It is important to clamp down on crypto applications that “mess up with the primal forces regulation,” says Shark Tank host Kevin O’Leary. O’Leary is a millionaire venture capitalist and Shark Tank host. He argued that Tornado Cash, and similar services, are hindering real institutional capital from entering the space.
O’Leary (also known as Mr. Wonderful suggested that applications such as the Ethereum-based crypto mixer Tornado Cash were part of a “crypto cowboy culture” that should not be allowed to exist in the industry.
O’Leary believes that crypto requires a rules-based environment to attract institutional capital to the digital-asset sector. Much of this regulation must be to eliminate protocols such as Tornado Cash which allow users to perform anonymous transactions and potentially engage in criminal activities.
O’Leary did not back down in his opinion about Alexey Pertsev’s arrest as Tornado Cash creator.
“At the end, it’s okay for that guy to be arrested. Why? He is a threat to the primary forces of regulation […]. If we have to kill him, it’s okay. We want some stability in that institution capital.”
O’Leary stated that although institutional interest in digital-assets continues to rise, they won’t touch it while crypto cowboys ride the fence. However, he believes that the industry’s “cowboys” are slowly but surely being weeded out.
“I believe we are getting to that stage now. We may be in the third or fourth innings towards that goal, but I am tired of all this crypto cowboy crap. I would like to be involved in a regulated environment where billions of dollars can be made. I don’t have to be a crypto cowboy and I don’t want to be one. I work in the regulated sector.
O’Leary’s view is contrary to the sentiment expressed by many in the space. Many prominent crypto figures were outraged by the U.S. government’s approval of the Ethereum-based privacy software last week. They defended the need to have basic privacy rights on decentralized networks.
Stefan George, co-founder of Gnosis, was among those who defended Tornado Cash. He stated that Tornado Cash provides “much-needed privacy” for Ethereum and that open-source software writing should be considered “an expression of freedom speech.”
3/ The Tornado cash team is an incredibly talented group that brought privacy to Ethereum. We hope that everyone will remember once again that software writing is an expression for free speech and technology is neutral.
Stefan George (@StefanDGeorge), August 12, 2022
Patrick Collins, Chainlink Lead Developer Advocate, said that Tornado Cash’s GitHub account was “much worse” than sanctioning a website. He also stated that code is speech and the U.S. Treasury are violating the Constitution’s first amendment.
It’s gotten MUCH worse. The codebase and accounts on @TornadoCash Github have been completely deleted. This is more than just sanctioning a site. We are violating the first Amendment because code is speech. @adamdavidlong
Patrick Collins (@PatrickAlphaC), August 8, 2022
Anthony Sassano, an Ethereum educator, shared with his 218,000 followers in a tweet that he was temporarily barred from the decentralized finance (DeFi), lending protocol AAVE. This was after his address was blacklisted because he received 0.1 Ether from Tornado Cash. Sassano stated that Ethereum is more of an issue for governments/nation-states than Bitcoin.
Recent events have led me to conclude that Ethereum is more of an issue for governments/nation-states than Bitcoin. This will have major implications for the industry’s future.
— sassal.eth, August 14, 2022 (@sassal0x).
Related: Tornado Cash founder reports being kicked from GitHub by industry reaction to sanctions
Fiscal Information and Investigation Service (FIOD), a Dutch financial crime agency, arrested a Tornado Cash developer aged 29 who was suspected of being involved in money laundering via protocol.
A Dutch regulator claims that Tornado Cash smart contracts have seen more than $7 billion in transactions since their inception in 2019. More claims were made that the protocol was being used to launder money. The U.S Treasury issued sanctions.