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I used to view things exactly like you did. I was a big Bitcoin user as well. I read Treasury's War and it sickened me. AML is indeed a parallel quasi-judicial

I used to view things exactly like you did. I was a big Bitcoin user as well. I read Treasury's War and it sickened me. AML is indeed a parallel quasi-judicial system except without the good bits of the actual judicial system, and poses many civil liberties concerns. However, I learned with time that it's not as ineffective as it looks. Governments around the world have adopted AML laws, and with less pressure from the US than is commonly believed. They aren't all stupid. These laws are not a total failure and do raise the bar for organised crime significantly. If you look at the stories of some of the world's highest profile crime lords, they do in fact struggle significantly to launder their money, often in ways that make it appear unclear what their planned end-game was (perhaps they didn't have one). Here are two examples: 1. Ross Ulbricht, poster child of the AML-free world. Ran a major drug market online. When arrested he was Bitcoin-rich and dollar poor, living like a student in San Francisco. He had been able to convert very little of his gains into real-world wealth that a crime lord might want, like houses, planes, boats, or whatever it is people plan to do with the proceeds of crime. 2. Paul le Roux. A much more successful gang leader than Ulbricht, yet when finally captured it was discovered most of his wealth was in the form of balls of precious metals under guard. He lived in fear of his guards turning on him and stealing his wealth. IIRC there was some evidence this happened, and he reached a point where he couldn't physically reach the safe houses anyway. Again, although powerful, he was not actually living the high life in the ways that might make doing such crimes attractive to most people. And there is no really good way to convert large amounts of precious metals into more useful forms of wealth without attracting a great deal of attention. Money laundering is like any form of crime fighting. It raises the bar. Ransomware exploded after cryptocurrency came on the scene because cryptocurrency makes AML much harder. You didn't see people regularly being held to ransom via PayPal, did you? In fact blackmail/extortion for physical cash is quite rare because obtaining the money always involves walking into a police trap. One of the many reasons I eventually got tired of the Bitcoin community was their absolute and total refusal to consider the physical safety issue: having lots of crypto just is not safe, in the sense that kidnapping your wife or kids to extract the coins from you is an actually viable strategy, whereas trying to extract money from a rich guy via a credit card or wire transfer is just a joke, it will never happen. You'd be caught immediately.

baybal2 6y ago
Both Ross, and Roux had all the means to play filthy rich, they just elected not to. In other words both were very bad at doing a criminal enterprise. I will though second you on this point: > I used to view things exactly like you did. I was a big Bitcoin user as well. I read Treasury's War and it sickened me. AML is indeed a parallel quasi-judicial system except without the good bits of the actual judicial system, and poses many civil liberties concerns. AMLKYC is the free world's equivalent of all what STASI wanted to become. But just like the original, STASI got largely useless for its nominal purpose the bigger, and more powerful it became. STASI started to finding people to prosecute for the sake of finding people to prosecute, and keep ever expanding need to grow its manpower, and political clout. At some point, they got to see a large double digit of DDR population as potential spies, and terrorists, and it was then when the system started to break down. STASI agents were running after people for they suspected of revolt for storing too many food items, while mass agitators were kind of overlooked for their "banality." That few month window was what allowed for DDR protest movement to materialise seemingly overnight.
xwolfi 6y ago
But think about what you said. Yes the criminal had issue enjoying his money, but it had no real link with the crime committed. You make them sweat more, but ... but what ? There's nothing else to say about it. Who cares how sad or happy they are, it's the impact of their crimes that matter. I agree maybe if they could use money freely they'd invade the system more, corrupt more people, buy a police station, whatever. But that's not what you said interestingly. The incentive might be lower for others, true, but there are already so many incentive to live an honest life, rationally, that we need to accept crime is more than an incentive tension. It's a bit that, but more, too. I work on the other side, in a large multinational bank in Hong Kong. KYC and AML, we eat it for breakfast, lunch and dinner. We talk about it, we're trained about it, we fight each other about it, in the damn elevator people strategize about how to report this or that transaction/client/colleague for breach of compliance. It's a HUGE work, we prevent tons of people to partner or work for us, we have entire teams of engineers building systems to monitor trades, we have armies of young people wasting their youth browsing databases trying to find who would be having round-number transactions, things like that. All this, to piss off a drug dealer trying to buy a Ferrari while kids die in the streets under the batons of the Police. I don't know what to do better, I like order and I will never commit crimes, even if it's against my very immediate interests. But it feels like such a lazy solution to work the banks like that because they're an easy evil to point a finger to, while closing your eyes to the cause of crime. Maybe it's financial incentives, maybe it's more than that.

baybal2 6y ago

Both Ross, and Roux had all the means to play filthy rich, they just elected not to. In other words both were very bad at doing a criminal enterprise. I will though second you on this point: > I used to view things exactly like you did. I was a big Bitcoin user as well. I read Treasury's War and it sickened me. AML is indeed a parallel quasi-judicial system except without the good bits of the actual judicial system, and poses many civil liberties concerns. AMLKYC is the free world's equivalent of all what STASI wanted to become. But just like the original, STASI got largely useless for its nominal purpose the bigger, and more powerful it became. STASI started to finding people to prosecute for the sake of finding people to prosecute, and keep ever expanding need to grow its manpower, and political clout. At some point, they got to see a large double digit of DDR population as potential spies, and terrorists, and it was then when the system started to break down. STASI agents were running after people for they suspected of revolt for storing too many food items, while mass agitators were kind of overlooked for their "banality." That few month window was what allowed for DDR protest movement to materialise seemingly overnight.

xwolfi 6y ago

But think about what you said. Yes the criminal had issue enjoying his money, but it had no real link with the crime committed. You make them sweat more, but ... but what ? There's nothing else to say about it. Who cares how sad or happy they are, it's the impact of their crimes that matter. I agree maybe if they could use money freely they'd invade the system more, corrupt more people, buy a police station, whatever. But that's not what you said interestingly. The incentive might be lower for others, true, but there are already so many incentive to live an honest life, rationally, that we need to accept crime is more than an incentive tension. It's a bit that, but more, too. I work on the other side, in a large multinational bank in Hong Kong. KYC and AML, we eat it for breakfast, lunch and dinner. We talk about it, we're trained about it, we fight each other about it, in the damn elevator people strategize about how to report this or that transaction/client/colleague for breach of compliance. It's a HUGE work, we prevent tons of people to partner or work for us, we have entire teams of engineers building systems to monitor trades, we have armies of young people wasting their youth browsing databases trying to find who would be having round-number transactions, things like that. All this, to piss off a drug dealer trying to buy a Ferrari while kids die in the streets under the batons of the Police. I don't know what to do better, I like order and I will never commit crimes, even if it's against my very immediate interests. But it feels like such a lazy solution to work the banks like that because they're an easy evil to point a finger to, while closing your eyes to the cause of crime. Maybe it's financial incentives, maybe it's more than that.