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25 sats \ 1 reply \ @om 9 Aug 2022 \ parent \ on: US Treasury Adds Ethereum Privacy Tool 'Tornado Cash' to Sanctions List bitcoin
Tornado is not centralized, it's an unupgradeable smart contract. But the important part is that evil NK hackers laundered money through Tornado.
Now instead of using Tornado they will launder Bitcoin like this:
- open a channel to a random LN node using dirty Bitcoin
- rent inbound liquidity from someone with clean Bitcoin
- pay through LN
- close the channels
... and they're left with clean Bitcoin. Do you see now why LN might be the next target of sanctions?
And Fedimints are basically mini-Tornados with LN support.
You are spot on. This is happening right now.
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