8 ms·

US Senate bill on “any digital exchanger or tumbler of digital currency”

87 points by fcanesin 9y ago

reilly3000 9y ago
I think this is mostly targeted at prepaid Visa cards which are very commonly used for money laundering. I keep my wallets in a private cloud. I don't see how a border agent could know they exist. I think the bigger question is 'does dark money enable crime?'. If the answer is yes, then we as a tech community need to consider the impact of legitimizing cryptocurrent and enabling unfettered criminal enterprise.
- deleted 9y ago
  [deleted]
- ceejayoz 9y ago
  > I think this is mostly targeted at prepaid Visa cards which are very commonly used for money laundering. I've never heard of prepaid Visa cards being called a "tumbler of digital currency", which the bill specifically deals with. It seems clear whoever wrote this knows about Bitcoin etc. > I keep my wallets in a private cloud. I don't see how a border agent could know they exist. It's well documented that they're poking around on social media for information on folks. You've posted that you have one on an account whose profile mentions your employer's name. I wouldn't be shocked if they could connect the dots pretty trivially.
  - cabaalis 9y ago
    During the last election cycle I stripped all of my online social media of any real life references. Except for my name on Facebook and my LinkedIn account, which I never use for non-work stuff or private opinions. Definitely doesn't make their work impossible, but why make it easy?
    - petre 9y ago
      Having FB and Linkedin accounts with your real name is already making it easy.
    - KGIII 9y ago
      Do you believe they really deleted it? Removing it from their website doesn't mean it was removed from their servers. I'd be skeptical, where I you.
  - ThrustVectoring 9y ago
    The amendment also covers "prepaid access devices", which is apparently the technically-specific way to talk about things like prepaid Visa cards. Quote: >A prepaid access program is an arrangement through which one or more persons acting together provide access to funds or the value of funds that have been paid in advance and can be retrieved or transferred at some point in the future through an electronic device or vehicle, such as a card, code, electronic serial number, mobile identification number, or personal identification number. https://www.occ.treas.gov/news-issuances/bulletins/2011/bulletin-2011-27.html https://www.occ.treas.gov/news-issuances/bulletins/2011/bull... So basically, the grandparent is asserting that the main thrust of the bill is the amendments that make prepaid cards covered.
- mrb 9y ago
  Any technology enables crime. Have you considered the impact of legitimizing cars, weapons, phones, audio recorders, drones, etc? Edit: not sure how to interpret the replies to my post ("currency enables crime"). Yes the dollar/euro/pound/cryptocurrency enable crime. Should we ban them all? No. Both government-controlled currencies and cryptocurrencies enable economic activity, hence create wealth, and are a net benefit to society. Besides more illegal activity is conducted (in absolute and relative numbers) in fiat than in cryptocurrency so that's even less of a reason to ban cryptocurrency.
  - senectus1 9y ago
    Any Currency enables crime. in fact I'd go as far as to say that it's a driving force for Crime...
  - cbanek 9y ago
    Currency definitely enables crime. There are a few reasons why institutions (government, banks) are crazy about digital currency: auditing (taxes, crime), fees, negative interest rates.
  - Kinnard 9y ago
    "If it can't be used for evil, it isn't a super power"
  - closeparen 9y ago
    We are in the process of delegitimizing cars, weapons are already taboo and illegal in liberal cities, Congress keeps trying to open phones to law enforcement, HN is enamored of European-style privacy laws that make it an onerous legal liability to have the capability for audio recording (or any other data collection), and drones were heavily curtailed by the FAA with widespread public support. We already have currency, and it works much better than any cryptocurrency. The specific problem cryptocurrency solves is vulnerability to law enforcement (i.e. central control). I would also be concerned if someone started selling weapons whose defining feature was their resistance to homicide investigators.
  - xg15 9y ago
    > Besides more illegal activity is conducted (in absolute and relative numbers) in fiat than in cryptocurrency. (emphasis mine) I'm honestly surprised by that. (Especially after it's seems to be the go-to method of payment for ransomware which should lead to huge amounts of illegal activity.) Could you link some sources?
- lisper 9y ago
  > does dark money enable crime? How can there be any doubt in your mind that the answer is yes? The whole ransomware industry is only viable because bitcoin has succeeded.
  - mirimir 9y ago
    Well, the Silk Road and its replacements have been orders of magnitude larger than the "ransomware industry". And there's arguably no moral requirement to obey immoral laws. So overall, cryptocurrencies have been a huge win for freedom.
    - lisper 9y ago
      I don't deny that. But being a win for freedom and being a win for crime are not mutually exclusive.
      - mirimir 9y ago
        I can't quite parse that :( But I believe that "being a win for freedom and being a win for crime" necessarily overlap. Maybe entirely. Because anything that allows some authorities to curtail crime necessarily allows other authorities to curtail freedom.
        lisper 9y ago
        > I can't quite parse that :( Sorry. It means we agree.
    - slg 9y ago
      Are you arguing laws against money laundering are immoral? Because they are a practical requirement in order to levy any type of income tax. Or are you claiming that Silk Road style sites are only illegal because of immoral laws? I get that the HN crowd generally has a libertarian and anti-prohibition bent, but outside of illicit drugs there are some inarguably horrible things being sold on those sites like child porn and murders for hire. Doesn't the government and law enforcement have a moral requirement to combat that?
- matt_wulfeck 9y ago
  They don't have to know about them. They just have to ask you about them. I don't know the exact legality around border agents, but I can't imagine lying to them working out well for you.
  - petre 9y ago
    Nice try. Lying to the feds is already a crime punishable by up to 5 years in jail if I'm not mistaken.
    - KGIII 9y ago
      I am pretty sure that only applies to certain federal agents - while under investigation, and on forms that are official submissions. There are, as near as I recall, certain other specific lies that are in the State's jurisdiction, such as giving the police a fake name. Something like 15 years ago, SCOTUS also ruled against a guy who refused to give the police his name when he was questioned. For the most part, you can tell a regular cop all sorts of lies, with some exceptions like your name. Lying to the FBI is against the law, if you're being questioned in regards to a criminal matter - I am unsure about civil matters. You sure as hell can't lie on the forms you sign when you cross the border. No, they will be right pissed if you do that. I am not a lawyer, but I have spent some time in court, dated a lawyer, and taken a few electives on the subject. So, this isn't legal advice but I'm pretty sure this is reasonably accurate. Sort of off topic, they pick students to hold mock trials, hearings, etc., and do this in a mock courtroom at many universities. If you audit the right course, you can volunteer and you can learn all sorts of neat things. You can also just go sit in the courtroom at your local court. It's open to the public, most of the time. It's a great way to learn more about procedure. Anyhow, like always, consult a qualified legal professional in your jurisdiction, should you need legal advice.
      - ceejayoz 9y ago
        > I am pretty sure that only applies to certain federal agents - while under investigation, and on forms that are official submissions. If digital currencies really take off (i.e. beyond just a niche group of speculators and early adopters), expect customs forms to include a question on it, then. You already have to promise not to be a member of Al Qaeda on some immigration forms.
- sbuttgereit 9y ago
  Along the way, we also need to consider what is considered crime and what is not. Not all 'crime' as defined by law, is immoral. And sometimes, enabling certain activities can be very illegal, yet profoundly moral. Of course, we all likely won't agree on what counts as illegal/moral. Your point is not invalid, just more nuanced or complex perhaps that your direct point suggests.
  - blazespin 9y ago
    It's a crime if you live there and it's considered the law of the land that you have broken. Don't like it and can't effect change lawfully? Move. This is the best explanation I have seen. Morality is a completely artificial construct. There is no such thing as something being provably evil or good. It's not a math equation, but rather the consensus of your peers. I love crypocurrency as much as the next guy, but I also enjoy the happiness I get from living in a law abiding community.
    - gameshot911 9y ago
      Sure. Tomorrow morning you wake up and your country has mandated DNA testing for all citizens. Anyone who does not have approved genomes will be summarily sterilized 'for the good of the future of the citizenry'. Oh, and they also made it illegal to avoid the DNA testing, and to move out of your current location. What then?
    - derefr 9y ago
      > It's not a math equation, but rather the consensus of your peers. Those two ideas aren't inherently contradictory. It's pretty easy to ground metaethics by asserting something like "human genetics encodes an instinctual preference function for social mores into human brains." Then, "morality" is an objective fact: an objective fact about what actions are acceptable to (neurotypical) humans.
      - aaron-lebo 9y ago
        Yeah and a century ago social mores said interracial marriage was immoral and neurotypical humans of the time believed it because society. Ain't nothing objective there.
- hilyen 9y ago
  >'does dark money enable crime?' all currency does this.
  - wfunction 9y ago
    Some more than others, e.g. see Bitcoin and ransomware proliferation
    - DaiPlusPlus 9y ago
      As we saw with WannaCry: the type of people who fall victim to ransomware attacks are also the type of people who aren't really able to use Bitcoin.
      - wfunction 9y ago
        That is completely irrelevant. The point is this is a reason to better regulate or ban digital currency, because it's massively helping the proliferation of ransomware. That people who get attacked by ransomware don't know how to use such currency is such a bizarrely irrelevant statement.
  - DaiPlusPlus 9y ago
    Has any crime happened with IMG Special Drawing Rights?
- arx1422 9y ago
  This is one of the most responsible comments I've ever seen on Hacker News.
- TheSpiceIsLife 9y ago
  we as a tech community There is no we that comprises a coherent tech community. People with malicious intent are also able to write code and assemble hardware.
- petre 9y ago
  > I keep my wallets in a private cloud. I don't see how a border agent could know they exist. When you exchange over $10k in cryptocurrency to actual cash, the exchange will have the obligation if reporting it. Also don't even think of breaking the exchange into 10 transactions of $1k because that too is covered by the law.
- deleted 9y ago
  [deleted]
- prawn 9y ago
  "I keep my wallets in a private cloud. I don't see how a border agent could know they exist." "Do you have a private cloud? Do you own cryptocurrency?" Watch your reaction while you realise that you've likely committed an offence if you deny it, etc. One day in the near future, they likely have algorithms giving them a likelihood that you fit the type, and that will suggest their line of questioning - whether it's about data storage or propensity to work while on a tourist visa, or whatever else. In the short term I imagine it will work, but I don't think it will work forever.
iandanforth 9y ago
Reading this is painful, is there any way to turn "inserting before the semicolon at the end the following: “, or any digital exchanger or tumbler of digital currency”; into a proper diff?
- declan 9y ago
  I tried here: https://news.ycombinator.com/item?id=14567005 https://news.ycombinator.com/item?id=14567005
arthur_trudeau 9y ago
Money laundering in practical terms means whatever the government wants it to mean. It has been successfully prosecuted as the simple deposit of funds the government doesn't like the origins of. The obstacle isn't law, it's the resources required to bring a successful case.
- cinquemb 9y ago
  >The obstacle isn't law, it's the resources required to bring a successful case. I think this is understated in this thread. In order to have effective governance on any level, you need people to "buy" into it willingly. It will only become easier for those who want to opt out of such despite the assumed risks of doing so. The resources [human, capital] are only getting more expensive for governance systems to use to effectively go after such on any meaningful level.
haser_au 9y ago
For me (not from or in the US), I see this as US Congress legitimising cryptocurrencies. If not fully, at least partially. Keeping legislation up to date with the latest methods of money laundering is their job. Digital currencies (in all of their forms) are the latest methods used. Therefore, including them specifically in legislation will help law enforcement combat money laundering. This will mean exchanges will need to cooperate with US agencies, if they operate any business in the US, and provide records of holders and balances, etc. This reduces risk for the businesses and individuals. At the moment, it's like the wild west (e.g. bankruptcies at Mt Gox and Cryptsy, large scale wallet thefts, WannaCry, etc.). Enabling US law enforcement to subpoena records from these exchanges will mean the 'dark money' moves out, and legitimacy takes it's place. I see this as a good thing. For those of us NOT laundering money through cryptocurrencies, this adds to the argument that they are legitimate replacements for the existing currencies of the world to perform transactions. That's how I see it from a completely external perspective.
- aaron-lebo 9y ago
  You're probably right, but it could just as easily be signs that authorities finally are starting to understand them and it's step one in a crackdown. I'll admit, that's partially due to a bias due to Bitcoin enthusiasts turning every event into a positive. Mt. Gox disaster? Oh well it's just the community policing itself. It's the sign of a healthy economy. To the moon! Sounds like an exaggeration, but checkout r/bitcoin and you'll know that sentiment. The really fun part about this is without tumblers or with regulated tumblers, you've now got a currency where every single transaction is globally available and traceable. Hits money launderers but hope you like the government tracking you. Cash transactions don't seem so bad after all.
  - cl0rkster 9y ago
    That is almost true. However, transferring value between cryptos is trivial and at least Monero and zcash allow you to tumble your transactions and essentially completely disguise the inputs and outputs from anyone trying to search the public ledger.
bobcallme 9y ago
I don't see why everyone here would be in favor of this bill. Not only does it expand civil forfeiture, it also turns almost everyone who works or runs a legitimate business into a criminal. Everyone here seems to want more government, laws and regulations that will be used against regular people who would otherwise be law abiding citizens.
- petre 9y ago
  They got tricked by gov't propaganda into thinking that only criminals launder money when in fact money laundering has ben extended to saving over $10k in cash under your matress. If you do that then you're obviously a criminal and your cash can be confiscated, your bank accounts can be frozen without due trial or a court order. The hunt for money is on.
  - coding123 9y ago
    It's very true. the good get punished.
- pmarreck 9y ago
  When it comes to matters of money it is apparently "guilty until proven innocent"
cowpig 9y ago
I wish I understood this language
declan 9y ago
This is a far-reaching bill that gives the Feds much more discretionary authority over digital currencies. The reason it's so far reaching is that it tweaks definitions that are embedded in thousands of pages of existing laws and regulations. It's like changing stdio.h in C--one tweak could have a big impact throughout an entire system. So let's wade through it. Federal law (31 USC 5312) currently regulates "financial institutions," which are defined as including banks, credit card companies, insurance companies, securities dealers, loan issuers--and that's not even an exhaustive list! One of the categories that's currently regulated is: "an issuer, redeemer, or cashier of travelers’ checks, checks, money orders, or similar instruments." The legislation would rewrite that definition to include: (K) an issuer, redeemer, or cashier of travelers’ checks, checks, money orders, prepaid access devices, digital currency, or similar instruments, or any digital exchanger or tumbler of digital currency; Another definition that gets changed is "monetary instruments," which expands to include prepaid access devices: as the Secretary may prescribe by regulation, coins and currency of a foreign country, travelers’ checks, bearer negotiable instruments, bearer investment securities, bearer securities, stock on which title is passed on delivery, prepaid access devices, and similar material... Prepaid access devices is a term of art that would now be defined broadly as: an electronic device or vehicle, such as a card, plate, code, number, electronic serial number, mobile identification number, personal identification number, or other instrument, that provides a portal to funds or the value of funds that have been paid in advance and can be retrievable and transferable at some point in the future. I don't know what the good senators are intending, but that seems pretty broad, and likely broader than necessary if their goal was to target prepaid Visa cards. Is a Bitcoin wallet "paid in advance" and "retrievable and transferable at some point in the future?" I'm not saying it necessarily is--what I am saying is that it's like wildcard matching when doing an 'rm -f', always a little dangerous. Better to be specific than something like any "portal to funds." Fincen (part of Treasury) said in 2013 that "A person's acceptance and/or transmission of convertible virtual currency cannot be characterized as providing or selling prepaid access because prepaid access is limited to real currencies." But that was based on the old definition, not the newly broadened one. (https://www.fincen.gov/resources/statutes-regulations/guidance/application-fincens-regulations-persons-administering https://www.fincen.gov/resources/statutes-regulations/guidan...) Now let's walk through some of the existing laws that reference these new definitions. A good start is the long list of existing Title 31 regulations primarily aimed at banks that would now get levied on any "issuer" or "redeemer" or "exchanger" of digital currency. That includes the obligation to: - "Verify[] the identity of any person seeking to open an account" (31 USC 5318) - "Maintain[] records of the information used to verify a person’s identity, including name, address, and other identifying information" (31 USC 5318) - "Report any suspicious transaction" to the Feds (31 USC 5318) - "Establish anti-money laundering programs, including, at a minimum" developing internal policies, compliance officer, training program, and independent audits (31 USC 5318) - File reports on transactions (31 USC 5313) - "Maintain appropriate procedures to ensure compliance with this subchapter and regulations prescribed under this subchapter" (31 USC 5318) - "Guard against money laundering" (31 USC 5318) - Allow the examination of "any books, papers, records, or other data of domestic financial institutions" related to reporting requirements (31 USC 5318) - Be summoned by Treasury to "produce such books, papers, records, or other data" and give testimony under oath up to 500 miles away (31 USC 5318) Note that many of the above sections of existing law give a heck of a lot of authority to the Treasury Department. Treasury could cough up very specific and narrow regulations that would lessen the impact. Or Treasury could follow the statutory text (aka go big or go home). The bill also expands the sweep of existing criminal law. Existing criminal law (31 USC 5324) prohibits any attempt to "structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions." (Structuring is defined as "evading the reporting requirements" in which banks tip off the Feds that you're, say, moving high volumes of cash.) Because an "issuer" or "redeemer" or "exchanger" of digital currency is now a financial institution, if you or I tried to dodge reporting requirements, we'd be looking at a federal felony punishable by up to 5 years in prison. Note that many other sections of Title 31 grant the Treasury Department discretion in rulemaking, so the blow could be lessened. At first glance this section does not seem to be one of those. The bill also means that no financial institution (remember this now includes any "issuer" or "redeemer" or "exchanger" of digital currency) would be allowed to "issue" any "monetary instrument" (which includes any code "retrievable and transferable at some point in the future") unless "the individual furnishes the financial institution with such forms of identification as the Secretary of the Treasury may require." (31 USC 5326) I'm getting a bit tired but did want to raise the question of whether or not the 31 USC 5332 rules against moving cash across the U.S. border now extend to digital currencies. One section of the bill requires CBP to devise a "strategy to interdict and detect prepaid access devices, digital currencies, or other similar instruments, at border crossings and other ports of entry for the United States." (Emphasis added) Existing law punishes anyone who: "Attempts to transport or transfer such currency or monetary instruments from a place within the United States to a place outside of the United States" -- and remember, "monetary instrument" is newly expanded. At least this seems at first glance to target only physical border-crossing and not electronic, and to require intent to evade reporting requirements. Would you have to declare a cold storage wallet if one happened to live on your electronic device? (CBP's forensic searches and scans just got a bit more worrisome...) Anyway, that's my quick take. I may be wrong on some items--as I'd like to be! That means this bill would not be as broad and potentially worrisome as it seems to be at first glance.
deleted 9y ago
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tjpaudio 9y ago
This is clearly going after services like shapeshift.io. If you are unaware, shapeshift lets you transact between various cryptocurrencies on an exchange. The exchange doesn't hold record of the transactions, so you could legitimately buy BTC with a coinbase account linked to your bank account, exchange it to lite coin (or any other currency to) and have it deposited in a wallet you created anonymously, then exchange it back to BTC but to yet again an anonymously created wallet. At most it nips away a couple of percent, and now your BTC cannot be traced back to you even though you bought it with a bank account linked to your name. Its the easiest laundering that has ever existed. This bill would force shapeshift IO to maintain transaction records, game over.
jpatokal 9y ago
I wonder if this applies to the latest generation of anonymous cryptocurrencies like Monero and Zcash, where the "exchanger or tumbler" is built in. Monero, in particular, supports only anonymous transactions: sender, receiver and amount are all hidden. https://en.wikipedia.org/wiki/Monero_(cryptocurrency)#Privacy https://en.wikipedia.org/wiki/Monero_(cryptocurrency)#Privac...

87 points by fcanesin 9y ago

I think this is mostly targeted at prepaid Visa cards which are very commonly used for money laundering. I keep my wallets in a private cloud. I don't see how a border agent could know they exist. I think the bigger question is 'does dark money enable crime?'. If the answer is yes, then we as a tech community need to consider the impact of legitimizing cryptocurrent and enabling unfettered criminal enterprise.

deleted 9y ago
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ceejayoz 9y ago
> I think this is mostly targeted at prepaid Visa cards which are very commonly used for money laundering. I've never heard of prepaid Visa cards being called a "tumbler of digital currency", which the bill specifically deals with. It seems clear whoever wrote this knows about Bitcoin etc. > I keep my wallets in a private cloud. I don't see how a border agent could know they exist. It's well documented that they're poking around on social media for information on folks. You've posted that you have one on an account whose profile mentions your employer's name. I wouldn't be shocked if they could connect the dots pretty trivially.
- cabaalis 9y ago
  During the last election cycle I stripped all of my online social media of any real life references. Except for my name on Facebook and my LinkedIn account, which I never use for non-work stuff or private opinions. Definitely doesn't make their work impossible, but why make it easy?
  - petre 9y ago
    Having FB and Linkedin accounts with your real name is already making it easy.
  - KGIII 9y ago
    Do you believe they really deleted it? Removing it from their website doesn't mean it was removed from their servers. I'd be skeptical, where I you.
- ThrustVectoring 9y ago
  The amendment also covers "prepaid access devices", which is apparently the technically-specific way to talk about things like prepaid Visa cards. Quote: >A prepaid access program is an arrangement through which one or more persons acting together provide access to funds or the value of funds that have been paid in advance and can be retrieved or transferred at some point in the future through an electronic device or vehicle, such as a card, code, electronic serial number, mobile identification number, or personal identification number. https://www.occ.treas.gov/news-issuances/bulletins/2011/bulletin-2011-27.html https://www.occ.treas.gov/news-issuances/bulletins/2011/bull... So basically, the grandparent is asserting that the main thrust of the bill is the amendments that make prepaid cards covered.
mrb 9y ago
Any technology enables crime. Have you considered the impact of legitimizing cars, weapons, phones, audio recorders, drones, etc? Edit: not sure how to interpret the replies to my post ("currency enables crime"). Yes the dollar/euro/pound/cryptocurrency enable crime. Should we ban them all? No. Both government-controlled currencies and cryptocurrencies enable economic activity, hence create wealth, and are a net benefit to society. Besides more illegal activity is conducted (in absolute and relative numbers) in fiat than in cryptocurrency so that's even less of a reason to ban cryptocurrency.
- senectus1 9y ago
  Any Currency enables crime. in fact I'd go as far as to say that it's a driving force for Crime...
- cbanek 9y ago
  Currency definitely enables crime. There are a few reasons why institutions (government, banks) are crazy about digital currency: auditing (taxes, crime), fees, negative interest rates.
- Kinnard 9y ago
  "If it can't be used for evil, it isn't a super power"
- closeparen 9y ago
  We are in the process of delegitimizing cars, weapons are already taboo and illegal in liberal cities, Congress keeps trying to open phones to law enforcement, HN is enamored of European-style privacy laws that make it an onerous legal liability to have the capability for audio recording (or any other data collection), and drones were heavily curtailed by the FAA with widespread public support. We already have currency, and it works much better than any cryptocurrency. The specific problem cryptocurrency solves is vulnerability to law enforcement (i.e. central control). I would also be concerned if someone started selling weapons whose defining feature was their resistance to homicide investigators.
- xg15 9y ago
  > Besides more illegal activity is conducted (in absolute and relative numbers) in fiat than in cryptocurrency. (emphasis mine) I'm honestly surprised by that. (Especially after it's seems to be the go-to method of payment for ransomware which should lead to huge amounts of illegal activity.) Could you link some sources?
lisper 9y ago
> does dark money enable crime? How can there be any doubt in your mind that the answer is yes? The whole ransomware industry is only viable because bitcoin has succeeded.
- mirimir 9y ago
  Well, the Silk Road and its replacements have been orders of magnitude larger than the "ransomware industry". And there's arguably no moral requirement to obey immoral laws. So overall, cryptocurrencies have been a huge win for freedom.
  - lisper 9y ago
    I don't deny that. But being a win for freedom and being a win for crime are not mutually exclusive.
    - mirimir 9y ago
      I can't quite parse that :( But I believe that "being a win for freedom and being a win for crime" necessarily overlap. Maybe entirely. Because anything that allows some authorities to curtail crime necessarily allows other authorities to curtail freedom.
      - lisper 9y ago
        > I can't quite parse that :( Sorry. It means we agree.
  - slg 9y ago
    Are you arguing laws against money laundering are immoral? Because they are a practical requirement in order to levy any type of income tax. Or are you claiming that Silk Road style sites are only illegal because of immoral laws? I get that the HN crowd generally has a libertarian and anti-prohibition bent, but outside of illicit drugs there are some inarguably horrible things being sold on those sites like child porn and murders for hire. Doesn't the government and law enforcement have a moral requirement to combat that?
matt_wulfeck 9y ago
They don't have to know about them. They just have to ask you about them. I don't know the exact legality around border agents, but I can't imagine lying to them working out well for you.
- petre 9y ago
  Nice try. Lying to the feds is already a crime punishable by up to 5 years in jail if I'm not mistaken.
  - KGIII 9y ago
    I am pretty sure that only applies to certain federal agents - while under investigation, and on forms that are official submissions. There are, as near as I recall, certain other specific lies that are in the State's jurisdiction, such as giving the police a fake name. Something like 15 years ago, SCOTUS also ruled against a guy who refused to give the police his name when he was questioned. For the most part, you can tell a regular cop all sorts of lies, with some exceptions like your name. Lying to the FBI is against the law, if you're being questioned in regards to a criminal matter - I am unsure about civil matters. You sure as hell can't lie on the forms you sign when you cross the border. No, they will be right pissed if you do that. I am not a lawyer, but I have spent some time in court, dated a lawyer, and taken a few electives on the subject. So, this isn't legal advice but I'm pretty sure this is reasonably accurate. Sort of off topic, they pick students to hold mock trials, hearings, etc., and do this in a mock courtroom at many universities. If you audit the right course, you can volunteer and you can learn all sorts of neat things. You can also just go sit in the courtroom at your local court. It's open to the public, most of the time. It's a great way to learn more about procedure. Anyhow, like always, consult a qualified legal professional in your jurisdiction, should you need legal advice.
    - ceejayoz 9y ago
      > I am pretty sure that only applies to certain federal agents - while under investigation, and on forms that are official submissions. If digital currencies really take off (i.e. beyond just a niche group of speculators and early adopters), expect customs forms to include a question on it, then. You already have to promise not to be a member of Al Qaeda on some immigration forms.
sbuttgereit 9y ago
Along the way, we also need to consider what is considered crime and what is not. Not all 'crime' as defined by law, is immoral. And sometimes, enabling certain activities can be very illegal, yet profoundly moral. Of course, we all likely won't agree on what counts as illegal/moral. Your point is not invalid, just more nuanced or complex perhaps that your direct point suggests.
- blazespin 9y ago
  It's a crime if you live there and it's considered the law of the land that you have broken. Don't like it and can't effect change lawfully? Move. This is the best explanation I have seen. Morality is a completely artificial construct. There is no such thing as something being provably evil or good. It's not a math equation, but rather the consensus of your peers. I love crypocurrency as much as the next guy, but I also enjoy the happiness I get from living in a law abiding community.
  - gameshot911 9y ago
    Sure. Tomorrow morning you wake up and your country has mandated DNA testing for all citizens. Anyone who does not have approved genomes will be summarily sterilized 'for the good of the future of the citizenry'. Oh, and they also made it illegal to avoid the DNA testing, and to move out of your current location. What then?
  - derefr 9y ago
    > It's not a math equation, but rather the consensus of your peers. Those two ideas aren't inherently contradictory. It's pretty easy to ground metaethics by asserting something like "human genetics encodes an instinctual preference function for social mores into human brains." Then, "morality" is an objective fact: an objective fact about what actions are acceptable to (neurotypical) humans.
    - aaron-lebo 9y ago
      Yeah and a century ago social mores said interracial marriage was immoral and neurotypical humans of the time believed it because society. Ain't nothing objective there.
hilyen 9y ago
>'does dark money enable crime?' all currency does this.
- wfunction 9y ago
  Some more than others, e.g. see Bitcoin and ransomware proliferation
  - DaiPlusPlus 9y ago
    As we saw with WannaCry: the type of people who fall victim to ransomware attacks are also the type of people who aren't really able to use Bitcoin.
    - wfunction 9y ago
      That is completely irrelevant. The point is this is a reason to better regulate or ban digital currency, because it's massively helping the proliferation of ransomware. That people who get attacked by ransomware don't know how to use such currency is such a bizarrely irrelevant statement.
- DaiPlusPlus 9y ago
  Has any crime happened with IMG Special Drawing Rights?
arx1422 9y ago
This is one of the most responsible comments I've ever seen on Hacker News.
TheSpiceIsLife 9y ago
we as a tech community There is no we that comprises a coherent tech community. People with malicious intent are also able to write code and assemble hardware.
petre 9y ago
> I keep my wallets in a private cloud. I don't see how a border agent could know they exist. When you exchange over $10k in cryptocurrency to actual cash, the exchange will have the obligation if reporting it. Also don't even think of breaking the exchange into 10 transactions of $1k because that too is covered by the law.
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prawn 9y ago
"I keep my wallets in a private cloud. I don't see how a border agent could know they exist." "Do you have a private cloud? Do you own cryptocurrency?" Watch your reaction while you realise that you've likely committed an offence if you deny it, etc. One day in the near future, they likely have algorithms giving them a likelihood that you fit the type, and that will suggest their line of questioning - whether it's about data storage or propensity to work while on a tourist visa, or whatever else. In the short term I imagine it will work, but I don't think it will work forever.

iandanforth 9y ago

Reading this is painful, is there any way to turn "inserting before the semicolon at the end the following: “, or any digital exchanger or tumbler of digital currency”; into a proper diff?

declan 9y ago
I tried here: https://news.ycombinator.com/item?id=14567005 https://news.ycombinator.com/item?id=14567005

arthur_trudeau 9y ago

Money laundering in practical terms means whatever the government wants it to mean. It has been successfully prosecuted as the simple deposit of funds the government doesn't like the origins of. The obstacle isn't law, it's the resources required to bring a successful case.

cinquemb 9y ago
>The obstacle isn't law, it's the resources required to bring a successful case. I think this is understated in this thread. In order to have effective governance on any level, you need people to "buy" into it willingly. It will only become easier for those who want to opt out of such despite the assumed risks of doing so. The resources [human, capital] are only getting more expensive for governance systems to use to effectively go after such on any meaningful level.

haser_au 9y ago

For me (not from or in the US), I see this as US Congress legitimising cryptocurrencies. If not fully, at least partially. Keeping legislation up to date with the latest methods of money laundering is their job. Digital currencies (in all of their forms) are the latest methods used. Therefore, including them specifically in legislation will help law enforcement combat money laundering. This will mean exchanges will need to cooperate with US agencies, if they operate any business in the US, and provide records of holders and balances, etc. This reduces risk for the businesses and individuals. At the moment, it's like the wild west (e.g. bankruptcies at Mt Gox and Cryptsy, large scale wallet thefts, WannaCry, etc.). Enabling US law enforcement to subpoena records from these exchanges will mean the 'dark money' moves out, and legitimacy takes it's place. I see this as a good thing. For those of us NOT laundering money through cryptocurrencies, this adds to the argument that they are legitimate replacements for the existing currencies of the world to perform transactions. That's how I see it from a completely external perspective.

aaron-lebo 9y ago
You're probably right, but it could just as easily be signs that authorities finally are starting to understand them and it's step one in a crackdown. I'll admit, that's partially due to a bias due to Bitcoin enthusiasts turning every event into a positive. Mt. Gox disaster? Oh well it's just the community policing itself. It's the sign of a healthy economy. To the moon! Sounds like an exaggeration, but checkout r/bitcoin and you'll know that sentiment. The really fun part about this is without tumblers or with regulated tumblers, you've now got a currency where every single transaction is globally available and traceable. Hits money launderers but hope you like the government tracking you. Cash transactions don't seem so bad after all.
- cl0rkster 9y ago
  That is almost true. However, transferring value between cryptos is trivial and at least Monero and zcash allow you to tumble your transactions and essentially completely disguise the inputs and outputs from anyone trying to search the public ledger.

bobcallme 9y ago

I don't see why everyone here would be in favor of this bill. Not only does it expand civil forfeiture, it also turns almost everyone who works or runs a legitimate business into a criminal. Everyone here seems to want more government, laws and regulations that will be used against regular people who would otherwise be law abiding citizens.

petre 9y ago
They got tricked by gov't propaganda into thinking that only criminals launder money when in fact money laundering has ben extended to saving over $10k in cash under your matress. If you do that then you're obviously a criminal and your cash can be confiscated, your bank accounts can be frozen without due trial or a court order. The hunt for money is on.
- coding123 9y ago
  It's very true. the good get punished.
pmarreck 9y ago
When it comes to matters of money it is apparently "guilty until proven innocent"

cowpig 9y ago

I wish I understood this language

declan 9y ago

This is a far-reaching bill that gives the Feds much more discretionary authority over digital currencies. The reason it's so far reaching is that it tweaks definitions that are embedded in thousands of pages of existing laws and regulations. It's like changing stdio.h in C--one tweak could have a big impact throughout an entire system. So let's wade through it. Federal law (31 USC 5312) currently regulates "financial institutions," which are defined as including banks, credit card companies, insurance companies, securities dealers, loan issuers--and that's not even an exhaustive list! One of the categories that's currently regulated is: "an issuer, redeemer, or cashier of travelers’ checks, checks, money orders, or similar instruments." The legislation would rewrite that definition to include: (K) an issuer, redeemer, or cashier of travelers’ checks, checks, money orders, prepaid access devices, digital currency, or similar instruments, or any digital exchanger or tumbler of digital currency; Another definition that gets changed is "monetary instruments," which expands to include prepaid access devices: as the Secretary may prescribe by regulation, coins and currency of a foreign country, travelers’ checks, bearer negotiable instruments, bearer investment securities, bearer securities, stock on which title is passed on delivery, prepaid access devices, and similar material... Prepaid access devices is a term of art that would now be defined broadly as: an electronic device or vehicle, such as a card, plate, code, number, electronic serial number, mobile identification number, personal identification number, or other instrument, that provides a portal to funds or the value of funds that have been paid in advance and can be retrievable and transferable at some point in the future. I don't know what the good senators are intending, but that seems pretty broad, and likely broader than necessary if their goal was to target prepaid Visa cards. Is a Bitcoin wallet "paid in advance" and "retrievable and transferable at some point in the future?" I'm not saying it necessarily is--what I am saying is that it's like wildcard matching when doing an 'rm -f', always a little dangerous. Better to be specific than something like any "portal to funds." Fincen (part of Treasury) said in 2013 that "A person's acceptance and/or transmission of convertible virtual currency cannot be characterized as providing or selling prepaid access because prepaid access is limited to real currencies." But that was based on the old definition, not the newly broadened one. (https://www.fincen.gov/resources/statutes-regulations/guidance/application-fincens-regulations-persons-administering https://www.fincen.gov/resources/statutes-regulations/guidan...) Now let's walk through some of the existing laws that reference these new definitions. A good start is the long list of existing Title 31 regulations primarily aimed at banks that would now get levied on any "issuer" or "redeemer" or "exchanger" of digital currency. That includes the obligation to: - "Verify[] the identity of any person seeking to open an account" (31 USC 5318) - "Maintain[] records of the information used to verify a person’s identity, including name, address, and other identifying information" (31 USC 5318) - "Report any suspicious transaction" to the Feds (31 USC 5318) - "Establish anti-money laundering programs, including, at a minimum" developing internal policies, compliance officer, training program, and independent audits (31 USC 5318) - File reports on transactions (31 USC 5313) - "Maintain appropriate procedures to ensure compliance with this subchapter and regulations prescribed under this subchapter" (31 USC 5318) - "Guard against money laundering" (31 USC 5318) - Allow the examination of "any books, papers, records, or other data of domestic financial institutions" related to reporting requirements (31 USC 5318) - Be summoned by Treasury to "produce such books, papers, records, or other data" and give testimony under oath up to 500 miles away (31 USC 5318) Note that many of the above sections of existing law give a heck of a lot of authority to the Treasury Department. Treasury could cough up very specific and narrow regulations that would lessen the impact. Or Treasury could follow the statutory text (aka go big or go home). The bill also expands the sweep of existing criminal law. Existing criminal law (31 USC 5324) prohibits any attempt to "structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions." (Structuring is defined as "evading the reporting requirements" in which banks tip off the Feds that you're, say, moving high volumes of cash.) Because an "issuer" or "redeemer" or "exchanger" of digital currency is now a financial institution, if you or I tried to dodge reporting requirements, we'd be looking at a federal felony punishable by up to 5 years in prison. Note that many other sections of Title 31 grant the Treasury Department discretion in rulemaking, so the blow could be lessened. At first glance this section does not seem to be one of those. The bill also means that no financial institution (remember this now includes any "issuer" or "redeemer" or "exchanger" of digital currency) would be allowed to "issue" any "monetary instrument" (which includes any code "retrievable and transferable at some point in the future") unless "the individual furnishes the financial institution with such forms of identification as the Secretary of the Treasury may require." (31 USC 5326) I'm getting a bit tired but did want to raise the question of whether or not the 31 USC 5332 rules against moving cash across the U.S. border now extend to digital currencies. One section of the bill requires CBP to devise a "strategy to interdict and detect prepaid access devices, digital currencies, or other similar instruments, at border crossings and other ports of entry for the United States." (Emphasis added) Existing law punishes anyone who: "Attempts to transport or transfer such currency or monetary instruments from a place within the United States to a place outside of the United States" -- and remember, "monetary instrument" is newly expanded. At least this seems at first glance to target only physical border-crossing and not electronic, and to require intent to evade reporting requirements. Would you have to declare a cold storage wallet if one happened to live on your electronic device? (CBP's forensic searches and scans just got a bit more worrisome...) Anyway, that's my quick take. I may be wrong on some items--as I'd like to be! That means this bill would not be as broad and potentially worrisome as it seems to be at first glance.

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tjpaudio 9y ago

This is clearly going after services like shapeshift.io. If you are unaware, shapeshift lets you transact between various cryptocurrencies on an exchange. The exchange doesn't hold record of the transactions, so you could legitimately buy BTC with a coinbase account linked to your bank account, exchange it to lite coin (or any other currency to) and have it deposited in a wallet you created anonymously, then exchange it back to BTC but to yet again an anonymously created wallet. At most it nips away a couple of percent, and now your BTC cannot be traced back to you even though you bought it with a bank account linked to your name. Its the easiest laundering that has ever existed. This bill would force shapeshift IO to maintain transaction records, game over.

jpatokal 9y ago

I wonder if this applies to the latest generation of anonymous cryptocurrencies like Monero and Zcash, where the "exchanger or tumbler" is built in. Monero, in particular, supports only anonymous transactions: sender, receiver and amount are all hidden. https://en.wikipedia.org/wiki/Monero_(cryptocurrency)#Privacy https://en.wikipedia.org/wiki/Monero_(cryptocurrency)#Privac...