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How would this be a conduit for money laundering if you can't withdraw USD? Your still just stuck with crypto; I'm not sure how it gets you any closer to "clean

How would this be a conduit for money laundering if you can't withdraw USD? Your still just stuck with crypto; I'm not sure how it gets you any closer to "clean" money.

yowlingcat 6y ago
Great question. So money laundering consists of several phases -- placement, layering and integration. In particular, even if you can't withdraw USD, there's an enormous amount of movement you can conduct on platform which contributes to the layering phase. Even if you don't place or (to your point) integrate it on platform, you can still get quite a bit closer in the process.
- thebean11 6y ago
  So using it as a BTC mixer essentially?
  - yowlingcat 6y ago
    Yep. Ironically, BTC mixers seem like they'd be quite poor at the job of actually mixing because unlike more sophisticated looking layering activity, it doesn't actually mimic legitimate transaction activity which could otherwise slip under the radar. On the contrary, it sticks out like a sore thumb and because the blockchain is immutable, has been used by the authorities to trace less sophisticated actors.
vmception 6y ago
hi, I started this subthread. it is very easy to money launder with crypto and isn't the crux of my argument. my argument is simply that this case is about unregistered futures and swaps being traded in US jurisdiction, and that its not about aml/kyc. to your question, "if you can't withdraw USD?" is very limiting and seems based on heavy misconceptions about both money laundering and a limited idea of utility of crypto, not sure where to start there. the other person's response talks about reintegration which is a very accurate tip of the iceberg. layer and reintegration is much easier with crypto.
- helloworld11 6y ago
  And how is it easy to convert crypto back into cash in the money laundering process. As far as I can tell, that's actually rather tricky.
  - vmception 6y ago
    Its not and for you to write that you didn't really visualize what I described At the bare minimum you should realize that any KYC’d individual can convert billions of dollars of crypto to US Dollars in a day without moving the markets more than a few percent and after that you should realize that classifying a transaction as clean is not difficult But if you don't want any transaction associated with anyone’s identity it is simply more time consuming, eventually you are still getting to a KYC’d individual that can receive a wire transfer in dollars at any meaningful amount in a day And finally, you can try to reread what I wrote earlier, jot the steps down on a napkin if you need to, its not that complicated you are just starting from a place that assumes an omniscient state and a culture of stigmatizing the movement of money, and thats just flawed
    - thebean11 6y ago
      based on your comments, this all seems pretty pointless. why mess with binance when you could just use a distributed service like coinjoin. Seems like money laundering is easy! > And finally, you can try to reread what I wrote earlier, jot the steps down on a napkin if you need to give me a break bud. talking down to people makes me assume you're clueless.
  - ryanlol 6y ago
    I just collected one million AED (~270k usd) from a localbitcoins exchanger. This cost me nothing, the guy didn’t even ask for my name. In Europe I could sell cryptocurrency for cash at a price several % above market value, people are desperate to get rid of paper money. It’s only a bit challenging if you want money in your bank account.

How would this be a conduit for money laundering if you can't withdraw USD? Your still just stuck with crypto; I'm not sure how it gets you any closer to "clean" money.

yowlingcat 6y ago

Great question. So money laundering consists of several phases -- placement, layering and integration. In particular, even if you can't withdraw USD, there's an enormous amount of movement you can conduct on platform which contributes to the layering phase. Even if you don't place or (to your point) integrate it on platform, you can still get quite a bit closer in the process.

thebean11 6y ago
So using it as a BTC mixer essentially?
- yowlingcat 6y ago
  Yep. Ironically, BTC mixers seem like they'd be quite poor at the job of actually mixing because unlike more sophisticated looking layering activity, it doesn't actually mimic legitimate transaction activity which could otherwise slip under the radar. On the contrary, it sticks out like a sore thumb and because the blockchain is immutable, has been used by the authorities to trace less sophisticated actors.

vmception 6y ago

hi, I started this subthread. it is very easy to money launder with crypto and isn't the crux of my argument. my argument is simply that this case is about unregistered futures and swaps being traded in US jurisdiction, and that its not about aml/kyc. to your question, "if you can't withdraw USD?" is very limiting and seems based on heavy misconceptions about both money laundering and a limited idea of utility of crypto, not sure where to start there. the other person's response talks about reintegration which is a very accurate tip of the iceberg. layer and reintegration is much easier with crypto.

helloworld11 6y ago
And how is it easy to convert crypto back into cash in the money laundering process. As far as I can tell, that's actually rather tricky.
- vmception 6y ago
  Its not and for you to write that you didn't really visualize what I described At the bare minimum you should realize that any KYC’d individual can convert billions of dollars of crypto to US Dollars in a day without moving the markets more than a few percent and after that you should realize that classifying a transaction as clean is not difficult But if you don't want any transaction associated with anyone’s identity it is simply more time consuming, eventually you are still getting to a KYC’d individual that can receive a wire transfer in dollars at any meaningful amount in a day And finally, you can try to reread what I wrote earlier, jot the steps down on a napkin if you need to, its not that complicated you are just starting from a place that assumes an omniscient state and a culture of stigmatizing the movement of money, and thats just flawed
  - thebean11 6y ago
    based on your comments, this all seems pretty pointless. why mess with binance when you could just use a distributed service like coinjoin. Seems like money laundering is easy! > And finally, you can try to reread what I wrote earlier, jot the steps down on a napkin if you need to give me a break bud. talking down to people makes me assume you're clueless.
- ryanlol 6y ago
  I just collected one million AED (~270k usd) from a localbitcoins exchanger. This cost me nothing, the guy didn’t even ask for my name. In Europe I could sell cryptocurrency for cash at a price several % above market value, people are desperate to get rid of paper money. It’s only a bit challenging if you want money in your bank account.