8 ms·

Anti-money laundering laws and copyright laws are similar and should be revised

116 points by drallison 11y ago

x5n1 11y ago
In another words totalitarian governments should be reformed. Laws did not come into existence on their own. They were implemented by governments that don't respect the will of the people.
- nickff 11y ago
  It may surprise you to hear that most citizens do not care about privacy, and actually support government surveillance, for a variety of reasons. If you want a simple gauge of whether the public supports a measure without wanting to read through polls, just look for a signing ceremony, and the date of passage. Unpopular or politically risky things (like releasing Hillary Clinton's e-mails) are done just before major holidays or events, and popular measures are enacted Monday-Wednesday on a quiet week (, whereas the largest group of Clinton's e-mails were released the day before the Super Bowl).
  - x5n1 11y ago
    I think other than a minority, the majority in the US that consume digital goods are willing to not respect copyright when acquiring them, so they don't care about copyright much more so and then don't wish to be prosecuted for it. In fact you will have a very hard time finding majority support for prosecution of copyright violation. In terms of money laundering most Americans don't care for their finances to be constantly monitored, and will not support such policies. Surveillance and privacy are a different issue, because it's not really possible to properly frame it in terms of most American's activities. You can frame it as a way to get drug dealers, junkies, the terrorists. So obviously when you put it that way you can get support.
    - marcoperaza 11y ago
      >In fact you will have a very hard time finding majority support for persecution of copyright violation. I think it's a little more nuanced than that. Most people might not support criminal prosecution for individuals downloading movies, but I think a majority would definitely support prosecuting someone that made thousands of dollars from copyright infringement.
  - elorant 11y ago
    Why do we keep assuming that people don’t care about privacy? Perhaps they care just not the way we do because we’re more informed. The average user doesn’t have the technical background to realize how companies are monitoring him online, but that doesn’t necessarily mean that if he knew he wouldn’t give a damn. From another point of view perhaps the main reason a great part of society is skeptical towards technology could be exactly because they fear it could steal away their privacy.
    - deleted 11y ago
      [deleted]
    - mikeash 11y ago
      I think just about everybody cares about privacy, but many care about it so differently that it looks a lot like not caring. A lot of it comes down to essentially having faith in law enforcement. Basically, "if you have nothing to hide, you have nothing to fear." Nobody wants to be watched while they get dressed or use the toilet, but government surveillance is looking for criminal activity. People don't mind it, because they're not criminals. Another big chunk is what I'd call theoretical versus practical privacy. The NSA is capturing all our phone calls and internet activity. Us techies typically see this as a massive invasion of privacy, because NSA employees might be looking through all our stuff. I think the average man on the street does not see it as a massive invasion of privacy, because NSA employees probably aren't looking through all of their stuff, as they have more important stuff to do. And then there's just the question of tradeoffs. We usually see government surveillance as a huge invasion of privacy with little if any benefit. Lots of people see it as a minor invasion of privacy with a huge law-and-order benefit. I think just about everybody cares about privacy, but that doesn't necessarily translate into opposing government surveillance.
      - nitrogen 11y ago
        People don't mind it, because they're not criminals. This should be called the "other people" fallacy, the idea that bad things only happen to someone else. Similar to the just world fallacy. How could we get people to understand these fallacies? probably aren't looking through all of their stuff We understand that the risks are not just from humans creeping on us, but also inscrutable secret algorithms monitoring and/or influencing people in ways we may not agree with. Also, potential abuse just about as important as actual abuse, since we don't know who will have access in the future. minor invasion of privacy with a huge law-and-order benefit. Maybe this can be countered by demanding numbers, with documentation backing up the numbers. How many crimes were solved, or terrorist plots foiled, by invading our privacy, that could not have been solved otherwise? And even if that number is significantly greater than zero, what is the societal cost, and is that societal cost justified by the numbers?
  - striking 11y ago
    Let's do some research! Pew Research states that "A majority of Americans (54%) disapprove of the U.S. government’s collection of telephone and internet data as part of anti-terrorism efforts".[1] So, right off the bat, we know that most people care about privacy. And maybe this meme that so many people are uncaring or ignorant about privacy will eventually die. 1: http://www.pewresearch.org/fact-tank/2015/05/29/what-americans-think-about-nsa-surveillance-national-security-and-privacy/ http://www.pewresearch.org/fact-tank/2015/05/29/what-america...
    - nickff 11y ago
      This is a snapshot, when the issue has been brought to the fore; if you look at the historical data, it appears that people were more comfortable with continuous monitoring and intrusions in the past, and that they will again become more comfortable with it in the future.
      - striking 11y ago
        They were fine with it until they realized their private pictures and everything else belonging to them on the web were accessible to the government. In other words, no one cared until they were made to care. No one knew the government was watching, and people who thought they were had no evidence. But that's tangential to the fact that a statistic has poked a hole through your argument about today's day and age, for which you haven't provided a counterargument. Is there a logical reason you think that people "will again become more comfortable with it" or is it just a hunch? I'm tired of the nonsense and FUD surrounding American attitudes towards privacy.
        nickff 11y ago
        I actually looked up the Pew polling data before posting. You found a contradictory point, but not a solid case. Look at the public's reactions to the 'Echelon' program for instance, and you will see their revulsion is ephemeral. In addition, the average citizen is against general surveillance, but in favor of suspect surveillance (as you will find if you look at the data a little more closely). The only way this works is to have backdoors, which everyone here knows are flawed.
marcosdumay 11y ago
I'll grant that some revising is needed, but... From the start copyright and anti money laundering laws have very different intents and act upon very different subjects. Avoiding money laundering is a laudable goal, while avoid the dissemination of information is not clearly so. Yes, anonymous payment systems are something interesting, and it may be that societies should let them flourish (I'm very ambivalent on this). But they are not on the same league as free communication systems.
- zanny 11y ago
  It isn't about the anonymous payment parts, it is about the restrictive terms anti-laundering laws force upon any form of currency, in a time when we are trying to push the boundaries of what "currency" or "money" should even mean. We cannot achieve the potential of technology in the scope of economics if this entire aspect of market cannot be explored because of archaic laws mostly made as draconian as they are to complement a war on drugs that is even more draconian.
  - TylerE 11y ago
    Yep, gotta push new boundaries of Sorry For Your Loss.
- SilasX 11y ago
  >Avoiding money laundering is a laudable goal, while avoid the dissemination of information is not clearly so. You're not comparing apples to apples. The goal of money laundering laws is to make it harder to profit from crimes, achieved by the means of e.g. violating financial privacy. The goal of copyright laws is not to "prevent dissemination of information" but to encourage better intellectual works by granting their creators temporary control of them; this is achieved by the means of restricting some kinds of copying. Both intents are noble; to characterize the goal of copyright law as "preventing the dissemination of information" is the wrong comparison.
  - over 11y ago
    You've introduced a means into your goal: goal: "encourage better intellectual works" means: "granting their creators temporary control of them" There are other ways to meet that goal.
Kinnard 11y ago
Money Laundering is Financial Thoughtcrime: http://www.americanbanker.com/bankthink/money-laundering-is-.. http://www.americanbanker.com/bankthink/money-laundering-is-.... . . . By Former Chief Foreign Exchange Dealer; Director of Credit Card Interchange @ Visa & Founding Director of the Bitcoin Foundation . . .
- ddinh 11y ago
  The link seems to be invalid; here is a working one: http://www.americanbanker.com/bankthink/money-laundering-is-financial-thoughtcrime-1058902-1.html http://www.americanbanker.com/bankthink/money-laundering-is-...
  - AnthonyMouse 11y ago
    Which also links to this: http://www.forbes.com/sites/jonmatonis/2013/02/24/the-cashless-utopia-mirage/ http://www.forbes.com/sites/jonmatonis/2013/02/24/the-cashle...
throwaway_exer 11y ago
Hi Joi. I think you wrote down a list of facts and anecdotes that are valuable, but you need to proof-read your work or collaborate with a greater intellect to make a coherent point, maybe Eben Moglen?
contingencies 11y ago
The premise of the article is interesting though a little bit of a stretch. Personally I've had some exposure to AML/KYC training for Kraken's implementation (~5% of global Bitcoin/conventional financial system exchange volume at last estimate). AML and KYC operate under a simple premise: if you don't comply, the government in a given jurisdiction fines you heavily and/or removes your license to operate. In practice, we've seen only 'slap on the wrist' (eg. for the recent case of HSBC laundering cartel money). The only way this works on a global basis is that the US goes around bullying different countries in to theoretically agreeing to comply, because terrorism blahblah. Enforcement in reality is weak to nonexistant: basically other than looking at SWIFT traffic and extrapolating what they believe 'should' have been reported (definitions are pretty vague in many cases), the US has no real way to check on financial institutions. Since basically the top 5-10% of capital holders routinely minimize tax (launder money) and much of the developing world's capital is illegally exported to western banks (Africa, China, etc.) and nobody blinks an eye, the system as it stands could be said to actively encourage a fiscal divide based upon selective enforcement. To put it simply, money under any premise of central control acts as a purveyor of political will. Personally, I have been extremely impressed at the efficacy with which the US has threatened various Bitcoin/conventional financial sysytem exchange operators in to complying, but simultaneously deeply disappointed at the resulting enhancement of status quo. Instead of the article's premise, I would posit the question: shouldn't high barriers to financial institution licensing be the real target here? Reporting is already arbitrary and vague, and somewhat useless to the government compared to pre-existing SWIFT surveillance.
ycmbntrthrwaway 11y ago
Related: https://news.ycombinator.com/item?id=11008398 https://news.ycombinator.com/item?id=11008398
spangry 11y ago
I don't really get the article's point on bitcoin and AML/CTF. The legislation works by requiring financial institutions to bind real-world identities to accounts, at the point of registration. Many bitcoin exchanges comply with this in the same way banks do: they do the required ID check if you want to set up an account (or when you want to transact in non-trivial volumes). Most of the reporting under AML/CTF laws is automated, as there are a bunch of 'automatically report' rules like: - Any transaction over $10,000 - Any transfer involving a foreign bank account, regardless of the amount The manual reports are much rarer, and rely more on things like bank teller judgment. Essentially they'll report 'structured' transactions that seem designed to avoid triggering the 'automatic reporting' rules (e.g. someone depositing $9,999 5 days in a row). Of course there are tonnes of holes in AML/CTF, even for conventional financial systems. For instance, if you want to transfer your money to a tax haven, you first route the money through some non-suspicious country. Even if that country has a data sharing agreement with the US, it's much harder for investigators to follow the trail. It's hard enough to get two bureaucrats from different departments to co-operate/co-ordinate. It's orders of magnitude harder to achieve this across borders. My point is this: yes bitcoin allows you to use a tumbling service, or coin join, or whatever to sever the link between your transactions and your identity. But this is also easy enough to do with conventional financial systems. I don't think bitcoin has some special property here that presents any kind of new problem for AML/CTF. Perhaps the more relevant issue, which has nothing to do with bitcoin, is that there are fairly trivial ways to avoid detection via AML/CTF laws, regardless of your chosen medium of exchange. So the laws tend only to catch the less sophisticated money launders/tax cheats. Bitcoin doesn't pose any new questions, but the existing ones are still worth answering: is the additional regulatory impost on financial institutions worth the compliance gains from AML/CTF reporting? If the answer is 'no', then perhaps we should just do away with them entirely.

116 points by drallison 11y ago

x5n1 11y ago

In another words totalitarian governments should be reformed. Laws did not come into existence on their own. They were implemented by governments that don't respect the will of the people.

nickff 11y ago
It may surprise you to hear that most citizens do not care about privacy, and actually support government surveillance, for a variety of reasons. If you want a simple gauge of whether the public supports a measure without wanting to read through polls, just look for a signing ceremony, and the date of passage. Unpopular or politically risky things (like releasing Hillary Clinton's e-mails) are done just before major holidays or events, and popular measures are enacted Monday-Wednesday on a quiet week (, whereas the largest group of Clinton's e-mails were released the day before the Super Bowl).
- x5n1 11y ago
  I think other than a minority, the majority in the US that consume digital goods are willing to not respect copyright when acquiring them, so they don't care about copyright much more so and then don't wish to be prosecuted for it. In fact you will have a very hard time finding majority support for prosecution of copyright violation. In terms of money laundering most Americans don't care for their finances to be constantly monitored, and will not support such policies. Surveillance and privacy are a different issue, because it's not really possible to properly frame it in terms of most American's activities. You can frame it as a way to get drug dealers, junkies, the terrorists. So obviously when you put it that way you can get support.
  - marcoperaza 11y ago
    >In fact you will have a very hard time finding majority support for persecution of copyright violation. I think it's a little more nuanced than that. Most people might not support criminal prosecution for individuals downloading movies, but I think a majority would definitely support prosecuting someone that made thousands of dollars from copyright infringement.
- elorant 11y ago
  Why do we keep assuming that people don’t care about privacy? Perhaps they care just not the way we do because we’re more informed. The average user doesn’t have the technical background to realize how companies are monitoring him online, but that doesn’t necessarily mean that if he knew he wouldn’t give a damn. From another point of view perhaps the main reason a great part of society is skeptical towards technology could be exactly because they fear it could steal away their privacy.
  - deleted 11y ago
    [deleted]
  - mikeash 11y ago
    I think just about everybody cares about privacy, but many care about it so differently that it looks a lot like not caring. A lot of it comes down to essentially having faith in law enforcement. Basically, "if you have nothing to hide, you have nothing to fear." Nobody wants to be watched while they get dressed or use the toilet, but government surveillance is looking for criminal activity. People don't mind it, because they're not criminals. Another big chunk is what I'd call theoretical versus practical privacy. The NSA is capturing all our phone calls and internet activity. Us techies typically see this as a massive invasion of privacy, because NSA employees might be looking through all our stuff. I think the average man on the street does not see it as a massive invasion of privacy, because NSA employees probably aren't looking through all of their stuff, as they have more important stuff to do. And then there's just the question of tradeoffs. We usually see government surveillance as a huge invasion of privacy with little if any benefit. Lots of people see it as a minor invasion of privacy with a huge law-and-order benefit. I think just about everybody cares about privacy, but that doesn't necessarily translate into opposing government surveillance.
    - nitrogen 11y ago
      People don't mind it, because they're not criminals. This should be called the "other people" fallacy, the idea that bad things only happen to someone else. Similar to the just world fallacy. How could we get people to understand these fallacies? probably aren't looking through all of their stuff We understand that the risks are not just from humans creeping on us, but also inscrutable secret algorithms monitoring and/or influencing people in ways we may not agree with. Also, potential abuse just about as important as actual abuse, since we don't know who will have access in the future. minor invasion of privacy with a huge law-and-order benefit. Maybe this can be countered by demanding numbers, with documentation backing up the numbers. How many crimes were solved, or terrorist plots foiled, by invading our privacy, that could not have been solved otherwise? And even if that number is significantly greater than zero, what is the societal cost, and is that societal cost justified by the numbers?
- striking 11y ago
  Let's do some research! Pew Research states that "A majority of Americans (54%) disapprove of the U.S. government’s collection of telephone and internet data as part of anti-terrorism efforts".[1] So, right off the bat, we know that most people care about privacy. And maybe this meme that so many people are uncaring or ignorant about privacy will eventually die. 1: http://www.pewresearch.org/fact-tank/2015/05/29/what-americans-think-about-nsa-surveillance-national-security-and-privacy/ http://www.pewresearch.org/fact-tank/2015/05/29/what-america...
  - nickff 11y ago
    This is a snapshot, when the issue has been brought to the fore; if you look at the historical data, it appears that people were more comfortable with continuous monitoring and intrusions in the past, and that they will again become more comfortable with it in the future.
    - striking 11y ago
      They were fine with it until they realized their private pictures and everything else belonging to them on the web were accessible to the government. In other words, no one cared until they were made to care. No one knew the government was watching, and people who thought they were had no evidence. But that's tangential to the fact that a statistic has poked a hole through your argument about today's day and age, for which you haven't provided a counterargument. Is there a logical reason you think that people "will again become more comfortable with it" or is it just a hunch? I'm tired of the nonsense and FUD surrounding American attitudes towards privacy.
      - nickff 11y ago
        I actually looked up the Pew polling data before posting. You found a contradictory point, but not a solid case. Look at the public's reactions to the 'Echelon' program for instance, and you will see their revulsion is ephemeral. In addition, the average citizen is against general surveillance, but in favor of suspect surveillance (as you will find if you look at the data a little more closely). The only way this works is to have backdoors, which everyone here knows are flawed.

marcosdumay 11y ago

I'll grant that some revising is needed, but... From the start copyright and anti money laundering laws have very different intents and act upon very different subjects. Avoiding money laundering is a laudable goal, while avoid the dissemination of information is not clearly so. Yes, anonymous payment systems are something interesting, and it may be that societies should let them flourish (I'm very ambivalent on this). But they are not on the same league as free communication systems.

zanny 11y ago
It isn't about the anonymous payment parts, it is about the restrictive terms anti-laundering laws force upon any form of currency, in a time when we are trying to push the boundaries of what "currency" or "money" should even mean. We cannot achieve the potential of technology in the scope of economics if this entire aspect of market cannot be explored because of archaic laws mostly made as draconian as they are to complement a war on drugs that is even more draconian.
- TylerE 11y ago
  Yep, gotta push new boundaries of Sorry For Your Loss.
SilasX 11y ago
>Avoiding money laundering is a laudable goal, while avoid the dissemination of information is not clearly so. You're not comparing apples to apples. The goal of money laundering laws is to make it harder to profit from crimes, achieved by the means of e.g. violating financial privacy. The goal of copyright laws is not to "prevent dissemination of information" but to encourage better intellectual works by granting their creators temporary control of them; this is achieved by the means of restricting some kinds of copying. Both intents are noble; to characterize the goal of copyright law as "preventing the dissemination of information" is the wrong comparison.
- over 11y ago
  You've introduced a means into your goal: goal: "encourage better intellectual works" means: "granting their creators temporary control of them" There are other ways to meet that goal.

Kinnard 11y ago

Money Laundering is Financial Thoughtcrime: http://www.americanbanker.com/bankthink/money-laundering-is-.. http://www.americanbanker.com/bankthink/money-laundering-is-.... . . . By Former Chief Foreign Exchange Dealer; Director of Credit Card Interchange @ Visa & Founding Director of the Bitcoin Foundation . . .

ddinh 11y ago
The link seems to be invalid; here is a working one: http://www.americanbanker.com/bankthink/money-laundering-is-financial-thoughtcrime-1058902-1.html http://www.americanbanker.com/bankthink/money-laundering-is-...
- AnthonyMouse 11y ago
  Which also links to this: http://www.forbes.com/sites/jonmatonis/2013/02/24/the-cashless-utopia-mirage/ http://www.forbes.com/sites/jonmatonis/2013/02/24/the-cashle...

throwaway_exer 11y ago

Hi Joi. I think you wrote down a list of facts and anecdotes that are valuable, but you need to proof-read your work or collaborate with a greater intellect to make a coherent point, maybe Eben Moglen?

contingencies 11y ago

The premise of the article is interesting though a little bit of a stretch. Personally I've had some exposure to AML/KYC training for Kraken's implementation (~5% of global Bitcoin/conventional financial system exchange volume at last estimate). AML and KYC operate under a simple premise: if you don't comply, the government in a given jurisdiction fines you heavily and/or removes your license to operate. In practice, we've seen only 'slap on the wrist' (eg. for the recent case of HSBC laundering cartel money). The only way this works on a global basis is that the US goes around bullying different countries in to theoretically agreeing to comply, because terrorism blahblah. Enforcement in reality is weak to nonexistant: basically other than looking at SWIFT traffic and extrapolating what they believe 'should' have been reported (definitions are pretty vague in many cases), the US has no real way to check on financial institutions. Since basically the top 5-10% of capital holders routinely minimize tax (launder money) and much of the developing world's capital is illegally exported to western banks (Africa, China, etc.) and nobody blinks an eye, the system as it stands could be said to actively encourage a fiscal divide based upon selective enforcement. To put it simply, money under any premise of central control acts as a purveyor of political will. Personally, I have been extremely impressed at the efficacy with which the US has threatened various Bitcoin/conventional financial sysytem exchange operators in to complying, but simultaneously deeply disappointed at the resulting enhancement of status quo. Instead of the article's premise, I would posit the question: shouldn't high barriers to financial institution licensing be the real target here? Reporting is already arbitrary and vague, and somewhat useless to the government compared to pre-existing SWIFT surveillance.

ycmbntrthrwaway 11y ago

Related: https://news.ycombinator.com/item?id=11008398 https://news.ycombinator.com/item?id=11008398

spangry 11y ago

I don't really get the article's point on bitcoin and AML/CTF. The legislation works by requiring financial institutions to bind real-world identities to accounts, at the point of registration. Many bitcoin exchanges comply with this in the same way banks do: they do the required ID check if you want to set up an account (or when you want to transact in non-trivial volumes). Most of the reporting under AML/CTF laws is automated, as there are a bunch of 'automatically report' rules like: - Any transaction over $10,000 - Any transfer involving a foreign bank account, regardless of the amount The manual reports are much rarer, and rely more on things like bank teller judgment. Essentially they'll report 'structured' transactions that seem designed to avoid triggering the 'automatic reporting' rules (e.g. someone depositing $9,999 5 days in a row). Of course there are tonnes of holes in AML/CTF, even for conventional financial systems. For instance, if you want to transfer your money to a tax haven, you first route the money through some non-suspicious country. Even if that country has a data sharing agreement with the US, it's much harder for investigators to follow the trail. It's hard enough to get two bureaucrats from different departments to co-operate/co-ordinate. It's orders of magnitude harder to achieve this across borders. My point is this: yes bitcoin allows you to use a tumbling service, or coin join, or whatever to sever the link between your transactions and your identity. But this is also easy enough to do with conventional financial systems. I don't think bitcoin has some special property here that presents any kind of new problem for AML/CTF. Perhaps the more relevant issue, which has nothing to do with bitcoin, is that there are fairly trivial ways to avoid detection via AML/CTF laws, regardless of your chosen medium of exchange. So the laws tend only to catch the less sophisticated money launders/tax cheats. Bitcoin doesn't pose any new questions, but the existing ones are still worth answering: is the additional regulatory impost on financial institutions worth the compliance gains from AML/CTF reporting? If the answer is 'no', then perhaps we should just do away with them entirely.