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.
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.
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.
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.)
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.
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.
Drunk driving is an upstream pre-requisite to drunk crashing.
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.
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-...
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.
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.
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...
I'm struggling to see how you could truly analyze the additional risk of being > .08 as zero but 1) I expect you're about to make an example and 2) I reckon the example is out there.
A one foot journey on a flat road during the day in good weather seems a bit degenerate, no?
Your "at what point is that a rationale for incarceration based on risk alone" reminds me a little of banning fireworks. We're not banning fireworks because we hate fun, we're banning them because of the risk of a deleterious effect that is not possible without an explosive. Do we incarcerate for fireworks possession? We usually do not. This is a thing that is worth thinking about.
I guess you could say we're not imprisoning because of the risk; we're imprisoning because drunk drivers are unable to follow a very bright line rule. Why would I be imprisoned for driving 180 mph? Same reason.
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.
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.
If anything, the consensus is we need harsher DUI laws and enforcement.
Also, in general any kind of "people support harsher X" where X is Think Of The Children-related will be true, but that's a heuristic for discovering bad laws that should be repealed because of the known effect that Think Of The Children rhetoric causes people to support bad laws.
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.
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.
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".
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.
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.
If you are just suspicious of anything "dangerous" without appropriate context then I question your peace of mind.
I was raised around law-abiding gun owners and have never felt unsafe in the presence of a firearm under normal circumstances provided the wielder is not intoxicated or otherwise exhibiting alarming behavior. It sounds like you just aren't used to guns.
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.
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.
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.
Source? Despotic governemnts in the real world are kleptocracies. They're using all manners of currencies because their elites spend what they can steal.
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-...
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.)
Is what I imagine some spook told the lawmakers. Sarcasm aside, I believe it is control.
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.
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.
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.
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...
burden of proof should be squarely on the prosecution, period, end of story, don't force people to create evidence against themselves
Nit: it's oppressive and quasi totalitarian, not authoritarian.
Sure. This isn't how money-laundering law works. Money laundering is specifcially disguising the proceeds of illicit activity.
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.
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.
These are untrue absolutes.
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.
Otherwise, what are you expecting? Direct taxation isn’t really compatible with ‘financial privacy’ and never was.
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.
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 law here notes even some CFRs are criminally binding, the CFRs explicitly require certain identification.
What happens if the banks don't close it?
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.)
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).
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.
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.)
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 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.
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.
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.
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.
So you've moved the goalpost from all large transactions to transactions with explicitly sanctioned (EDIT: listed) entities.
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.
Sure. There are three black list countries: North Korea, Myanmar and Iran. "Almost all large transactions" do not happen with people in these countries.
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).
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.
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.
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.
>he example you cite
You asked for an example of proving something not illegal in court. You know damn well that's not the standard used in criminal law, it was a trick question which I tried to answer how I thought you meant to ask until I realized you were being duplicitous.
>without any illegal underlying crime.
This is a false understanding of money laundering. It isn't sufficient that there be illegal money involved, there should be mens rea of such. Your premise is a lie designed to mislead the audience. Good day.
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.
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.
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.
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.
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.
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.
Based on what? Is 2008 not "today," because last I checked cryptocurrencies aren't illegal.
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?
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.
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...
> Cash-equivalent monetary commodities are, by literal definition, illegal to create
No they're not.
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.
> 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.
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.
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.
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.
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.
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 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.
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?
> 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.
You missed the securities law qualifier. The IRS has valid opinions on tax law. Someone using IRS actions to find insight into e.g. the legality of military actions is probably misguided.
> the First Amendment prohibits the government from restricting independent expenditures for political campaigns by corporations, nonprofit organizations, labor unions, and other associations
Yes. Not the same as money = speech. Independent expenditures for political campaigns are protected political speech.
> 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
Sure. Because that’s, for practical purposes, using dollars. Nobody is debating the U.S.’s power to regulate dollars.
> or any other easily swappable/transferable commoditized store of value
What is a commoditised store of value to you? You can use your community currency or crypto to buy grain and gold, for example. Community currency can be used to buy silver trinkets.
> It isn't illegal, but it is, however, de facto, _not_ legal tender. It's not legal, but it's not illegal.
Not what legal tender means. Dollars aren’t legal tender in the EU. That doesn’t put them into some quasi-legal grey area.
Why should guns be illegal, we already have a crime against killing.
Breathtakingly idiotic.
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 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”.
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!