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The so-called anti-money laundering push is actually a manifestation of Total Information Awareness, applied to value transfer. It's completely unconstitutional

The so-called anti-money laundering push is actually a manifestation of Total Information Awareness, applied to value transfer. It's completely unconstitutional and extremely dangerous. It began in 1989, with leaders of the G7 agreeing at a summit to create the FATF. It has, by at least one account, become one of the least effective policy experiments in history: https://www.tandfonline.com/doi/full/10.1080/25741292.2020.1725366 https://www.tandfonline.com/doi/full/10.1080/25741292.2020.1.... There is a reason that historically, the state needed a warrant, issued by a court, before it could conduct a search. Allowing the state to conduct dragnet surveillance creates the kind of power imbalance that ensures growing income equality and social instability. The need for the state to obtain a warrant before conducting a search was seen as striking the right balance between the need to maintain reasonable checks on the power of the state, and the need to investigate crime. And in one summit, all of that was cast aside. Any actual incident of money laundering involves some underlying crime that generated the illicit revenue. To prove money laundering occurred, you need to prove that the underlying crime occurred. So an AML law is redundant. Any actual money laundering that is proven would land the party involved in prison, for the underlying crime. But the so-called AML laws do not require proving money laundering occurred. It only requires proving that a person did not comply with the AML-related disclosure requirements, i.e. not complying with warrantless mass-surveillance. The crime is privacy.

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stavros 5y ago
I want to dismiss this comment as alarmist nonsense, but I find myself agreeing with every last bit of it.
nine_k 5y ago
One can consider AML measures similar to getting your luggage scanned in an airport. Such measures strip everyone of a bit of privacy, but prevent rare nutcases from inflicting large-scale damage. The question is how much benefit an average society member gains for that cost. How many planes were not hijacked because the potential perpetrators knew they won't be able to covertly bring a handgun abroad? How many crimes were not done because the potential perpetrators understood that they won't be able to turn the proceeds into large sums of usable money? It's really hard to measure, and because of that, the extent of such regulations tends to grow, just in case. There's plenty of security theater in airports, along with useful measures. There's plenty of overreach in AML regulations, along with useful measures. Curbing both back to the reasonable levels is a hard task, because it's hard to obtain a strong evidence that a particular level is reasonable at preventing the crime.
- CryptoPunk 5y ago
  Money laundering is absolutely rampant. When criminal organizations are able to sell billions of dollars worth of highly restricted schedule I drugs in the US, it stands to reason that laundering the proceeds of those sales is a cake walk in comparison. And we know they successfully launder a significant fraction of those billions of dollars worth of criminal proceeds, as otherwise their criminal enterprises wouldn't be sustainable the way they are. So AML laws result in massive amounts of privacy violation (far more than what TSA rules, which only apply when one boards a plane, impose), in requiring the reporting of a significant fraction of private financial interactions to law enforcement surveillance agencies. And despite this massive sacrifice in government accountability and privacy, these laws are widely circumvented, to the tune of billions of dollars worth of criminal proceeds being laundered each year. The reason why AML laws are dangerous is that the state itself is a threat vector, and these laws massively increase the power of the state relative to the private citizen. Policy needs to be crafted to minimize all risks, not just those that emanate from malicious non-state actors, like criminals. The risk of tyranny, or structural repression, needs to be addressed too. Given there are numerous other investigative tools available to law enforcement to stop crime besides warrantless surveillance, I see no justification for such a dangerous law, with such limited evidence of effectiveness, being in place.

deleted 5y ago

[deleted]

stavros 5y ago

I want to dismiss this comment as alarmist nonsense, but I find myself agreeing with every last bit of it.

nine_k 5y ago

One can consider AML measures similar to getting your luggage scanned in an airport. Such measures strip everyone of a bit of privacy, but prevent rare nutcases from inflicting large-scale damage. The question is how much benefit an average society member gains for that cost. How many planes were not hijacked because the potential perpetrators knew they won't be able to covertly bring a handgun abroad? How many crimes were not done because the potential perpetrators understood that they won't be able to turn the proceeds into large sums of usable money? It's really hard to measure, and because of that, the extent of such regulations tends to grow, just in case. There's plenty of security theater in airports, along with useful measures. There's plenty of overreach in AML regulations, along with useful measures. Curbing both back to the reasonable levels is a hard task, because it's hard to obtain a strong evidence that a particular level is reasonable at preventing the crime.

CryptoPunk 5y ago
Money laundering is absolutely rampant. When criminal organizations are able to sell billions of dollars worth of highly restricted schedule I drugs in the US, it stands to reason that laundering the proceeds of those sales is a cake walk in comparison. And we know they successfully launder a significant fraction of those billions of dollars worth of criminal proceeds, as otherwise their criminal enterprises wouldn't be sustainable the way they are. So AML laws result in massive amounts of privacy violation (far more than what TSA rules, which only apply when one boards a plane, impose), in requiring the reporting of a significant fraction of private financial interactions to law enforcement surveillance agencies. And despite this massive sacrifice in government accountability and privacy, these laws are widely circumvented, to the tune of billions of dollars worth of criminal proceeds being laundered each year. The reason why AML laws are dangerous is that the state itself is a threat vector, and these laws massively increase the power of the state relative to the private citizen. Policy needs to be crafted to minimize all risks, not just those that emanate from malicious non-state actors, like criminals. The risk of tyranny, or structural repression, needs to be addressed too. Given there are numerous other investigative tools available to law enforcement to stop crime besides warrantless surveillance, I see no justification for such a dangerous law, with such limited evidence of effectiveness, being in place.