According to Mr. Wonderful. more regulation is needed for crypto and “crypto cowboys” like Alexey Pertsev, the developer of Tornado Cash, should be sacrificed to bring stability to institutional inflows.
Shark Tank host and millionaire venture capitalist Kevin O’Leary said that Tornado Cash and similar services are blocking real institutional money from entering the industry, therefore cracking down on crypto applications that “mess with the primordial forces of regulation” is required.
O’Leary, also known as Mr. Wonderful, made the claim that tools like the Ethereum-based cryptocurrency mixer Tornado Cash are examples of a “crypto cowboy” attitude that has no place in the sector during a debate on Crypto Banter on Saturday.
Instead, O’Leary believes that the cryptocurrency industry needs a “rules-based environment” in order to draw in real institutional capital. A large part of that regulation must target protocols like Tornado Cash, which allow users to conduct anonymous transactions and thus may be used for illegal activity.
O’Leary maintained his position throughout the conversation regarding the detention of Alexey Pertsev, the man who created Tornado Cash, saying:
“At the end of the day, it’s okay to arrest that guy. Why? He’s messing with the primal forces of regulation […] If we have to sacrifice him, that’s okay, because we want to have some stability in that institutional capital.”
Although institutional interest in the digital assets market is growing, the venture investor claimed that “crypto cowboys are riding the fence” and that “they’re not going to touch it.” O’Leary stressed that there wouldn’t be “stability in […] institutional capital” until we get rid of this junk, but he thinks the sector is gradually getting rid of the “cowboys”:
“I think we’re getting to that stage now. Maybe we’re in the third or fourth inning towards that, but I’m tired of this crypto cowboy crap. I want to get involved in a regulated place where we can bring billions of dollars to work. I don’t need to be a crypto cowboy, and I don’t want to be one because I work in the regulated world.”
But O’Leary’s viewpoint runs counter to what many others in the area believe. Many prominent crypto personalities who supported the necessity for fundamental privacy rights on decentralized networks were incensed by the U.S. Government’s approval of the Ethereum-based privacy tool last week.
Stefan George, co-founder of Gnosis, was one of those speaking out in favor of Tornado Cash. He said that the protocol gives Ethereum “much-needed anonymity” and that creating open-source software ought to be viewed as “an expression of free speech.”
The removal of Tornado Cash’s GitHub account, according to Chainlink Lead Developer Advocate Patrick Collins, is “far worse than sanctioning a website” since code is speech, and by doing this, the U.S. Treasury is infringing on the first amendment to the U.S. Constitution.
Anthony Sassano, a teacher of Ethereum, informed his 218,000 followers through Twitter that he had been temporarily barred from AAVE. This occurred after his address had been blacklisted for receiving 0.1 ETH via Tornado Cash from an unidentified source. Sassano continued by saying that the “primary conclusion I have drawn from recent events is that governments/nation states are more concerned with Ethereum than Bitcoin.”
A 29-year-old Tornado Cash developer was detained last week by the Dutch fiscal information and investigation service (FIOD) on suspicion of participating in the laundering protocol.
Over $7 billion has reportedly passed through Tornado Cash’s smart contracts since its launch in 2019 according to a Dutch regulatory organization. Following fresh allegations that the protocol had become widely used for money laundering operations, the U.S. Treasury imposed sanctions.
