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The DOJ just released a report that explicitly says that use of privacy coins like Monero is a "high risk activity" and "indicative of possible criminal conduc

The DOJ just released a report that explicitly says that use of privacy coins like Monero is a "high risk activity" and "indicative of possible criminal conduct". https://cointelegraph.com/news/doj-says-use-of-privacy-coins-is-indicative-of-possible-criminal-conduct https://cointelegraph.com/news/doj-says-use-of-privacy-coins...

droffel 6y ago
So is using cash. Lots of things could be 'indicative of possible criminal conduct'. Thankfully, the US operates under presumed innocence until proven guilty. This attitude of people claiming you shouldn't seek privacy lest you 'look like a criminal' is disappointing. I expect better from HN.
- asdfasgasdgasdg 6y ago
  > This attitude of people claiming you shouldn't seek privacy lest you 'look like a criminal' is disappointing. I expect better from HN. "Indicative of possible criminal conduct" means more than just "looking like a criminal." That means, if you were to be arrested for something, your use of Monero might count as evidence that you were involved in criminal activity. Combined with enough other circumstantial evidence, it might even contribute to your conviction, even without a smoking gun. This would depend on the judge and jury, but it's worth noting. I don't think it's "better" for people to ignore the risks of certain behaviors and pretend those risks don't exist. You apparently care a lot about optimizing a particular dimension: privacy. Recognize that other people have different mixes of priorities. Not everyone must agree with yours. Some people who disagree with you might even comment on this very site, as offensive as that is.
  - wolco2 6y ago
    I think he was lamenting the loss of priority of privacy within the general hn makeup. If everyone took your advice no one would protest, write a political comment against anyone in power, take any position that isn't accepted by all and be ready to drop that opinion when society shifts. You live in a free society. Use your freedom or risk losing it.
    - asdfasgasdgasdg 6y ago
      What is my advice that would lead to this tragic outcome? I'm rereading it and I don't see it. Do you mean my advice to be respectful of individual people who disagree with you? Privacy has never been more important to the aggregate HN commenter than it is today. Moreover, nothing I said enjoins people from making political statements or protests.
      - fomine3 6y ago
        Would you say same thing for using encrypted communication app like Telegram, PGP?
        asdfasgasdgasdg 6y ago
        Perhaps not. Private communication is more central to our national values than customized money. That's why only one of those two things is protected by the constitution. That being said, I don't think they'd really get far with such a rule, since any prosecution based on it would be easily challenged on constitutional grounds. So we will probably never find out what in fact I would say about it.
  - kache_ 6y ago
    If you're using monero correctly, no one should know you own any.
    - pas 6y ago
      How can one buy Monero anonymously? Let's say I have 100 USD and a bank card, what's the step by step process? Does this also work with 1 000 000 USD?
      - DarthGhandi 6y ago
        I'm not sure how you are going to stay anonymous buying anything with a bank card. Using cash then localmoneros or bisq would be fine.
        Forbo 6y ago
        This answer is completely grounded in fact, so I vouched for it. Even without the bank card number itself, many places used tokenized versions of the card number for tracking purposes.
      - akimball 6y ago
        Find someone to sell you Monero. Give them $1mm and your address. Receive Monero. Alternatively, buy bitcoin through your bank. Use it to buy monero on an exchange. Alternatively, wait 6-9 months and exchange your btc with xmr using an atomic swap, on-chain.
        _-___________-_ 6y ago
        > Find someone to sell you Monero. Give them $1mm and your address. Receive Monero. How do you ensure this person does not know who you are, whilst also ensuring they don't steal your $1m? > Alternatively, buy bitcoin through your bank. Use it to buy monero on an exchange. Difficult to do this anonymously.
        6y ago
  - woah 6y ago
    If you're arrested for something, your possession of a pry bar might count as evidence you were involved in criminal activity
  - webmaven 6y ago
    > "Indicative of possible criminal conduct" means more than just "looking like a criminal." That means, if you were to be arrested for something, your use of Monero might count as evidence that you were involved in criminal activity. Combined with enough other circumstantial evidence, it might even contribute to your conviction, even without a smoking gun. This would depend on the judge and jury, but it's worth noting. A bigger issue might be if it counts as "probable cause" to get a warrant. Seizure of records and computers would put a crimp in anyone's day, even with no conviction or even an arrest.[0] Heck, even if all it does is in practical terms is to raise the odds of an IRS audit a bit, or raise the odds of an audit becoming a criminal investigation (by being considered a "badge of fraud"[1]), that would be enough to squelch adoption. [0] Maybe Steve Jackson Games should start working on a "Cryptopunk" GURPS module and get raided[2] again: http://www.sjgames.com/SS/ http://www.sjgames.com/SS/ [1] https://en.m.wikipedia.org/wiki/Fraudulent_conveyance https://en.m.wikipedia.org/wiki/Fraudulent_conveyance [2] Holy crapoly, that was 30 years ago. Damn, I feel old.
- newacct583 6y ago
  > Lots of things could be 'indicative of possible criminal conduct'. Deliberately hiding the origin of funds is itself criminal conduct, though. It's true that AML statutes tend to be hyperspecific, because it's a difficult area to regulate. So areas like crytocurrency mixing are gray and uncertain even among law enforcement lawyers. It's not true, however, that there is an inherent right to unrestricted private transfer of money. Bascially, the statement you're reading is not saying "Mixing is probably illegal because the money must have been illegal to begin with". It's saying that "Mixing is probably money laundering on its face, no matter where the money came from." At some point governments are going to need to step in and clarify this with laws. But don't fool yourself: Crypto mixers are going to end up being subject to effectively the same reporting requirements that banks are. What you want (perfect financial privacy) you can't have, sorry. That ship sailed decades ago.
  - jdmichal 6y ago
    EDIT: I'm wrong please disregard. You can have it. You just need to do everything in cash and not use the banking system. Of course, there's a lot of advantages to the banking system... But you can still use things like safety deposit boxes for storage, gold to help protect against inflation, etc.
    - newacct583 6y ago
      AML reporting requirements cover cash transfers too, though. Yes, there are more holes in the protocols because of the messiness of the medium (broadly it's the same thing crypto regulation would face), but in general MANY people who would have to touch that cash you're hoarding are required to report large transfers. Money laundering is a crime, all by itself. It doesn't matter where the money comes from or what form it takes. The spirit behind AML legislation, long established, is that the government has the right to see where money is held and to whom it is transferred. Minutiae about mechanism might appeal to software nerds, but it doesn't address the underlying issue. This fight was fought, and lost, more than half a century ago.
    - PeterisP 6y ago
      You can't do everything in cash anonymously, at least not legally, because large cash transactions are subject to similar laws and require the business receiving the cash to identify you and report the transaction - e.g. Form 8300 in USA.
- tcberry 6y ago
  That can still mean that you may be vulnerable to civil forfeiture, since your pile of Monero doesn't receive the same presumption of innocence.
  - akimball 6y ago
    Monero is inalienable.
    - tcberry 6y ago
      I guess you can try telling that to the judge who holds you in contempt for refusing to turn over your keys.
- zepearl 6y ago
  Ok, you aren't wrong, but let's try not to be too naive - unluckily what's good for you (privacy, flexibility, speed, ...) is good as well for the "bad" guys. I guess that the final question will be if it's used more for "good" or for "bad" purposes (or maybe just if the amount of "bad" purposes surpasses a certain acceptable level). (same thing about cash - I think that most governments keep introducing stricter rules about cash withdrawals/deposits/transfers)
  - CryptoPunk 6y ago
    The bad guys can also be IN the government. When the government consistently omits threats from state bodies in its risk analyses, then the public tends to overlook that danger and heed, or at least not vigorously oppose, calls by the government to reduce privacy and increase surveillance.
    - zepearl 6y ago
      > The bad guys can also be IN the government. Yes, possible, focus on the "can/might". In general I would say that it's less likely (on the other hand there will always be 100% chances of the opposite, meaning that there will always be N bad citizens brainstorming about how to use "the system"/"any system" for their own advantage). > When the government consistently omits threats from state bodies in its risk analyses, then the public tends to overlook that danger and ... Well, it can be true (meaning that in general people are probably more prone to accept compromises when they feel threatened), but such a general discussion is in my opinion out of context here. Monero was designed to handle transactions in a way that pushes privacy to the extremes, unluckily at the same time the same mechanism can be used as well by criminals. Personally I think that "currently" the ones benefiting of the features offered by a cryptocurrency like Monero are mostly criminals as I don't think that most people have a strong need for highly-private transactions (might change in the future). Monero's other features of flexibility/access/etc... (to e.g. be able to trade in 3rd world countries without the need to have a bank account) are already offered by other cryptocurrencies.
      - CryptoPunk 6y ago
sgp_ 6y ago
There are many ways to account for this in a risk-based approach however. Asking for basic information about a customer's occupation and source of funds (as is common when opening a bank account) can adequately address ML/TF risks. You don't see exchanges freaking out over other higher-risk activities like onboarding PEPs, but they can do this with proper risk controls. https://www.perkinscoie.com/en/news-insights/anti-money-laundering-regulation-of-privacy-enabling-cryptocurrencies.html https://www.perkinscoie.com/en/news-insights/anti-money-laun...
CryptoPunk 6y ago
It also says that use of such coins is not necessarily for use in or proof of crime.
john_alan 6y ago
In reference to companies accepting it, not individual users. Come on man. “Companies that choose to offer AEC products should consider the increased risks of money laundering and financing of criminal activity, and should evaluate whether it is possible to adopt appropriate AML/CFT measures to address such risks.”

droffel 6y ago

So is using cash. Lots of things could be 'indicative of possible criminal conduct'. Thankfully, the US operates under presumed innocence until proven guilty. This attitude of people claiming you shouldn't seek privacy lest you 'look like a criminal' is disappointing. I expect better from HN.

asdfasgasdgasdg 6y ago
> This attitude of people claiming you shouldn't seek privacy lest you 'look like a criminal' is disappointing. I expect better from HN. "Indicative of possible criminal conduct" means more than just "looking like a criminal." That means, if you were to be arrested for something, your use of Monero might count as evidence that you were involved in criminal activity. Combined with enough other circumstantial evidence, it might even contribute to your conviction, even without a smoking gun. This would depend on the judge and jury, but it's worth noting. I don't think it's "better" for people to ignore the risks of certain behaviors and pretend those risks don't exist. You apparently care a lot about optimizing a particular dimension: privacy. Recognize that other people have different mixes of priorities. Not everyone must agree with yours. Some people who disagree with you might even comment on this very site, as offensive as that is.
- wolco2 6y ago
  I think he was lamenting the loss of priority of privacy within the general hn makeup. If everyone took your advice no one would protest, write a political comment against anyone in power, take any position that isn't accepted by all and be ready to drop that opinion when society shifts. You live in a free society. Use your freedom or risk losing it.
  - asdfasgasdgasdg 6y ago
    What is my advice that would lead to this tragic outcome? I'm rereading it and I don't see it. Do you mean my advice to be respectful of individual people who disagree with you? Privacy has never been more important to the aggregate HN commenter than it is today. Moreover, nothing I said enjoins people from making political statements or protests.
    - fomine3 6y ago
      Would you say same thing for using encrypted communication app like Telegram, PGP?
      - asdfasgasdgasdg 6y ago
        Perhaps not. Private communication is more central to our national values than customized money. That's why only one of those two things is protected by the constitution. That being said, I don't think they'd really get far with such a rule, since any prosecution based on it would be easily challenged on constitutional grounds. So we will probably never find out what in fact I would say about it.
- kache_ 6y ago
  If you're using monero correctly, no one should know you own any.
  - pas 6y ago
    How can one buy Monero anonymously? Let's say I have 100 USD and a bank card, what's the step by step process? Does this also work with 1 000 000 USD?
    - DarthGhandi 6y ago
      I'm not sure how you are going to stay anonymous buying anything with a bank card. Using cash then localmoneros or bisq would be fine.
      - Forbo 6y ago
        This answer is completely grounded in fact, so I vouched for it. Even without the bank card number itself, many places used tokenized versions of the card number for tracking purposes.
    - akimball 6y ago
      Find someone to sell you Monero. Give them $1mm and your address. Receive Monero. Alternatively, buy bitcoin through your bank. Use it to buy monero on an exchange. Alternatively, wait 6-9 months and exchange your btc with xmr using an atomic swap, on-chain.
      - _-___________-_ 6y ago
        > Find someone to sell you Monero. Give them $1mm and your address. Receive Monero. How do you ensure this person does not know who you are, whilst also ensuring they don't steal your $1m? > Alternatively, buy bitcoin through your bank. Use it to buy monero on an exchange. Difficult to do this anonymously.
        6y ago
- woah 6y ago
  If you're arrested for something, your possession of a pry bar might count as evidence you were involved in criminal activity
- webmaven 6y ago
  > "Indicative of possible criminal conduct" means more than just "looking like a criminal." That means, if you were to be arrested for something, your use of Monero might count as evidence that you were involved in criminal activity. Combined with enough other circumstantial evidence, it might even contribute to your conviction, even without a smoking gun. This would depend on the judge and jury, but it's worth noting. A bigger issue might be if it counts as "probable cause" to get a warrant. Seizure of records and computers would put a crimp in anyone's day, even with no conviction or even an arrest.[0] Heck, even if all it does is in practical terms is to raise the odds of an IRS audit a bit, or raise the odds of an audit becoming a criminal investigation (by being considered a "badge of fraud"[1]), that would be enough to squelch adoption. [0] Maybe Steve Jackson Games should start working on a "Cryptopunk" GURPS module and get raided[2] again: http://www.sjgames.com/SS/ http://www.sjgames.com/SS/ [1] https://en.m.wikipedia.org/wiki/Fraudulent_conveyance https://en.m.wikipedia.org/wiki/Fraudulent_conveyance [2] Holy crapoly, that was 30 years ago. Damn, I feel old.
newacct583 6y ago
> Lots of things could be 'indicative of possible criminal conduct'. Deliberately hiding the origin of funds is itself criminal conduct, though. It's true that AML statutes tend to be hyperspecific, because it's a difficult area to regulate. So areas like crytocurrency mixing are gray and uncertain even among law enforcement lawyers. It's not true, however, that there is an inherent right to unrestricted private transfer of money. Bascially, the statement you're reading is not saying "Mixing is probably illegal because the money must have been illegal to begin with". It's saying that "Mixing is probably money laundering on its face, no matter where the money came from." At some point governments are going to need to step in and clarify this with laws. But don't fool yourself: Crypto mixers are going to end up being subject to effectively the same reporting requirements that banks are. What you want (perfect financial privacy) you can't have, sorry. That ship sailed decades ago.
- jdmichal 6y ago
  EDIT: I'm wrong please disregard. You can have it. You just need to do everything in cash and not use the banking system. Of course, there's a lot of advantages to the banking system... But you can still use things like safety deposit boxes for storage, gold to help protect against inflation, etc.
  - newacct583 6y ago
    AML reporting requirements cover cash transfers too, though. Yes, there are more holes in the protocols because of the messiness of the medium (broadly it's the same thing crypto regulation would face), but in general MANY people who would have to touch that cash you're hoarding are required to report large transfers. Money laundering is a crime, all by itself. It doesn't matter where the money comes from or what form it takes. The spirit behind AML legislation, long established, is that the government has the right to see where money is held and to whom it is transferred. Minutiae about mechanism might appeal to software nerds, but it doesn't address the underlying issue. This fight was fought, and lost, more than half a century ago.
  - PeterisP 6y ago
    You can't do everything in cash anonymously, at least not legally, because large cash transactions are subject to similar laws and require the business receiving the cash to identify you and report the transaction - e.g. Form 8300 in USA.
tcberry 6y ago
That can still mean that you may be vulnerable to civil forfeiture, since your pile of Monero doesn't receive the same presumption of innocence.
- akimball 6y ago
  Monero is inalienable.
  - tcberry 6y ago
    I guess you can try telling that to the judge who holds you in contempt for refusing to turn over your keys.
zepearl 6y ago
Ok, you aren't wrong, but let's try not to be too naive - unluckily what's good for you (privacy, flexibility, speed, ...) is good as well for the "bad" guys. I guess that the final question will be if it's used more for "good" or for "bad" purposes (or maybe just if the amount of "bad" purposes surpasses a certain acceptable level). (same thing about cash - I think that most governments keep introducing stricter rules about cash withdrawals/deposits/transfers)
- CryptoPunk 6y ago
  The bad guys can also be IN the government. When the government consistently omits threats from state bodies in its risk analyses, then the public tends to overlook that danger and heed, or at least not vigorously oppose, calls by the government to reduce privacy and increase surveillance.
  - zepearl 6y ago
    > The bad guys can also be IN the government. Yes, possible, focus on the "can/might". In general I would say that it's less likely (on the other hand there will always be 100% chances of the opposite, meaning that there will always be N bad citizens brainstorming about how to use "the system"/"any system" for their own advantage). > When the government consistently omits threats from state bodies in its risk analyses, then the public tends to overlook that danger and ... Well, it can be true (meaning that in general people are probably more prone to accept compromises when they feel threatened), but such a general discussion is in my opinion out of context here. Monero was designed to handle transactions in a way that pushes privacy to the extremes, unluckily at the same time the same mechanism can be used as well by criminals. Personally I think that "currently" the ones benefiting of the features offered by a cryptocurrency like Monero are mostly criminals as I don't think that most people have a strong need for highly-private transactions (might change in the future). Monero's other features of flexibility/access/etc... (to e.g. be able to trade in 3rd world countries without the need to have a bank account) are already offered by other cryptocurrencies.
    - CryptoPunk 6y ago

sgp_ 6y ago

There are many ways to account for this in a risk-based approach however. Asking for basic information about a customer's occupation and source of funds (as is common when opening a bank account) can adequately address ML/TF risks. You don't see exchanges freaking out over other higher-risk activities like onboarding PEPs, but they can do this with proper risk controls. https://www.perkinscoie.com/en/news-insights/anti-money-laundering-regulation-of-privacy-enabling-cryptocurrencies.html https://www.perkinscoie.com/en/news-insights/anti-money-laun...

CryptoPunk 6y ago

It also says that use of such coins is not necessarily for use in or proof of crime.

john_alan 6y ago

In reference to companies accepting it, not individual users. Come on man. “Companies that choose to offer AEC products should consider the increased risks of money laundering and financing of criminal activity, and should evaluate whether it is possible to adopt appropriate AML/CFT measures to address such risks.”