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Blockchain technology is about to transform every trust-based interaction of our lives, from financial services to identity, from health care to our Internet of Things devices. In this podcast, host Laura Shin talks with industry pioneers across tech, financial services, health care, government and other sectors about how the blockchain and cryptocurrency will open up new opportunities for incumbents, startups and everyday people to interact more efficiently, directly and globally.

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  2. The Chopping Block: Did OFAC Overstep by Sanctioning Tornado Cash? - Ep. 386

The Chopping Block: Did OFAC Overstep by Sanctioning Tornado Cash? - Ep. 386

Aug 18, 2022

Welcome to The Chopping Block! Crypto insiders Haseeb Qureshi, Tom Schmidt, and Tarun Chitra chop it up about the latest news in the digital asset industry. In this episode, Laura Shin, host of Unchained and author of The Cryptopians, also joined the conversation. 

 

Show topics:

  • What Tornado Cash is and why it got sanctioned by the OFAC
  • The difference between Tornado Cash and blender.io 
  • Whether privacy is dead as a category and whether regulators are going after it
  • How these sanctions have a negative impact on the funding of privacy projects
  • How people within the industry can have different points of view, even when they understand the technology
  • Whether the ban of Tornado Cash only means that malicious groups will just go and use other protocols
  • Why regulation by enforcement sucks
  • The asymmetry between the government’s sanction and the effort needed to push it back.
  • What changes after the Merge for ETH in terms of centralization
  • Whether some MEV solutions make Ethereum more centralized
  • Why MEV is intrinsic to blockchains and whether it is impossible to get rid of it
  • Why Proposer-Builder Separation is helpful for the network
  • Whether MEV is illegal and the plausibility of major exchanges not extracting MEV
  • Why Facebook has an MEV extraction business model, according to Tarun
  • How some NFT exchanges are not enforcing royalties
  • What Sudoswap is and how it works
  • How the royalties were there to bootstrap the supply side of NFTs
  • Why Tarun thinks music NFTs will never happen
  • The economic reasoning around royalties
  • The differences between NFT marketplaces like OpenSea and Magic Eden
  • Whether NFTs have a real-world use
  • How Dragonfly’s acquisition of Metastable brought Laura some old memories





Hosts

 

Laura



Episode Links

 

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

Developer arrested: https://www.fiod.nl/arrest-of-suspected-developer-of-tornado-cash/

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’s 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

Secretary of State deletes tweet: https://www.coindesk.com/policy/2022/08/08/us-secretary-of-state-tweets-deletes-claim-that-crypto-mixer-tornado-cash-is-north-korea-sponsored/

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/ 

 

MEV

What is MEV: https://ethereum.org/en/developers/docs/mev/#:~:text=Maximal%20extractable%20value%20(MEV)%20refers,of%20transactions%20in%20a%20block.

Proposer-Builder separation: https://www.alchemy.com/overviews/proposer-builder-separation

MEV Boost: https://www.alchemy.com/overviews/mev-boost

Flashbots auctions: https://docs.flashbots.net/flashbots-auction/overview

 

NFTs

Why NFT Creators and Collectors Can’t Stop Talking About Artist Royalties: https://decrypt.co/107482/why-nft-creators-collectors-artist-royalties

NFT Royalties: Why artists love them, and traders don’t: https://www.cnbctv18.com/cryptocurrency/nft-royalties-why-artists-love-them-and-traders-dont-14496762.htm