6 ms·

If DOJ can show evidence of cartels, terrorist cells, and other unsavory entities laundering their money through bitcoin, ICOs, ethereum, altcoins and tether, t

If DOJ can show evidence of cartels, terrorist cells, and other unsavory entities laundering their money through bitcoin, ICOs, ethereum, altcoins and tether, then anyone who has ever taken crypto to work on a project, anyone who handled the influx of cash to exchange it for crypto by selling Tether (which is all of the major exchanges), are headed for a storm of hurt. We are no longer in SEC turf and DOJ has a conviction rate of 93% as of 2012, a trend which has been increasing. It's one thing to argue against Howey Test or hide money from the Taxman. It's a whole new level of shit storm to be accused of laundering money for terrorists and drug cartels. https://medium.com/@justsomeperson/uncovering-the-real-cartel-in-bitcoin-814427d00f54 https://medium.com/@justsomeperson/uncovering-the-real-carte...

ForHackernews 8y ago
It worked out fine for HSBC. AFAIK, nobody there went to jail for being the personal bankers to Mexican cartels. https://www.reuters.com/article/us-hsbc-probe/hsbc-became-bank-to-drug-cartels-pays-big-for-lapses-idUSBRE8BA05M20121212 https://www.reuters.com/article/us-hsbc-probe/hsbc-became-ba...
- yasp 8y ago
  Worked out fine for Citigroup as well. https://www.bloomberg.com/news/articles/2018-11-16/gett-is-said-to-court-buyers-as-ride-hailing-apps-battle-it-out https://www.bloomberg.com/news/articles/2018-11-16/gett-is-s...
  - jondubois 8y ago
    It worked out fine for all the people who sold toxic assets for a profit leading up to the 2008 crisis. The government has already made its stance clear. Crime is OK if it's done in a complex way. They just need to formalize it into a law that way citizens are aware of the complexity threshold that is required for a crime to be legal.
- pathseeker 8y ago
  Well not fine from a business perspective. The fines were larger than the money made from such activities. If HSBC were primarily a front for the cartels, it would have gone bankrupt.
yasp 8y ago
> If DOJ can show evidence of cartels, terrorist cells, and other unsavory entities laundering their money through bitcoin, ICOs, ethereum, altcoins and tether, then anyone who has ever taken crypto to work on a project, anyone who handled the influx of cash to exchange it for crypto by selling Tether (which is all of the major exchanges), are headed for a storm of hurt. Oh no, the cartels and terrorist cells would have to go back to conducting all their illegal activities in physical US dollars. > We are no longer in SEC turf and DOJ has a conviction rate of 93% as of 2012 DOJ has such a high conviction rate because they only prosecute cases they expect to win.
- tyingq 8y ago
  "DOJ has such a high conviction rate because they only prosecute cases they expect to win." Things like kingpin laws (continuing criminal enterprise) and RICO probably help the conviction rate.
pavel_lishin 8y ago
> then anyone who has ever taken crypto to work on a project, anyone who handled the influx of cash to exchange it for crypto by selling Tether (which is all of the major exchanges), are headed for a storm of hurt. Why would all cryptocurrency transactions be tainted by this? Or are you saying that the value (relative to real money) would plummet?
- nyolfen 8y ago
  presumably it would foreshadow a regulatory crackdown
  - gibsons77 8y ago
    Sounds like torrents all over again, i.e. a giant waste of resources. Criminals will always be one step ahead of the DOJ or any other regulatory body.
    - dralley 8y ago
      Whether a "giant waste of resources" or not, the torrent ecosystem nowadays is nowhere close to what it was a few years ago.
      - gibsons77 8y ago
        Right, but that's thanks to innovation in the digital media space and subscription models, not necessarily regulatory pressure.
    - pavel_lishin 8y ago
      Well, it's a little different. Torrent sites didn't have centralized websites that would literally trade large sums of money for torrents.
    - r00fus 8y ago
      Torrents couldn't be used to launder money for corrupt purposes. Anyone in crypto who didn't see this coming was blind or willfully ignorant.
craftyguy 8y ago
Cartels, terrorist cells, and other unsavory entities also use cash, but you don't see the DOJ prosecuting everyone who has accepted cash as payment.
- api 8y ago
  You definitely see them prosecuting people who accept cash from cartels and terrorist cells or engineering financial entities explicitly to do so. Tether looks a whole whole lot like one of those.
- wgerard 8y ago
  Wait, isn't that basically the basis for civil forfeiture? "We don't know why you would have this much cash, so prove it isn't related to drugs/laundering"?
  - deleted 8y ago
    [deleted]
- calciphus 8y ago
  In fairness, if I set up a bank which, by accident or by design, made it exceedingly easy to launder millions in cash relatively quickly, you can bet the DOJ would have a problem with that. Transporting millions in cash is risky (either you trust the courier with that and risk their life, or you do it yourself and risk yours), and doing so internationally is extremely challenging and/or expensive. By contrast, doing it digitally is quite easy and fast. It feels a bit disingenuous to insist the two are the same.
  - stef25 8y ago
    HSBC cooperated with cartels to launder money, apparently they even opened special counters for them to deposit cash at. https://en.m.wikipedia.org/wiki/HSBC_Mexico#Money_laundering https://en.m.wikipedia.org/wiki/HSBC_Mexico#Money_laundering
    - 8y ago
ryanlol 8y ago
From your link: >f. People/exchanges/entities rarely use shell companies for legitimate purposes. And by rarely, I mean almost never.
deleted 8y ago
[deleted]
Devils_Avocado 8y ago
OOOOOOOOOOOOHHHHHHHHHHHHHHHHHH SHHHHHHHHHHHHHHHIIIIIIIIIIIIIIIIIITTTTTTTTTTTTTTTTTTTTT - watch out for your US Dollars y'all, I heard at least one physical paper $20 bill was used to buy an 8th of reefer in Rhode Island this one time... the Fed is winding up its operations as we speak...
- dang 8y ago
  Please don't do this here.
empath75 8y ago
Bitcoin has never been anything but a money laundering scheme for drug dealers and tax cheats and various other criminals. It’s literally the only valid use case for it.
- deleted 8y ago
  [deleted]
- DINKDINK 8y ago
  >It’s literally the only valid use case for it. Use case: a currency with better inflation characteristics than even gold.
  - sdinsn 8y ago
    Gold isn't a currency, and price fluctuations are TERRIBLE for currency.
    - DINKDINK 8y ago
      Price fluctuations are normal for markets. No one expects the exchange rate between food and oil to be constant, why expect it to be constant between a money and food? If you need down-side risk insurance, by a put option. When letting a government have a monopoly of the risk management of a money, you are essentially buying a collar (long stock + long put + short call) trade which is expensive for people who don't need that exposure.
      - spookthesunset 8y ago
        > why expect it to be constant between a money and food? Because sometimes all I want to do is buy a bigmac with some cash and not worry about put options or hedging risk in currency fluctuations? Why expect the government to keep a predictable exchange rate between money and food? Because then I don't have to worry about that and neither does anybody else. That adds incredible value to an economy.
rando444 8y ago
Eric Holder neutered the DOJ because he was too afraid to lose cases. The only reason their conviction rate is so high is because they don't bother to prosecute the majority of crimes anymore. These days if you can pay an arbitrary fine, you can get away with pretty much any financial crime.. (laundering money for drug cartels, etc.)
antocv 8y ago
The terrorists in Syria were funded by US Governement, both by CIA and Armed forces. They didnt need bitcoin to do it.
stale2002 8y ago
People have used USD to fund crimes, but it would be ridiculous to say that unrelated restaurant owners would get in trouble for the mere act of accepting USD. The US has already given guidance on this. They have already stated that BTC and other cryptos are a commodity, and legal. The SEC itself disagrees with your absurd notion that anyone who even accept crypto as payment could be in trouble.

ForHackernews 8y ago

It worked out fine for HSBC. AFAIK, nobody there went to jail for being the personal bankers to Mexican cartels. https://www.reuters.com/article/us-hsbc-probe/hsbc-became-bank-to-drug-cartels-pays-big-for-lapses-idUSBRE8BA05M20121212 https://www.reuters.com/article/us-hsbc-probe/hsbc-became-ba...

yasp 8y ago
Worked out fine for Citigroup as well. https://www.bloomberg.com/news/articles/2018-11-16/gett-is-said-to-court-buyers-as-ride-hailing-apps-battle-it-out https://www.bloomberg.com/news/articles/2018-11-16/gett-is-s...
- jondubois 8y ago
  It worked out fine for all the people who sold toxic assets for a profit leading up to the 2008 crisis. The government has already made its stance clear. Crime is OK if it's done in a complex way. They just need to formalize it into a law that way citizens are aware of the complexity threshold that is required for a crime to be legal.
pathseeker 8y ago
Well not fine from a business perspective. The fines were larger than the money made from such activities. If HSBC were primarily a front for the cartels, it would have gone bankrupt.

yasp 8y ago

> If DOJ can show evidence of cartels, terrorist cells, and other unsavory entities laundering their money through bitcoin, ICOs, ethereum, altcoins and tether, then anyone who has ever taken crypto to work on a project, anyone who handled the influx of cash to exchange it for crypto by selling Tether (which is all of the major exchanges), are headed for a storm of hurt. Oh no, the cartels and terrorist cells would have to go back to conducting all their illegal activities in physical US dollars. > We are no longer in SEC turf and DOJ has a conviction rate of 93% as of 2012 DOJ has such a high conviction rate because they only prosecute cases they expect to win.

tyingq 8y ago
"DOJ has such a high conviction rate because they only prosecute cases they expect to win." Things like kingpin laws (continuing criminal enterprise) and RICO probably help the conviction rate.

pavel_lishin 8y ago

> then anyone who has ever taken crypto to work on a project, anyone who handled the influx of cash to exchange it for crypto by selling Tether (which is all of the major exchanges), are headed for a storm of hurt. Why would all cryptocurrency transactions be tainted by this? Or are you saying that the value (relative to real money) would plummet?

nyolfen 8y ago
presumably it would foreshadow a regulatory crackdown
- gibsons77 8y ago
  Sounds like torrents all over again, i.e. a giant waste of resources. Criminals will always be one step ahead of the DOJ or any other regulatory body.
  - dralley 8y ago
    Whether a "giant waste of resources" or not, the torrent ecosystem nowadays is nowhere close to what it was a few years ago.
    - gibsons77 8y ago
      Right, but that's thanks to innovation in the digital media space and subscription models, not necessarily regulatory pressure.
  - pavel_lishin 8y ago
    Well, it's a little different. Torrent sites didn't have centralized websites that would literally trade large sums of money for torrents.
  - r00fus 8y ago
    Torrents couldn't be used to launder money for corrupt purposes. Anyone in crypto who didn't see this coming was blind or willfully ignorant.

craftyguy 8y ago

Cartels, terrorist cells, and other unsavory entities also use cash, but you don't see the DOJ prosecuting everyone who has accepted cash as payment.

api 8y ago
You definitely see them prosecuting people who accept cash from cartels and terrorist cells or engineering financial entities explicitly to do so. Tether looks a whole whole lot like one of those.
wgerard 8y ago
Wait, isn't that basically the basis for civil forfeiture? "We don't know why you would have this much cash, so prove it isn't related to drugs/laundering"?
- deleted 8y ago
  [deleted]
calciphus 8y ago
In fairness, if I set up a bank which, by accident or by design, made it exceedingly easy to launder millions in cash relatively quickly, you can bet the DOJ would have a problem with that. Transporting millions in cash is risky (either you trust the courier with that and risk their life, or you do it yourself and risk yours), and doing so internationally is extremely challenging and/or expensive. By contrast, doing it digitally is quite easy and fast. It feels a bit disingenuous to insist the two are the same.
- stef25 8y ago
  HSBC cooperated with cartels to launder money, apparently they even opened special counters for them to deposit cash at. https://en.m.wikipedia.org/wiki/HSBC_Mexico#Money_laundering https://en.m.wikipedia.org/wiki/HSBC_Mexico#Money_laundering
  - 8y ago

ryanlol 8y ago

From your link: >f. People/exchanges/entities rarely use shell companies for legitimate purposes. And by rarely, I mean almost never.

deleted 8y ago

[deleted]

Devils_Avocado 8y ago

OOOOOOOOOOOOHHHHHHHHHHHHHHHHHH SHHHHHHHHHHHHHHHIIIIIIIIIIIIIIIIIITTTTTTTTTTTTTTTTTTTTT - watch out for your US Dollars y'all, I heard at least one physical paper $20 bill was used to buy an 8th of reefer in Rhode Island this one time... the Fed is winding up its operations as we speak...

dang 8y ago
Please don't do this here.

empath75 8y ago

Bitcoin has never been anything but a money laundering scheme for drug dealers and tax cheats and various other criminals. It’s literally the only valid use case for it.

deleted 8y ago
[deleted]
DINKDINK 8y ago
>It’s literally the only valid use case for it. Use case: a currency with better inflation characteristics than even gold.
- sdinsn 8y ago
  Gold isn't a currency, and price fluctuations are TERRIBLE for currency.
  - DINKDINK 8y ago
    Price fluctuations are normal for markets. No one expects the exchange rate between food and oil to be constant, why expect it to be constant between a money and food? If you need down-side risk insurance, by a put option. When letting a government have a monopoly of the risk management of a money, you are essentially buying a collar (long stock + long put + short call) trade which is expensive for people who don't need that exposure.
    - spookthesunset 8y ago
      > why expect it to be constant between a money and food? Because sometimes all I want to do is buy a bigmac with some cash and not worry about put options or hedging risk in currency fluctuations? Why expect the government to keep a predictable exchange rate between money and food? Because then I don't have to worry about that and neither does anybody else. That adds incredible value to an economy.

rando444 8y ago

Eric Holder neutered the DOJ because he was too afraid to lose cases. The only reason their conviction rate is so high is because they don't bother to prosecute the majority of crimes anymore. These days if you can pay an arbitrary fine, you can get away with pretty much any financial crime.. (laundering money for drug cartels, etc.)

antocv 8y ago

The terrorists in Syria were funded by US Governement, both by CIA and Armed forces. They didnt need bitcoin to do it.

stale2002 8y ago

People have used USD to fund crimes, but it would be ridiculous to say that unrelated restaurant owners would get in trouble for the mere act of accepting USD. The US has already given guidance on this. They have already stated that BTC and other cryptos are a commodity, and legal. The SEC itself disagrees with your absurd notion that anyone who even accept crypto as payment could be in trouble.