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Except that it isn't. At some point your coins have to be converted to USD. You can't pay your employees in cryptocurrency, you can't pay your electric bill in

Except that it isn't. At some point your coins have to be converted to USD. You can't pay your employees in cryptocurrency, you can't pay your electric bill in cryptocurrency, you can't pay your rent/mortgage in cryptocurrency. If you think just because you did a USD -> coin -> USD flip that no one will consider it laundering or ask where the proceeds came from, guess again.

spmurrayzzz 9y ago
You may not be able to directly pay entities, but you can easily do so through a liquidity aggregator. If that aggregation vehicle is through a privacy-focused coin like Monero or Zcash, or anything onion routed (e.g. Lightning network), how exactly do you demonstrate laundering? This really is no different than dealing in cash presently. Employees still need to report their income, even when paid in cash, so even in that event they'd still be subject to any laundering concerns of the federal government given the paper trail follows back to the dispensary entity. Same with any other entities they're paying in cash (unless they are dodging reporting requirements). Crypto solves the problem (partially) of where to store your revenue instead of a bank. Its just a better way than the alternative of paying security outfits to guard your heaps of cash— its judgment-resistant and reasonably easy to liquidate. The biggest problem with that use case right now is obviously price fluctuations. Not sure anyone is comfortable using a volatile asset class for that at present.
- jonknee 9y ago
  > Crypto solves the problem (partially) of where to store your revenue instead of a bank. How exactly? You run a pot shop and end the day with $10,000 in USD. What happens next?
  - hndamien 9y ago
    Go buy Monero from local Monero.
    - saganus 9y ago
      The GP is saying that after you have the cash in hand from your customers, how do you transfer it into a digital currency like btc or monero or anything else? You need to physically have an armored transport take it to whoever is selling you the cryptocurrency. Edit: I guess that's a potentially profitable but unfulfilled niche. Create a company that can take cash in big amounts and sell cryptocurrency. Not sure how feasible is it but that is the missing link as I see it.
      - jlarocco 9y ago
        > Edit: I guess that's a potentially profitable but unfulfilled niche. Create a company that can take cash in big amounts and sell cryptocurrency. Not sure how feasible is it but that is the missing link as I see it. That just pushes the problem down the road to somebody else, though. At the end of the day somebody's going to have a huge pile of cash, and no bank will accept it without knowing where it came from.
        saganus 9y ago
        You have a point. I guess this really does boil down to a federal vs state legality then? So if it's legal in a federal level then banks should be able to accept the cash right? or would they have a "right to refuse the business because we don't like it even if it's legal at the federal and the state level"?
      - jonknee 9y ago
        > Create a company that can take cash in big amounts and sell cryptocurrency. Not sure how feasible is it but that is the missing link as I see it. The problem is they would fall under the same money laundering rules that banks are and would probably not want to take dispensary cash. Even if they do take the cash, where would they deposit it?
      - TheSpiceIsLife 9y ago
        > Create a company that can take cash in big amounts and sell cryptocurrency. I believe this is commonly referred to as an exchange. I believe there are quite a few in existence already.
  - bufferoverflow 9y ago
    Give the customers a 5% discount if they pay in Ethereum, Bitcoin Cash, Monero, ZCash, etc.
    - jonknee 9y ago
      Then you'll end your day with about $9,950 in USD...
- deleted 9y ago
  [deleted]
- Keeeeeeeks 9y ago
  What legitimate liquidity aggregator is going to hold the counterparty risk for PotCoin/HempCoin and have banking relationships? Because once the Weed-coins are sold for BTC and given to a liquidity aggregator in jurisdictions where marijuana/hemp are illegal that becomes money laundering. Cryptocurrencies that dodge regulations do not; their value is backed by the greater fool theory and the fact that this new retail wave aren't too familiar with AML/KYC/counterparty risk To address your last point, a non-gubmint backed stablecoin would address that, but then again, perpetual motion devices would probably stop energy issues.
  - mrep 9y ago
    Now I kind of want to create a PotCoin/HempCoin marketed as a solution to marijuana businesses (which are rapidly growing as more states legalize so get it now while it's still cheap!) inability to use federal banks just to see how many people i could fool into buying it. The sad thing is I bet I could make millions...
- losteric 9y ago
  lol, crypto isn't magic. Security through obscurity is not a solution. We're trying to move away from that tor blackmarket world. People need security through legality. This just needs to be... not illegal.
  - bufferoverflow 9y ago
    Crypto is not illegal. You just have to pay taxes on it, and exchanges might ask you to explain where the money came from. I'm surprised nobody created a bank/exchange to take advantage of the situation.
    - losteric 9y ago
      Weed revenue is federally illegal. I think that's ridiculous, but buying crypto with that money in order to buy clean money is still considered money laundering under federal law.
- olefoo 9y ago
  Literally none of that matters to a prosecutor. In fact, taking steps to obscure the source of funds is going to be considered a crime in and of itself. You may not like it but KYC/AML regulations exist and are enforced.
- TheSpiceIsLife 9y ago
  > Crypto solves the problem (partially) of where to store your revenue instead of a bank. The question on everyone's lips is: in what way is storing money in a bank a problem. Any way you slice it banks are a number of solutions. Problems not so much.
- mstodd 9y ago
  USDT doesn't fluctuate does it?
- vidarh 9y ago
  > If that aggregation vehicle is through a privacy-focused coin like Monero or Zcash, or anything onion routed (e.g. Lightning network), how exactly do you demonstrate laundering? You should be more concerned about how you demonstrate it's not laundering, because in more and more jurisdictions KYC (Known Your Customer) regulations in banking means you will in more and more circumstances get questions about where your money came from and potentially be asked to prove it. This may or may not affect your jurisdiction now, but these will likely get more common as crypto spreads. E.g. my ex bought a house recently, and part of the funds she paid the deposit with were transferred from her sister as part of her inheritance from her dad. Which created a whole circus with her lawyer, who was obligated to be certain they were not dealing with laundering, of digging up not just her statements, but dealing with requests for her sisters bank statements, and documentation of the source. If one of those steps is effectively a tumbler, the answer may very well be "you can't prove the money is clean; we can't deal with you, and we have to report this" No need to make any specific approach illegal even - just require that anyone you make large payments to are sufficiently satisfied the source is clean, which will be exceedingly hard for users of methods that obscure where it's from.
kevingrahl 9y ago
> You can’t pay your electric bill in crypto currency. I’m from Hanover, Germany and was surprised to see that since September 2016 my electric/gas/water company added a QR code to their bills to easily pay bills with Bitcoin [1] (They have super informative bills with easy to read charts as well). They even have service center support staff that will help you if you don’t know how to get/use bitcoin. There were (haven’t checked in a while) multiple listings for flats (we Germans tend to rent) that offered payment in bitcoin a year back and multiple little bars and cafes also offered payment with Bitcoin. I’m pretty sure I could live by doing >80% of all my outgoing payments in Bitcoin (if it weren’t for the high tx fees). [1] - https://blog.energybrainpool.com/en/german-regional-utility-enercity-accepts-bitcoin/ https://blog.energybrainpool.com/en/german-regional-utility-...
- stuntkite 9y ago
  I paid my electric bill ($2400/mo) in BTC in 2014 at the first bubble for a while because I was runninga 13 terrahash mine from my spare bedroom. I used a lot of weird methods to do it. My friend did it once using this service where someone would pay your bill and the BTC would be held in escrow. The card used was fraudulent and now he has to pay his electric bill in cash for his home and business. You definitely CAN pay your bill in BTC, it's just harder than most people want to mess with.
  - FireBeyond 9y ago
    > using this service where someone would pay your bill and the BTC would be held in escrow. The card used was fraudulent Jack's complete lack of surprise has reached a new low.

spmurrayzzz 9y ago

You may not be able to directly pay entities, but you can easily do so through a liquidity aggregator. If that aggregation vehicle is through a privacy-focused coin like Monero or Zcash, or anything onion routed (e.g. Lightning network), how exactly do you demonstrate laundering? This really is no different than dealing in cash presently. Employees still need to report their income, even when paid in cash, so even in that event they'd still be subject to any laundering concerns of the federal government given the paper trail follows back to the dispensary entity. Same with any other entities they're paying in cash (unless they are dodging reporting requirements). Crypto solves the problem (partially) of where to store your revenue instead of a bank. Its just a better way than the alternative of paying security outfits to guard your heaps of cash— its judgment-resistant and reasonably easy to liquidate. The biggest problem with that use case right now is obviously price fluctuations. Not sure anyone is comfortable using a volatile asset class for that at present.

jonknee 9y ago
> Crypto solves the problem (partially) of where to store your revenue instead of a bank. How exactly? You run a pot shop and end the day with $10,000 in USD. What happens next?
- hndamien 9y ago
  Go buy Monero from local Monero.
  - saganus 9y ago
    The GP is saying that after you have the cash in hand from your customers, how do you transfer it into a digital currency like btc or monero or anything else? You need to physically have an armored transport take it to whoever is selling you the cryptocurrency. Edit: I guess that's a potentially profitable but unfulfilled niche. Create a company that can take cash in big amounts and sell cryptocurrency. Not sure how feasible is it but that is the missing link as I see it.
    - jlarocco 9y ago
      > Edit: I guess that's a potentially profitable but unfulfilled niche. Create a company that can take cash in big amounts and sell cryptocurrency. Not sure how feasible is it but that is the missing link as I see it. That just pushes the problem down the road to somebody else, though. At the end of the day somebody's going to have a huge pile of cash, and no bank will accept it without knowing where it came from.
      - saganus 9y ago
        You have a point. I guess this really does boil down to a federal vs state legality then? So if it's legal in a federal level then banks should be able to accept the cash right? or would they have a "right to refuse the business because we don't like it even if it's legal at the federal and the state level"?
    - jonknee 9y ago
      > Create a company that can take cash in big amounts and sell cryptocurrency. Not sure how feasible is it but that is the missing link as I see it. The problem is they would fall under the same money laundering rules that banks are and would probably not want to take dispensary cash. Even if they do take the cash, where would they deposit it?
    - TheSpiceIsLife 9y ago
      > Create a company that can take cash in big amounts and sell cryptocurrency. I believe this is commonly referred to as an exchange. I believe there are quite a few in existence already.
- bufferoverflow 9y ago
  Give the customers a 5% discount if they pay in Ethereum, Bitcoin Cash, Monero, ZCash, etc.
  - jonknee 9y ago
    Then you'll end your day with about $9,950 in USD...
deleted 9y ago
[deleted]
Keeeeeeeks 9y ago
What legitimate liquidity aggregator is going to hold the counterparty risk for PotCoin/HempCoin and have banking relationships? Because once the Weed-coins are sold for BTC and given to a liquidity aggregator in jurisdictions where marijuana/hemp are illegal that becomes money laundering. Cryptocurrencies that dodge regulations do not; their value is backed by the greater fool theory and the fact that this new retail wave aren't too familiar with AML/KYC/counterparty risk To address your last point, a non-gubmint backed stablecoin would address that, but then again, perpetual motion devices would probably stop energy issues.
- mrep 9y ago
  Now I kind of want to create a PotCoin/HempCoin marketed as a solution to marijuana businesses (which are rapidly growing as more states legalize so get it now while it's still cheap!) inability to use federal banks just to see how many people i could fool into buying it. The sad thing is I bet I could make millions...
losteric 9y ago
lol, crypto isn't magic. Security through obscurity is not a solution. We're trying to move away from that tor blackmarket world. People need security through legality. This just needs to be... not illegal.
- bufferoverflow 9y ago
  Crypto is not illegal. You just have to pay taxes on it, and exchanges might ask you to explain where the money came from. I'm surprised nobody created a bank/exchange to take advantage of the situation.
  - losteric 9y ago
    Weed revenue is federally illegal. I think that's ridiculous, but buying crypto with that money in order to buy clean money is still considered money laundering under federal law.
olefoo 9y ago
Literally none of that matters to a prosecutor. In fact, taking steps to obscure the source of funds is going to be considered a crime in and of itself. You may not like it but KYC/AML regulations exist and are enforced.
TheSpiceIsLife 9y ago
> Crypto solves the problem (partially) of where to store your revenue instead of a bank. The question on everyone's lips is: in what way is storing money in a bank a problem. Any way you slice it banks are a number of solutions. Problems not so much.
mstodd 9y ago
USDT doesn't fluctuate does it?
vidarh 9y ago
> If that aggregation vehicle is through a privacy-focused coin like Monero or Zcash, or anything onion routed (e.g. Lightning network), how exactly do you demonstrate laundering? You should be more concerned about how you demonstrate it's not laundering, because in more and more jurisdictions KYC (Known Your Customer) regulations in banking means you will in more and more circumstances get questions about where your money came from and potentially be asked to prove it. This may or may not affect your jurisdiction now, but these will likely get more common as crypto spreads. E.g. my ex bought a house recently, and part of the funds she paid the deposit with were transferred from her sister as part of her inheritance from her dad. Which created a whole circus with her lawyer, who was obligated to be certain they were not dealing with laundering, of digging up not just her statements, but dealing with requests for her sisters bank statements, and documentation of the source. If one of those steps is effectively a tumbler, the answer may very well be "you can't prove the money is clean; we can't deal with you, and we have to report this" No need to make any specific approach illegal even - just require that anyone you make large payments to are sufficiently satisfied the source is clean, which will be exceedingly hard for users of methods that obscure where it's from.

kevingrahl 9y ago

> You can’t pay your electric bill in crypto currency. I’m from Hanover, Germany and was surprised to see that since September 2016 my electric/gas/water company added a QR code to their bills to easily pay bills with Bitcoin [1] (They have super informative bills with easy to read charts as well). They even have service center support staff that will help you if you don’t know how to get/use bitcoin. There were (haven’t checked in a while) multiple listings for flats (we Germans tend to rent) that offered payment in bitcoin a year back and multiple little bars and cafes also offered payment with Bitcoin. I’m pretty sure I could live by doing >80% of all my outgoing payments in Bitcoin (if it weren’t for the high tx fees). [1] - https://blog.energybrainpool.com/en/german-regional-utility-enercity-accepts-bitcoin/ https://blog.energybrainpool.com/en/german-regional-utility-...

stuntkite 9y ago
I paid my electric bill ($2400/mo) in BTC in 2014 at the first bubble for a while because I was runninga 13 terrahash mine from my spare bedroom. I used a lot of weird methods to do it. My friend did it once using this service where someone would pay your bill and the BTC would be held in escrow. The card used was fraudulent and now he has to pay his electric bill in cash for his home and business. You definitely CAN pay your bill in BTC, it's just harder than most people want to mess with.
- FireBeyond 9y ago
  > using this service where someone would pay your bill and the BTC would be held in escrow. The card used was fraudulent Jack's complete lack of surprise has reached a new low.