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Money-laundering can be significantly reduced if every bank had to: 1. show the "contra" bank account details for every transfer in and out of an account (to s

Money-laundering can be significantly reduced if every bank had to: 1. show the "contra" bank account details for every transfer in and out of an account (to show who oaid or who received the funds) 2. provide bank statements in a (standardised) machine readable format 3. provide the statements within a week of request. Such bank statements would make following the trail a lot easier. None of the enormous, listed, multi-national banks where I live can do all three. Most can barely do 3. They are so bad, we have had to conclude that money-laundering is actually a tacit service they offer.

smitty1e 6y ago
If I'm an "artist", and I draw a horizontal line, and a "buyer" pays 7 figures for my "art", and I sort of know into exactly which account to deposit the payment: is that money laundering? Or just a modern art?
- colinb 6y ago
  That is just modern art. But... if in the previous week you paid someone those same 7 figures, or you paid N people 7 figures/N for their creative dance with walnuts, then the tax people might be justified in their curiosity.
- Rochus 6y ago
  That was enlightening; now I also understand the need for NFTs.
- pas 6y ago
  If you deposit the payment into an account that's not yours, that is where AML (and tax laws!) kick in. Are you simply giving a gift to that person? Are you buying something from them? Are you making a honest mistake? The problem is not that a casino "makes a lot of money" suddenly. Sure, great for them. But then if that money starts to percolate into the other jurisdictions. For example the casino orders dry cleaning from a foreign company. The casino wire transfers the money, the cleaners send the receipts, but no actual cleaning happens (obviously). And this is where banks come in, because they provide the wire transfer. And they are mandated to flag extremely successful dry cleaners and other providers, report it to various government agencies. And ... it turns out that somehow they can't even do plausible deniability properly.
- throwaway210222 6y ago
  I have no idea if that is money laundering or not. But in the Real World™, most money-laundering investigations are done by law firms after a theft of funds is discovered. The frauds are typically insider-assisted procurement fraud where some known list of initial illegal transactions are identified and then attempts are make to recover it from intermediate and/or ultimate beneficiaries. The bank accounts of a long list of intermediaries are subpeonaed and the transactions traced. The entire point of money-laundering is to make the trail go cold. The 'contra' bank account entries keeps the trail very, very alive.
- vagrantJin 6y ago
  Imagine, paying 52 million bucks for a vertical blue line on a canvas. When the auctioneer, who suspiciously never really care to do background checks beyond the simple stuff, finds that the buyer is an offshore trust fund - they are more than happy to sell the painting and extract ridiculous fees because the trustee won't care. The trust is a laundering device for whole countries created by the English to aid capital flight. 52 million is but a drop in the ocean. So no. Its not modern art. It's money laundering.
- Stranger43 6y ago
  If the money used to pay for the "art" comes from declared income and and the only thing you provide in return is "the artwork" it's modern art, unless of cause your connected enough that it could be seen as an attempt to carry favor with your connections. The transaction that happens when the buyer then sells it for twice the amount to an offshore holding trust without any operational business associated with it is money laundering.
zo1 6y ago
I would argue you really just need one step: 1. All economic transactions between parties are given to government and linked to a government-issued identifier. With this data, you can throw a bunch of smart people and algorithms to detect fraud, laundering and tax evasion. But of course, "privacy". Such a convenient excuse to prevent us from stopping alot of crime and fraud.
- Nextgrid 6y ago
  > But of course, "privacy". Such a convenient excuse to prevent us from stopping alot of crime and fraud. Are you saying that law-abiding people should renounce their right to privacy because of a few malicious actors, especially when there's plenty of other ways to prevent such crime (money laundering is merely a symptom of another crime and that one needs to be prevented).
- KMag 6y ago
  "I'm sorry, your 6 month old daughter was selling carfentanil to her grandparents, with a probability of 99.63%" Privacy also saves us from lots of machine learning fishing expeditions gone wrong.
- MadSudaca 6y ago
  What if I don't trust the government or their appointed "identifiers"?
  - zo1 6y ago
    Then I'd ask why you trust them with everything else? They can pretty much make you a non-person, or make you disappear, or treat you as sub-human. And they regularly prioritize companies, rich people and other special-interest groups over you. So yeah, you shouldn't trust them. But right now they are an inevitability with no alternative, so we need to figure out how to solve the problems plaguing us whilst reigning government in and keeping it from overstepping. Some element of "given" trust is necessary for that. As a side note, seeing as this is a technical space. One reason you should trust their identifiers is the same reason you shouldn't use non-unique natural keys as primary-keys in your database. The identifier is essentially your surrogate key and government is in a very unique position of power/influence that aides it in being a custodian of citizen data.
LatteLazy 6y ago
That's not really true: it takes about 30min to setup dummy companies so instead of A->B you now go A->X->Y->B and A and B can continue pretending they didn't know...
- imagine99 6y ago
  I hear this a lot and on the face of it, it sounds plausible but I have worked with a number of startups from before their founders incorporated and I don't think, "setting up dummy companies in 30 min" is a thing. You need directors and shareholders for all these companies (and nominee directors aren't really a thing anymore because of the obvious risks), you need to provide a lot of UBO paperwork (ultimate beneficial owner) and even more if you ever want to open a bank account (dummy companies without bank accounts are useless after all). So while you, as a person, may be able to open a bunch of Ltd.s online (e.g. in GB) in an hour, this means that all these would be in your name and all your data publicly available for everybody. Please correct me if I'm wrong, I'd like to learn more about this...
  - yardie 6y ago
    Delaware LLCs take literal minutes and just a small amount of paperwork. We created a LLC because we bought a boat. since my partner wasn’t a US citizen it couldn’t be documented with her name on it so we created a LLC who technically owned it and me holding 50.1% ownership. Any documents to the LLC goes to a POBox in Delaware. There is very little attaching my name to it that you could find without a court order.
    - imagine99 6y ago
      I get that. How would that help you do any money-laundering though? (Not saying that you would do that but that's the subject of the thread ;-)). You couldn't just set up a second or third Delaware LLC and move money back and forth between them with impunity... What I was saying is that I don't see how money-laundering is all that easy anymore nowadays, at least not for any normal person which is not part of a criminal organization (mafia etc.) with lots of members willing to do illegal stuff for them...
swiley 6y ago
Don't some of them just do it and pay the fines because it's still profitable?

smitty1e 6y ago

If I'm an "artist", and I draw a horizontal line, and a "buyer" pays 7 figures for my "art", and I sort of know into exactly which account to deposit the payment: is that money laundering? Or just a modern art?

colinb 6y ago
That is just modern art. But... if in the previous week you paid someone those same 7 figures, or you paid N people 7 figures/N for their creative dance with walnuts, then the tax people might be justified in their curiosity.
Rochus 6y ago
That was enlightening; now I also understand the need for NFTs.
pas 6y ago
If you deposit the payment into an account that's not yours, that is where AML (and tax laws!) kick in. Are you simply giving a gift to that person? Are you buying something from them? Are you making a honest mistake? The problem is not that a casino "makes a lot of money" suddenly. Sure, great for them. But then if that money starts to percolate into the other jurisdictions. For example the casino orders dry cleaning from a foreign company. The casino wire transfers the money, the cleaners send the receipts, but no actual cleaning happens (obviously). And this is where banks come in, because they provide the wire transfer. And they are mandated to flag extremely successful dry cleaners and other providers, report it to various government agencies. And ... it turns out that somehow they can't even do plausible deniability properly.
throwaway210222 6y ago
I have no idea if that is money laundering or not. But in the Real World™, most money-laundering investigations are done by law firms after a theft of funds is discovered. The frauds are typically insider-assisted procurement fraud where some known list of initial illegal transactions are identified and then attempts are make to recover it from intermediate and/or ultimate beneficiaries. The bank accounts of a long list of intermediaries are subpeonaed and the transactions traced. The entire point of money-laundering is to make the trail go cold. The 'contra' bank account entries keeps the trail very, very alive.
vagrantJin 6y ago
Imagine, paying 52 million bucks for a vertical blue line on a canvas. When the auctioneer, who suspiciously never really care to do background checks beyond the simple stuff, finds that the buyer is an offshore trust fund - they are more than happy to sell the painting and extract ridiculous fees because the trustee won't care. The trust is a laundering device for whole countries created by the English to aid capital flight. 52 million is but a drop in the ocean. So no. Its not modern art. It's money laundering.
Stranger43 6y ago
If the money used to pay for the "art" comes from declared income and and the only thing you provide in return is "the artwork" it's modern art, unless of cause your connected enough that it could be seen as an attempt to carry favor with your connections. The transaction that happens when the buyer then sells it for twice the amount to an offshore holding trust without any operational business associated with it is money laundering.

zo1 6y ago

I would argue you really just need one step: 1. All economic transactions between parties are given to government and linked to a government-issued identifier. With this data, you can throw a bunch of smart people and algorithms to detect fraud, laundering and tax evasion. But of course, "privacy". Such a convenient excuse to prevent us from stopping alot of crime and fraud.

Nextgrid 6y ago
> But of course, "privacy". Such a convenient excuse to prevent us from stopping alot of crime and fraud. Are you saying that law-abiding people should renounce their right to privacy because of a few malicious actors, especially when there's plenty of other ways to prevent such crime (money laundering is merely a symptom of another crime and that one needs to be prevented).
KMag 6y ago
"I'm sorry, your 6 month old daughter was selling carfentanil to her grandparents, with a probability of 99.63%" Privacy also saves us from lots of machine learning fishing expeditions gone wrong.
MadSudaca 6y ago
What if I don't trust the government or their appointed "identifiers"?
- zo1 6y ago
  Then I'd ask why you trust them with everything else? They can pretty much make you a non-person, or make you disappear, or treat you as sub-human. And they regularly prioritize companies, rich people and other special-interest groups over you. So yeah, you shouldn't trust them. But right now they are an inevitability with no alternative, so we need to figure out how to solve the problems plaguing us whilst reigning government in and keeping it from overstepping. Some element of "given" trust is necessary for that. As a side note, seeing as this is a technical space. One reason you should trust their identifiers is the same reason you shouldn't use non-unique natural keys as primary-keys in your database. The identifier is essentially your surrogate key and government is in a very unique position of power/influence that aides it in being a custodian of citizen data.

LatteLazy 6y ago

That's not really true: it takes about 30min to setup dummy companies so instead of A->B you now go A->X->Y->B and A and B can continue pretending they didn't know...

imagine99 6y ago
I hear this a lot and on the face of it, it sounds plausible but I have worked with a number of startups from before their founders incorporated and I don't think, "setting up dummy companies in 30 min" is a thing. You need directors and shareholders for all these companies (and nominee directors aren't really a thing anymore because of the obvious risks), you need to provide a lot of UBO paperwork (ultimate beneficial owner) and even more if you ever want to open a bank account (dummy companies without bank accounts are useless after all). So while you, as a person, may be able to open a bunch of Ltd.s online (e.g. in GB) in an hour, this means that all these would be in your name and all your data publicly available for everybody. Please correct me if I'm wrong, I'd like to learn more about this...
- yardie 6y ago
  Delaware LLCs take literal minutes and just a small amount of paperwork. We created a LLC because we bought a boat. since my partner wasn’t a US citizen it couldn’t be documented with her name on it so we created a LLC who technically owned it and me holding 50.1% ownership. Any documents to the LLC goes to a POBox in Delaware. There is very little attaching my name to it that you could find without a court order.
  - imagine99 6y ago
    I get that. How would that help you do any money-laundering though? (Not saying that you would do that but that's the subject of the thread ;-)). You couldn't just set up a second or third Delaware LLC and move money back and forth between them with impunity... What I was saying is that I don't see how money-laundering is all that easy anymore nowadays, at least not for any normal person which is not part of a criminal organization (mafia etc.) with lots of members willing to do illegal stuff for them...

swiley 6y ago

Don't some of them just do it and pay the fines because it's still profitable?