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Agree. My hunch is that the US government is using money laundering and “know your customer” laws to force payment processors to play cops. I’ve long hated mon

Agree. My hunch is that the US government is using money laundering and “know your customer” laws to force payment processors to play cops. I’ve long hated money laundering and “know your customer” laws for many reasons. They’re a giant privacy violation. And for what? These laws measurably don’t work to stop big banks from financing terrorism and human trafficking. There are several reasons they don’t work. One is that, the DOJ will come down hard on small American businesses but refuses to actually investigate or prosecute large, offshore companies. They also can’t work because the vast majority of money laundering happens with cash. Even if these laws could meaningfully reduce money laundering, who does that benefit? The vast majority of money laundering is for victimless crimes, including the consensual adult sales of drugs, gambling, porn, and prostitution. These laws simply work to give large incumbents a regulatory advantage over their competitors.

quadcore 6y ago
That comment made my day. Those laws are a pain in the ass for Digital Nomads for example which is a growing population.
Proziam 6y ago
> Agree. My hunch is that the US government is using money laundering and “know your customer” laws to force payment processors to play cops. This isn't a hunch, this is entire purpose of KYC and AML. Even something as simple as making a large deposit at the bank is enough to trigger reports going to places that might cause you concern.
- Spooky23 6y ago
  Look at former Governor Spitzer as an example.
colechristensen 6y ago
Absolutely, one of the ways the United States projects its power is through financial regulation. If you want to touch our economy in any way, you expose yourself to regulation. You have a lot of claims there, do you have sources? AML regulations do plenty, and they start with banks checking for sketchy transactions and not executing them. You can also look up several cases of very large penalties for breaking these laws. The US crushed a couple of Swiss banks a few years back, the longest operating bank which had been going for hundreds of years was effectively shut down by money laundering judgements. It seems you want to have small financial businesses not be responsible for people using their services to commit crimes... well too bad, I say. You don't get a free pass to aid and abet crime because you're small. Like many things, the business of facilitating financial transactions isn't just keeping a ledger and presenting a nice interface to it... the real meat of the business is accurately keeping transactions on par with regulation and resolving disputes. The obvious part of the business is the easy part, the hard part is what you get paid for.
- cathyreisenwitz 6y ago
  Actually I want large banks investigated and prosecuted the way small banks are. Which isn't the case. HSBC laundered billions for terrorists and human traffickers with zero DOJ involovment despite whistleblowers tipping them off. But Charlie Shrem didn't report his bitcoin sale and went to prison. If you think these laws make banking fairer I've got a bridge to sell you.
  - colechristensen 6y ago
    https://www.corp-research.org/HSBC https://www.corp-research.org/HSBC Here are billions in fines for HSBC. You can say financial regulators aren’t doing enough, but you can’t say they’re doing nothing. Where did I say anything about fairness? There is a problem where prosecutors are rated by success and they only take slam dunk cases. That problem really has nothing to do with the laws themselves,
    - standardUser 6y ago
      "That problem really has nothing to do with the laws themselves" The fact that vast swaths of victimless, consensual activity is criminalized is exactly the problem. When enough laws exist to make enforcement an impossibility, selective enforcement becomes the law.
      - colechristensen 6y ago
        What exactly are the victimless consentual activities that money laundering laws punish?
        standardUser 6y ago
        Production and distribution of illicit drugs.
batterseapower 6y ago
Not just a hunch, actual US policy: "Operation Choke Point" was a 2013 inititative by the DoJ to hurt legal but unpopular businesses (e.g. payday lenders, tobacco, firearm dealers, and - yes - pornographers) by making it harder for banks to provide services to them.
- LinuxBender 6y ago
  I am curious, if such an operation exists, then does it stand to reason that perhaps they have agent provocateurs that post illicit content, then report it to the banks to disrupt the service?
  - Hjfrf 6y ago
    No need in the case of PH. It's already full of illegal content and getting caught would sabotage KYC regulations for years.
- rualca 6y ago
  > "Operation Choke Point" was a 2013 inititative by the DoJ to hurt legal but unpopular businesses (...) by making it harder for banks to provide services to them. Honest question: can the US goverent stop anyone from launching their banking/payment services?
  - LinuxBender 6y ago
    Probably not. I think what would stop you would be the mountain of regulations required to be a payment provider and tie the networks required for ACH and other types of transfers. And then of course, you need the relationships with all the other banks and so you are really back at square one. Now you are in the same position Mastercard is in.
- ghthor 6y ago
  Thanks Obama Administration.
mabbo 6y ago
> the vast majority of money laundering happens with cash Can you explain that? How do I take my illegal gained cash and convert it into enough clean money to buy a house? And why can't anti-money-laundering laws and agencies stop that? > The vast majority of money laundering is for victimless crimes, including the consensual adult sales of drugs, gambling, porn, and prostitution There's two things here. There is not believing that these crimes should be crimes- and in that, you and I likely agree. But the other thing is whether criminals should be allowed to make money for doing things that are against the law. And I don't agree. If you think the laws should be changed, vote for that, fight for that, protest for that. But don't tell me that all criminals should be allowed to clean their money because some laws aren't just.
- bigbubba 6y ago
  Open a bar, pour liquor down the drain then say you sold it at a huge markup and they paid with cash. (This is not advice.)
  - renata 6y ago
    Why wouldn't you just sell the liquor like normal? Extra profit on top of your ill-gotten gains.
    - __blockcipher__ 6y ago
      You need a paper trail of invoices, both of you buying sufficient supplies and having sufficient sales to customers to warrant those supplies. The amount of money you can launder in a given period of time is ultimately limited by how much real business you have. So if you need to launder an excessive amount of money eventually you’ll have to start metaphorically or literally pouring alcohol down the drain.
    - philwelch 6y ago
      You would, actually. But you need to somehow account for revenue above and beyond the amount of liquor you’ve actually served. So my hypothesis is that money laundering bars just pour stronger drinks than fully legitimate ones, or tolerate more “shrinkage” in general. (According to a bar manager I once knew, bars inherently have higher shrinkage than other businesses anyway; in bartending, you don’t get fired for stealing the occasional bottle or giving away free drinks to your friends because every bartender will do one of those, but if you do both you will get fired. I don’t consider this guy a reliable source, but it seems plausible; stevedores were notorious for liquor theft prior to the invention of shipping containers, so why not bartenders?)

quadcore 6y ago

That comment made my day. Those laws are a pain in the ass for Digital Nomads for example which is a growing population.

Proziam 6y ago

> Agree. My hunch is that the US government is using money laundering and “know your customer” laws to force payment processors to play cops. This isn't a hunch, this is entire purpose of KYC and AML. Even something as simple as making a large deposit at the bank is enough to trigger reports going to places that might cause you concern.

Spooky23 6y ago
Look at former Governor Spitzer as an example.

colechristensen 6y ago

Absolutely, one of the ways the United States projects its power is through financial regulation. If you want to touch our economy in any way, you expose yourself to regulation. You have a lot of claims there, do you have sources? AML regulations do plenty, and they start with banks checking for sketchy transactions and not executing them. You can also look up several cases of very large penalties for breaking these laws. The US crushed a couple of Swiss banks a few years back, the longest operating bank which had been going for hundreds of years was effectively shut down by money laundering judgements. It seems you want to have small financial businesses not be responsible for people using their services to commit crimes... well too bad, I say. You don't get a free pass to aid and abet crime because you're small. Like many things, the business of facilitating financial transactions isn't just keeping a ledger and presenting a nice interface to it... the real meat of the business is accurately keeping transactions on par with regulation and resolving disputes. The obvious part of the business is the easy part, the hard part is what you get paid for.

cathyreisenwitz 6y ago
Actually I want large banks investigated and prosecuted the way small banks are. Which isn't the case. HSBC laundered billions for terrorists and human traffickers with zero DOJ involovment despite whistleblowers tipping them off. But Charlie Shrem didn't report his bitcoin sale and went to prison. If you think these laws make banking fairer I've got a bridge to sell you.
- colechristensen 6y ago
  https://www.corp-research.org/HSBC https://www.corp-research.org/HSBC Here are billions in fines for HSBC. You can say financial regulators aren’t doing enough, but you can’t say they’re doing nothing. Where did I say anything about fairness? There is a problem where prosecutors are rated by success and they only take slam dunk cases. That problem really has nothing to do with the laws themselves,
  - standardUser 6y ago
    "That problem really has nothing to do with the laws themselves" The fact that vast swaths of victimless, consensual activity is criminalized is exactly the problem. When enough laws exist to make enforcement an impossibility, selective enforcement becomes the law.
    - colechristensen 6y ago
      What exactly are the victimless consentual activities that money laundering laws punish?
      - standardUser 6y ago
        Production and distribution of illicit drugs.

batterseapower 6y ago

Not just a hunch, actual US policy: "Operation Choke Point" was a 2013 inititative by the DoJ to hurt legal but unpopular businesses (e.g. payday lenders, tobacco, firearm dealers, and - yes - pornographers) by making it harder for banks to provide services to them.

LinuxBender 6y ago
I am curious, if such an operation exists, then does it stand to reason that perhaps they have agent provocateurs that post illicit content, then report it to the banks to disrupt the service?
- Hjfrf 6y ago
  No need in the case of PH. It's already full of illegal content and getting caught would sabotage KYC regulations for years.
rualca 6y ago
> "Operation Choke Point" was a 2013 inititative by the DoJ to hurt legal but unpopular businesses (...) by making it harder for banks to provide services to them. Honest question: can the US goverent stop anyone from launching their banking/payment services?
- LinuxBender 6y ago
  Probably not. I think what would stop you would be the mountain of regulations required to be a payment provider and tie the networks required for ACH and other types of transfers. And then of course, you need the relationships with all the other banks and so you are really back at square one. Now you are in the same position Mastercard is in.
ghthor 6y ago
Thanks Obama Administration.

mabbo 6y ago

> the vast majority of money laundering happens with cash Can you explain that? How do I take my illegal gained cash and convert it into enough clean money to buy a house? And why can't anti-money-laundering laws and agencies stop that? > The vast majority of money laundering is for victimless crimes, including the consensual adult sales of drugs, gambling, porn, and prostitution There's two things here. There is not believing that these crimes should be crimes- and in that, you and I likely agree. But the other thing is whether criminals should be allowed to make money for doing things that are against the law. And I don't agree. If you think the laws should be changed, vote for that, fight for that, protest for that. But don't tell me that all criminals should be allowed to clean their money because some laws aren't just.

bigbubba 6y ago
Open a bar, pour liquor down the drain then say you sold it at a huge markup and they paid with cash. (This is not advice.)
- renata 6y ago
  Why wouldn't you just sell the liquor like normal? Extra profit on top of your ill-gotten gains.
  - __blockcipher__ 6y ago
    You need a paper trail of invoices, both of you buying sufficient supplies and having sufficient sales to customers to warrant those supplies. The amount of money you can launder in a given period of time is ultimately limited by how much real business you have. So if you need to launder an excessive amount of money eventually you’ll have to start metaphorically or literally pouring alcohol down the drain.
  - philwelch 6y ago
    You would, actually. But you need to somehow account for revenue above and beyond the amount of liquor you’ve actually served. So my hypothesis is that money laundering bars just pour stronger drinks than fully legitimate ones, or tolerate more “shrinkage” in general. (According to a bar manager I once knew, bars inherently have higher shrinkage than other businesses anyway; in bartending, you don’t get fired for stealing the occasional bottle or giving away free drinks to your friends because every bartender will do one of those, but if you do both you will get fired. I don’t consider this guy a reliable source, but it seems plausible; stevedores were notorious for liquor theft prior to the invention of shipping containers, so why not bartenders?)