Millionaire venture investor and Shark Tank host Kevin O’Leary made the case that services like Tornado Cash and others are keeping real institutional capital out of the market.
According to O’Leary, the digital asset market needs a “rules-based environment” to draw real institutional investment. He thinks that a large portion of the regulation needs to outlaw systems like Tornado Cash, which lets users make transactions anonymously and potentially engage in illicit activity.
Kevin O’Leary says sacrificing Tornado cash was worth it
On Saturday, O’Leary, also known as Mr. Wonderful, asserted that applications like Ethereum-based crypto mixer Tornado Cash are part of a “crypto cowboy” culture that has no place in the sector.
During the discussion, O’Leary did not back down from his position on the arrest of Tornado Cash developer Alexey Pertsev.
“If we have to sacrifice him, that’s okay, because we want to have some stability in that institutional capital,” he said. “I want to get involved in a regulated place where we can bring billions of dollars to work. […] I’m tired of this crypto cowboy crap.”
Opposing views
But O’Leary’s viewpoint contradicts what many others in the area space believe. Many prominent crypto experts who supported the necessity for basic privacy rights on decentralized networks were incensed by the US government’s approval of the Ethereum-based privacy tool last week.
Since code is speech, removing Tornado Cash’s GitHub account is “much worse than sanctioning a website,” according to Chainlink Lead Developer Advocate Patrick Collins. As a result, the US Constitution’s first amendment is being violated by Treasury.
Stefan George, a co-founder of Gnosis, spoke in favor of Tornado Cash, saying that the protocol gives Ethereum “much-needed privacy” and that creating open-source software ought to be viewed as “an expression of free speech.”
While this was going on, Ethereum researcher Anthony Sassano informed his followers that he had been temporarily barred from the decentralized finance (DeFi) lending platform Aave after having his address blacklisted for receiving 0.1 ETH via Tornado Cash from an unidentified source.
The major implication Sassano drew from recent events, he continued, is that Ethereum is “more of a concern to governments/nation-states than Bitcoin.”
A 29-year-old Tornado Cash developer who was accused of using the protocol to launder money was taken into custody last week by the Dutch financial crime authority Fiscal Information and Investigation Service (FIOD).
Over $7 billion has passed through Tornado Cash’s smart contracts since its start in 2019, according to a Dutch regulatory authority. The US Treasury imposed penalties in response to new allegations that the protocol was used for money laundering.