So I know next to nothing about these regulations but what do you mean by "cost/benefit" exactly? Surely if these rules are meant to fight (directly or indirectly) organized crime then you can't just judge them on the amount of money saved? If you spend $10 millions to prevent $1 million to reach a terrorist organization, can't you consider it money well spent?

Exactly. If we want to do a true benefit calculation, we have to look at alternate futures.

One important future to avert is where organized crime is rampant. Even if we look at only the economic costs, one study in Italy suggests mafia domination cost 16% of per-capita GDP. Given the US's $20 trillion GDP, that's quite a lot. And that's ignoring people's preference for security and safety. As an entrepreneur, for example, I think it's great that I don't have to worry about paying for "protection" to keep from having my business burned down or my legs broken.

We also have to look at terrorism. KYC/AML work to keep cash out of the hands of terrorists. Terrorism is, moral and human cost aside, very expensive. The 9/11 incident alone sees estimates in the $2-3 trillion range for total economic costs.

So even if KYC/AML really does cost hundreds of billions, which I doubt, it's a bargain compared to the problems it's meant to prevent.

[1] https://onlinelibrary.wiley.com/doi/abs/10.1111/ecoj.12235

[2] E.g., see https://www.brookings.edu/articles/the-world-after-911-part-... and https://archive.nytimes.com/www.nytimes.com/interactive/2011...

> One important future to avert is where organized crime is rampant... one study in Italy suggests mafia domination cost 16% of per-capita GDP. Given the US's $20 trillion GDP, that's quite a lot.

You’re making two separate, tenuous extrapolations here. Can you justify them?

I probably can. Did you want to ask some specific question? Better, do you you have a way of calculating path-not-taken costs for rampant organized crime that you think might be more effective?

I didn't see any calculation in the parent comment.

Are you asking me to do some sort of calculation? If so, could you spell out what and why?

The point of my original comment was to point out a couple of things we'd have to include in a cost/benefit analysis of KYC/AML regulation, not to actually do a proper analysis, which I would expect to run to hundreds of carefully researched pages.

Maybe I misread your comment. What did you mean by "Given the US's $20 trillion GDP, that's quite a lot"? What is "that" in this sentence referring to?

That "that" refers to the implied product of 16% times $20 trillion. It's meant to provide an order-of-magnitude notion of what rampant organized crime could cost an economy, so that people who had previously read "costs of such bureaucratic monstrosities is in the range of hundreds of billions, whereas the benefit is a few orders of magnitude lower" could more usefully think about what the benefits of crime reduction really are.

Let's try this again: What makes you believe that repealing KYC laws (which were introduced by the Patriot Act in the 2000s) would lead to the same conditions as Italy? And how is this consistent with the fact that the US didn’t lose 16% of its GDP to mafia activity before such laws were introduced?

Exactly. You have provided no reason at all to think that repealing KYC laws (which were introduced by the Patriot Act in the 2000s) would transform the US into Italy, which is frankly just silly.

It also flatly contradicts the fact that the US didn’t lose 16% of its GDP to mafia activity before KYC laws were introduced.

> Well I'm glad that after 4 comments, you've finally gotten to stating a point.

I stated my point quite clearly at the very beginning of this thread. Did you miss it?

> Unfortunately, your point is shallow and dismissive, rather than engaging substantively.

In what way is requesting evidence for an implausible extrapolation "shallow and dismissive"?

> If you're saying it seems silly to you, an anonymous rando, I can live with that.

Is "anonymous rando" supposed to be an insult of some sort? Is it relevant to the topic in some way, or just a plain ad hominem?

> try asking succinctly and with at least a modicum of respect

I did. You should do likewise.

> Because people generally have better things to do than spoon-feed anonymous jerks.

The only one being a jerk here is you, my friend. Take a deep breath and re-read the thread. And no, requesting evidence rather than accepting your assumptions at face value isn't "spoon-feeding". Frankly, your response (or lack thereof) gives the impression that you've been backed into a corner and have resorted to name-calling and "spoon-feeding" accusations to try to save face.

> Is "anonymous rando" supposed to be an insult of some sort? Is it relevant to the topic in some way, or just a plain ad hominem?

It's not about the quality of your point. It's about who's worth my time. This is the internet, where I can be in contact with most of the planet. As I explained long ago in my bio here, anonymous people with bad attitudes get less leeway from me. If you want conversation, you have to be worth it.

In addition, when you introduce words like "silly" and "implausible", you are either a) asserting you have a technology that allows you to objectively measure those qualities in discussions, or b) asserting that you have some expertise which makes you a more qualified judge than the person you are talking to. Presuming for a moment that it's the latter case, you're the one who has introduced yourself as the arbiter of all that's right and true. It's within bounds for me to point out that from my perspective you demonstrate no qualities that would make you the expert you are acting like.

You are of course welcome to have any impressions of me you like. Again, the feelings of anonymous randos are not high on my list of concerns. Less so, of course, for the ones who start out a discussion with the assumption I'm a fool.

He meant cost bebefit to organizations to implement it. Take HSBC for example, one of largest China/HK bank. They waited until Fatca kicks in, then realized it will be too complicated and expensive to implement, so what do they do? Within 45 days they kick out all us-citizen based accounts off their grid. All gone. Thats how foreign banks “comply” with Fatca. Arguably some politicians say it was actually mean to work this way so us citizens behave nice and just keep their freaking money in us banks. I know of 3 friends who had to sold their hong kong based business because noone there would open them banking account anymore so here it is american politicans screwing over american citizens having business on a foreign land.

FATCA is about making non-US financial institutions report to the IRS et al about holdings of US citizens abroad. Worrying about terrorist cells in foreign countries made up of U.S. citizens is absurd.

FATCA is the stick used to dissuade tax evasion by US citizens. If people think they can evade taxes successfully, they will. Whether this impacts Bitcoin or other crypto is inconsequential.

My American relative that was born in the USA and lived there for about 6 weeks finally did their US tax returns a few years ago.

No tax owing and received some hundreds of dollars in refunds from the IRS.

They even corrected a mistake resulting in an even larger refund (forgot to apply for some program).

All because of increasingly draconious laws for non-filers that conveniently ignore that most Americans abroad aren’t millionaires.

Cost: hundreds of US$, data entry and processing.

Benefit to US: ?????

if the terrorist organization is able to fund itself, then no, 10 to 1 is not money well spent. You'll lose in the long run.

Do you have a source for your hundreds of billions (hundreds of billions what?). Compliance costs are usually baked in personnel and IT costs.

KYC compliance: A form and proof of identity.

Actually it goes a bit further than that.

It means to determine the actual beneficiery of a bank account in addition to traceability of the funds used.

The bloke showing id may not be the actual owner of the funds and it's up to the bank to determine this.

FATCA has nothing to do with KYC / AML provisions.

It involves, simplified, reporting requirements of US account holders by foreign banks to the US authorities. It's main purpose is to avoid tax dodging by US persons.

I'm not arguing that it's a great law, since it's not. For example: it can make it extremely hard for US persons living abroad to open a bank account because foreign banks just don't want to bother with those onnerous reporting requirements.

It has nothing, whatsoever, to do with KYC / AML provisions, which are very rightfully imposed on financial instituions. And yes, I work for one.