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Bitcoin's goal was to help people "get out" of the traditional financial system "not inside it". Everyone knows where the real money laundering and terrorist f

by max_ 5y ago

Bitcoin's goal was to help people "get out" of the traditional financial system "not inside it". Everyone knows where the real money laundering and terrorist financing happens. It is done by the likes of HSBC, Standard Chartered and other big banks. This is public knowledge, as we have seen with the Panama papers and most recently the FinCen files. Our financial institutions are too rotten for you to even assume that the intention of this regulation is altruistic (i.e public benefit). The tradition of regulation in finance is to perform a kind of scam called "regulator capture"[0]. It is what we have mostly observed to be the goal of complex financial regulations. For it to divert from this would be an exception. [0]: https://www.investopedia.com/terms/r/regulatory-capture.asp https://www.investopedia.com/terms/r/regulatory-capture.asp

stkdump 5y ago
"Getting out" is very fuzzy goal. For my understanding people usually cite two central goals: 1. Stop central bank imposed inflation. 2. Serve the people who are excluded from banking. If either of those goals can't be reached, it is due to misdesign/inherent flaws of the approach and not governments.
rad_gruchalski 5y ago
> It is done by the likes of HSBC, Standard Chartered and other big banks. And, as it happens, because of the records, it has been discovered and everyone involved is traceable. The system works.
- read_if_gay_ 5y ago
  So where are the consequences?
  - rad_gruchalski 5y ago
    What do you expect? That I google this for you? Here’s an example: https://www.investopedia.com/stock-analysis/2013/investing-news-for-jan-29-hsbcs-money-laundering-scandal-hbc-scbff-ing-cs-rbs0129.aspx https://www.investopedia.com/stock-analysis/2013/investing-n... It’s all public knowledge and pretty easy to find.
    - read_if_gay_ 5y ago
      > Given the bank's size, it appears that it and some of its peers are too big to jail because they are too big to fail. Instead they got fined for less than 0.1% of their total holdings. The system doesn’t work. This is not a consequence.
  - krageon 5y ago
    There are no consequences that matter, because the system itself is the problem.
- nenadg 5y ago
  >and everyone involved is traceable. The system works. The system does not work. Everyone involved have been discovered by `rouges` like Assange that system holds in jail for either made-up or largely irrelevant accusations, out of the scope of their opus, full soviet style. Everyone knows the king is naked and just comedians and activists at large (or in jail) has courage to say something about it, which is pretty medieval position for all of us to start with.
  - rad_gruchalski 5y ago
    You are making a very broad statement and I was able to find this right in the first result from google: “Immigration and Customs Enforcement agents revealed suspect money trails between HSBC's Mexican and United States operations.” https://www.investopedia.com/stock-analysis/2013/investing-news-for-jan-29-hsbcs-money-laundering-scandal-hbc-scbff-ing-cs-rbs0129.aspx https://www.investopedia.com/stock-analysis/2013/investing-n...
  - ridiculous_leke 5y ago
    In case of crypto, even the rogues wouldn't be able to do anything.
arcticbull 5y ago
Funny, right after 1100 crypto money launderers in China were arrested, nobody wanted any more Tethers. [1] Now my statements are entirely circumstantial, but I strongly suggest you watch this space. > The public security ministry said that by Wednesday afternoon police had busted more than 170 criminal groups involved in using cryptocurrencies to launder money. > China’s Payment & Clearing Association said on Wednesday that the number of crimes involving the use of virtual currencies is on the rise. > Because cryptocurrencies are anonymous, convenient and global in nature, “they have increasingly become an important channel for cross-border money laundering,” the association said in a statement. Sounds right to me. [1] https://www.cnbc.com/2021/06/10/china-arrests-over-1100-suspects-for-crypto-related-money-laundering.html https://www.cnbc.com/2021/06/10/china-arrests-over-1100-susp...
- x4e 5y ago
  > nobody wanted any more Tethers Can you provide a source on that? I certainly don’t want any Tethers but I know plenty of people that do.
  - codebolt 5y ago
    The market is the source. Just look at the market cap chart here, you can see that it's been flat for the past few weeks (after a long period of exponential growth): https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/
    - thebean11 5y ago
      Tether market cap tends to grow during bull runs, and crypto's been pretty flat. I'm skeptical of this argument given that Tether is still trading 1:1 with dollars, and at an extremely high volume..
      - arcticbull 5y ago
        Volumes on USDT:USD pairs should be taken with extreme skepticism, after all, exchanges have a massive vested interest in the peg remaining fixed and are more than likely just arbitraging/wash trading to keep it there. It's hard to know with any sort of certainty how much actual volume is going back and forth across that pair. It also doesn't represent a redemption in any way vis-a-vis the backing assets so can at best be treated as (with a massive lump of salt) some connection to faith that someone else will accept it at 1:1. Remember only entities Tether deems as customers are permitted to redeem in the first place, and more than likely only the exchanges are deemed customers. They know they can't redeem anyways so they don't bother even trying. That's my read on it anyways.
anigbrowl 5y ago
That's very true, but 'dark money for everyone' doesn't necessarily seem like an improvement. I am in favor of privacy and not having to explain what you choose to do with your own money, but imho the aggregate yield curve of total privacy inverts as you ascend a logarithmic scale.
RandomLensman 5y ago
Do you have evidence on KYC/AML/CFT being in a state of regulatory capture? I would say they are anything but. Huge expenses for all involved, no standards that would be good enough to just fulfill. What we have observed is financial institutions failing with respect to KYC/AML/CFT/sanctions etc. (and getting fined for it), but that is not regulatory capture. Also, I'd argue that since 2008 regulatory capture isn't working so well anymore, with a lot of extra regulation being thrown at the system (some of which being eased now again). Regulators are incentivized to see dangers everywhere and acting accordingly. The last time they did not see dangers everywhere, it didn't work out so well, either. The counteracting force would come for electorates and policy makers seeing opportunity and progress lost from being overly cautious.
cromka 5y ago
> Everyone knows where the real money laundering and terrorist financing happens. > It is done by the likes of HSBC, Standard Chartered and other big banks. > This is public knowledge, as we have seen with the Panama papers and most recently the FinCen files. No. This is an observational bias. All we know is that they do that. But the fact that they do that, too, does not logically imply that resorting to them is the only way of money laundering and that BTC is not used for that a) at all b) at a much larger scale.
qeternity 5y ago
> Everyone knows where the real money laundering and terrorist financing happens. > It is done by the likes of HSBC, Standard Chartered and other big banks. This used to be the case. And undoubtedly it still goes on. There simply weren’t many other mechanisms to launder money that didn’t involve large banks…until crypto joined the party. Crypto’s most popular feature is speculation, and its second most popular feature is money laundering/capital control evasion. These two probably encompass well in excess of 99% of typical real world use cases.
- atq2119 5y ago
  By user count (as opposed to volume), ransomware is almost certainly a bigger use case of Bitcoin than money laundering and friends.
  - qeternity 5y ago
    Hackers user crypto for ransomware because they can easily launder the ransom payments. It's the same side of the coin.
  - Andrew_nenakhov 5y ago
    Do you have sources to back up this claim?
- tummybug 5y ago
  I would argue its second most popular feature is purchases on dark net markets. This has been a constant theme since bitcoin was first released and I think is always discounted when talking about the currency.
  - DrAwdeOccarim 5y ago
    Is there a way to reliably figure out the GDP of dark net markets?
    - Cthulhu_ 5y ago
astoor 5y ago
The problem is, if you build a new financial system which facilitates criminal activity such as scams, fraud, extortion, money laundering, tax evasion, terrorist financing, etc., it very quickly gets dominated by the types of people who want to perform such activity, or end up performing such activity ("opportunity makes a thief"). So the options are either to become more and more attractive to criminals and help build up their strength so they can take on the traditional financial system more effectively, or to become more like the traditional financial system and try to stamp out such activity. Personally, and I think most rational people would agree, it would be better for society as a whole if we didn't let the scammers, fraudsters, extortionists etc. win. And I know the typical cryptocurrency supporter's response is going to be "well banks and governments are scammers, fraudsters etc.", but while banks and governments may not have a completely spotless record, the fact is that they are on the whole infinitely more trustworthy than the tiny number of unelected and largely anonymous people who own almost all the cryptocurrency wealth.
- jdhn 5y ago
  I'm sure you have a source that shows that Bitcoin/crypto in general is dominated by things like money laundering and terrorist financing, right?
  - franga2000 5y ago
    There's always that one person that questions that claim. Just look around. What goods and services can you actually get in exchange for most crypto? Very little. What is the most common thing ransomware and cybercriminals demand as payment? Crypto. It's not like it's dominated by it - what makes us the largest part of crypto usage is speculative investors and bots. But as for the rest, it's clearly not normal people buying burgers, that's for sure.
thesz 5y ago
I would like to prove you otherwise with shameless plug of my tweet [1]. [1] https://twitter.com/sergueyz/status/1365041519154061315 https://twitter.com/sergueyz/status/1365041519154061315 The amount of illicit transactioins is higher in bitcoin than in regular cash ($100 bills to be precise). I guess the same is for money laundering - amounts spent in legal transaactions going through current financial institutions will be much higher than money laundering there. And ratio between amounts of legal and possibly money laundering transactions will be higher for regular institutions than for bitcoin. Precisely because of regulations and their absence.
deleted 5y ago
[deleted]

by max_ 5y ago

stkdump 5y ago

"Getting out" is very fuzzy goal. For my understanding people usually cite two central goals: 1. Stop central bank imposed inflation. 2. Serve the people who are excluded from banking. If either of those goals can't be reached, it is due to misdesign/inherent flaws of the approach and not governments.

rad_gruchalski 5y ago

> It is done by the likes of HSBC, Standard Chartered and other big banks. And, as it happens, because of the records, it has been discovered and everyone involved is traceable. The system works.

read_if_gay_ 5y ago
So where are the consequences?
- rad_gruchalski 5y ago
  What do you expect? That I google this for you? Here’s an example: https://www.investopedia.com/stock-analysis/2013/investing-news-for-jan-29-hsbcs-money-laundering-scandal-hbc-scbff-ing-cs-rbs0129.aspx https://www.investopedia.com/stock-analysis/2013/investing-n... It’s all public knowledge and pretty easy to find.
  - read_if_gay_ 5y ago
    > Given the bank's size, it appears that it and some of its peers are too big to jail because they are too big to fail. Instead they got fined for less than 0.1% of their total holdings. The system doesn’t work. This is not a consequence.
- krageon 5y ago
  There are no consequences that matter, because the system itself is the problem.
nenadg 5y ago
>and everyone involved is traceable. The system works. The system does not work. Everyone involved have been discovered by `rouges` like Assange that system holds in jail for either made-up or largely irrelevant accusations, out of the scope of their opus, full soviet style. Everyone knows the king is naked and just comedians and activists at large (or in jail) has courage to say something about it, which is pretty medieval position for all of us to start with.
- rad_gruchalski 5y ago
  You are making a very broad statement and I was able to find this right in the first result from google: “Immigration and Customs Enforcement agents revealed suspect money trails between HSBC's Mexican and United States operations.” https://www.investopedia.com/stock-analysis/2013/investing-news-for-jan-29-hsbcs-money-laundering-scandal-hbc-scbff-ing-cs-rbs0129.aspx https://www.investopedia.com/stock-analysis/2013/investing-n...
- ridiculous_leke 5y ago
  In case of crypto, even the rogues wouldn't be able to do anything.

arcticbull 5y ago

Funny, right after 1100 crypto money launderers in China were arrested, nobody wanted any more Tethers. [1] Now my statements are entirely circumstantial, but I strongly suggest you watch this space. > The public security ministry said that by Wednesday afternoon police had busted more than 170 criminal groups involved in using cryptocurrencies to launder money. > China’s Payment & Clearing Association said on Wednesday that the number of crimes involving the use of virtual currencies is on the rise. > Because cryptocurrencies are anonymous, convenient and global in nature, “they have increasingly become an important channel for cross-border money laundering,” the association said in a statement. Sounds right to me. [1] https://www.cnbc.com/2021/06/10/china-arrests-over-1100-suspects-for-crypto-related-money-laundering.html https://www.cnbc.com/2021/06/10/china-arrests-over-1100-susp...

x4e 5y ago
> nobody wanted any more Tethers Can you provide a source on that? I certainly don’t want any Tethers but I know plenty of people that do.
- codebolt 5y ago
  The market is the source. Just look at the market cap chart here, you can see that it's been flat for the past few weeks (after a long period of exponential growth): https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/
  - thebean11 5y ago
    Tether market cap tends to grow during bull runs, and crypto's been pretty flat. I'm skeptical of this argument given that Tether is still trading 1:1 with dollars, and at an extremely high volume..
    - arcticbull 5y ago
      Volumes on USDT:USD pairs should be taken with extreme skepticism, after all, exchanges have a massive vested interest in the peg remaining fixed and are more than likely just arbitraging/wash trading to keep it there. It's hard to know with any sort of certainty how much actual volume is going back and forth across that pair. It also doesn't represent a redemption in any way vis-a-vis the backing assets so can at best be treated as (with a massive lump of salt) some connection to faith that someone else will accept it at 1:1. Remember only entities Tether deems as customers are permitted to redeem in the first place, and more than likely only the exchanges are deemed customers. They know they can't redeem anyways so they don't bother even trying. That's my read on it anyways.

anigbrowl 5y ago

That's very true, but 'dark money for everyone' doesn't necessarily seem like an improvement. I am in favor of privacy and not having to explain what you choose to do with your own money, but imho the aggregate yield curve of total privacy inverts as you ascend a logarithmic scale.

RandomLensman 5y ago

Do you have evidence on KYC/AML/CFT being in a state of regulatory capture? I would say they are anything but. Huge expenses for all involved, no standards that would be good enough to just fulfill. What we have observed is financial institutions failing with respect to KYC/AML/CFT/sanctions etc. (and getting fined for it), but that is not regulatory capture. Also, I'd argue that since 2008 regulatory capture isn't working so well anymore, with a lot of extra regulation being thrown at the system (some of which being eased now again). Regulators are incentivized to see dangers everywhere and acting accordingly. The last time they did not see dangers everywhere, it didn't work out so well, either. The counteracting force would come for electorates and policy makers seeing opportunity and progress lost from being overly cautious.

cromka 5y ago

> Everyone knows where the real money laundering and terrorist financing happens. > It is done by the likes of HSBC, Standard Chartered and other big banks. > This is public knowledge, as we have seen with the Panama papers and most recently the FinCen files. No. This is an observational bias. All we know is that they do that. But the fact that they do that, too, does not logically imply that resorting to them is the only way of money laundering and that BTC is not used for that a) at all b) at a much larger scale.

qeternity 5y ago

> Everyone knows where the real money laundering and terrorist financing happens. > It is done by the likes of HSBC, Standard Chartered and other big banks. This used to be the case. And undoubtedly it still goes on. There simply weren’t many other mechanisms to launder money that didn’t involve large banks…until crypto joined the party. Crypto’s most popular feature is speculation, and its second most popular feature is money laundering/capital control evasion. These two probably encompass well in excess of 99% of typical real world use cases.

atq2119 5y ago
By user count (as opposed to volume), ransomware is almost certainly a bigger use case of Bitcoin than money laundering and friends.
- qeternity 5y ago
  Hackers user crypto for ransomware because they can easily launder the ransom payments. It's the same side of the coin.
- Andrew_nenakhov 5y ago
  Do you have sources to back up this claim?
tummybug 5y ago
I would argue its second most popular feature is purchases on dark net markets. This has been a constant theme since bitcoin was first released and I think is always discounted when talking about the currency.
- DrAwdeOccarim 5y ago
  Is there a way to reliably figure out the GDP of dark net markets?
  - Cthulhu_ 5y ago

astoor 5y ago

The problem is, if you build a new financial system which facilitates criminal activity such as scams, fraud, extortion, money laundering, tax evasion, terrorist financing, etc., it very quickly gets dominated by the types of people who want to perform such activity, or end up performing such activity ("opportunity makes a thief"). So the options are either to become more and more attractive to criminals and help build up their strength so they can take on the traditional financial system more effectively, or to become more like the traditional financial system and try to stamp out such activity. Personally, and I think most rational people would agree, it would be better for society as a whole if we didn't let the scammers, fraudsters, extortionists etc. win. And I know the typical cryptocurrency supporter's response is going to be "well banks and governments are scammers, fraudsters etc.", but while banks and governments may not have a completely spotless record, the fact is that they are on the whole infinitely more trustworthy than the tiny number of unelected and largely anonymous people who own almost all the cryptocurrency wealth.

jdhn 5y ago
I'm sure you have a source that shows that Bitcoin/crypto in general is dominated by things like money laundering and terrorist financing, right?
- franga2000 5y ago
  There's always that one person that questions that claim. Just look around. What goods and services can you actually get in exchange for most crypto? Very little. What is the most common thing ransomware and cybercriminals demand as payment? Crypto. It's not like it's dominated by it - what makes us the largest part of crypto usage is speculative investors and bots. But as for the rest, it's clearly not normal people buying burgers, that's for sure.

thesz 5y ago

I would like to prove you otherwise with shameless plug of my tweet [1]. [1] https://twitter.com/sergueyz/status/1365041519154061315 https://twitter.com/sergueyz/status/1365041519154061315 The amount of illicit transactioins is higher in bitcoin than in regular cash ($100 bills to be precise). I guess the same is for money laundering - amounts spent in legal transaactions going through current financial institutions will be much higher than money laundering there. And ratio between amounts of legal and possibly money laundering transactions will be higher for regular institutions than for bitcoin. Precisely because of regulations and their absence.

deleted 5y ago

[deleted]