I never knew it could be so interesting to be an anthropologist!
And I love how the article gives the Chinese words for all the terms involved. It feeds my fascination for everything that is Language.
> The Chinese word tongdao, which we chose to translate as ‘gateway’, parallels the English word ‘channel’—a linguistic coincidence that shows the intermediary nature of these businesses, which act as a channel for the circulation of both information and money.
Exposition like this is so rare. I cannot upvote this article enough.
Here in Brazil, I've seen some people starting to suspect on web influencers for money laundering. Pick your niece/nephew, start a social media account, buy followers/likes then start laundering the money on fake ads and partnerships.
Along with Chinese organized crime, these marketplaces and brokers are protected and linked to Cambodia's ruling family [0] who themselves are ethnic Teochow/Nanyang.
It seems they only describe that Telegram has been used extensively by criminals for the same reasons everyone else use it:
Great ux, reasonable privacy (for what we needed).
Note: all that is in a flux now. Personally I trust Telegram less now as it seems the same exceptions the French has made for themselves can also be used by russia or any other terrorist regime.
The assumption has been that Telegram provided significantly more access to Russia years ago, as it remains unblocked (with channels even run by the government), and Pavel Durov wasn't arrested when he visited Russia after laws were passed that would apply to Telegram but he claims they were refusing to follow.
I have however thought that the actual reason was because Russia depends on it.
They seriously even use it to coordinate artillery strikes although lately I have seen evidence they now sometimes use Discord.
I am not sure, and being convinced that Pavel Durov has actually visited Russia several times the last few years make me question my assumptions.
However I still see Russian opposition being more scared now after Pavels visit to France because now the terms of service has been updated to tell us that they will ahare our ip address and phone number with law enforcement if they feel compelled to or something to that effect.
Targeting civilians, destroying civilian infrastructure such as schools, hospitals, places of worship, water supplies, food supply lines, etc for the purposes of instilling fear in a civilian population to push a particular stance.
To clarify, is it still a terrorist regime when it's not actually targeting civilians, but only by coincidence civilians and civilian infrastructure are close to the regime's military targets?
This is rather clearly described in the laws of war.
If militants hides behind civilians or use civilians as shields for military infrastructure, the lives of the civilians is their responsibility.
This might seem counterintuitive at first but is perfectly obvious once you stop and think:
If it was legal to use civilians as human shields and it would shield your military infrastructure everyone would do it.
Because the laws of the war is so clear about it nobody does it except Hamas and they only do it because they know western media and commentators will blame Israel despite international laws being very very clear in this matter.
> Because the laws of the war is so clear about it nobody does it except Hamas
Everyone does it. We just call it espionage. That said, when a Western espionage mission goes awry and it results in collateral damage, the government doing the fuckery is properly blamed.
Sure, Hamas dials the tactic to eleven. Point is hiding merchant raiders [1] and clandestine activities (e.g. the CIA's fake vaccine campaign to verify Bin Laden [2]) operate on the same principle. And when those go wrong, we properly blame the people using civilians for cover.
Because the war is only partially about engaging with Hamas. It is also about cementing is stranglehold on the West Bank, and in creating conditions in Gaza favorable to what its current regime coldly refers to as "voluntary transfer":
When the targets, as a matter of publicly stated policy, engage in war crimes of using human shields to both attack civilians and defend themselves, store war munitions and setup command centers in hospitals, schools, etc., and when the country defends itself against those war crimes adhering to legal proportionality rules, then no.
If it is actual indiscriminate bombing or targeting of civilian targets not used in war crimes, human shields, storing military equipment & munitions, command& control, etc., then yes.
Bad publicity against your enemy; it's literally the stated policy of Hamas to make more Palestinian "martyrs". It gets others to scream "genocide", causrs more global division, etc. And, in fact, they are averse to killing the human shields, just not absolutely averse (and definitely less averse after you go on murder, raoe, & kidnapping sprees at music festivals, etc).
> Telegram’s encryption and anonymity provide a readymade technological platform for illicit activity, helping people to overcome information barriers and gaps in the circulation of information
That sentence is definitely in the "services like Telegram should not exist" camp. I wouldn't call the entire article a "hit piece" but the author is definitely trying to sway minds in favor of more government crackdowns on apps like Telegram.
My understanding is that groups in Telegram are not encrypted and the document mostly refers to groups. When it comes to e2e encryption of one-to-one chats Telegram is not unique in that space.
It's not even considered a good implementation. It's opt-in instead of by default and uses non-standard cryptographic techniques.
People who are critical of encrypted apps like to use Telegram as the chief boogyman but the real reason that Telegram is preferred by criminals isn't the encryption, it's that Telegram has a history of not moderating at all, allowing huge private groups, and refusing any cooperation with law enforcement or CSAM reporting groups.
Better for a central source to not have the data, like Signal, than to refuse to cooperate. Now Telegram can be compelled to disclose what they do have.
Telegram encryption is not opt in. End-to-end encryption however is.
Also this always get mentioned and everyone confuses encryption and end-to-end encryption.
What seems to never get mentioned here unless I do is that there is more to security than end-to-end encryption or not:
WhatsApp would (will? I don't use it since years ago) happily upload your data unencrypted (actually unencrypted not not-end-to-end-encryted!) to the biggest data harvester of all -Google if you or anyone you chat with enabled cloud backups.
Signal had months I think where they had a weird bug were tje client would send pictures to people without the user triggering it.
Facebook Messenger besides leaking all your communication patterns to the second largest data harvester also have this nifty feature were if someone reports your message an unencrypted message goes to Facebook.
Facebook was also the ones that suggested people uploaded nudes so the could "know what they should remove", wasn't it?
Signal also had a nasty exploit that would let anyone who sent a specially crafted message take control over the signal users computer if they opened the message in the desktop client.
Telegram is also the only one that I am aware of that has reproducible builds for both Android and IOS. For every other client you have to trust them. With Telegram you can (could at least last I checked) check out the source, build it and compare it to the version on the App Store.
What I mean is not that one should trust Telegram (there are things I use Signal for), only that when it comes to security engineering there is a lot more to consider than end-to-end encryption and HN really struggles to see this.
seems like meta and google jump thru a lot of hoops to maintain the sharade of e2e-privacy whereas with telegram you know upfront that everything goes to someone else's computer and call it a day
Signal I think is very good with the two major exceptions:
- AFAIK they don't publish reproducible builds
- They've (IIRC and AFAIK) at times had lower quality when it came to the non cryptographic parts.
So if someones lives depend on e2e-encryption Signal is the only recommended messenger IMO.
For following public news channels from Ukraine and the Middle East there is no alternative to Telegram.
And if I have to organize something and not everyone is ready to install Signal (i.e. all the time around here) I try to use Telegram. That way I'm at least not spoonfeeding Google and Meta at the same time.
If FSB sits on my weekend plans that is annoying but no big deal.
(I was however rather annoyed when I realized local police used Telegram a while ago. I think that was very irresponsible.)
Signal has reproducible builds on Android. If they have on IOS like Telegram then I have missed it.
I realize now that while I wrote reproducible builds on both Android and iOS further up the thread I forgot to in my last reply. It was an honest mistake, I forgot.
Telegram is open source.
And has reproducible builds.
So anyone can audit it and verify that
a) end-to-end encryption either works or does not (but I guess someone had told us if it was broken)
b) it is not enabled by default
c) in the default mode data is sent encrypted to Telegrams data centers, after that you have to trust Telegram not to snoop in it.
Does not mean it is perfect or even good, but for its use cases it is a lot better than HN gives it credit for.
I am not conversant in this field, but this portion of the author's profile made me think that she favors the money launderers on some libertarian grounds:
> Her dissertation explores how the illicit market intersects and coexists with Cambodia’s political and economic systems in the cybercrime sector, breaking the sovereign state’s monopoly on violence and intersecting with transnational business networks to form a global illicit network.
"Breaking the sovereign state’s monopoly on violence" would seem a good thing only if you think that distributing violence more widely should be a social goal.
> "Breaking the sovereign state’s monopoly on violence" would seem a good thing only if you think that distributing violence more widely should be a social goal.
I think that a reasonable and useful distinction can be made between
"Breaking the sovereign state’s monopoly on violence"
and
distributing violence more widely should be a social goal.
The first would be every ideological 2nd amendment supporter (as opposed to criminal, practical, contrarian or stick-it-to-the-libs 2nd amendment supporters).
Here is a fuller expansion of the thinking behind my sentence you quote.
The usual construction is:
- in order to have a peaceful and ordered society, citizens renounce the use of violence and interact only by peaceful means
- citizens of a city/region/country delegate the use of violence to the government (the "sovereign state")
- the government's use of violence is carefully circumscribed by laws and use of governmental laws outside these circumstances is forbidden
Which ends up defining government as the agent with the exclusive authority to use violence in a geographic region. And by extension has a monopoly on the use of violence, for the safety and freedom of all concerned.
"Breaking the sovereign state’s monopoly on violence", in this interpretation, would be to say that some or all people have recourse to violence, and in the worst case are not restrained by law or government. It's in this sense that I think that "breaking the sovereign state’s monopoly on violence" amounts to distributing access to violence more widely.
The consistent application of these ideas would require that citizens not have the right to resist government application of force. In my view, the second amendment is not a carve-out of (i.e. an exception to) this doctrine if it is understood to be applicable to resisting force applied by other citizens, not by government.
To try to explain were I come from in this discussion:
I live in one of the Nordic countries in the suburbs.
From what I know two of my immediate neighbors have firearms. I suspect there are a lot more nearby because gun ownership is very common and most people don't talk about it - I only know they have guns because they sometimes go hunting.)
Growing up I knew about three houses with complete, working assault rifles and emergency depots of ammo. (This was completely normal until a spectacular robbery were the robbers used stolen assault rifles early in the 2000s.)
Switzerland and Austria I understand is the same.
All three known as very peaceful countries.
From what I read most of the absolute worst crimes against humanity has happened by the government against the citizens, not by citizens against citizens.
I am aware of the risks of pervasive weapons ownership but I think of it as an insurance policy against much much worse problems.
So I feel quite confident that there is a huge difference between having access to violence and using violence.
> first would be every ideological 2nd amendment supporter
Owning a gun doesn't break the government's monopoly on violence because owning a gun isn't violent. Firing a gun at a shooting range isn't violent. (Most people don't consider hunting violence.)
Reasonable 2nd Amendment supporters grant the state its monopoly on violence. They just want the means by way to revoke it. (Or, more realistically, make its abuse more difficult.)
> the government's monopoly on violence is more about its power to engage in violence than literal acts of violence
Power being capability and willingness. Guns give a private citizen capability, same as anyone who can make a fist. They do not extend to signalling a willingness to shoot someone. (Threats, on the other hand, are illegal. Partly because they're no fun for anyone involved. Partly because that crosses from potential to actual.)
> Note: all that is in a flux now. Personally I trust Telegram less now as it seems the same exceptions the French has made for themselves can also be used by russia or any other terrorist regime.
What made you believe that Russia hasn't had a firehose into Telegram's backend for the longest time?
For one the fact that Ukraine used it for a long time and Russia even back before Ukraine told people to shun Telegram for work didn't seem to have very good intelligence.
Also because I see over time how hopelessly incompetent Russian authorities are.
Also (but this is more shaky, I never verified) because supposedly a good number of Telegram employees are Ukrainian.
The imaginary crime of money laundering. If the underlying activity is a crime, we already have laws to deal with that. Why is any attempt at financial privacy deemed money laundering? Why does making any tool that help law abiding citizens have financial privacy, also guilty of money laundering?
Of course, now that most people have bought into money laundering, the goal posts are now getting moved that any attempt at privacy can be considered illegal.
You use or provide a messaging service that has unbreakable privacy - we'll make this a crime too!
Why should it be illegal to use a crypto tumbler/mixer service?
Oh because some people use it for crimes.
Then arrest the CEOs of gun companies, because guns can be used to commit crimes!
> If the underlying activity is a crime, we already have laws to deal with that
This is like complaining about DUIs being illegal because we already have laws banning manslaughter.
> Why is any attempt at financial privacy deemed money laundering?
It's not. Layering per se isn't illegal. It's suspicious but legal, in the same category as carting a semi-automatic into a grocery store in an open-carry state.
> Why does making any tool that help law abiding citizens have financial privacy, also guilty of money laundering?
It doesn't. Practically every prosecution of money-laundering services included evidence of knowledge by the operator that their customers included people committing crimes.
> This is like complaining about DUIs being illegal because we already have laws banning manslaughter.
The premise of DUIs is to punish a person acting recklessly. The premise of KYC is to punish a third party for not conducting mass surveillance on predominantly innocent people in case one of them commits a crime. It's hard to see how these are analogous.
> Practically every prosecution of money-laundering services included evidence of knowledge by the operator that their customers included people committing crimes.
This is quite a fig leaf for any entity operating at scale. The customers of any major bank will obviously include people committing crimes -- they have millions of customers. They also have thousands of employees, and then some percentage of them will be criminals as well. Expecting the intersection of these to be literally zero is an unreasonable standard.
More to the point, the underlying problem is what it incentivizes them to do, i.e. manufacture some opaque and arbitrary indicators and then conduct mass surveillance and punish innocent people for running afoul of secret rules.
> premise of DUIs is to punish a person acting recklessly. The premise of KYC is to punish a third party for not conducting mass surveillance on predominantly innocent people in case one of them commits a crime. It's hard to see how these are analogous
You don't see how a bank not doing KYC and thereby financing terrorists and Pyongyang could be seen as behaving recklessly?
> quite a fig leaf for any entity operating at scale
Sure. It's why a lot of anti-money laundering isn't prosecuted and why OP's complaint strikes me as silly.
> conduct mass surveillance
U.S. AML law is actually somewhat terrible for mass surveillance. Records are held at each private institution. This is why, if you've ever been party to wire fraud, it takes the Feds hours to days to gather records. It's pull, not push.
The practical arms of mass surveillance are the credit/debit card rails. (And, increasingly, crypto.)
> You don't see how a bank not doing KYC and thereby financing terrorists and Pyongyang could be seen as behaving recklessly?
Even if that were a reasonable premise, the analogy would then be automakers not doing KYC and thereby enabling drunk drivers to have cars. Which is a much more controversial claim, and it's not at all obvious why carmakers should be the ones deciding who gets to drive.
Which is the reason the premise is unreasonable. Is it reckless for a general store to sell ski masks without investigating their customers? That's not the right place to address the problem.
> It's why a lot of anti-money laundering isn't prosecuted and why OP's complaint strikes me as silly.
Laws that are commonly violated and selectively enforced are bad laws.
> U.S. AML law is actually somewhat terrible for mass surveillance.
Just having it inside of megabanks is already mass surveillance, because then the bank is using it for things and the user can't switch to a bank that doesn't collect the information because the law prohibits that.
Moreover, the data is dangerous as soon as it's collected even if it isn't currently being centrally indexed, because its existence allows the central database to be created ex post facto. Turnkey totalitarianism is bad.
> The practical arms of mass surveillance are the credit/debit card rails.
How are you distinguishing this? Those companies are financial institutions that have to do KYC/AML.
> Drivers under the influence isn't necessarily reckless, but is banned due to a strong association with reckless action
I’m trying to understand this. It is well documented that consuming alcohol impairs thinking, reaction time, motor function, etc. How is the decision to drive a multi-thousand pound vehicle in the proximity of other humans while in that state not itself reckless?
You seem to be arguing that the problem primarily exists when some percentage of impaired drivers start to drive recklessly. But given the baseline impairment, how is the act of driving not inherently reckless?
Drunk driving crashes don’t just happen because someone decided to go crazy and drive 130mph or something similar. They also happen because the impaired person fails at basic aspects of driving like staying in their lane, stopping in time, seeing pedestrians, etc.
> The crime of DUI is not contingent on the actual facts, risk, and danger presented in a given situation.
DUI is a crime based on the fact that people driving under the influence are significantly more likely to harm others, and the baseline risk is high enough to make driving in such a state unacceptable. Even with laws in place banning it, alcohol is a leading cause of vehicle related deaths and there are quite a few of them every year.
It seem problematic to argue that these laws aren’t based on actual facts and real danger when both are well documented.
> The association with realized harm is probabilistic in nature
The same could be said about almost every kind of harm you can think of. It’s unclear what someone is supposed to take from this statement.
My point is that the law doesn't actually look at situational risk or recklessness. It is a rough heuristic to approximate it. Im not even necessarily arguing against it, but highlighting the common conflation between harm, actual risk, and heuristically approximated risk.
A cop or the law makes no pretension of trying to evaluate if a driver actually put someone at risk in a given scenario. A judge doesn't care if you were alone on the road or how far you were going. A judge doesn't even care if the car is on or moving.
>alcohol is a leading cause of vehicle related deaths and there are quite a few of them every year. It seem problematic to argue that these laws aren’t based on actual facts and real danger when both are well documented.
I would say there is little systemic logic to the rate and severity of penalties. In 33% of pedestrian fatalities, the pedestrian was drunk. In 16%, the driver was drunk.[1]
Similarly, the common DUI threshold is 0.08 BAC.
Being awake for 17 hours (working late) is similar to having a BAC of 0.05%. [2]
Being awake for 24 hours (working a double shift) is similar to having a BAC of 0.10%
Simply talking on a phone while driving has been shown to be similar to a BAC of 0.08%.
Texting while driving is equivalent to a BAC of 0.19%! [3]
The fine for texting while driving starts $20, but the total cost can be over $162 due to court costs.
>The same could be said about almost every kind of harm you can think of. It’s unclear what someone is supposed to take from this statement.
Im just making the point that we we criminalize isnt as clear cut as one might think, and people often conflate actual harm, actual risk, and heuristically approximated risk.
More generally, I think the intersection with probability and criminal justice is fascinating, particularly the criminalizing risk factors. e.g. if we took a similar approach, what percent confidence would we need that someone will commit murder to preemptively lock them up based on risk.
How do you figure drivers driving under the influence aren’t reckless? Are they not aware of the risk? Are they not consciously disregarding it? Or are you using some weird definition of recklessness?
I think what I find interesting in the application of statistics, and how a population characteristic can be different from individual circumstance. Real world risk isnt categorical, it variable.
On average, drunk driving obviously poses more risk than regular driving. However, drunk driving isnt always risky, and does not necessarily or uniformly put others at risk at the factual case by case level.
Edit: I think this makes it an interesting intersection between probability, heuristics, and criminal justice. It highlights the difference between a categorical model of the world, and reality, i.e. Probability is an abstraction and property of the model, not the object, in a deterministic universe.
Sometimes in this thread you appear to use the word risk to mean harm. I could probably agree with you if I was allowed to pick which you used in any given phrase. I agree that drunk driving isn’t always harmful but I can’t see any situation where it wouldn’t be more risky than the same driving act with a different intoxication level.
Otherwise I’m not sure how to resolve the contradiction between “drunk driving … poses more risk than regular driving” and “drunk driving isn’t always risky.”
You’re right to wonder how a system based on civil justifiability principles that include concretized injury also allows criminal penalty for risk without harm.
Im trying to be careful about my use of risk and harm.
In my excerpt you quoted, I meant what I said, and added an edit that might help.
On average, drunk drivers are more risky than sober drivers. However an individual is not the average. The more information you have about an individual circumstance, the more it can diverge from the average of the model.
For example, for the average smoker, the lifetime risk of developing lung cancer is typically estimated to be around 10% to 20%.
If you know the smoker is 80 years old, the chance they will get lung cancer in their lifetime is much lower.
If that 80 year old smoker is in an airplane barreling towards a mountain, their chance of getting lung cancer in their lifetime is 0% and less than an average non-smoker.
The same is true for anything described by risk (like drunk driving). If you plug in enough details around the circumstance, the risk changes. Sometimes it goes up, sometimes it goes down.
>You’re right to wonder how a system based on civil justifiability principles that include concretized injury also allows criminal penalty for risk without harm.
Thats a big part of what I was thinking. Drunk drivers can cause tremendous damage, and make up a clear portion of vehicle accidents, but I think the actual chance of accident per individual drunk trip is quite low in terms of percent. Lets say for argument it is 5%, which I think is very conservative.
If we were to use all data available, I wonder how well something like future violent crime could be predicted. At what point is that a rationale for incarceration based on risk alone? For context, the Average recidivism rate for the category of violent instant felons (spontaneous violence) is over 60%. Average recidivism rate for groups with particularly serious criminal records (Criminal History Category VI ) are over 85%![1 pg 14], and that is without all of the invasive but theoretically available information like psychological reports, medical records, race, income, and family history, ect.
What are the implications here for the viability of criminalizing risk without harm. I know these two cases are not the same, but I am still processing the differences, to see what distinctions can be made. Surely we shouldn't incarcerate based on risk alone. I suppose that is why I am posting these provocative but good faith questions.
> Hell, being drunk just sitting in a parked, no ignition driver seat is illegal in some places.
But those laws are controversial for exactly that deviation from the norm, so it can't be held up as an instance of a widely agreed upon law which is uncontroversial to emulate.
Seems the norm is many places. I think it has been the law of the land for 40 years in California and nobody seems to care. having friend getting a DUI for trying to do the sleep it off instead of driving home seems like a standard coming of age story.
If anything, the consensus is we need harsher DUI laws and enforcement.
> Expecting the intersection of these to be literally zero is an unreasonable standard.
Nobody expects the intersection to be zero - not the banks, not the regulators. The rule is that banks must take prudent measures, and the definition of that has evolved over time (as financial crime has evolved over time).
Google "risk-based anti-money laundering approach" or if you'd like a more thorough introduction, listen to the Dark Money Files podcast.
I have libertarian sympathies too, especially since most AML rules were originally established to fight the war on drugs (my sympathies lie with the dealers, sorry). But I'm pretty happy to make life hard for terrorists, bad governments, and kleptocrats - who, unlike the characters in Reefer Madness, are not just bogeymen.
> It's suspicious but legal, in the same category as carting a semi-automatic into a grocery store in an open-carry state.
Any suspicion toward a US citizen for open-carrying a semi-automatic weapon (which you realize is like half of the handguns in circulation, right?) is entirely due to one's own prejudice and misconceptions. It is objectively not suspicious. The individual is openly carrying it, not hiding it. Concealed carry should not be suspicious either, but open carry should be less suspicious.
This would be a good moment to examine your biases against a fundamentally protected human right as recognized by our constitution.
It is more suspicious than not carrying. In terms of suspicision from a third party:
Concealed carry > open carry > no carry
The fact that concealed carry is undetectable and indiscernible from no carry does mean it is free from suspicion.
As a 2A proponent, a protected right is no protection from bias or suspicion. If I see an open carry in a strange context, I will wonder WTF they are doing.
A friend of mine was open-carrying his pistol in his holster once and stopped at Walmart for some groceries. A woman called the police on him and claimed he was waving his gun around and threatening people.
So the police show up, talk to both of them, thankfully didn't shoot my friend, reviewed the footage and ended up arresting the woman for making a false 911 call.
Things like this give me little sympathy for people who find someone wanting to be safe in public "suspicious".
I know someone that caught a charge for brandishing in similar circumstances and unfortunately it stuck, so I truly am sympathetic.
That said, I think there's a difference between being suspicious and keeping your head on a swivel vs freaking out, calling the cops, or taking radical action
It literally couldn't be any more suspicious. Carrying a jar of bees into a public space isn't illegal either but I'd be very suspicious of anyone doing it, and it doesn't even need any special protection in the constitution.
Just because something is legal doesn't mean you have to be completely and unquestionably accepting of it in public spaces.
> Just because something is legal doesn't mean you have to be completely and unquestionably accepting of it in public spaces.
Nothing should be suspicious about exercising any of your rights as recognized by the US bill of rights and other constitutional amendments. Any of them. You can choose to be suspicious, but again that's a product of your own misconceptions. A gun is not a jar of bees. I'm not interested in debating straw man arguments. If you have a real argument to make, I'm all ears.
A gun is substantially more dangerous than a jar of bees. Dangerous things warrant suspicion. If you don't see that, I question your abilities in the realm of risk analysis.
I lived in a state for half my life where a concealed carry permit was one page of paper and $100. I knew a lot of people who exercised that right.
I wouldn’t describe any of them as legal scholars. Their knowledge extended to two amendments and not much more. I wouldn’t describe many of them as confident or brave either.
They could angry post with the best of them though. Loved arguments.
This is an example of bias based on your environment. These people you've encountered are not representative of every person living in the US who still believes in constitutional protections from the government.
The "money laundering" at focus in the article is receiving money directly from people who are being scammed, and moving it quickly enough that the police cannot freeze or recover it when the scam is discovered. That's different from usual money laundering.
You're exaggerating of course, but as a matter of principle, if X is a crime, then obscuring the evidence of having done X must surely also be a separate crime in its own right? Otherwise someone would do X, then destroy the evidence and be in the clear, since original X is now impossible to prove.
No, it very much should not be. We have an existing sort of crime for knowing participation in that kind of thing, it's called being an accessory.
If someone buys, let's say a bike, off an online marketplace, and it turns out to be stolen, they're out the price of the bike. It never belonged to them and gets returned to the owner. But it must be proven that they knew it was stolen for that to qualify as accessory to theft.
If you make any action which has the effect of obscuring evidence of crime, regardless of mens rea, into a crime, you will end up prosecuting innocent people. That's why this legal doctrine works the way it does.
Not in the UK - there is a crime of handling stolen goods - where you can be asked to prove the steps you took to ensure they aren't stolen, or risk forfiting the good and the money you made selling them. Hence why KYC is so important for pawn shops etc. here.
Another UK example - a boat maker made incredibly high powered speedboats - that happened to be very popular with drugs runners. How how was he supposed to know what would be done with them? But still they end up on the most wanted list: https://www.eadt.co.uk/news/21291272.high-speed-boats-sold-d...
I was under the impression that you don't need an underlying act to charge or convict someone with obstruction/other crimes of concealment because if they were so good at concealing the crime you wouldn't be able to prove the underlying act, even if you could prove that they concealed it.
For example if a court subpoenaed a document while investigating a crime but then the suspect destroyed the document, you don't need to prove that the underlying crime happened to prove that the suspect attempted to conceal it.
If a court subpoenas evidence, and someone destroys that evidence, that's destruction of evidence, which is a specific crime. My point is more general than that. The reason someone could be prosecuted for that, even though it leads to a lack of conviction for the originally-investigated crime, is that destruction of evidence is itself criminal behavior.
One could construct situations where a third party with no knowledge of the subpoena destroys a document for ordinary reasons, after the subpoena is issued. That person is going to be very closely scrutinized, possibly charged, but it's entirely possible to be found innocent of a crime there. Say a corporation employs a document warehouse and the contract says that documents are to be destroyed after 60 days. A court orders on day 58 that those documents be remanded, but the corporation doesn't tell the warehouse, and the court is not aware that the documents are in that warehouse, so they don't send the subpoena to the warehouse.
The operator of the warehouse is not guilty of destruction of evidence in this case. The party at the corporation whose duty it was to produce the documents is guilty. Assuming this is a high-profile case, there will absolutely be additional subpoenas to demonstrate that the operator was not informed of the need to retain the documents, but mens rea must be demonstrated because shredding documents is not per se illegal behavior.
A casino isn't a "knowing participant" to any specific crime — no criminal comes up to them and makes a deal to launder money through the casino.
But casinos (for example) have a tacit agreement with the "criminal industry" in general, that criminals will be able to inherently launder money through the cash-in/cash-out mechanisms of the casino, in exchange for having to play some table games (and therefore lose at least a small percentage of their money, i.e. give a percentage of their ill-gotten gains to the casino) to make everything look legitimate.
If a given business has a business model where it would not possibly stay afloat over the long term, if not for some appreciable fraction of its customer base making use of the business for money laundering — then the business is a "knowing participant" to the general concept of money laundering, even if they have never shaken hands with any specific criminals. Their MBAs knowingly design the business around enabling money laundering.
Come to think of it, this is a bit like the argument the US DOJ used to take down Napster — which actually, finally somewhat convinces me of the logic they used.
The Napster company's business model depended upon some appreciable fraction of its clientele being IP pirates. For everyone else, Napster was a vitamin; but for pirates, Napster was a painkiller. Napster would never have achieved spread without a core base of pirates to spread it. The Napster company's business model (presumably something like "make the software widely used, then sell ads that display in the client" or something) depended on — was planned around — piracy. Thus, Napster was in tacit collusion with pirates; just as most money launderers are in tacit collusion with gangsters.
Isn't that the reason that (at least in the US) cashing out over a certain size requires ID? So that large amounts of cash can't be laundered easily in this way?
Yes, and the point where that became enforced, was pretty much the point where casinos in the US were sold off from the gangs that generally owned them up to that point, to “entertainment tycoons” who turned them into the “arcades for adults” / “cruise ships on land” they’re known as today.
The US just got uniquely "lucky" here, in that the people who bought up the casinos from the gangs, had a business plan that involved making Las Vegas et al "family friendly", which required moving as far away from the casinos' previous "gang-affiliated" image as possible. As such, they had no plans related to continuing to tacitly launder money for the gangs; instead looking specifically for that kind of signature and stopping it when they notice it. (The shared Vegas-casino blacklist exists 1% to stop card counters, and 99% to stop organized criminals.)
Elsewhere in the world, this particular story didn't play out the same way, though. So casinos elsewhere are still mostly money-laundering fronts. Not always operated by gangs, but often operated under the implicit business-model assumption of gangs.
What you'll see in your average casino-allowing country — Australia, say — are casino businesses run by regular people, who get very little traffic from regular gamblers (nobody travels to Australia to gamble), who do zero investment into making the casino attractive to regular people... and who instead concentrate all their effort on making sure that gangs — some even state-affiliated, apparently! — can continue to launder money through the casinos with ease.
Though, for an example of very explicit gang-casino involvement, there's the Golden Triangle, containing casinos owned directly by a particular gang — where it isn’t the gang members themselves (or their proxies) cashing in and out to wash money; but instead, customers of the gang’s drug business, cashing in at the casino, and then proceeding to lose all their money at the table, as their way of making payment for a drug shipment from the gang.
> If you make any action which has the effect of obscuring evidence of crime, regardless of mens rea, into a crime, you will end up prosecuting innocent people
Sure. This isn't how aML law works. Money laundering is specifically disguising the proceeds of illicit activity. If there is no illicit activity, it's not money laundering and it isn't illegal. Using a mixer or running your life exclusively on cash is not illegal.
Does any money laundering offence not have a mens rea, though? You typically have to have at least suspected that you were dealing with the proceeds of crime.
Structuring (splitting up cash deposits to a bank so that they don't trigger the bank to file a CTR) comes to mind. It does have a mens rea component, but the money being entirely clean doesn't make the act not-structuring, IIUC.
no - this assumes the absolute existence of an unspecified crime, so the question has incomplete context and poisonous assumptions. There are rights of privacy for individuals and groups in mature systems of law. The extremes of "everything I do is my own information" and the opposite "we enforcers have a right to all information at any time" are both explicitly not allowed, for real reasons.
> any attempt at financial privacy deemed money laundering
If by privacy you mean concealing it from the government then yeah, that’s generally illegal in pretty much any place that has income/capital gains/wealth taxes.
This doesn't explain why surveillance is required on the buyer's side. Why can't you go to a retail store, buy an anonymous prepaid debit card for cash and then use it to make purchases over the internet without giving anyone your social security number? The cash you're using has already been taxed.
> Why can't you go to a retail store, buy an anonymous prepaid debit card for cash and then use it to make purchases over the internet
Because when this is made available in practice like 99% of the volume is tied to crime. 99% of users aren't criminals. But criminals use it at scale in a way that dwarfs licit activity. (Without tracking how much each person is using it, you can't cut off the scale users.)
This is just assuming the conclusion. Anonymous purchases should be the default, so that ordinary people aren't baselessly subject to mass surveillance. At which point you'd have to be arguing that 99% of all purchases are criminal, which seems implausible.
To protect the kids of course! How ever could the government prevent all of these awful crimes against children unless we surveil everything. Like I always say, if you have nothing to hide. . .
Is what I imagine some spook told the lawmakers. Sarcasm aside, I believe it is control.
> generally illegal in pretty much any place that has income/capital gains/wealth taxes
Authoritarian governments typically enforce fiat currency to monitor citizens, especially those with financial ties to anti-establishment entities. They couldn't care less if you're trading tomatoes.
> Authoritarian governments typically enforce fiat currency to monitor citizens
Example? Despotic governemnts in the real world are kleptocracies. They use all manners of currencies because their elites spend what they can steal. To the extent we have highly-surveillable money systems, it's ones people freely engage with, e.g. the U.S. dollar and crypto.
That isn't generally true, what real world autocratic regime do you have experience with? You can have less government theft than in more democratic countries, because favorable economic conditions are one way of buying compliance. Take the largest dictatorship in the world: China. The CCP does not take "what they can". The tax burden is much lower than basically in any liberal democracy in the West. A lot of taxes that you may think are normal simply do not exist, property tax for example is not a thing. They have heavy foreign exchange restrictions, to keep money in the country. Many people working in China are able to save a lot more of their income than they would if they were in Europe or North America. The catch is you can't freely use all manners of currency, you can't even easily exchange to USD as a Chinese. Foreign stock ownership is restricted. Cryptocurrency is banned. It's basically the complete opposite of what you described.
> take the largest dictatorship in the world: China
China has semi-effective capital controls, at least on the hoi polloi. (There is massive leakage via Hong Kong and Macau, but that's for the hoi olligoi.) China also has a thriving cash culture, which undermines your tracking motivation argument.
Look at authoritarian countries broadly, however, and you find a mix of strict capital-control regimes to maybe something on paper but zero enforcement [1]. To the extent they have capital controls, it's generally to defend the value of the currency. Not for surveillance. Conversely, thriving democracies have enforced capital controls (again to defend their currency).
Capital controls are not an authoritarian-only policy tool. And the principal motivation for capital controls, i.e. requiring the use of domestic currency, across history, has been economic.
> CCP does not take "what they can". The tax burden is much lower than basically in any liberal democracy in the West
Straw man--nobody claimed the CCP or anyone else takes "what they can." Your metapoint is correct: China is the 34th lowest (7.7%) and the U.S. 184th (12.2%) [2]. But that number doesn't include what the elites extract [3].
>Why is any attempt at financial privacy deemed money laundering? Why does making any tool that help law abiding citizens have financial privacy, also guilty of money laundering?
There is still an element of truth. If you don't provide KYC for a bank account there is now a crime if it is knowingly allowed. You could go offshore but now you need to report the account. You could form an anonymous LLC but law recently changed an now must report UBO to fincen.
You could store cash/gold in an anonymous safe deposit, but FBI raid and steal this. You cant fly with large cash because again feds steal it. You can't carry it out the country in large without reporting it.
Crypto, same story, KYC at the exits and P2P offramp actors getting treated as 'unlicensed money transmitter' etc which again triggers KYC.
Quickly you realize it's about shutting off all the exits of privacy, not money laundering which only has increased cost consolidating power to more dangerous organizations.
Not providing KYC is definitely not a crime. It happens all the time. What usually happens is that the bank just terminates the account, after a while.
> a lot of people would be eager to know the names of these banks that let customers operate without KYC for awhile
Non sequitur. Banks generally have to have KYC to do business, though there are famous exceptions in history. There is no jurisdiction I know of in which as a customer not providing KYC is itself a crime.
The customer isnt charged, it is the bank/entity or persons there. Not legal advice but failure if AML and not collecting identifying information is charged under 31 USC 5322 under indictment I'm reading.
The law here notes even some CFRs are criminally binding, the CFRs explicitly require certain identification.
Unless someone dislikes them, in which case they will unwittingly accept a sanctioned entity and then the indictment will scream bloody murder that this was basically all about not doing KYC (even though we all know sanctioned entities operate on white market using dark identity, so regular banks guilty too).
> in which case they will unwittingly accept a sanctioned entity and then the indictment will scream bloody murder that this was basically all about not doing KYC
Example? Every one I can think of involved the bank not doing KYC, criminals taking advantage of it, and evidence at least some people at the bank knew what was happening. (Usually because authorities told the bank they were doing business with criminals and the bank responded by shuffling things around so they could continue doing that business.)
Banks are always doing business with criminals and sanctioned entities and they know that, although not always when and where.
The difference is if the bank does KYC and the criminal uses a dark identity, the bank will likely get away with it. If the bank just gives each person a random number as their only identifier like the old swiss accounts, then they'll be warned sanctioned entities are using it and ultimately prosecuted when they fail to KYC (i.e. similar but but identical to CZ).
> difference is if the bank does KYC and the criminal uses a dark identity, the bank will likely get away with it
What is a dark entity? Have you worked in finance? Because if you collect KYC and accepted forged or faulty documents, the moment you figure out what's going on is the moment you call your personal lawyer.
> criminal pays a heroin addict for their real ID and then basically uses them as pass through nominee on the account
Sure. If you're at a financial institution and accept that documentation, you're personally in for a world of hurt. Doesn't mean it doesn't happen, either due to someone being negligent, overworked or happy to look the other way. But if it's caught, it's not great for the individual. (The bank will survive after paying a fine unless it's systemic.)
I imagine they usually don't know. Some fraction of identities are real IDs taken advantage of by sanctioned entities. If you bank at all you knowingly accept some level of sanctioned entities, but often don't know what identity they operate.
> Some fraction of identities are real IDs taken advantage of by sanctioned entities
Sure. But if the addict you mentioned's account goes from overdrafting every few weeks to holding millions of dollars, that should set off internal alarms.
Is most of that an issue if you declare your income and pay any relevant taxes? Outside of some unnecessary annoyances it generally wouldn’t be too complicated to move your money around.
Otherwise, what are you expecting? Direct taxation isn’t really compatible with ‘financial privacy’ and never was.
It depends. Some banks will ask for root origin of funds. Say you earned some money 20 years ago, invested them with various brokers into stocks all over the world, real estate etc. And then cashed a large sum into your account. If any one of those transactions is flagged they will require you to go back 20 years and collect those invoices that you earned and then you have to collect every transaction from the brokers, this may involve foreign jurisdictions where record keeping and querying is not available from 20 years ago.
So you will fail the disclosure and the bank will flag you in the shared blacklist DBs, they close your accounts and you are out of the system. This is happening enmasse to people who invested in and cashed out of real estate abroad(asia/africa/sa) some time ago. I imagine it's the same with foreign stock markets. And you never know what will be required 20 years in the future, thus most financial advisors discourage "moving money around". They even have a whitelist of brokers, stocks and jurisdictions, anything outside that is uninvestable for normal people just because of KYC/AML paperwork requirements.
> Why is any attempt at financial privacy deemed money laundering?
Is it? I thought laundering money is only illegal if it's covering up illegal activity. Otherwise how is that different from e.g. the shell corporations that mask the sources of their funds.
Almost all large financial transactions or storage useful and active in commerce require KYC or reporting so the magic is the very act of privacy makes it illegal.
It sounds like you're mixing up a bunch of things. To be clear: do you have a single example of a person who was convicted of the crime of money laundering despite it being proven in court that the underlying activity wasn't illegal?
In criminal law people aren't expected to prove what they did wasn't illegal, it is the other way around. What did happen in the case of CZs conviction is the state alleged that lack of KYC allows some actors with illegal funds to pass through, making weak KYC checks an element of money laundering.
> In criminal law people aren't expected to prove what they did wasn't illegal, it is the other way around.
I very much understand that, but you missed my point with that constraint: the point was that if your objection is that legal underlying activity can constitute money laundering, then to prove your objection you need to show an example of provably legal underlying activity.
On the other hand, if your complaint is that innocent-before-proven-guilty isn't being upheld by courts, that's a fine complaint, but an entirely separate one from money laundering.
> What did happen in the case of CZs conviction is the state alleged that lack of KYC allows some actors with illegal funds to pass through, making weak KYC checks an element of money laundering.
In other words he did conceal illegal activity. Hence my point.
Every single bank and person conceals illegal activity by your final sentence. You probably have sold something for cash bought by a drug dealer and unknowingly laundered drug money.
The point here is that an unwitting actor is somehow guilty if they did not do KYC. By your standard basically every gas station near the border is a money launderer, since they know damn well much of the cash they take and transmit is drug and cartel money.
And that's the genius of this line of reasoning. There is nary a dollar in circulation that hasnt been used in crime.
Again, you're mixing things up and moving goalposts. I wasn't trying to make a case for what money laundering is, only what (as I understand it) it definitely isn't. The example you cite clearly covered up underlying criminal activity, whereas the claim was that you can be guilty of money laundering without any illegal underlying crime. Hence it fails to support the premise. That is all.
> No you're mixing things. I said acts of privacy (with listed examples of reporting large transactions) are made illegal, then you went to only money laundering.
How did I move to money laundering? Are we reading the same thread? The comment I initially replied to specifically said, "Why is any attempt at financial privacy deemed money laundering"?
> you were being duplicitous. Your premise is a lie designed to mislead the audience.
It's quite the opposite, but your personal swipes are pretty uncalled for, so I won't continue.
> all large financial transactions or storage useful and active in commerce require KYC
Not at all. I have authorised large wires without providing KYC or collecting KYC from the other party. My bank knows who I am. And I colloquially know the person I'm sending money to. But I haven't e.g. run them through OFAC.
I've wired non-USD from my U.S. bank and wired U.S. dollars overseas. I presume their bank is doing KYC. But I don't know.
You claimed "all large financial transactions or storage useful and active in commerce require KYC." That's simply untrue. It's advisable to ensure someone is doing their KYC. But not necessary.
Yes if you cutoff the first word it becomes untrue, how ridiculously disinguine.
Here's an exercise, look at the FATF black list and then start asking your bank about the process for wiring large sums there. A lot of this compliance is driven through FATF actions that drive any country that wants access to anyone touching dollars or us banks to comply.
No I haven't. For instance the nation of Myanmar is in the list. OFAC as far as I know would permit transmission to most people there
The black list is nominally about weak AML and other factors. It's an example I used because it's a list of places on the shit list in part because they may have weak controls on KYC.
FATF is a big driver if imposing KYC everywhere that wants to interact with a US bank or USD. I'm trying to show you if you actually try to wire somewhere with bad KYC I think you're going to have issues.
> if you actually try to wire somewhere with bad KYC I think you're going to have issues
Sure. There are three black list countries: North Korea, Myanmar and Iran. "Almost all large transactions" do not happen with people in these countries.
Are you at least open to the idea that the major reason why many other nations like Bahamas, Cayman Islands, Panama, St Kitts came off the black list and into AML and KYC compliance is so they would have low friction wire transfers and banking in USD?
I think you're missing connecting the dots here. Countries with large USD transaction dependence comply with KYC precisely because otherwise they'd not be able to easily accept your wire transfer. They were pressured into it, this KYC requirement that is largely invisible to you. And the threat is well if they don't they end up like Myanmar which I promise your bank will be getting to know what the purpose and identity of any transaction you have with them is.
KYC dominates because of a worldwide regulatory effort, do this or you'll be cut off and it will be a nightmare to trade USD. Almost all large transactions go through KYC or reporting because it's been made difficult and usually illegal not to. Were this not the case you WOULD likely see lots of large transactions to Myanmar as various rich people use it as a haven for stashing funds anonymously ( although I think Panama etc would quickly steal the competitive edge).
This kind of legislation is crafter by big masses of lawyers, lobbyists, politicians, whatever. Additionally they change all the time. There are many different motivations at play. Maybe it is surveillance, maybe something else, in the end who cares, because it is impossible to read minds.
> Why is any attempt at financial privacy deemed money laundering?
Ummm. Taxes?
Money laundering is very clearly accounting fraud. If embezzlement is a crime, then money laundering is just embezzlement in reverse.
I feel like you are down an absolutist rabbithole about privacy. There are certain practical limits to privacy. You cannot blight yourself from other people's vision. You cannot operate in a society (whether it be grocery shopping, owning property, driving a car) without existing in some form. "Privacy" only makes sense in the context and is not some maximalist ideal that you can apply to any situation.
The underlying is one thing and the overlying another thing. It's one thing to not declare your money and thus be tried for tax evasion only, and another thing putting said money in financial tricks (as we both know that's the only goal of mixers) in order to commit tax evasion. If you want, think like the difference between murder and manslaughter - which also have many degrees and associated crimes like assault, arson, rape... we always try for those as well.
> (as we both know that's the only goal of mixers)
Do "we" know that's the only goal?
I've reported every digital currency-related gain or loss I've ever had on my taxes, but that doesn't mean I wanted the guy I bought my llama wool socks from to be able to trace my whole holdings. I know how easy it is to do. I learned how to do it in an afternoon.
Believe it or not, some of us just really don't think the world needs an indelible record of what kind of socks we wear, not because we actually think anybody will care, but because we reject the principle that buying socks should require a data record for third parties.
We might be weirder than you, but that doesn't make us dishonest cheats.
> Then arrest the CEOs of gun companies, because guns can be used to commit crimes!
So, obviously people know this, but it's important to spell out:
There is an explicit protection for keeping and bearing arms in the constitution. No such language exists for "financial privacy", in fact the fourth amendment explicitly says the government can search and investigate citizens' property, just that they have to get a warrant based on probable cause.
It's probably only a matter of time until the SC extends "papers and effects" to mean "your stuff on other people's hard drives" in some capacity. That will probably trigger a bunch of re-litigation around the financial side of things though I have no idea what the consequences would be.
It... already does. You can get a warrant for whatever evidence you need already, no need for any new legislation. The constitutional requirement is for judicial supervision, and that's been pretty solid (not perfect, but good) for almost three centuries now.
I'm just saying that there is no "right to financial privacy" anywhere. You have a general right to privacy as granted by the fourth amendment. And courts take that seriously. But it's not absolute and the government is allowed to unmask things for law enforcement.
Hey actually there is good news! I follow this topic and the broken dragnet of AML/KYC a lot
The US federal law of Money laundering relies on there being an illicit origin, which means it is impossible to be charged with just money laundering and it can only be a tacked on charge (but it may be the only charge that sticks). Merely obfuscating the origin is not a crime, it’s just stigmatized.
Ironically, if you are successful with money laundering, the origin looks licit.
The government acts like that never happens, DOJ always issues these pompous press releases about how nobody can hide in our financial system, but they dont know anything.
In this case, the people are actually laundering money.
So-called anti-money laundering laws criminalize far more than money laundering, like financial privacy.
In any case, I would argue that the focus should be entirely on the crime that generates the illicit revenue, and not the after-the-fact laundering of the proceeds. When the focus is on the latter, laws are inevitably passed that mandate people to submit to warrantless surveillance of their financial transactions. The populace at large should not be made to sacrifice freedom and privacy in a largely futile attempt to track illicit criminal gains after the fact.
No useful money — i.e. no money that is unencumbered enough to be practical to use, and that provisions people with a modicum of protection against arbitrary state seizure — will give the state the ability to significantly prevent criminals from profiting from the proceeds of their crimes, merely by tracking and policing its flows.
My point is that the argument "the underlying activity is already illegal so the things that make it possible shouldn't be ", is stupid. It comes from a place of ideology. The ideology of "let's organize everything as they should be, not how they are". So I presented a similar arguments (with guns) which I hoped everyone here would see is a good one. And you did, so task successful! :-)
> the underlying activity is already illegal so the things that make it possible [should also] be
The logic being that an object which can be used for murder should be outlawed by virtue of the fact that it can be used for murder, such as a monkey wrench or a kitchen knife.
Like it or not, some people have a use for guns that doesn’t involve violence and it’s reasonable to allow non-violent uses for things when such a use exists.
> the underlying activity is already illegal so the things that make it possible [should also] be
Oh! It’s like how I could commit criminal fraud by telling a lie in an email and, therefore: SSDs, routers, modems, keyboards, speech; all outlawed because they can be used for crime.
It’s just like how I can launder money by keeping my financial life private and therefore a private financial life should be outlawed. I hope you can see why one might reject this line of reasoning. Indeed, the underlying activity is already illegal so things that make it possible don’t need to be.
Not only is the OP comment completely valid, it has both legal, historical, and contextual significance, unlike your comment.
Cash-equivalent monetary commodities are, by literal definition, illegal to create, trade, receive, pay taxes, or entice/offer/force employees to accept, without the explicit permission from congress through the US Mint - an authorized office of the Treasury, or a licence as a credible/reputable broker, brokerage, or investment firm through the Security and Exchange Commission.
If someone owes you for a debt that has been incurred - public or private, you must accept United States Dollars.
An executive order can, has, had, and will almost certainly be passed again, imminently seizing any cache of "valued currency" - regardless of its medium.
An EO isn't even needed - so far, the legal coverage of "sactions" has allowed the US to help shape the narrative in the interest of the security of the economy/nation by not allowing an unbacked, un-correctable fiat challenge the stability of the nations currency.
> Cash-equivalent monetary commodities are, by literal definition, illegal to create
No they're not.
U.S. dollars are illegal to forge. But the history of currency in America includes state-chartered currency [1], privately-issued currency [2] and even community currencies [3]. Hell, the entire theory of banking is private banks create cash-like instruments in the form of deposits.
> executive order can, has, had, and will almost certainly be passed again, imminently seizing any cache of "valued currency"
Source? This has only been done with gold to my knowledge.
> Cash-equivalent monetary commodities are, by literal definition, illegal to create
No they're not.
Next time you get a token for your local arcade, note the obvious "not redeemable for cash" that every single one has.
The same reason is why Gift cards/store 'credit'(read: literally legally debit) have the opposite - that they can only be redeemed for its cash equivalent - but are "not transferable" - those words explicitly dilineate a currency from a store of value - it's economic interoperability.
You can have internal representations of value that you accept - and even deny, such as Casino's, if warranted. But you must treat them as a debited cash account, must accept USD regardless for any services indebted, and if you allow infra-structural transactions ( like between users) or accept a large enough amount of fiat, you must Know your Customer, or run afoul of more laws.
Eutherum's ICO and the subsequent secondary shovel-selling scams saddled the SEC with the need for more stringent guidance.
>U.S. dollars are illegal to forge.
without a charter/license/permit and your 10% tax, effectively making it nonviable.
It's also illegal to drive a car without a license, sell untaxed alcohol, and offer redemptive fractions of future swap's possible `price.
The difference between a fine and a tax is semantics (see: Obamacare)
> But the history of currency in America includes state-chartered currency [1], privately-issued currency [2] and even community currencies [3]. Hell, the entire theory of banking is private banks create cash-like instruments in the form of deposits.
This is moreso an artifact of companies being people and money being speech; which is legally/politically irreconcilable with the needs of modern governance.
> executive order can, has, had, and will almost certainly be passed again, imminently seizing any cache of "valued currency"
Source? This has only been done with gold to my knowledge.
https://ofac.treasury.gov/recent-actions/20220808
Bitcoin was intentionally modeled after the literal economics of the scarcity of a resource vs. it's production rate and it intrinsic utility - Gold.
Aside from a trivial privacy oversight (really from a lack of applied math at the time), Bitcoin is nearly perfectly analogous to cash, and therefore would likely be reasoned as such. Even each token having a unique serial number, and those presumably being connected/correlated constantly, make it a near perfect analogy - especially in contexts.
Bitcoin is a currency, currencies must be controlled by the State for stability and institutional continuity.
Even if it's not "de facto" illegal - given non-production, a regressive tax, and a mote of regulation, it is essentially illegally to horde value for others without 'oversight', as the risks you expose others to could systemically impact everyone's security/stability.
> note the obvious "not redeemable for cash" that every single one has
Sure. They don't want to do KYC. There is nothing preventing them from issuing a currency untied to U.S. dollars.
Again, look at the community currency example.
> Eutherum's ICO and the subsequent secondary shovel-selling scams saddled the SEC with the need for more stringent guidance
The fact that a civil agency enforcing securities laws is the enforcer in your model should be the hint.
What may be confusing you is the difference between issuing a currency de novo, which is pretty much unregulated, and issuing something that's linked to U.S. dollars, which is highly regulated.
>The fact that a civil agency enforcing securities laws is the enforcer in your model should be the hint.
IRS is a civil agency, referring anything more than fines to the DOJ.
However, that actually illustrates your point even more.
Since money is speech, and freedom of association is a right, it is not really possible to 'legally' enforce (nor practically, in-theory) others to not value some representation as valuable.
That right is only inalienable when it affects 'interstate' commerce / national interests - offering this proactively as a mediated service, or becoming a sizable portion of a nation's GDP - which boils semantically back down to... what does it mean to be "illegal"
> the difference between issuing a currency de novo, which is pretty much unregulated, and issuing something that's linked to U.S. dollars, which is highly regulated.
This is also the other grey part. If it has value and was traded - or not traded, it impacts "interstate commerce", and therefore is regulated as a good, it must have a tax levied on it.
Which just re-enforces the Le Laissez Faire' attitude projection the US tries to impose.
We don't need actual laws, just taxes. No wars, just foreign policy.
You are correct tho - "de novo", legal. Practically, its nearly treasonous - literally.
> IRS is a civil agency, referring anything more than fines to the DOJ.
Yes. The IRS doesn't make rules around what currency is legal or not.
> Since money is speech
No court has ever said this.
> If it has value and was traded - or not traded, it impacts "interstate commerce", and therefore is regulated as a good, it must have a tax levied on it
What are you talking about? Plenty of economic activity is untaxed.
> You are correct tho - "de novo", legal. Practically, its nearly treasonous - literally
Did you ignore the links provided in the top comment?
> The fact that a civil agency enforcing securities laws is the enforcer in your model should be the hint.
The IRS is a civil agency and they enforce laws by referring the claimant to the people with the monopoly on violence; your implication that an agency being categorized as "civil" implies, even faintly, categorical legality is the false premise I was 'hinting' to dismantle.
>> Since money is speech
No court has ever said this.
Argued March 24, 2009
Reargued September 9, 2009
Decided January 21, 2010
Citizens United v. Federal Election Commission, 558 U.S. 310 (2010), is a landmark decision of the Supreme Court of the United States regarding campaign finance laws and free speech under the First Amendment to the U.S. Constitution. The court held 5–4 that the freedom of speech clause of the First Amendment prohibits the government from restricting independent expenditures for political campaigns by corporations, nonprofit organizations, labor unions, and other associations.
>> If it has value and was traded - or not traded, it impacts "interstate commerce", and therefore is regulated as a good, it must have a tax levied on it
What are you talking about? Plenty of economic activity is untaxed.
>and issuing something that's linked to U.S. dollars, which is highly regulated
>Cash-equivalent monetary commodities
Did you ignore the links provided in the top comment?
You can create your own currency for your own locale, sure. You cannot begin to leverage that credit/debit flow without oversight, and you cannot claim that your currency is at all pegged to the USD, or any other easily swappable/transferable commoditized store of value.
> Cash-equivalent monetary commodities are, by literal definition, illegal to create
Is true. You are free to create your own currency, however. It isn't illegal, but it is, however, de facto, _not_ legal tender.
This is directly against the guidelines. Please do not conduct yourself in this way here, if you need to insult strangers on the Internet, find somewhere else to do it.
I never knew it could be so interesting to be an anthropologist!
And I love how the article gives the Chinese words for all the terms involved. It feeds my fascination for everything that is Language.
> The Chinese word tongdao, which we chose to translate as ‘gateway’, parallels the English word ‘channel’—a linguistic coincidence that shows the intermediary nature of these businesses, which act as a channel for the circulation of both information and money.
Exposition like this is so rare. I cannot upvote this article enough.
Indeed. I also noted the clarifying language here. It is great, and a great article to boot.-
Bricklaying it is ...
Here in Brazil, I've seen some people starting to suspect on web influencers for money laundering. Pick your niece/nephew, start a social media account, buy followers/likes then start laundering the money on fake ads and partnerships.
So that's what keeps USDT going.
Along with Chinese organized crime, these marketplaces and brokers are protected and linked to Cambodia's ruling family [0] who themselves are ethnic Teochow/Nanyang.
[0] - https://www.wired.com/story/pig-butchering-scam-crypto-huion...
drugs, crime, fin-laundering, and china capital outflow (all of the above)
these are the epitome of all the use-cases of all the cryptos
Hit piece on Telegram?
No, not as far as I have seen.
It seems they only describe that Telegram has been used extensively by criminals for the same reasons everyone else use it:
Great ux, reasonable privacy (for what we needed).
Note: all that is in a flux now. Personally I trust Telegram less now as it seems the same exceptions the French has made for themselves can also be used by russia or any other terrorist regime.
The assumption has been that Telegram provided significantly more access to Russia years ago, as it remains unblocked (with channels even run by the government), and Pavel Durov wasn't arrested when he visited Russia after laws were passed that would apply to Telegram but he claims they were refusing to follow.
That is a good argument.
I have however thought that the actual reason was because Russia depends on it.
They seriously even use it to coordinate artillery strikes although lately I have seen evidence they now sometimes use Discord.
I am not sure, and being convinced that Pavel Durov has actually visited Russia several times the last few years make me question my assumptions.
However I still see Russian opposition being more scared now after Pavels visit to France because now the terms of service has been updated to tell us that they will ahare our ip address and phone number with law enforcement if they feel compelled to or something to that effect.
What criteria do you use when calling regime a terrorist regime?
Targeting civilians, destroying civilian infrastructure such as schools, hospitals, places of worship, water supplies, food supply lines, etc for the purposes of instilling fear in a civilian population to push a particular stance.
To clarify, is it still a terrorist regime when it's not actually targeting civilians, but only by coincidence civilians and civilian infrastructure are close to the regime's military targets?
No.
This is rather clearly described in the laws of war.
If militants hides behind civilians or use civilians as shields for military infrastructure, the lives of the civilians is their responsibility.
This might seem counterintuitive at first but is perfectly obvious once you stop and think:
If it was legal to use civilians as human shields and it would shield your military infrastructure everyone would do it.
Because the laws of the war is so clear about it nobody does it except Hamas and they only do it because they know western media and commentators will blame Israel despite international laws being very very clear in this matter.
> Because the laws of the war is so clear about it nobody does it except Hamas
Everyone does it. We just call it espionage. That said, when a Western espionage mission goes awry and it results in collateral damage, the government doing the fuckery is properly blamed.
Not sure if we are talking about the same thing?
I'm talking about Hamas literally
a) putting missile ramps and ammo depots in busy areas
b) preventing civilians from leaving after Israel has dropped leaflets, called phones in the area and dropped noise bombs
I don't see how the west does anything similar.
Sure, Hamas dials the tactic to eleven. Point is hiding merchant raiders [1] and clandestine activities (e.g. the CIA's fake vaccine campaign to verify Bin Laden [2]) operate on the same principle. And when those go wrong, we properly blame the people using civilians for cover.
[1] https://en.wikipedia.org/wiki/Merchant_raider
[2] https://www.scientificamerican.com/article/how-cia-fake-vacc...
Why does Israel target civilian targets that have nothing to do with Hamas?
Because the war is only partially about engaging with Hamas. It is also about cementing is stranglehold on the West Bank, and in creating conditions in Gaza favorable to what its current regime coldly refers to as "voluntary transfer":
https://www.timesofisrael.com/israel-in-talks-with-congo-and...
Traditionally, no. Terrorism is the deliberate targeting of civilians
When the targets, as a matter of publicly stated policy, engage in war crimes of using human shields to both attack civilians and defend themselves, store war munitions and setup command centers in hospitals, schools, etc., and when the country defends itself against those war crimes adhering to legal proportionality rules, then no.
If it is actual indiscriminate bombing or targeting of civilian targets not used in war crimes, human shields, storing military equipment & munitions, command& control, etc., then yes.
What's the point of using human shields if your enemy isn't averse to killing the shields at all?
Bad publicity against your enemy; it's literally the stated policy of Hamas to make more Palestinian "martyrs". It gets others to scream "genocide", causrs more global division, etc. And, in fact, they are averse to killing the human shields, just not absolutely averse (and definitely less averse after you go on murder, raoe, & kidnapping sprees at music festivals, etc).
So if the enemy acts exactly like them, they suddenly get even worse morals? What happened to "turnabout is fair play"?
> Telegram’s encryption and anonymity provide a readymade technological platform for illicit activity, helping people to overcome information barriers and gaps in the circulation of information
That sentence is definitely in the "services like Telegram should not exist" camp. I wouldn't call the entire article a "hit piece" but the author is definitely trying to sway minds in favor of more government crackdowns on apps like Telegram.
My understanding is that groups in Telegram are not encrypted and the document mostly refers to groups. When it comes to e2e encryption of one-to-one chats Telegram is not unique in that space.
It's not even considered a good implementation. It's opt-in instead of by default and uses non-standard cryptographic techniques.
People who are critical of encrypted apps like to use Telegram as the chief boogyman but the real reason that Telegram is preferred by criminals isn't the encryption, it's that Telegram has a history of not moderating at all, allowing huge private groups, and refusing any cooperation with law enforcement or CSAM reporting groups.
Better for a central source to not have the data, like Signal, than to refuse to cooperate. Now Telegram can be compelled to disclose what they do have.
Telegram encryption is opt in, even for one on one chats. That's unlike What's App, Facebook Messenger (as of 2024-03), Signal
Telegram encryption is not opt in. End-to-end encryption however is.
Also this always get mentioned and everyone confuses encryption and end-to-end encryption.
What seems to never get mentioned here unless I do is that there is more to security than end-to-end encryption or not:
WhatsApp would (will? I don't use it since years ago) happily upload your data unencrypted (actually unencrypted not not-end-to-end-encryted!) to the biggest data harvester of all -Google if you or anyone you chat with enabled cloud backups.
Signal had months I think where they had a weird bug were tje client would send pictures to people without the user triggering it.
Facebook Messenger besides leaking all your communication patterns to the second largest data harvester also have this nifty feature were if someone reports your message an unencrypted message goes to Facebook.
Facebook was also the ones that suggested people uploaded nudes so the could "know what they should remove", wasn't it?
Signal also had a nasty exploit that would let anyone who sent a specially crafted message take control over the signal users computer if they opened the message in the desktop client.
Telegram is also the only one that I am aware of that has reproducible builds for both Android and IOS. For every other client you have to trust them. With Telegram you can (could at least last I checked) check out the source, build it and compare it to the version on the App Store.
What I mean is not that one should trust Telegram (there are things I use Signal for), only that when it comes to security engineering there is a lot more to consider than end-to-end encryption and HN really struggles to see this.
seems like meta and google jump thru a lot of hoops to maintain the sharade of e2e-privacy whereas with telegram you know upfront that everything goes to someone else's computer and call it a day
I agree.
Signal I think is very good with the two major exceptions:
- AFAIK they don't publish reproducible builds
- They've (IIRC and AFAIK) at times had lower quality when it came to the non cryptographic parts.
So if someones lives depend on e2e-encryption Signal is the only recommended messenger IMO.
For following public news channels from Ukraine and the Middle East there is no alternative to Telegram.
And if I have to organize something and not everyone is ready to install Signal (i.e. all the time around here) I try to use Telegram. That way I'm at least not spoonfeeding Google and Meta at the same time.
If FSB sits on my weekend plans that is annoying but no big deal.
(I was however rather annoyed when I realized local police used Telegram a while ago. I think that was very irresponsible.)
Signal has been audited. Has Telegram?
Signal says it's had reproducible builds since 2016: https://github.com/signalapp/Signal-Android/tree/main/reprod...
Signal has reproducible builds on Android. If they have on IOS like Telegram then I have missed it.
I realize now that while I wrote reproducible builds on both Android and iOS further up the thread I forgot to in my last reply. It was an honest mistake, I forgot.
Telegram is open source.
And has reproducible builds.
So anyone can audit it and verify that
a) end-to-end encryption either works or does not (but I guess someone had told us if it was broken)
b) it is not enabled by default
c) in the default mode data is sent encrypted to Telegrams data centers, after that you have to trust Telegram not to snoop in it.
Does not mean it is perfect or even good, but for its use cases it is a lot better than HN gives it credit for.
The author is a Taiwanese university student studying anthropology. Not everything is a submarine (planted PR).
I am not conversant in this field, but this portion of the author's profile made me think that she favors the money launderers on some libertarian grounds:
> Her dissertation explores how the illicit market intersects and coexists with Cambodia’s political and economic systems in the cybercrime sector, breaking the sovereign state’s monopoly on violence and intersecting with transnational business networks to form a global illicit network.
"Breaking the sovereign state’s monopoly on violence" would seem a good thing only if you think that distributing violence more widely should be a social goal.
> "Breaking the sovereign state’s monopoly on violence" would seem a good thing only if you think that distributing violence more widely should be a social goal.
I think that a reasonable and useful distinction can be made between
and The first would be every ideological 2nd amendment supporter (as opposed to criminal, practical, contrarian or stick-it-to-the-libs 2nd amendment supporters).The second would be criminals.
Here is a fuller expansion of the thinking behind my sentence you quote.
The usual construction is:
- in order to have a peaceful and ordered society, citizens renounce the use of violence and interact only by peaceful means
- citizens of a city/region/country delegate the use of violence to the government (the "sovereign state")
- the government's use of violence is carefully circumscribed by laws and use of governmental laws outside these circumstances is forbidden
Which ends up defining government as the agent with the exclusive authority to use violence in a geographic region. And by extension has a monopoly on the use of violence, for the safety and freedom of all concerned.
"Breaking the sovereign state’s monopoly on violence", in this interpretation, would be to say that some or all people have recourse to violence, and in the worst case are not restrained by law or government. It's in this sense that I think that "breaking the sovereign state’s monopoly on violence" amounts to distributing access to violence more widely.
The consistent application of these ideas would require that citizens not have the right to resist government application of force. In my view, the second amendment is not a carve-out of (i.e. an exception to) this doctrine if it is understood to be applicable to resisting force applied by other citizens, not by government.
Edit: just saw this now, and I think I understand what you mean: https://news.ycombinator.com/item?id=41672534
Sorry, English is not my first language :-)
-----------
To try to explain were I come from in this discussion:
I live in one of the Nordic countries in the suburbs.
From what I know two of my immediate neighbors have firearms. I suspect there are a lot more nearby because gun ownership is very common and most people don't talk about it - I only know they have guns because they sometimes go hunting.)
Growing up I knew about three houses with complete, working assault rifles and emergency depots of ammo. (This was completely normal until a spectacular robbery were the robbers used stolen assault rifles early in the 2000s.)
Switzerland and Austria I understand is the same.
All three known as very peaceful countries.
From what I read most of the absolute worst crimes against humanity has happened by the government against the citizens, not by citizens against citizens.
I am aware of the risks of pervasive weapons ownership but I think of it as an insurance policy against much much worse problems.
So I feel quite confident that there is a huge difference between having access to violence and using violence.
> first would be every ideological 2nd amendment supporter
Owning a gun doesn't break the government's monopoly on violence because owning a gun isn't violent. Firing a gun at a shooting range isn't violent. (Most people don't consider hunting violence.)
Reasonable 2nd Amendment supporters grant the state its monopoly on violence. They just want the means by way to revoke it. (Or, more realistically, make its abuse more difficult.)
I would argue that the government's monopoly on violence is more about its power to engage in violence than literal acts of violence.
> the government's monopoly on violence is more about its power to engage in violence than literal acts of violence
Power being capability and willingness. Guns give a private citizen capability, same as anyone who can make a fist. They do not extend to signalling a willingness to shoot someone. (Threats, on the other hand, are illegal. Partly because they're no fun for anyone involved. Partly because that crosses from potential to actual.)
Ahh. Good point.
Around here people are often very well armed but only military and politice are allowed to use firearms.
> Note: all that is in a flux now. Personally I trust Telegram less now as it seems the same exceptions the French has made for themselves can also be used by russia or any other terrorist regime.
What made you believe that Russia hasn't had a firehose into Telegram's backend for the longest time?
For one the fact that Ukraine used it for a long time and Russia even back before Ukraine told people to shun Telegram for work didn't seem to have very good intelligence.
Also because I see over time how hopelessly incompetent Russian authorities are.
Also (but this is more shaky, I never verified) because supposedly a good number of Telegram employees are Ukrainian.
Is the issue the stealing or the laundering?
[flagged]
The imaginary crime of money laundering. If the underlying activity is a crime, we already have laws to deal with that. Why is any attempt at financial privacy deemed money laundering? Why does making any tool that help law abiding citizens have financial privacy, also guilty of money laundering?
Of course, now that most people have bought into money laundering, the goal posts are now getting moved that any attempt at privacy can be considered illegal.
You use or provide a messaging service that has unbreakable privacy - we'll make this a crime too!
Why should it be illegal to use a crypto tumbler/mixer service?
Oh because some people use it for crimes.
Then arrest the CEOs of gun companies, because guns can be used to commit crimes!
> If the underlying activity is a crime, we already have laws to deal with that
This is like complaining about DUIs being illegal because we already have laws banning manslaughter.
> Why is any attempt at financial privacy deemed money laundering?
It's not. Layering per se isn't illegal. It's suspicious but legal, in the same category as carting a semi-automatic into a grocery store in an open-carry state.
> Why does making any tool that help law abiding citizens have financial privacy, also guilty of money laundering?
It doesn't. Practically every prosecution of money-laundering services included evidence of knowledge by the operator that their customers included people committing crimes.
> This is like complaining about DUIs being illegal because we already have laws banning manslaughter.
The premise of DUIs is to punish a person acting recklessly. The premise of KYC is to punish a third party for not conducting mass surveillance on predominantly innocent people in case one of them commits a crime. It's hard to see how these are analogous.
> Practically every prosecution of money-laundering services included evidence of knowledge by the operator that their customers included people committing crimes.
This is quite a fig leaf for any entity operating at scale. The customers of any major bank will obviously include people committing crimes -- they have millions of customers. They also have thousands of employees, and then some percentage of them will be criminals as well. Expecting the intersection of these to be literally zero is an unreasonable standard.
More to the point, the underlying problem is what it incentivizes them to do, i.e. manufacture some opaque and arbitrary indicators and then conduct mass surveillance and punish innocent people for running afoul of secret rules.
> premise of DUIs is to punish a person acting recklessly. The premise of KYC is to punish a third party for not conducting mass surveillance on predominantly innocent people in case one of them commits a crime. It's hard to see how these are analogous
You don't see how a bank not doing KYC and thereby financing terrorists and Pyongyang could be seen as behaving recklessly?
> quite a fig leaf for any entity operating at scale
Sure. It's why a lot of anti-money laundering isn't prosecuted and why OP's complaint strikes me as silly.
> conduct mass surveillance
U.S. AML law is actually somewhat terrible for mass surveillance. Records are held at each private institution. This is why, if you've ever been party to wire fraud, it takes the Feds hours to days to gather records. It's pull, not push.
The practical arms of mass surveillance are the credit/debit card rails. (And, increasingly, crypto.)
> You don't see how a bank not doing KYC and thereby financing terrorists and Pyongyang could be seen as behaving recklessly?
Even if that were a reasonable premise, the analogy would then be automakers not doing KYC and thereby enabling drunk drivers to have cars. Which is a much more controversial claim, and it's not at all obvious why carmakers should be the ones deciding who gets to drive.
Which is the reason the premise is unreasonable. Is it reckless for a general store to sell ski masks without investigating their customers? That's not the right place to address the problem.
> It's why a lot of anti-money laundering isn't prosecuted and why OP's complaint strikes me as silly.
Laws that are commonly violated and selectively enforced are bad laws.
> U.S. AML law is actually somewhat terrible for mass surveillance.
Just having it inside of megabanks is already mass surveillance, because then the bank is using it for things and the user can't switch to a bank that doesn't collect the information because the law prohibits that.
Moreover, the data is dangerous as soon as it's collected even if it isn't currently being centrally indexed, because its existence allows the central database to be created ex post facto. Turnkey totalitarianism is bad.
> The practical arms of mass surveillance are the credit/debit card rails.
How are you distinguishing this? Those companies are financial institutions that have to do KYC/AML.
Drivers under the influence isn't necessarily reckless, but is banned due to a strong association with reckless action.
The crime of DUI is not contingent on the actual facts, risk, and danger presented in a given situation.
The association with realized harm is probabilistic in nature.
> Drivers under the influence isn't necessarily reckless, but is banned due to a strong association with reckless action
I’m trying to understand this. It is well documented that consuming alcohol impairs thinking, reaction time, motor function, etc. How is the decision to drive a multi-thousand pound vehicle in the proximity of other humans while in that state not itself reckless?
You seem to be arguing that the problem primarily exists when some percentage of impaired drivers start to drive recklessly. But given the baseline impairment, how is the act of driving not inherently reckless?
Drunk driving crashes don’t just happen because someone decided to go crazy and drive 130mph or something similar. They also happen because the impaired person fails at basic aspects of driving like staying in their lane, stopping in time, seeing pedestrians, etc.
> The crime of DUI is not contingent on the actual facts, risk, and danger presented in a given situation.
DUI is a crime based on the fact that people driving under the influence are significantly more likely to harm others, and the baseline risk is high enough to make driving in such a state unacceptable. Even with laws in place banning it, alcohol is a leading cause of vehicle related deaths and there are quite a few of them every year.
It seem problematic to argue that these laws aren’t based on actual facts and real danger when both are well documented.
> The association with realized harm is probabilistic in nature
The same could be said about almost every kind of harm you can think of. It’s unclear what someone is supposed to take from this statement.
My point is that the law doesn't actually look at situational risk or recklessness. It is a rough heuristic to approximate it. Im not even necessarily arguing against it, but highlighting the common conflation between harm, actual risk, and heuristically approximated risk.
A cop or the law makes no pretension of trying to evaluate if a driver actually put someone at risk in a given scenario. A judge doesn't care if you were alone on the road or how far you were going. A judge doesn't even care if the car is on or moving.
>alcohol is a leading cause of vehicle related deaths and there are quite a few of them every year. It seem problematic to argue that these laws aren’t based on actual facts and real danger when both are well documented.
I would say there is little systemic logic to the rate and severity of penalties. In 33% of pedestrian fatalities, the pedestrian was drunk. In 16%, the driver was drunk.[1]
Similarly, the common DUI threshold is 0.08 BAC.
Being awake for 17 hours (working late) is similar to having a BAC of 0.05%. [2]
Being awake for 24 hours (working a double shift) is similar to having a BAC of 0.10%
Simply talking on a phone while driving has been shown to be similar to a BAC of 0.08%.
Texting while driving is equivalent to a BAC of 0.19%! [3]
The fine for texting while driving starts $20, but the total cost can be over $162 due to court costs.
>The same could be said about almost every kind of harm you can think of. It’s unclear what someone is supposed to take from this statement.
Im just making the point that we we criminalize isnt as clear cut as one might think, and people often conflate actual harm, actual risk, and heuristically approximated risk.
More generally, I think the intersection with probability and criminal justice is fascinating, particularly the criminalizing risk factors. e.g. if we took a similar approach, what percent confidence would we need that someone will commit murder to preemptively lock them up based on risk.
https://www.ghsa.org/sites/default/files/2020-02/GHSA-Pedest...
https://www.cdc.gov/niosh/work-hour-training-for-nurses/long... https://facilities.uw.edu/blog/posts/2016/07/26/texting-and-...
How do you figure drivers driving under the influence aren’t reckless? Are they not aware of the risk? Are they not consciously disregarding it? Or are you using some weird definition of recklessness?
I think what I find interesting in the application of statistics, and how a population characteristic can be different from individual circumstance. Real world risk isnt categorical, it variable.
On average, drunk driving obviously poses more risk than regular driving. However, drunk driving isnt always risky, and does not necessarily or uniformly put others at risk at the factual case by case level.
Edit: I think this makes it an interesting intersection between probability, heuristics, and criminal justice. It highlights the difference between a categorical model of the world, and reality, i.e. Probability is an abstraction and property of the model, not the object, in a deterministic universe.
Sometimes in this thread you appear to use the word risk to mean harm. I could probably agree with you if I was allowed to pick which you used in any given phrase. I agree that drunk driving isn’t always harmful but I can’t see any situation where it wouldn’t be more risky than the same driving act with a different intoxication level.
Otherwise I’m not sure how to resolve the contradiction between “drunk driving … poses more risk than regular driving” and “drunk driving isn’t always risky.”
You’re right to wonder how a system based on civil justifiability principles that include concretized injury also allows criminal penalty for risk without harm.
Im trying to be careful about my use of risk and harm.
In my excerpt you quoted, I meant what I said, and added an edit that might help.
On average, drunk drivers are more risky than sober drivers. However an individual is not the average. The more information you have about an individual circumstance, the more it can diverge from the average of the model.
For example, for the average smoker, the lifetime risk of developing lung cancer is typically estimated to be around 10% to 20%.
If you know the smoker is 80 years old, the chance they will get lung cancer in their lifetime is much lower.
If that 80 year old smoker is in an airplane barreling towards a mountain, their chance of getting lung cancer in their lifetime is 0% and less than an average non-smoker.
The same is true for anything described by risk (like drunk driving). If you plug in enough details around the circumstance, the risk changes. Sometimes it goes up, sometimes it goes down.
>You’re right to wonder how a system based on civil justifiability principles that include concretized injury also allows criminal penalty for risk without harm.
Thats a big part of what I was thinking. Drunk drivers can cause tremendous damage, and make up a clear portion of vehicle accidents, but I think the actual chance of accident per individual drunk trip is quite low in terms of percent. Lets say for argument it is 5%, which I think is very conservative.
If we were to use all data available, I wonder how well something like future violent crime could be predicted. At what point is that a rationale for incarceration based on risk alone? For context, the Average recidivism rate for the category of violent instant felons (spontaneous violence) is over 60%. Average recidivism rate for groups with particularly serious criminal records (Criminal History Category VI ) are over 85%![1 pg 14], and that is without all of the invasive but theoretically available information like psychological reports, medical records, race, income, and family history, ect.
What are the implications here for the viability of criminalizing risk without harm. I know these two cases are not the same, but I am still processing the differences, to see what distinctions can be made. Surely we shouldn't incarcerate based on risk alone. I suppose that is why I am posting these provocative but good faith questions.
https://www.ussc.gov/sites/default/files/pdf/research-and-pu...
The point is that drunk driving is illegal even if you are driving perfectly fine.
Hell, being drunk just sitting in a parked, no ignition driver seat is illegal in some places.
Not sure how the second one is reckless in this context.
> Hell, being drunk just sitting in a parked, no ignition driver seat is illegal in some places.
But those laws are controversial for exactly that deviation from the norm, so it can't be held up as an instance of a widely agreed upon law which is uncontroversial to emulate.
Seems the norm is many places. I think it has been the law of the land for 40 years in California and nobody seems to care. having friend getting a DUI for trying to do the sleep it off instead of driving home seems like a standard coming of age story.
If anything, the consensus is we need harsher DUI laws and enforcement.
I agree. The problem isn't drunk driving. The problem is drunk crashing.
Both can be a problem, depending on the problem statement, but the harm clearly occurs with the crashing.
Drunk driving is an upstream pre-requisite to drunk crashing.
All skills require practice, but they simply won't let us get good.
> Expecting the intersection of these to be literally zero is an unreasonable standard.
Nobody expects the intersection to be zero - not the banks, not the regulators. The rule is that banks must take prudent measures, and the definition of that has evolved over time (as financial crime has evolved over time).
Google "risk-based anti-money laundering approach" or if you'd like a more thorough introduction, listen to the Dark Money Files podcast.
I have libertarian sympathies too, especially since most AML rules were originally established to fight the war on drugs (my sympathies lie with the dealers, sorry). But I'm pretty happy to make life hard for terrorists, bad governments, and kleptocrats - who, unlike the characters in Reefer Madness, are not just bogeymen.
> It's suspicious but legal, in the same category as carting a semi-automatic into a grocery store in an open-carry state.
Any suspicion toward a US citizen for open-carrying a semi-automatic weapon (which you realize is like half of the handguns in circulation, right?) is entirely due to one's own prejudice and misconceptions. It is objectively not suspicious. The individual is openly carrying it, not hiding it. Concealed carry should not be suspicious either, but open carry should be less suspicious.
This would be a good moment to examine your biases against a fundamentally protected human right as recognized by our constitution.
It is more suspicious than not carrying. In terms of suspicision from a third party:
Concealed carry > open carry > no carry
The fact that concealed carry is undetectable and indiscernible from no carry does mean it is free from suspicion.
As a 2A proponent, a protected right is no protection from bias or suspicion. If I see an open carry in a strange context, I will wonder WTF they are doing.
Is a grocery store considered a strange context?
A friend of mine was open-carrying his pistol in his holster once and stopped at Walmart for some groceries. A woman called the police on him and claimed he was waving his gun around and threatening people.
So the police show up, talk to both of them, thankfully didn't shoot my friend, reviewed the footage and ended up arresting the woman for making a false 911 call.
Things like this give me little sympathy for people who find someone wanting to be safe in public "suspicious".
I know someone that caught a charge for brandishing in similar circumstances and unfortunately it stuck, so I truly am sympathetic.
That said, I think there's a difference between being suspicious and keeping your head on a swivel vs freaking out, calling the cops, or taking radical action
>> It is objectively not suspicious.
It literally couldn't be any more suspicious. Carrying a jar of bees into a public space isn't illegal either but I'd be very suspicious of anyone doing it, and it doesn't even need any special protection in the constitution.
Just because something is legal doesn't mean you have to be completely and unquestionably accepting of it in public spaces.
> Just because something is legal doesn't mean you have to be completely and unquestionably accepting of it in public spaces.
Nothing should be suspicious about exercising any of your rights as recognized by the US bill of rights and other constitutional amendments. Any of them. You can choose to be suspicious, but again that's a product of your own misconceptions. A gun is not a jar of bees. I'm not interested in debating straw man arguments. If you have a real argument to make, I'm all ears.
A gun is substantially more dangerous than a jar of bees. Dangerous things warrant suspicion. If you don't see that, I question your abilities in the realm of risk analysis.
I lived in a state for half my life where a concealed carry permit was one page of paper and $100. I knew a lot of people who exercised that right.
I wouldn’t describe any of them as legal scholars. Their knowledge extended to two amendments and not much more. I wouldn’t describe many of them as confident or brave either.
They could angry post with the best of them though. Loved arguments.
This is an example of bias based on your environment. These people you've encountered are not representative of every person living in the US who still believes in constitutional protections from the government.
The "money laundering" at focus in the article is receiving money directly from people who are being scammed, and moving it quickly enough that the police cannot freeze or recover it when the scam is discovered. That's different from usual money laundering.
You're exaggerating of course, but as a matter of principle, if X is a crime, then obscuring the evidence of having done X must surely also be a separate crime in its own right? Otherwise someone would do X, then destroy the evidence and be in the clear, since original X is now impossible to prove.
No, it very much should not be. We have an existing sort of crime for knowing participation in that kind of thing, it's called being an accessory.
If someone buys, let's say a bike, off an online marketplace, and it turns out to be stolen, they're out the price of the bike. It never belonged to them and gets returned to the owner. But it must be proven that they knew it was stolen for that to qualify as accessory to theft.
If you make any action which has the effect of obscuring evidence of crime, regardless of mens rea, into a crime, you will end up prosecuting innocent people. That's why this legal doctrine works the way it does.
Not in the UK - there is a crime of handling stolen goods - where you can be asked to prove the steps you took to ensure they aren't stolen, or risk forfiting the good and the money you made selling them. Hence why KYC is so important for pawn shops etc. here.
Another UK example - a boat maker made incredibly high powered speedboats - that happened to be very popular with drugs runners. How how was he supposed to know what would be done with them? But still they end up on the most wanted list: https://www.eadt.co.uk/news/21291272.high-speed-boats-sold-d...
it's incredibly authoritarian to have to affirmatively prove that one is not committing a crime to the government
burden of proof should be squarely on the prosecution, period, end of story, don't force people to create evidence against themselves
> it's incredibly authoritarian to have to affirmatively prove that one is not committing a crime to the government
Nit: it's oppressive and quasi totalitarian, not authoritarian.
I was under the impression that you don't need an underlying act to charge or convict someone with obstruction/other crimes of concealment because if they were so good at concealing the crime you wouldn't be able to prove the underlying act, even if you could prove that they concealed it.
For example if a court subpoenaed a document while investigating a crime but then the suspect destroyed the document, you don't need to prove that the underlying crime happened to prove that the suspect attempted to conceal it.
If a court subpoenas evidence, and someone destroys that evidence, that's destruction of evidence, which is a specific crime. My point is more general than that. The reason someone could be prosecuted for that, even though it leads to a lack of conviction for the originally-investigated crime, is that destruction of evidence is itself criminal behavior.
One could construct situations where a third party with no knowledge of the subpoena destroys a document for ordinary reasons, after the subpoena is issued. That person is going to be very closely scrutinized, possibly charged, but it's entirely possible to be found innocent of a crime there. Say a corporation employs a document warehouse and the contract says that documents are to be destroyed after 60 days. A court orders on day 58 that those documents be remanded, but the corporation doesn't tell the warehouse, and the court is not aware that the documents are in that warehouse, so they don't send the subpoena to the warehouse.
The operator of the warehouse is not guilty of destruction of evidence in this case. The party at the corporation whose duty it was to produce the documents is guilty. Assuming this is a high-profile case, there will absolutely be additional subpoenas to demonstrate that the operator was not informed of the need to retain the documents, but mens rea must be demonstrated because shredding documents is not per se illegal behavior.
A casino isn't a "knowing participant" to any specific crime — no criminal comes up to them and makes a deal to launder money through the casino.
But casinos (for example) have a tacit agreement with the "criminal industry" in general, that criminals will be able to inherently launder money through the cash-in/cash-out mechanisms of the casino, in exchange for having to play some table games (and therefore lose at least a small percentage of their money, i.e. give a percentage of their ill-gotten gains to the casino) to make everything look legitimate.
If a given business has a business model where it would not possibly stay afloat over the long term, if not for some appreciable fraction of its customer base making use of the business for money laundering — then the business is a "knowing participant" to the general concept of money laundering, even if they have never shaken hands with any specific criminals. Their MBAs knowingly design the business around enabling money laundering.
Come to think of it, this is a bit like the argument the US DOJ used to take down Napster — which actually, finally somewhat convinces me of the logic they used.
The Napster company's business model depended upon some appreciable fraction of its clientele being IP pirates. For everyone else, Napster was a vitamin; but for pirates, Napster was a painkiller. Napster would never have achieved spread without a core base of pirates to spread it. The Napster company's business model (presumably something like "make the software widely used, then sell ads that display in the client" or something) depended on — was planned around — piracy. Thus, Napster was in tacit collusion with pirates; just as most money launderers are in tacit collusion with gangsters.
Isn't that the reason that (at least in the US) cashing out over a certain size requires ID? So that large amounts of cash can't be laundered easily in this way?
Yes, and the point where that became enforced, was pretty much the point where casinos in the US were sold off from the gangs that generally owned them up to that point, to “entertainment tycoons” who turned them into the “arcades for adults” / “cruise ships on land” they’re known as today.
The US just got uniquely "lucky" here, in that the people who bought up the casinos from the gangs, had a business plan that involved making Las Vegas et al "family friendly", which required moving as far away from the casinos' previous "gang-affiliated" image as possible. As such, they had no plans related to continuing to tacitly launder money for the gangs; instead looking specifically for that kind of signature and stopping it when they notice it. (The shared Vegas-casino blacklist exists 1% to stop card counters, and 99% to stop organized criminals.)
Elsewhere in the world, this particular story didn't play out the same way, though. So casinos elsewhere are still mostly money-laundering fronts. Not always operated by gangs, but often operated under the implicit business-model assumption of gangs.
What you'll see in your average casino-allowing country — Australia, say — are casino businesses run by regular people, who get very little traffic from regular gamblers (nobody travels to Australia to gamble), who do zero investment into making the casino attractive to regular people... and who instead concentrate all their effort on making sure that gangs — some even state-affiliated, apparently! — can continue to launder money through the casinos with ease.
Though, for an example of very explicit gang-casino involvement, there's the Golden Triangle, containing casinos owned directly by a particular gang — where it isn’t the gang members themselves (or their proxies) cashing in and out to wash money; but instead, customers of the gang’s drug business, cashing in at the casino, and then proceeding to lose all their money at the table, as their way of making payment for a drug shipment from the gang.
> If you make any action which has the effect of obscuring evidence of crime, regardless of mens rea, into a crime, you will end up prosecuting innocent people
Sure. This isn't how aML law works. Money laundering is specifically disguising the proceeds of illicit activity. If there is no illicit activity, it's not money laundering and it isn't illegal. Using a mixer or running your life exclusively on cash is not illegal.
Does any money laundering offence not have a mens rea, though? You typically have to have at least suspected that you were dealing with the proceeds of crime.
Structuring (splitting up cash deposits to a bank so that they don't trigger the bank to file a CTR) comes to mind. It does have a mens rea component, but the money being entirely clean doesn't make the act not-structuring, IIUC.
no - this assumes the absolute existence of an unspecified crime, so the question has incomplete context and poisonous assumptions. There are rights of privacy for individuals and groups in mature systems of law. The extremes of "everything I do is my own information" and the opposite "we enforcers have a right to all information at any time" are both explicitly not allowed, for real reasons.
> any attempt at financial privacy deemed money laundering
If by privacy you mean concealing it from the government then yeah, that’s generally illegal in pretty much any place that has income/capital gains/wealth taxes.
This doesn't explain why surveillance is required on the buyer's side. Why can't you go to a retail store, buy an anonymous prepaid debit card for cash and then use it to make purchases over the internet without giving anyone your social security number? The cash you're using has already been taxed.
> Why can't you go to a retail store, buy an anonymous prepaid debit card for cash and then use it to make purchases over the internet
Because when this is made available in practice like 99% of the volume is tied to crime. 99% of users aren't criminals. But criminals use it at scale in a way that dwarfs licit activity. (Without tracking how much each person is using it, you can't cut off the scale users.)
This is just assuming the conclusion. Anonymous purchases should be the default, so that ordinary people aren't baselessly subject to mass surveillance. At which point you'd have to be arguing that 99% of all purchases are criminal, which seems implausible.
To protect the kids of course! How ever could the government prevent all of these awful crimes against children unless we surveil everything. Like I always say, if you have nothing to hide. . .
Is what I imagine some spook told the lawmakers. Sarcasm aside, I believe it is control.
> generally illegal in pretty much any place that has income/capital gains/wealth taxes
Authoritarian governments typically enforce fiat currency to monitor citizens, especially those with financial ties to anti-establishment entities. They couldn't care less if you're trading tomatoes.
> Authoritarian governments typically enforce fiat currency to monitor citizens
Example? Despotic governemnts in the real world are kleptocracies. They use all manners of currencies because their elites spend what they can steal. To the extent we have highly-surveillable money systems, it's ones people freely engage with, e.g. the U.S. dollar and crypto.
That isn't generally true, what real world autocratic regime do you have experience with? You can have less government theft than in more democratic countries, because favorable economic conditions are one way of buying compliance. Take the largest dictatorship in the world: China. The CCP does not take "what they can". The tax burden is much lower than basically in any liberal democracy in the West. A lot of taxes that you may think are normal simply do not exist, property tax for example is not a thing. They have heavy foreign exchange restrictions, to keep money in the country. Many people working in China are able to save a lot more of their income than they would if they were in Europe or North America. The catch is you can't freely use all manners of currency, you can't even easily exchange to USD as a Chinese. Foreign stock ownership is restricted. Cryptocurrency is banned. It's basically the complete opposite of what you described.
> take the largest dictatorship in the world: China
China has semi-effective capital controls, at least on the hoi polloi. (There is massive leakage via Hong Kong and Macau, but that's for the hoi olligoi.) China also has a thriving cash culture, which undermines your tracking motivation argument.
Look at authoritarian countries broadly, however, and you find a mix of strict capital-control regimes to maybe something on paper but zero enforcement [1]. To the extent they have capital controls, it's generally to defend the value of the currency. Not for surveillance. Conversely, thriving democracies have enforced capital controls (again to defend their currency).
Capital controls are not an authoritarian-only policy tool. And the principal motivation for capital controls, i.e. requiring the use of domestic currency, across history, has been economic.
> CCP does not take "what they can". The tax burden is much lower than basically in any liberal democracy in the West
Straw man--nobody claimed the CCP or anyone else takes "what they can." Your metapoint is correct: China is the 34th lowest (7.7%) and the U.S. 184th (12.2%) [2]. But that number doesn't include what the elites extract [3].
[1] https://worldpopulationreview.com/country-rankings/what-coun...
[2] https://en.wikipedia.org/wiki/List_of_sovereign_states_by_ta...
[3] https://www.icij.org/investigations/offshore/leaked-records-...
>Why is any attempt at financial privacy deemed money laundering? Why does making any tool that help law abiding citizens have financial privacy, also guilty of money laundering?
These are untrue absolutes.
There is still an element of truth. If you don't provide KYC for a bank account there is now a crime if it is knowingly allowed. You could go offshore but now you need to report the account. You could form an anonymous LLC but law recently changed an now must report UBO to fincen.
You could store cash/gold in an anonymous safe deposit, but FBI raid and steal this. You cant fly with large cash because again feds steal it. You can't carry it out the country in large without reporting it.
Crypto, same story, KYC at the exits and P2P offramp actors getting treated as 'unlicensed money transmitter' etc which again triggers KYC.
Quickly you realize it's about shutting off all the exits of privacy, not money laundering which only has increased cost consolidating power to more dangerous organizations.
Not providing KYC is definitely not a crime. It happens all the time. What usually happens is that the bank just terminates the account, after a while.
I suspect a lot of people would be eager to know the names of these banks that let customers operate without KYC for awhile.
> a lot of people would be eager to know the names of these banks that let customers operate without KYC for awhile
Non sequitur. Banks generally have to have KYC to do business, though there are famous exceptions in history. There is no jurisdiction I know of in which as a customer not providing KYC is itself a crime.
The customer isnt charged, it is the bank/entity or persons there. Not legal advice but failure if AML and not collecting identifying information is charged under 31 USC 5322 under indictment I'm reading.
The law here notes even some CFRs are criminally binding, the CFRs explicitly require certain identification.
You're so close, but so far.
What happens if the banks don't close it?
Later they might get a fine, which is just the cost of doing business for them.
Unless someone dislikes them, in which case they will unwittingly accept a sanctioned entity and then the indictment will scream bloody murder that this was basically all about not doing KYC (even though we all know sanctioned entities operate on white market using dark identity, so regular banks guilty too).
> in which case they will unwittingly accept a sanctioned entity and then the indictment will scream bloody murder that this was basically all about not doing KYC
Example? Every one I can think of involved the bank not doing KYC, criminals taking advantage of it, and evidence at least some people at the bank knew what was happening. (Usually because authorities told the bank they were doing business with criminals and the bank responded by shuffling things around so they could continue doing that business.)
Banks are always doing business with criminals and sanctioned entities and they know that, although not always when and where.
The difference is if the bank does KYC and the criminal uses a dark identity, the bank will likely get away with it. If the bank just gives each person a random number as their only identifier like the old swiss accounts, then they'll be warned sanctioned entities are using it and ultimately prosecuted when they fail to KYC (i.e. similar but but identical to CZ).
> difference is if the bank does KYC and the criminal uses a dark identity, the bank will likely get away with it
What is a dark entity? Have you worked in finance? Because if you collect KYC and accepted forged or faulty documents, the moment you figure out what's going on is the moment you call your personal lawyer.
One example is criminal pays a heroin addict for their real ID and then basically uses them as pass through nominee on the account.
> criminal pays a heroin addict for their real ID and then basically uses them as pass through nominee on the account
Sure. If you're at a financial institution and accept that documentation, you're personally in for a world of hurt. Doesn't mean it doesn't happen, either due to someone being negligent, overworked or happy to look the other way. But if it's caught, it's not great for the individual. (The bank will survive after paying a fine unless it's systemic.)
I imagine they usually don't know. Some fraction of identities are real IDs taken advantage of by sanctioned entities. If you bank at all you knowingly accept some level of sanctioned entities, but often don't know what identity they operate.
> Some fraction of identities are real IDs taken advantage of by sanctioned entities
Sure. But if the addict you mentioned's account goes from overdrafting every few weeks to holding millions of dollars, that should set off internal alarms.
Is most of that an issue if you declare your income and pay any relevant taxes? Outside of some unnecessary annoyances it generally wouldn’t be too complicated to move your money around.
Otherwise, what are you expecting? Direct taxation isn’t really compatible with ‘financial privacy’ and never was.
It depends. Some banks will ask for root origin of funds. Say you earned some money 20 years ago, invested them with various brokers into stocks all over the world, real estate etc. And then cashed a large sum into your account. If any one of those transactions is flagged they will require you to go back 20 years and collect those invoices that you earned and then you have to collect every transaction from the brokers, this may involve foreign jurisdictions where record keeping and querying is not available from 20 years ago.
So you will fail the disclosure and the bank will flag you in the shared blacklist DBs, they close your accounts and you are out of the system. This is happening enmasse to people who invested in and cashed out of real estate abroad(asia/africa/sa) some time ago. I imagine it's the same with foreign stock markets. And you never know what will be required 20 years in the future, thus most financial advisors discourage "moving money around". They even have a whitelist of brokers, stocks and jurisdictions, anything outside that is uninvestable for normal people just because of KYC/AML paperwork requirements.
My response is civil rights should drive the tax man's behavior and not the other way around. I will accept a loss in efficiency of taxation.
> Why is any attempt at financial privacy deemed money laundering?
Is it? I thought laundering money is only illegal if it's covering up illegal activity. Otherwise how is that different from e.g. the shell corporations that mask the sources of their funds.
Almost all large financial transactions or storage useful and active in commerce require KYC or reporting so the magic is the very act of privacy makes it illegal.
It sounds like you're mixing up a bunch of things. To be clear: do you have a single example of a person who was convicted of the crime of money laundering despite it being proven in court that the underlying activity wasn't illegal?
In criminal law people aren't expected to prove what they did wasn't illegal, it is the other way around. What did happen in the case of CZs conviction is the state alleged that lack of KYC allows some actors with illegal funds to pass through, making weak KYC checks an element of money laundering.
> In criminal law people aren't expected to prove what they did wasn't illegal, it is the other way around.
I very much understand that, but you missed my point with that constraint: the point was that if your objection is that legal underlying activity can constitute money laundering, then to prove your objection you need to show an example of provably legal underlying activity.
On the other hand, if your complaint is that innocent-before-proven-guilty isn't being upheld by courts, that's a fine complaint, but an entirely separate one from money laundering.
> What did happen in the case of CZs conviction is the state alleged that lack of KYC allows some actors with illegal funds to pass through, making weak KYC checks an element of money laundering.
In other words he did conceal illegal activity. Hence my point.
Every single bank and person conceals illegal activity by your final sentence. You probably have sold something for cash bought by a drug dealer and unknowingly laundered drug money.
The point here is that an unwitting actor is somehow guilty if they did not do KYC. By your standard basically every gas station near the border is a money launderer, since they know damn well much of the cash they take and transmit is drug and cartel money.
And that's the genius of this line of reasoning. There is nary a dollar in circulation that hasnt been used in crime.
Again, you're mixing things up and moving goalposts. I wasn't trying to make a case for what money laundering is, only what (as I understand it) it definitely isn't. The example you cite clearly covered up underlying criminal activity, whereas the claim was that you can be guilty of money laundering without any illegal underlying crime. Hence it fails to support the premise. That is all.
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> No you're mixing things. I said acts of privacy (with listed examples of reporting large transactions) are made illegal, then you went to only money laundering.
How did I move to money laundering? Are we reading the same thread? The comment I initially replied to specifically said, "Why is any attempt at financial privacy deemed money laundering"?
> you were being duplicitous. Your premise is a lie designed to mislead the audience.
It's quite the opposite, but your personal swipes are pretty uncalled for, so I won't continue.
> all large financial transactions or storage useful and active in commerce require KYC
Not at all. I have authorised large wires without providing KYC or collecting KYC from the other party. My bank knows who I am. And I colloquially know the person I'm sending money to. But I haven't e.g. run them through OFAC.
Your counterparty was almost certainly KYCd if the receiving bank deals in USD or receive from a bank in us jurisdiction.
I've wired non-USD from my U.S. bank and wired U.S. dollars overseas. I presume their bank is doing KYC. But I don't know.
You claimed "all large financial transactions or storage useful and active in commerce require KYC." That's simply untrue. It's advisable to ensure someone is doing their KYC. But not necessary.
Yes if you cutoff the first word it becomes untrue, how ridiculously disinguine.
Here's an exercise, look at the FATF black list and then start asking your bank about the process for wiring large sums there. A lot of this compliance is driven through FATF actions that drive any country that wants access to anyone touching dollars or us banks to comply.
> look at the FATF black list and then start asking your bank about the process for wiring large sums there
So you've moved the goalpost from all large transactions to transactions with explicitly sanctioned (EDIT: listed) entities.
No I haven't. For instance the nation of Myanmar is in the list. OFAC as far as I know would permit transmission to most people there
The black list is nominally about weak AML and other factors. It's an example I used because it's a list of places on the shit list in part because they may have weak controls on KYC.
FATF is a big driver if imposing KYC everywhere that wants to interact with a US bank or USD. I'm trying to show you if you actually try to wire somewhere with bad KYC I think you're going to have issues.
> if you actually try to wire somewhere with bad KYC I think you're going to have issues
Sure. There are three black list countries: North Korea, Myanmar and Iran. "Almost all large transactions" do not happen with people in these countries.
Are you at least open to the idea that the major reason why many other nations like Bahamas, Cayman Islands, Panama, St Kitts came off the black list and into AML and KYC compliance is so they would have low friction wire transfers and banking in USD?
I think you're missing connecting the dots here. Countries with large USD transaction dependence comply with KYC precisely because otherwise they'd not be able to easily accept your wire transfer. They were pressured into it, this KYC requirement that is largely invisible to you. And the threat is well if they don't they end up like Myanmar which I promise your bank will be getting to know what the purpose and identity of any transaction you have with them is.
KYC dominates because of a worldwide regulatory effort, do this or you'll be cut off and it will be a nightmare to trade USD. Almost all large transactions go through KYC or reporting because it's been made difficult and usually illegal not to. Were this not the case you WOULD likely see lots of large transactions to Myanmar as various rich people use it as a haven for stashing funds anonymously ( although I think Panama etc would quickly steal the competitive edge).
While AML regulations likely have an impact, imo their main secret motive is financial surveillance.
This kind of legislation is crafter by big masses of lawyers, lobbyists, politicians, whatever. Additionally they change all the time. There are many different motivations at play. Maybe it is surveillance, maybe something else, in the end who cares, because it is impossible to read minds.
> Why is any attempt at financial privacy deemed money laundering?
Ummm. Taxes?
Money laundering is very clearly accounting fraud. If embezzlement is a crime, then money laundering is just embezzlement in reverse.
I feel like you are down an absolutist rabbithole about privacy. There are certain practical limits to privacy. You cannot blight yourself from other people's vision. You cannot operate in a society (whether it be grocery shopping, owning property, driving a car) without existing in some form. "Privacy" only makes sense in the context and is not some maximalist ideal that you can apply to any situation.
The underlying is one thing and the overlying another thing. It's one thing to not declare your money and thus be tried for tax evasion only, and another thing putting said money in financial tricks (as we both know that's the only goal of mixers) in order to commit tax evasion. If you want, think like the difference between murder and manslaughter - which also have many degrees and associated crimes like assault, arson, rape... we always try for those as well.
> (as we both know that's the only goal of mixers)
Do "we" know that's the only goal?
I've reported every digital currency-related gain or loss I've ever had on my taxes, but that doesn't mean I wanted the guy I bought my llama wool socks from to be able to trace my whole holdings. I know how easy it is to do. I learned how to do it in an afternoon.
Believe it or not, some of us just really don't think the world needs an indelible record of what kind of socks we wear, not because we actually think anybody will care, but because we reject the principle that buying socks should require a data record for third parties.
We might be weirder than you, but that doesn't make us dishonest cheats.
Fair enough, I take that generalization back.
> Then arrest the CEOs of gun companies, because guns can be used to commit crimes!
So, obviously people know this, but it's important to spell out:
There is an explicit protection for keeping and bearing arms in the constitution. No such language exists for "financial privacy", in fact the fourth amendment explicitly says the government can search and investigate citizens' property, just that they have to get a warrant based on probable cause.
It's probably only a matter of time until the SC extends "papers and effects" to mean "your stuff on other people's hard drives" in some capacity. That will probably trigger a bunch of re-litigation around the financial side of things though I have no idea what the consequences would be.
It... already does. You can get a warrant for whatever evidence you need already, no need for any new legislation. The constitutional requirement is for judicial supervision, and that's been pretty solid (not perfect, but good) for almost three centuries now.
I'm just saying that there is no "right to financial privacy" anywhere. You have a general right to privacy as granted by the fourth amendment. And courts take that seriously. But it's not absolute and the government is allowed to unmask things for law enforcement.
> The imaginary crime of money laundering
There's nothing imaginary about trying to hide money that you stole from someone, so that it can't be taken back from you.
Hey actually there is good news! I follow this topic and the broken dragnet of AML/KYC a lot
The US federal law of Money laundering relies on there being an illicit origin, which means it is impossible to be charged with just money laundering and it can only be a tacked on charge (but it may be the only charge that sticks). Merely obfuscating the origin is not a crime, it’s just stigmatized.
Ironically, if you are successful with money laundering, the origin looks licit.
The government acts like that never happens, DOJ always issues these pompous press releases about how nobody can hide in our financial system, but they dont know anything.
In this case, the people are actually laundering money.
So-called anti-money laundering laws criminalize far more than money laundering, like financial privacy.
In any case, I would argue that the focus should be entirely on the crime that generates the illicit revenue, and not the after-the-fact laundering of the proceeds. When the focus is on the latter, laws are inevitably passed that mandate people to submit to warrantless surveillance of their financial transactions. The populace at large should not be made to sacrifice freedom and privacy in a largely futile attempt to track illicit criminal gains after the fact.
No useful money — i.e. no money that is unencumbered enough to be practical to use, and that provisions people with a modicum of protection against arbitrary state seizure — will give the state the ability to significantly prevent criminals from profiting from the proceeds of their crimes, merely by tracking and policing its flows.
> If the underlying activity is a crime, we already have laws to deal with that.
Why should guns be illegal, we already have a crime against killing.
Breathtakingly idiotic.
That's actually a good argument against outlawing guns. What point are you trying to make?
I agree it's a good argument.
My point is that the argument "the underlying activity is already illegal so the things that make it possible shouldn't be ", is stupid. It comes from a place of ideology. The ideology of "let's organize everything as they should be, not how they are". So I presented a similar arguments (with guns) which I hoped everyone here would see is a good one. And you did, so task successful! :-)
> the underlying activity is already illegal so the things that make it possible [should also] be
The logic being that an object which can be used for murder should be outlawed by virtue of the fact that it can be used for murder, such as a monkey wrench or a kitchen knife.
Like it or not, some people have a use for guns that doesn’t involve violence and it’s reasonable to allow non-violent uses for things when such a use exists.
> the underlying activity is already illegal so the things that make it possible [should also] be
Oh! It’s like how I could commit criminal fraud by telling a lie in an email and, therefore: SSDs, routers, modems, keyboards, speech; all outlawed because they can be used for crime.
It’s just like how I can launder money by keeping my financial life private and therefore a private financial life should be outlawed. I hope you can see why one might reject this line of reasoning. Indeed, the underlying activity is already illegal so things that make it possible don’t need to be.
That is not “breathtakingly idiotic”.
If cash were invented today, it would be illegal.
> If cash were invented today, it would be illegal
Based on what? Is 2008 not "today," because last I checked cryptocurrencies aren't illegal.
Bitcoin is the furthest thing from cash, every single transaction is transparent on input and output.
On the other hand...
Tornado Cash was made illegal. Pressure is put on exchanges not to service Monero.
Odd that it only happens to actual cash-like crypto?
They're de facto illegal if you ever make a transaction the government can't trace.
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Your irony is poisonous.
Not only is the OP comment completely valid, it has both legal, historical, and contextual significance, unlike your comment.
Cash-equivalent monetary commodities are, by literal definition, illegal to create, trade, receive, pay taxes, or entice/offer/force employees to accept, without the explicit permission from congress through the US Mint - an authorized office of the Treasury, or a licence as a credible/reputable broker, brokerage, or investment firm through the Security and Exchange Commission.
If someone owes you for a debt that has been incurred - public or private, you must accept United States Dollars.
An executive order can, has, had, and will almost certainly be passed again, imminently seizing any cache of "valued currency" - regardless of its medium.
An EO isn't even needed - so far, the legal coverage of "sactions" has allowed the US to help shape the narrative in the interest of the security of the economy/nation by not allowing an unbacked, un-correctable fiat challenge the stability of the nations currency.
> Cash-equivalent monetary commodities are, by literal definition, illegal to create
No they're not.
U.S. dollars are illegal to forge. But the history of currency in America includes state-chartered currency [1], privately-issued currency [2] and even community currencies [3]. Hell, the entire theory of banking is private banks create cash-like instruments in the form of deposits.
> executive order can, has, had, and will almost certainly be passed again, imminently seizing any cache of "valued currency"
Source? This has only been done with gold to my knowledge.
[1] https://en.wikipedia.org/wiki/Wildcat_banking
[2] https://en.wikipedia.org/wiki/Free_banking
[3] https://en.wikipedia.org/wiki/List_of_community_currencies_i...
The same reason is why Gift cards/store 'credit'(read: literally legally debit) have the opposite - that they can only be redeemed for its cash equivalent - but are "not transferable" - those words explicitly dilineate a currency from a store of value - it's economic interoperability.
You can have internal representations of value that you accept - and even deny, such as Casino's, if warranted. But you must treat them as a debited cash account, must accept USD regardless for any services indebted, and if you allow infra-structural transactions ( like between users) or accept a large enough amount of fiat, you must Know your Customer, or run afoul of more laws.
Eutherum's ICO and the subsequent secondary shovel-selling scams saddled the SEC with the need for more stringent guidance.
>U.S. dollars are illegal to forge.
without a charter/license/permit and your 10% tax, effectively making it nonviable.
It's also illegal to drive a car without a license, sell untaxed alcohol, and offer redemptive fractions of future swap's possible `price.
The difference between a fine and a tax is semantics (see: Obamacare)
This is moreso an artifact of companies being people and money being speech; which is legally/politically irreconcilable with the needs of modern governance. https://ofac.treasury.gov/recent-actions/20220808 Bitcoin was intentionally modeled after the literal economics of the scarcity of a resource vs. it's production rate and it intrinsic utility - Gold.Aside from a trivial privacy oversight (really from a lack of applied math at the time), Bitcoin is nearly perfectly analogous to cash, and therefore would likely be reasoned as such. Even each token having a unique serial number, and those presumably being connected/correlated constantly, make it a near perfect analogy - especially in contexts.
Bitcoin is a currency, currencies must be controlled by the State for stability and institutional continuity.
Even if it's not "de facto" illegal - given non-production, a regressive tax, and a mote of regulation, it is essentially illegally to horde value for others without 'oversight', as the risks you expose others to could systemically impact everyone's security/stability.
> note the obvious "not redeemable for cash" that every single one has
Sure. They don't want to do KYC. There is nothing preventing them from issuing a currency untied to U.S. dollars.
Again, look at the community currency example.
> Eutherum's ICO and the subsequent secondary shovel-selling scams saddled the SEC with the need for more stringent guidance
The fact that a civil agency enforcing securities laws is the enforcer in your model should be the hint.
What may be confusing you is the difference between issuing a currency de novo, which is pretty much unregulated, and issuing something that's linked to U.S. dollars, which is highly regulated.
However, that actually illustrates your point even more.
Since money is speech, and freedom of association is a right, it is not really possible to 'legally' enforce (nor practically, in-theory) others to not value some representation as valuable.
That right is only inalienable when it affects 'interstate' commerce / national interests - offering this proactively as a mediated service, or becoming a sizable portion of a nation's GDP - which boils semantically back down to... what does it mean to be "illegal"
This is also the other grey part. If it has value and was traded - or not traded, it impacts "interstate commerce", and therefore is regulated as a good, it must have a tax levied on it.Which just re-enforces the Le Laissez Faire' attitude projection the US tries to impose.
We don't need actual laws, just taxes. No wars, just foreign policy.
You are correct tho - "de novo", legal. Practically, its nearly treasonous - literally.
> IRS is a civil agency, referring anything more than fines to the DOJ.
Yes. The IRS doesn't make rules around what currency is legal or not.
> Since money is speech
No court has ever said this.
> If it has value and was traded - or not traded, it impacts "interstate commerce", and therefore is regulated as a good, it must have a tax levied on it
What are you talking about? Plenty of economic activity is untaxed.
> You are correct tho - "de novo", legal. Practically, its nearly treasonous - literally
Did you ignore the links provided in the top comment?
> The fact that a civil agency enforcing securities laws is the enforcer in your model should be the hint.
The IRS is a civil agency and they enforce laws by referring the claimant to the people with the monopoly on violence; your implication that an agency being categorized as "civil" implies, even faintly, categorical legality is the false premise I was 'hinting' to dismantle.
Argued March 24, 2009 Reargued September 9, 2009 Decided January 21, 2010 https://en.wikipedia.org/wiki/Citizens_United_v._FEC https://en.wikipedia.org/wiki/Commerce_Clause#Substantial_im... You can create your own currency for your own locale, sure. You cannot begin to leverage that credit/debit flow without oversight, and you cannot claim that your currency is at all pegged to the USD, or any other easily swappable/transferable commoditized store of value.> Cash-equivalent monetary commodities are, by literal definition, illegal to create
Is true. You are free to create your own currency, however. It isn't illegal, but it is, however, de facto, _not_ legal tender.
It's not legal, but it's not illegal.
This is directly against the guidelines. Please do not conduct yourself in this way here, if you need to insult strangers on the Internet, find somewhere else to do it.
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