source.
I was hearing on the grapevine that even though the Samurai team was detained and their website seized... people are still using the CoinJoin feature. How? Because it's all open source anyway. The Samurai guys were just a frontend that made it easier to access. Motivated Bitcoiners are going to find a way to CoinJoin whether there's a convenient solution or not. The government doesn't yet seem to realize that this is exactly like a Pirate Bay situation (except even worse for them). They can shut down a single node but ten more can pop up in its place.
Monero XMR
Of course you know what Bitcoiners hate the most about this whole situation? The Monero community coming out the woodwork to be like, "Uh yeah... I told you so." It's funny because every XMR transfer is way way way way more private than a Bitcoin CoinJoin situation. The XMR blockchain itself doesn't even store addresses or even the amounts being moved around. This whole ordeal really makes me want to buy some XMR. Even 10 coins would probably be enough to last a lifetime if and when privacy starts being respected like it should be. The upcoming integration with Serai DEX is the icing on the cake of interoperability.
The right to privacy
The Fourth Amendment of the constitution guarantees citizens the right to privacy, but the government doesn't seem to care about silly little details like the legal document upon which it was founded. Big government has been leveraging technology for decades to illegally invade the privacy of citizens under the guise of "national security" and "crime prevention".
At one point the government decided that they have a legal right to monitor all the transfer of wealth under their umbrella. Back when cash and silver were the primary modes of wealth transfer all transactions were private by default. The digital transformation of the economy allowed them to make up the rules as they went and scoop up as much power as possible along the way.
Classic government.
A good example of this regarding the First Amendment right to free speech is social media. The founding fathers would be rolling in their damn graves if they saw how government essentially has implemented backdoor power structures within our direct lines of communication. However because social media companies are technically private entities they can legally give government backdoor access and censor unfavorable messages while completely avoiding the First Amendment and other laws that were specifically put in place to stop them from doing the things that they are doing today. And the most annoying part about it is that they act like these violations of the law are their God-given right. These people are sociopaths.
SAMOURAI DID NOTHING WRONG, SELF CUSTODIAL TOOLS ARE NOT MONEY TRANSMITTERS
The exactly correct take is also given by Bitcoin Magazine. Providing neutral infrastructure that doesn't give anyone an edge is not a crime. Are we to sue the government because criminals drive on roads and drink tap water? No, because that would be fucking ridiculous.
That same exact ridiculousness is being projected onto privacy technology but most are too blind to see that it's the exact same concept. Crypto being private is a human right, but the government doesn't like that so now we have this extreme level of friction rippling through the ecosystem. None of this was surprising either. Everyone who was paying attention has seen all of this coming a mile away. The only difference is that it's no longer theory and we are now living in that future. Fuck it, we'll do live.
This raid comes at the perfect time.
Why would this be the perfect time? Well if you can't tell the regulators are working overtime trying to crack down on crypto. Why is that? Isn't it obvious? Blackrock adoption. Fidelity adoption. MSTR is gonna be in the S&P 500. All the things. They have no other option but to go nuclear.
The Samurai devs have a good case, but I don't think they'll actually win because there is precedence for shitting on the constitution like this.
There are already multiple cases of people running tumblers and mixers and getting that guilty verdict. Of course this guy pled guilty so there is that, but still.
The actual definition of money laundering is that something illegal has been done to obtain the money in the first place. The money is then washed through some kind of integration scheme so it can be spent on the grid without getting red-flagged by the IRS or another government agency.
Notice that the language used against these operators of privacy infrastructure is never "money laundering" itself, but rather "conspiracy to commit money laundering". This means that the prosecution doesn't need to prove that Samurai devs actually did anything directly illegal, but that they knowingly helped criminals.
In my opinion this is a very weak argument but courts are corrupt so there is that. I expect them to be found guilty and serve a light sentence because the case is weak, but hopefully they win because all these other crypto lawsuits will almost certainly get a victory.
SEC sued over Ethereum, crypto firm asks court to state token is not a security
And lastly
It was revealed today that Metamask (Consensys) sued the SEC for refusing to classify ETH as a security or not. Why did Metamask sue the SEC? That's the hilarious part. They issued the lawsuit immediately upon getting a Wells Notice from the SEC. So the SEC basically declared their intent to sue them for being a money transmitter and their response was just to instantly countersue. Kinda funny.
Crypto is PISSED.
I'm guessing that Coinbase, Uniswap, and Metamask are all going to win their lawsuits. The SEC has extremely weak cases against all of them and at this point crypto is collectively raging against the machine. Unfortunately I doubt Samurai will win their case, but they definitely should by merit and principal alone.
Conclusion
Can you feel the energy in the air? Crypto is on the verge of going mainstream, and it just so happens that the SEC has decided to engage in a new frivolous lawsuit every week against us. Gee, what a surprise. Could have never seen that coming.
Privacy is not illegal. Providing neutral architecture that anyone can use is not illegal. The gubment has controlled everything for far too long and they're a bit too big for their britches in this regard. They are going to suffer some pretty embarrassing losses in court, but do they even care? Or was the entire point of all of this simply to delay delay delay?