This is an interesting case because it's applying financial law to a decentralised cryptocurrency operation. If research shows that Tornado was indeed processing a billion dollars of criminal funds then I'm not surprised arrests have been made even though it may be hard to prove actual involvement by the network operators. These numbers come close to the fund processing capacity of a small financial institution and there are
The points about DAOs are also interesting. DAOs have no central authority or elected leadership. Setting up a DAO should not be enough to get out of legal responsibilities of running a financial institution, but people voting in DAOs also shouldn't be treated like CEOs because they have very little actual power.
Conviction in this case might have a serious impact on decentralized crypto schemes. DAOs are a great technical workaround for not having a direct kind of leadership but the real world doesn't care about fancy technical solutions. Someone sets up a certain system and that someone has the responsibilities that come with setting up such system. If that service a free website, the responsibilities are extremely limited; if that service is a financial institution, your responsibilities become more serious.
Re: "this is just a dev", the dev also presumably ran the software they created, and with a seventh of the processed volume being criminal funds, it's almost sure that they operated on dirty funds at some point. Even if the developer's role in the (suspected criminal) DAO is considered insignificant, this might make the dev a money mule as he temporarily stored stolen funds in their crypto wallet. According to Dutch law, money mules may be prosecuted as complicit with fraud and any other financial crimes that take place.
One might defend the cryptocurrency operators by claiming that they can't verify the identities of their customers to comply with money laundering regulations, but that only underlines the illegality of the system: if your system isn't capable of complying with the law, you shouldn't operate such a system. It's like claiming you don't need seat belts in your cars because you can't figure out how seat belts work: your lack of control or creativity is not society's problem.
With how overloaded the courts are, it'll take months or even years to see the impact of this arrest. Whatever the outcome, it'll have a big impact.
The dev doesn't operate the TornadoCash contract. The code is actually run by people who operate ethereum nodes. After the initial deployment, the dev has zero involvement.
The points about DAOs are also interesting. DAOs have no central authority or elected leadership. Setting up a DAO should not be enough to get out of legal responsibilities of running a financial institution, but people voting in DAOs also shouldn't be treated like CEOs because they have very little actual power.
Conviction in this case might have a serious impact on decentralized crypto schemes. DAOs are a great technical workaround for not having a direct kind of leadership but the real world doesn't care about fancy technical solutions. Someone sets up a certain system and that someone has the responsibilities that come with setting up such system. If that service a free website, the responsibilities are extremely limited; if that service is a financial institution, your responsibilities become more serious.
Re: "this is just a dev", the dev also presumably ran the software they created, and with a seventh of the processed volume being criminal funds, it's almost sure that they operated on dirty funds at some point. Even if the developer's role in the (suspected criminal) DAO is considered insignificant, this might make the dev a money mule as he temporarily stored stolen funds in their crypto wallet. According to Dutch law, money mules may be prosecuted as complicit with fraud and any other financial crimes that take place.
One might defend the cryptocurrency operators by claiming that they can't verify the identities of their customers to comply with money laundering regulations, but that only underlines the illegality of the system: if your system isn't capable of complying with the law, you shouldn't operate such a system. It's like claiming you don't need seat belts in your cars because you can't figure out how seat belts work: your lack of control or creativity is not society's problem.
With how overloaded the courts are, it'll take months or even years to see the impact of this arrest. Whatever the outcome, it'll have a big impact.