Everyone knows where the real money laundering and terrorist financing happens.
It is done by the likes of HSBC, Standard Chartered and other big banks.
This is public knowledge, as we have seen with the Panama papers and most recently the FinCen files.
Our financial institutions are too rotten for you to even assume that the intention of this regulation is altruistic (i.e public benefit).
The tradition of regulation in finance is to perform a kind of scam called "regulator capture"[0].
It is what we have mostly observed to be the goal of complex financial regulations. For it to divert from this would be an exception.
[0]: https://www.investopedia.com/terms/r/regulatory-capture.asp
> It is done by the likes of HSBC, Standard Chartered and other big banks.
This used to be the case. And undoubtedly it still goes on. There simply weren’t many other mechanisms to launder money that didn’t involve large banks…until crypto joined the party.
Crypto’s most popular feature is speculation, and its second most popular feature is money laundering/capital control evasion. These two probably encompass well in excess of 99% of typical real world use cases.
I'd be more than happy if controlling capital joined the list of things government just can't do. I think freely flowing capital is going to be good for everyone. Good luck to the crypto community & I'm sure a big chunk of the world trying to get away from unreasonable US sanctions will agree.
The US and 'west' is already financially liberal, so we can make an observation: it is NOT good for everyone. Capital flows freely, but it flows upwards. Trickle-down economics is proven false. Advocating for more liberal finances also means being okay with leaving people behind and in the shit; the unemployed, the homeless, the working poor, the huge percentage of people who constantly live one paycheck or one medical issue away from bankruptcy, the people who work 16 hours a day at multiple jobs and still can't make ends meet, etc etc etc.
I mean to rephrase your claim, yeah capital / money should flow freely, but egalitarian. The wealth of an individual should benefit all. The richest countries in the world shouldn't have poverty on an individual level. There shouldn't be a case where a handful of people have more money than half the world population.
And I get it, building a space company and launching yourself into space is cool, but that money could also have gone to your employees to lift them out of poverty and insecurity.
Capital controls aren't going to help the unemployed, the homeless, the working poor, the huge percentage of people who constantly live one paycheck or one medical issue away from bankruptcy. Capital controls will make those problems worse; forcing people to make bad decisions with their investments is not the fast track to getting great long term results.
There are capital controls and then there are capital controls - but preventing you from moving all of your money out of the country to avoid taxes is still a control on capital.
You mean the theory of...mathematics? More money in one place necessarily means less money in another.
If I sell a product for 100€ but only pay my worker 20€ to make it, I'm becoming rich. If my worker wants to buy that product, it costs them 5x their salary, but only costs me 1.4x. If all my CEO friends do the same for their products, the workers are becoming poor because of us becoming rich.
Now let's stop trying to be rich. Let's lower the margins and sell the product for 40€. Now it's 2x my salary (marginally worse for me), but also only 2x my worker's salary (much better for them). Let's say all of us CEOs do that. By not being rich, we've allowed our workers to be less poor.
Examples are basically any kind of crime and violence, traffic accidents, all kinds of things that harm people and societies.
Ya think ? People are indoctrinated from as soon as they start school. By the time they reach adulthood they are fully institutionalized.
You might not agree with every use of US financial might, but I do not think that a “big chunk” of the world are affected by US sanctions or that a big chunk disagree with US sanctions that exist. Most of these sanctions are against demonstrably hostile governments. The US isn’t perfect by any means, but cutting off NK, Iran, etc from international banking to extract nuclear compliance is, I think, a good use of sanctions.
It's the same side of the coin.
It's not like it's dominated by it - what makes us the largest part of crypto usage is speculative investors and bots. But as for the rest, it's clearly not normal people buying burgers, that's for sure.
> The public security ministry said that by Wednesday afternoon police had busted more than 170 criminal groups involved in using cryptocurrencies to launder money.
> China’s Payment & Clearing Association said on Wednesday that the number of crimes involving the use of virtual currencies is on the rise.
> Because cryptocurrencies are anonymous, convenient and global in nature, “they have increasingly become an important channel for cross-border money laundering,” the association said in a statement.
Sounds right to me.
[1] https://www.cnbc.com/2021/06/10/china-arrests-over-1100-susp...
Can you provide a source on that? I certainly don’t want any Tethers but I know plenty of people that do.
Remember only entities Tether deems as customers are permitted to redeem in the first place, and more than likely only the exchanges are deemed customers. They know they can't redeem anyways so they don't bother even trying. That's my read on it anyways.
Remember, the most trusted crypto exchange, Coinbase, wash traded 99% of all global Litecoin volume for a few months in 2016/2017. [2] And again, "exchanging" means nothing, because it's not a redemption. And the volume likely means nothing because it's probably just arb trades and wash trades.
95% of all crypto trading volume is fake. [3]
Nothing here is regulated. Take everything you see in crypto with a giant lump of salt.
Tether is a criminal enterprise [4], the fact that USDT is trading at 1:1 is an indication the market is completely untrustworthy, irrational or both - not that Tether is trustworthy. Be careful out there!
[1] https://wallet.tether.to/richlist
[2] https://www.cftc.gov/PressRoom/PressReleases/8369-21
[3] https://www.technologyreview.com/2019/03/26/1206/nearly-all-...
[4] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen...
I'm fully aware (and agree with) all your criticisms of Tether, my point is that if I had tens of millions in USDT (as many real people who aren't affiliated with Tether do) I could easily exchange it for USD.
I agree you could probably clear 10s of millions via USDT:USD pair, but I'm almost 100% confident you could not actually redeem them.
Sorry if I came across harsh btw, I appreciate your thoughts! Tone doesn't always carry well online and I'm actually a pretty positive person haha.
Totally agree you wouldn't be able to redeem it, I'm just saying the market seems to think 1 USDT = 1 USD. I honestly can't imagine they could keep that peg through manipulation..it would be astronomically expensive.
What we have observed is financial institutions failing with respect to KYC/AML/CFT/sanctions etc. (and getting fined for it), but that is not regulatory capture.
Also, I'd argue that since 2008 regulatory capture isn't working so well anymore, with a lot of extra regulation being thrown at the system (some of which being eased now again).
Regulators are incentivized to see dangers everywhere and acting accordingly. The last time they did not see dangers everywhere, it didn't work out so well, either. The counteracting force would come for electorates and policy makers seeing opportunity and progress lost from being overly cautious.
I am in favor of privacy and not having to explain what you choose to do with your own money, but imho the aggregate yield curve of total privacy inverts as you ascend a logarithmic scale.
> It is done by the likes of HSBC, Standard Chartered and other big banks.
> This is public knowledge, as we have seen with the Panama papers and most recently the FinCen files.
No. This is an observational bias. All we know is that they do that. But the fact that they do that, too, does not logically imply that resorting to them is the only way of money laundering and that BTC is not used for that a) at all b) at a much larger scale.
And, as it happens, because of the records, it has been discovered and everyone involved is traceable. The system works.
The system does not work.
Everyone involved have been discovered by `rouges` like Assange that system holds in jail for either made-up or largely irrelevant accusations, out of the scope of their opus, full soviet style.
Everyone knows the king is naked and just comedians and activists at large (or in jail) has courage to say something about it, which is pretty medieval position for all of us to start with.
https://www.investopedia.com/stock-analysis/2013/investing-n...
It’s all public knowledge and pretty easy to find.
Instead they got fined for less than 0.1% of their total holdings.
The system doesn’t work. This is not a consequence.
1. Stop central bank imposed inflation.
2. Serve the people who are excluded from banking.
If either of those goals can't be reached, it is due to misdesign/inherent flaws of the approach and not governments.
[1] https://twitter.com/sergueyz/status/1365041519154061315
The amount of illicit transactioins is higher in bitcoin than in regular cash ($100 bills to be precise). I guess the same is for money laundering - amounts spent in legal transaactions going through current financial institutions will be much higher than money laundering there. And ratio between amounts of legal and possibly money laundering transactions will be higher for regular institutions than for bitcoin.
Precisely because of regulations and their absence.
It’s never about you, until it is. You should assume the government will do the maximum amount of evil given the power they are granted.
This is the classic anti-privacy argument: this isn’t about you, you’re not doing anything wrong, you have nothing to hide, etc.
Sure, there’s a pretty good chance that a random person, e.g. you, isn’t the target of these policies. However, when applied to an entire population, these sorts of policies result in privacy violations on a broad scale.
I kinda doubt the filthy rich will be affected
Or is it more likely that I give that away and nothing else really improves?
Yes, I think it's worse if North Korea gets a nuke than if the FBI gets a peek at my Amazon purchases pursuant to a judge's order.
North Korea has leveraged cryptocurrency to evade sanctions to the tune of billions of dollars. [1] This has a material negative impact on global security.
> We already know this whole "give up your privacy for safety!" thing is nonsense, because the privacy has gone way down over the past years and safety has not changed at all.
We are roughly at one of the safest, most peaceful points in history. [2] This is in no small part due to our careful and measured efforts to balance privacy and the public good. Generally you have a right to privacy unless someone can show a good reason why you should lose that right - at least at a state level. I think this is the right balance. I think most people do too.
> It's theater, a puppet show put up in order to rob you of your essential freedom for the gratification and enrichment of another.
Citation needed. And I don't mean that glibly, if you have some data I'll happily read it.
[1] https://www.forbes.com/sites/thomasbrewster/2021/02/09/north...
[2] https://towardsdatascience.com/has-global-violence-declined-...
Add to that: don't only think about what the current government will use those powers for, think about what future governments will use them for. If you're not okay with those powers existing when the party you don't like is in power, you should also be advocating against those powers when your own preferred party is in power. (That is, of course, unless you're a fascist and counting on your preferred party to perform a full 1933 Weimar Germany-style takeover that abolishes democracy.)
Why? Shouldn't you then assume that all people will do the maximum amount of evil given the power they are granted. And what exactly makes government different then other places where power is concentrated? For example, crypto miners.
Not OP, but you definitely should!
> And what exactly makes government different then other places where power is concentrated? For example, crypto miners.
One of them can send people-with-guns to your home to arrest you and take away your stuff.
Note that I'm not some crypto-anarchist absolutist, but IMO being weary and critical of governments grabbing more power is the right reaction.
All we do is make a glorified X every few years, allowed to choose between the plague and cancer. All they do is wasting our money and making life worse for everyone except themselves, their peers and the rich. It's like this at least everywhere in the western world.
If the last year hasn't shown you that, and the last decades didn't either, then I don't know what to tell you.
I'm a pragmatist. The public sector seems the appropriate vehicle to deliver some things, and not for others.
It most certainly isn't a choice we've made democratically.
Rather, it's a case of boiling the frog: a thousand tiny cuts inflicted by elected politicians over the very long term which has slowly led to the monster size leech our government has become.
Society votes for these governments.
I know, we all would prefer to argue that some shadow cabal decides what the government does and society has nothing to do with it, but at the end of the day it still stands: We vote for these people. We get the government we deserve.
How often have politicians of all countries said and promised to enact or revoke certain policies during their election campaign and then developed amnesia, stalled until outrage dies down or simply shrug until re-election time?
People don't always get the government they deserve.
The point of a system that has large financial and societal pressure at the top to conform to the wishes of specific lobbying interests is that the pressure is so large you either stop being a politician or do what they say. There is no middle ground.
It is better to say that society votes. It definitely does, but when every (and I do mean every) politician that gets in power can come right out and say that they won't do anything they promised it is not reasonable to say society voted for the governments they get. Society has governments and society votes, these two are unconnected facts because of an endemic and deeply toxic lack of accountability on the part of politicians. The lies are blatant, so much so that everyone expects them and sees them coming.
> We vote for these people. We get the government we deserve.
So, a poke in the eye, or a kick in the shin? Whatever you get, you deserve..
Agreed. IMO, what a society is/does/allows is always up for grabs…
Man made rules aren't laws of physics, and even those are bounded by our understanding/awareness of such.
Expecting others to be transparent, while governments go on about their private secret activities is very unfair.
Case in point - why hasn't any government adopted any open blockchain till date ? I mean, there are gazillions of operations that the government can use a blockchain for. OK, forget about a blockchain, at least an open distributed ledger ? For instance, all public RFPs and contracts can go on a queryable open distributed ledger. Why hasn't this happened yet ?
Let the governments show a spend log of every tax penny collected and then we'll talk about transparency.
(1) https://en.m.wikipedia.org/wiki/Senate_Intelligence_Committe...
Given that the existence of your examples and its horrors is very much common knowledge, at this point it is clearly not an issue of transparency. The people quite simply choose to be okay with it.
Big money laundering and state wide unethical operations always find a way to operate on the clear financial system. You are probably using some shinny brand device bought from a famous company that contains parts made by slave labor in a certain region of a certain country.
AML/KYC only affect small people. To comply with those regulations is expensive and time consuming and the punishments are heavy so its better to just remove anyone who has a slight hint of suspicious activity.
Because banks are terrified of being punished by governments they will kick honest person out of the system because they've sent money to their mother in some war thorn Middle East country. Thats it. You are banned from the platform with no right to appeal.
For fuck sake. You live in a world where Snowden is a fugitive, Assange is sickened in Jail and the literal criminal Christine Lagarde is the god damn president of the European Central Bank! YOU need to stop fantasizing.
I can tell you, as someone who works in finance, that KYC rules are taken very, very seriously. The bigger the client, the more important they become. There is harsh punishment from both my company if not the government if KYC processes aren't followed correctly. Losing your job is the least of your worries if you're complicit in a case like that.
Yet accountability is so great for big offenders that one day they might preside over the European Central Bank.
> There is harsh punishment from both my company if not the government if KYC processes aren't followed correctly.
And that's why banks will just kick Amir who has only 3000 EUR on his account out of the platform. Why risk such a heavy punishment for a poor bloke?
I invite you to visit the reddit pages for N26, Revolut and similar banks. I don't think those threads about accounts being closed without justification are made by terrorists and money launderers.
It's big of you to admit, but you'll pardon me if I take what you say with a grain of salt when you tell me the extremely problematic industry you work in definitely is not a problem. You have a vested interest to believe this.
Instead of society, read political elite.
A random voter cannot choose a politician who is totally aligned with him on all thousand important topics. Much less so in America, a two-party system, where your choice is binary.
As a result, whatever the top brass does with regard to most topics, is what they want, not what society wants.
Notably, big business and important people still enjoy a lot of economic privacy that is being denied to us.
Except they fucking do, otherwise I could walk down the road and buy my cannabis from a legal business.
How often does a career politician decide to step aside because someone else has better ideas?
All I'm saying is that there's no optimal solution here, it's all a balance.
I don't want to live in a government mandated box.
One of the biggest problems of the state has always been how to hold power accountable.
I can see a nightmare forming where one becomes a slave to their managerial class. Where everything is tracked and managed. No new ideas can form. No new paths can be taken. Everything is mercilessly beaten down as they don't obey the rules or the standards.
It all leads to stagnation and misery, and a few people making a killing off the backs of the majority.
Sure, very few people want to live in a total anarchy. But giving the state a total control over money and wealth seems like a complete solution to the too much freedom problem.
So we have to make a superior system inferior?
I never voted for any of those clowns in power
You can vote for someone who wants to reverse this, and it might change. Since this is pretty much an international system though (banks offering anonymous accounts will have difficulty interoperating with other actors), it’s likely not enough with political/public opinion in just one country.
From a 10 year old in the US to a 20 year old somewhere in Africa, bitcoin has no barriers and can be used just like that.
> You can’t show up in a bank with a bucket load of $100 bills and open an anonymous bank account. Well you shouldn’t be able to with bitcoins either.
So no, this statement goes against bitcoin and what it stands for.
You used to be able to do this at HSBC, and for a very long time, before all these annoying KYC laws
If you want to launder money there are people for that, they will take your money, set uou5 up with legitimate businesses, put your money into other businesses and over some time those businesses will order a ton of shit from your ones, so you'll end up with a lot of clear after-tax income.
To every person who downloads random phone apps and gives them mic permissions, who has Siri or Alexa listening all the time, or who has a Nest doorbell recording their street... probably?
The gov do care about what you buy.
... on perhaps one or two hot-button issues. You won't find any "representative" which actually represents you on more than a few issues (at best), so voters have to prioritize—and then the winners go on to vote on their constituents' behalf on many other issues which weren't major talking points during the elections, in effect representing only themselves.
You're right that this isn't different from (almost) any other issue. It's a real problem for any issue that isn't right at the top of the priority list.
If there are 5-10 parties then there is usually at least a neighboring party that you can switch to if your pet issue isn’t correctly handled by the party you regularly vote for. It’s also a lot easier to steer the opinion of a 10-15% party than a 50% party (with the obvious downside that even if the 10% party forms a government, it will be a coalition where it only has 1:5 weight)
Any party you choose is going to vote against you interests in some area, abusing your endorsement to back policies you disagree with. The ability to switch to another party which represents you even less apart from one "pet issue" which might not be your highest priority doesn't change that.
This is quite a speculative & ambitious comment..
>Stop fantasizing that the government cares about the shit you buy. This is not about you.
...wot. You assume this is why folks want privacy in their transactions?
>And Bitcoin’s anonymity is not a feature of blockchain and never has been.
Bitcoin is psuedonymous, & always will be.
No more than America has chosen the 1% over 99%; or white lives over black.
The gov says "laundering, terrorism" in the same way it says "terrorism, paedophiles" in other civil liberties cases.
Then explanation of why a government should tax its citizens is usually the fact that those citizens use that countries infrastructure to make money, so that country should take "it's" cut.
But many countries now want to tax CG on cyber currencies that has nothing to do with any of that countries infrastructure. Why should a system of value that exists entirely without the support of the EU require a payment to the EU?
> You can’t show up in a bank with a bucket load of $100 bills and open an anonymous bank account. Well you shouldn’t be able to with bitcoins either.
Why? bills are backed by the country and legal tender as a result - BTC isn't. Bank accounts, and banks themselves, are nationally regulated w/ consumer protections - BTC wallets aren't. How are these two things similar at all?
Short newsflash:
People can - and do - pay for goods and services in cash.
Sometimes these transactions aren't declared.
If you insist on a written record of your transaction, sometimes the price goes up :)
None of these things are new, they've been going on since very shortly after taxation was invented!
No, I'm afraid governments already track all data necessary to pursue and convict tax evasion and terrorists. We don't need to sacrifice this new, exciting technology because of bureaucratic laziness and FUD. $800 billion defense + $200 billion law enforcement should be enough to track all dozen suspected domestic terrorists in the USA, and Interpol/Nato/EU share technology with the USA.
It is extremely common where I live, India. To an extent that, going by official statistics, paying tax is rare.
I agree with your second assertion though. The government is tracking more and more transactions by making it mandatory to use tax ID for transactions above a certain threshold.
While I do think there's a case to be made that it's none of the government's business how many times per week I visit Starbucks, my main concern is big tech companies, banks and insurance companies collecting this information about me, and using it to build a profile based on which they place me into different groups or more or less privilege, offer me different deals, or otherwise manipulate me and my behavior.
Government cares very much what people buy and worst yet companies care even more.
Believe or not society functioned pretty well before the surveillance zoo and people were able to spend their money without worrying about their privacy. For the 99% of people that aren't money laundering or tax evading, yes the right to privacy is important.
That said, you're probably right in the long run. Cash is already less convenient, and it's only a matter of time until it's gone. The "transparency" argument will win, for the arguments you've outlined: "tax evasion, money laundering, political fixing, terrorism financing" and anything the government can prosecute under those descriptions. And to add to the list, non-accredited investors having a flutter, people spreading disinformation, people we don't like etc.
I would also LOVE to see each and every transaction my state does but all I see is high-level budgets with no individual level transactions.
States and state institutions have much much greater "privacy" while the people are heading towards 0 privacy.
I would have expected the reverse to happen first but here we are.
The government most definitely cares about the shit you buy. If they had an infrastructure they would tax you and "nudge" you based on a lot of societal / individual metrics.
I would say the whole purpose of BitCoin was to counter government stupidity so this new regulation continues the trend.
If I die my estate can be dished out to family members via estate laws and the banks comply with it.. how does one liquidate cryptocurrencies when I die? My family will most likely not be protected in that case and the funds will be stuck forever.
money laundering: focus on catching the actual criminals and stopping real crime instead.
political fixing: privacy tech actually helps here. (Eg Secret ballot)
terrorism financing: terrorists don't need much money. Just a deranged mind, a hand gun or even a sharp sushi chef knife and a social media account are enough.
Well, it sorta is when this plan applies to everyone.
Buy one thing with Bitcoin with your shipping address and name and guess what, the seller can back track through the blockchain and knows your entire purchase history and crypto net worth.
Reading western media, I wouldn't rule out the possibility of being labelled as extremist for, say, supporting Trump, and consequently be cut off all services by companies that are owned by his political opponents. Twitter, Facebook, airlines, banks, ...
If you are harmed by it then you get a veto, which is better than merely getting to "vote it down". No action which harms you can legitimately be taken without your consent.
If you are not harmed then your opinion as a mere bystander on whether it is "harmful" is neither needed nor wanted.
Even if I purchase a PinePhone, there is no way for me to show the disdain in engineering malpractice of other brands. That is what I mean. Buying a pinephone does not send a message that "I really like the samsung S10 but I wish it had a removable panel." Buying a pinephone instead of a S10 says "I dislike the entirety of the S10 as well as every other phone, without discrimination.". There is no way to vote down specific products short of leaving a review nobody will read. So neutral votes are a bug - you end up giving your money to a corporation either way, so the system is biased to corporations making money.
A reasonable argument can be made that force in the guise of patents and copyrights (among other restrictions, e.g. licensing of the airwaves and devices that make use of them) is being employed to prevent you from producing your own phone to your liking, and that is indeed a form of harm, but it is also outside the scope of the market. The government won't save you from this; it's the source of the problem.
Misuse of the term "harm" aside, if you want to "send a message" the best way to do that is to… actually send a message. Write the reviews—people do read them—and say what you liked or didn't like about a particular model which influenced your purchase decision. Send a courteous letter to the manufacturer with your comments and suggestions. And let them know that you bought a PinePhone instead as evidence that this was a real issue for you and not a passing fancy. The market data alone might not be enough to say why people are buying the PinePhone instead of the S10, but if Samsung starts losing sales over it they will certainly stop and take notice, and investigate, and revise their plans for the next model.
Of course you can't always get what you want, especially with something as tightly integrated as a smartphone. An S10 with a removable battery, for example, is not really an S10. It would be bulkier, and heavier, and probably not as water-resistant since the case can't be thoroughly sealed. The trade-offs might involve a slower CPU or less RAM or storage. Even just allowing for modularity and customization in the design to suit different needs and preferences has a cost which isn't always worth paying.
The bloatware and user-hostile software design is less excusable, though that gets back to government interference, in the form of copyright, anti-circumvention laws, etc., which manufacturers leverage to shut down purveyors of improved or otherwise modified software derived from the original OEM code.
P.S. There really isn't any conspiracy to keep phones with removable batteries off the market. Battery tech, and availability of public chargers, just improved to the point where people rarely needed to worry about carrying around a spare to swap in when their battery died, at which point the trade-offs of the removable battery option became nothing but a liability.
When it comes to large financial operations, society has clearly chosen transparency over privacy. Cause guess what, tax evasion, money laundering, political fixing, terrorism financing are things that exist and really are hurtful to our economies.
Stop fantasizing that the government cares about the shit you buy. This is not about you.
And Bitcoin’s anonymity is not a feature of blockchain and never has been. There is the wallet, but who holds the wallet is not part of the protocol.
You can’t show up in a bank with a bucket load of $100 bills and open an anonymous bank account. Well you shouldn’t be able to with bitcoins either.