Celsius CEO Alex Mashinsky has entered a guilty plea in his criminal fraud trial, which was scheduled to begin in about two months. His Celsius cryptocurrency platform collapsed in July 2022 after it couldn't meet customer withdrawal demands. Its failure was particularly devastating because it had actively marketed itself to customers as safer than banks, regularly telling customers that "banks are not your friends". Many people believed that because Celsius was based in the US, it was carefully regulated and therefore safe.
Web Summit, CC BY 2.0
Letters written to the judge in the bankruptcy case revealed the extent of the devastation to people around the world, some of whom had their entire life savings or retirement money on the platform. I published some excerpts back in July 2022.
These Celsius letters to the bankruptcy judge should be required reading for anyone who thinks that the only victims of crypto collapses are degens out there gambling on memecoins.
for those of you who've seen the supposed Enron relaunch and crypto project: their website's terms of use say it's parody.
tl;dr apparently someone thinks it's a good and funny idea to make a big joke out of a company that ruined people, and this is about as much oxygen as i'm inclined to give it
It's interesting to me that the Fifth Circuit only considered "control" at the smart contract level, and does not seem to consider the role of validators in their opinion. A substantial portion of ETH blocks are built with relays that censor transactions with OFAC-sanctioned contracts, and it seems to me there is now an open question as to whether validators that use non-censoring relays could be sanctioned directly.
(Not saying they should, just remarking on the fact that it seems to have gone completely unaddressed.)
Of course this was a concern already, but what with the Treasury focused on the Tornado Cash contracts, it was less central than I suspect it might be soon. This strategy would be somewhat in keeping with legal theories around other "malicious" code, where it's broadly speaking legal to write a devastating computer virus, but a whole lot less legal to run one.
The Fifth Circuit has just opined that the smart contracts that comprise the Tornado Cash cryptocurrency tumbler are "not property because they are not capable of being owned", and thus cannot be sanctioned by OFAC.
![The immutable smart contracts at issue in this appeal are not property because they are not capable of being owned. More than one thousand volunteers participated in a “trusted setup ceremony” to “irrevocably remov[e] the option for anyone to update, remove, or otherwise control those lines of code.” And as a result, no one can “exclude” anyone from using the Tornado Cash pool smart contracts. In fact, because these immutable smart contracts are unchangeable and unremovable, they remain available for anyone to use and “the targeted North Korean wrongdoers are not actually blocked from retrieving their assets,” even under the sanctions regime. Simply put, regardless of OFAC’s designation of Tornado Cash, the immutable](https://storage.mollywhite.net/micro/5c9f39635b98489b176d_Screenshot-2024-11-26-at-7.01.20---PM.png)
