Considering Using Tornado (But is it a bad idea?)

After I have withdrawn the Tornado’d eth/erc20 then I am concerned of the possibility of the funds BECOMING tainted, simply as anyone looking at the origin of the funds would (?) see it is funds from a Tornado mix.

Well, I don’t want to turn good funds into bad funds, so that wouldn’t be smart if the exchanges decide to blacklist exit-addresses in the future as well.

So are these concerns valid? Are there indeed a small limited number of Tornado exit addresses, and so it is obvious indeed that the withdrawal is from Torn?


They’re somewhat valid. So far I haven’t seen any funds get blacklisted for exiting Tornado, but there is no doubt that will change at some point

For now, if you do have regulators making serious inquiries and you want to cooperate with them, you can show them the source of your funds using the Compliance tab at the top of the interface

Basically, I don’t think it’s worth avoiding Tornado altogether for this fear for the time being. If anything now is the time to use it before more eyes get on it


Absolute worst case: an exchange asks you to withdraw all your funds, they don’t want your business because they want to trace all your financial transactions automatically.

I hope no exchange ever does that, but if one did I’d take my business somewhere else. Screw them.

More likely worst case: exchanges ask you “what is the source of these funds” if you deposit a significant amount of cryptocurrency (eg $10,000 worth). Tell the truth (“I purchased it last year on another exchange using money I earned as a plumber”).

Or give them a plausible lie: “I bought it from a friend way back in 2013 for a hundred bucks.” (Does anybody know if there are laws about lying when businesses ask you overly personal questions?)

Best case: don’t use centralized exchanges. Spend your crypto on stuff you want to buy. Use DeFi if you want to invest it. Or give it to a charity that accepts crypto.

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A plausible lie in such context might be considered ‘trickery or deceit when forming a contract’, which is generally against the Common Law, at least. But I guess it could depend on the business :wink:

Incidentally I once asked Deribit if they would accept freshly mixed ETH as a deposit and they said they were fine with that. (Might have changed by now though.)

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