The trade-of here is individual liberty vs what we know the consequences will be from allowing truly anonymous exchange.

For all things in life: cui bono. Illegal operations (the vast majority of which are doing tremendous damage to society) stand to gain the most from anonymous money exchanges. So that's who end up using the service.

So even die hard libertarians who value personal freedom such as anonymity a great deal have to acknowledge that the real life consequences of exchanges like Liberty Reserve are a net negative to society. Leading to less bottom line Freedom compared to the current situation where society tries to make life difficult for gangsters and enterprises that harm us all.

Isn't cash more popular than Liberty Reserve and just as anonymous? (Albeit more cumbersome to transmit around the world.)

So isn't your argument also that cash encourages crime? And if so shouldn't it be abolished so that we can prevent activities that damage society?

Things aren't so clear cut. Laws have to draw boundaries around things all the time, even if the particular location of any particular boundary cannot be easily justified, the necessity of the boundary's existence most certainly can. In this case, we can regulate electronic transactions, but we can't regulate cash. Furthermore, it happens to be the case that when you allow electronic transactions willy-nilly bad things happen, and it's harder for those bad things to happen when cash is involved (Breaking Bad would have been completely different if Walter White had hid is money in Bitcoin). So, we regulate electronic transactions more than we do cash. It doesn't solve all the problems, but it does mitigate them.

>So even die hard libertarians who value personal freedom such as anonymity a great deal have to acknowledge that the real life consequences of exchanges like Liberty Reserve are a net negative to society.

I'm not sure I agree at all with this statement. Replace "liberty reserve" with Bitcoin and I certainly don't agree that it's a net negative to society.

Unless by "society" you mean the current status quo, in which case I'd agree but this changes the tone of your message significantly.

I think Bitcoin's extremely cool, and I think it will take off and increase in value, but it's not yet obvious if it will be a net positive or negative for the population as a whole.

> Illegal operations (the vast majority of which are doing tremendous damage to society) stand to gain the most from anonymous money exchanges.

If we ended the war on individual freedom that is the drug war it would eliminate the vast majority of these illegal operations and the "tremendous damage to society" they cause.

Umm, no, you shouldn't be able to do everything you want with your money.

A payment processor has a fiduciary duty for its customers. So if you are sending $100,000 to Nigeria to pay for puppies, the Payment processor better stop this transaction to protect you form being scammed.

Now maybe you are smart and savvy enough to be not scammed but an average joe isn't.

There are many rules in the payment industry but KYC (Know Your Customer) is pretty high up in the Payment Processor's Bible. From the article it seems that Lib.Res. didn't just commit minor sins; it was designed to disregard the bible all together.

In actuality it's way worse than just being scammed out of your property. People are being deprived of their freedom and dignity, something even the most die-hard libertarian will find challenging about this "total freedom in moving my money anonymously" position.

http://blogs.aljazeera.com/blog/americas/face-human-traffick...

I have seen stories about "human trafficking" in the news for a while. They tend to sound very unrealistic and are all tinged with either hype or hysteria, depending on the source.

The news has had many articles that say the strip clubs and whorehouses in or near New York City are filled with women who are forced to be there. Forced in the manner said here - "they travelled with an escort who held a gun to their backs" and so forth.

The news even said a strip club which I visited a few times, Gallagher's, was like this. It's just ludicrous. There's no way girls were forced to stay at this strip club. It's risible. I talked to some of the girls there before I read the nonsense article about them. Some were from other countries. They were there for the money.

There are very poor girls all over the world who would and sometimes do work in a strip club or whorehouse if they could make a lot of money. Just like girls in China go to work in Foxconn factories for the same reason.

With so many willing women, why go through all the trouble of hiring a full-time guard to watch three women? What happens when he goes to sleep? They pull out the gun when they travel around? It's possible, but highly improbable.

What is she going to say, she wanted to move to the US to make money doing sex-related stuff, then didn't like it any more with those people and still wanted to stay? These stories that people are in locked rooms with guards who escort them around by gunpoint with their families at home under the gun as well - it sounds like something a 21-year-old Indonesian prostitute who wanted a visa to stay in the US would say. The joke is that anyone would believe this. It's laughable. I mean what else is someone who knowingly came to the US for prostitution going to say? Her only option is to say that. Oh, and she wants to stay in the US as well, of course. I don't have the ability to say if her story is true or not, but it makes no sense. Every hole in the story is plugged by some improbably sounding story ("You were moved from apartment to apartment, why didn't you escape when they were continually moving you?", "Uhh...someone was holding a gun to my back, yaa, that's it". This is what she actually said. It sounds ludicrous).

Of course the shady nature of whorehouses in the US is helped by the fact that it is completely illegal in New York, unlike Nevada or European countries. If there were legal brothels, then business for places like this one would dry up.

The hypocrisy is the US helped drive Indonesians into poverty when the CIA helped an Indonesian coup massacre hundreds of thousands of trade unionists etc. in the 1960s. The hypocrisy is the US has a religious hysteria about sex. The hypocrisy is the US has laws on the book making prostitution illegal, which is what could create something like this theoretically happening. Women in poverty come to the US and work for pittance wages sowing shirts and pants together, but we never hear about how they have the gun at their back as they move from place to place and are enslaved etc. But when religious fundamentalists hear sex is involved, then some form of hysteria sets in.

Then we hear excuses for the PRISM Big Brother government controls everything stuff because of all this hypocrisy. It's a win-win for big money and big government - ban a woman willing to have sex from a man with money from conducting a transaction (driving it underground and allowing situations like this to potentially happen), massacre the Indonesian left and drive Indonesians into poverty, and then get support for Big Brother tactics to stop the invented tales of prostitutes who "escaped their captivity" but surprisingly "still want to stay in the US".

So, your argument is that your intimate knowledge of criminal enterprise and everyone's lives leads you to believe that anyone who claims to be a victim of human trafficking is a liar because it sounds unlikely to you?

Despite all the evidence to the contrary provided by human rights organizations around the world?

Fiduciary duty should be to prevent customers from being scammed themselves, not to prevent them from purchasing things they want. IE Nigerian puppies is probably a scam, but of, "Hi, we're Paypal and we've decided to just keep your money because you ordered a reproduction Civil War cavalry saber and it's against our TOS" is just bull.

It's one thing to have some sort of fiduciary duty to protect customers from scams. It's another to impose government or public morality on the commerce a service is gatekeeping.

Especially when said laws prevent access to the marketplace without going through said gatekeepers.

> A payment processor has a fiduciary duty for its customers.

Oh? This time the fiduciary duty is towards customers and not shareholders? :p

Funny how most times it's trotted out as an excuse for some scumbaggery by a corporation, but now it's a reason to "protect" customers.

The idea that the state has a right to know what I do with my money and can force me to give up my privacy just because the amount in question is 'large' is disgusting.

Wanting privacy shouldn't make you a criminal just because many criminals also happen to want to remain on the down low.

Further, the appeals of "oh, but drugs" or "oh, but human trafficking" or "oh, but child porn" and so on are empty.

They reflect an abject laziness from society and law enforcement: they want problems to be easy and they want to play lip service rather than solve them. They reflect the notions that it's 'good enough' for something to be done however ineffective and worthless it is.

Agreed. The entire concept of "financial crimes" has only been applied in a widespread manner with the advent of the war on drugs, which many of us oppose for a variety of very valid reasons.

Actually, the Bank Secrecy Act was passed alongside RICO. The target was organized crime, not drugs. Nixon coined the term "War on Drugs" in 1971, but aggressive drug prohibition in the U.S. dated back long before that, and the explosion in imprisonment as a result of drug prosecutions didn't really kick in until a decade later: http://en.wikipedia.org/wiki/War_on_Drugs#Arrests_and_incarc....

While "financial crimes" are a key part of the drug war now, their primary use has been to attack the kind of organized crime that turned New York into Gotham City in the 1970's.

Watch the movie Donnie Brasco and also the various documentaries about the Mob Commission Trial. National Geographic has some good material here: http://channel.nationalgeographic.com/channel/inside-the-ame....

Yeah, take a real close look at what led to our needing RICO (another non-sensical law): prohibition of alcohol and gambling. Without those two legal battles, the mob would have still been shaking down the corner grocer for a couple of bucks protection money (which our country's law enforcement should have been taking care of, instead of chasing down bootleggers and betting operations).

Watch Ken Burn's documentary on prohibition and soak in all the parallel's to today's war on drugs: http://www.pbs.org/kenburns/prohibition/

"organized crime" to the level that necessitated the RICO act only came about because of the war on drugs (in that particular case, alcohol was the drug in question).

While it's true that organized crime grew up during the bootlegging era, organized crime was on the upswing in the 1960's and 1970's, at a time long after prohibition had ended and before the modern drug war had started. Clearly, the fuel to feed organized crime existed without prohibition. Given that fact, it's hard to say that those organizations wouldn't have grown bigger and more sophisticated during that period anyway (just like corporations did, for reasons that had nothing to do with prohibition).

The modern drug war was well underway in the 1970s (watch Donnie Brasco again). It just had not yet morphed into the crack epidemic (an epidemic whose roots lay partially in the skyrocketing cost of cocaine due to the war on drugs).

Exactly my point. Prohibition was definitely part of this country's long-standing war on "illegal substances".

The crime isn't transferring the money. The law applies to the payment processor, who profits from often criminal activity.

Operating a medium of trade for profit that others use consensually shouldn't be illegal. The act of people trading value consensually also shouldn't be illegal. The parent post is likely affirming both of these positions.

You can make that argument, but there are two different positions to argue, and the former position is harder to justify than the latter.

Money laundering is, indeed, as deluded of a new age crime as are most other nonviolent actions made into crimes under a heavily corporatist or domineering system. It's as deserving of punishment as is the harvest and trade of plants; or as is an entrepreneur who dares to create in a world where others, for a fee, can claim total national dominion over trade in prior intellectual "inventions" (patents: one of the most top-heavy, anti-small-business systems in US government); or as are the sexual actions of consenting people.

Societies that learn to solve problems -- what some people see as problems -- by using violence and the threat thereof (i.e. law) will, of course, be societies that have a propensity to engineer even the tritest of cultural aspects they want to change by using more violence.

Crimes against facilitating human trafficking and terrorism disgust you?

We should ban trucks too, because people can be carried in trucks. And you're against human trafficking, right?

Nobody is banning money transfer, just regulating it.

And coming back to trucks, we do require trucks to be registered, drivers to have identification that can be checked by police officers and the ability for border police to examine your cargo when you cross an international border.