7 ms·

New Anti Anti-Money Laundering Services for Crooks

93 points by parsecs 5y ago

qzw 5y ago
Potential twist: it’s operated by the FBI/Secret Service/IRS/NSA. Would be a great way to compile a list of “addresses of interest.”
- Wingman4l7 5y ago
  Not far-fetched at all. The FBI has set up at least one carder forum to catch entire networks of credit card thieves, and in the past they set up a whole fake bank to entice money laundering operations from drug cartels: https://www.npr.org/sections/money/2019/02/13/694549634/episode-418-a-fake-bank-for-money-laundering-run-by-the-government https://www.npr.org/sections/money/2019/02/13/694549634/epis...
  - CrazyStat 5y ago
    Also the recent ANOM sting [1]. [1] https://en.wikipedia.org/wiki/ANOM https://en.wikipedia.org/wiki/ANOM
    - jmkni 5y ago
      What about the recently launched privacy focused photo app called Stingle - https://arstechnica.com/gadgets/2021/08/foss-mobile-app-stingle-wants-to-privately-securely-back-up-your-photos/ https://arstechnica.com/gadgets/2021/08/foss-mobile-app-stin... If that isn’t an FBI sting I don’t know what is lol
- Scoundreller 5y ago
  So, how does it work? Can I submit any address for checking? If so, I know some addresses I don’t like. Or do they require you to sign a message with your wallet? If so, you’ve gotta be really dumb to show your hand like that. But I could still see users trying for funzies. How much does it cost to check? (If anything?)
  - pphysch 5y ago
    There is definitely noise and false positives as with any honeypot, but there is probably enough signal among the noise to correlate with other datasets and contribute to crime detection models.
- vmception 5y ago
  > The problem is, cashing out in Monero raises eyebrows on exchanges and mail by cash method is sometimes risky as well. Yeah, Monero doesn't raise eyebrows. This adds another point to FBI/The SS/IRS/NSA. Exchanges only track fund sources because they can see it. Banks don't even do that, so this is a separate higher standard for crypto exchanges that accept surveillance coins. And when exchanges can't see it because the funds came from Monero or Tornado.cash they just revert to bank standards.
ncmncm 5y ago
As I understand it, the international "gold standard" for money laundering is still real estate. The reporting requirements the US pushed onto international banking specifically except real property transactions. Thus, property is the place embezzled money is parked. Vancouver, BC seems to be the favored place to park Chinese money. Of course New York remains popular. American "midwest" farmland is another big sink. I would welcome any updates to this situation; my information might be old.
- nonameiguess 5y ago
  I have no idea to what extent they actually get used for money laundering, but churches are still the only form of nonprofit in the US that automatically gets exempted from having to file a tax return. I'm sure the whole season five plot of The Wire where this was how drug lords were funneling money to the local politicians was not entirely fictional, given how everything else in the plot was based on the writers' real life experiences. Of course, even on The Wire, this was small time compared to the money laundered through urban reclamation and seafront development projects.
  - parsecs 5y ago
    Could this explain some architectural designs in the world that don't make too much sense like the skyscrapers next to a cargo cult of urban sprawl next to massive golf courses in Dubai?
    - charlesdm 5y ago
      Dubai has no income taxes. So this is irrelevant. Companies are not even required to hold records for tax purposes.
      - ryanlol 5y ago
        They are still required to hold records if they want any local bank to work with them.
ProjectArcturis 5y ago
If you did a crime and made money in Bitcoin, deposited at an exchange, traded it for Monero, cashed out, sent it to a different exchange, traded back for BTC, cashed out, and went to a different exchange to turn it to dollars, how would anyone trace that? Someone would need to link internal data from the second and third exchanges in order to even know you ever owned Monero.
- stevenjgarner 5y ago
  Every time I have tried to "cash out" there has been a significant restriction on the amount of the transaction, or the exchange rate has not been favorable. Isn't quantity a problem, given that many crypto cyber-crimes involve a lot of money?
  - wmf 5y ago
    I think my limit is $50K/day which seems like plenty. Maybe shady accounts have lower limits.
- paulpauper 5y ago
  your transfers would simply be flagged by exchanges and then then any relevant info possibly sent to authorities
- piyh 5y ago
  You could look for regularity of transactions and build a pattern. It would be like a Tor timing attack. You also can look and probably get intel that the BTC is coming from large Monero transactions and get AML heat on you.
- noobly 5y ago
  The problem is in laundering this money, i.e entering it into the legal system such that the IRS or whatever approves. You can't just deposit huge sums of unexplained money.
- Tangokat 5y ago
  You can't just deposit large amounts of Monero to an exchange without a REALLY good reason. Monero is a red flag these days.
unnouinceput 5y ago
Isn't "Anti Anti-Money Laundering" just "Money Laundering"? Or am I missing something in English (not a native speaker)?
- deleted 5y ago
  [deleted]
- p1esk 5y ago
  It’s about money laundering which is resistant to anti-money laundering tactics.
  - unnouinceput 5y ago
    Sounds like a money laundering criminal that stays in touch with times. You wouldn't call a hitman that drops a fragmentation grenade on his victims soaking in the sun, using a drone, a anti anti-hitman, do you?
CryptoPunk 5y ago
Even if your funds are 100% clean, AML flagging can lead to weeks of funds being frozen. People also regularly get refused bank accounts not because they were convicted of any crime, but because these AML risk assessment systems mark them as suspicious. To convince the bank you're not suspicious, you have to give their employees extremely intimate information about your personal business, and even that doesn't guarantee approval. The asymmetries this creates in possession of private financial information, between the general population, and those who work in the banking sector, undoubtedly leads to the latter attaining a major unfair market advantage in finding investment opportunities, which will contribute to the growth of incomes of those in the financial sector outpacing the growth of income in the economy at large. And we do see those working in the financial sector receiving a significant pay premium: https://www.brookings.edu/research/make-elites-compete-why-the-1-earn-so-much-and-what-to-do-about-it/ https://www.brookings.edu/research/make-elites-compete-why-t... And seeing rapid growth in compensation between 1979 and 2005: https://www.epi.org/publication/ib331-ceo-pay-top-1-percent/ https://www.epi.org/publication/ib331-ceo-pay-top-1-percent/ >>Those in the financial sector were associated with nearly a fourth (23 percent) of the expansion of the income shares of both the top 1.0 and top 0.1 percent. Beyond the inequality AML gatekeeping fosters, the global AML compliance industry costs trillions, and by at least one account, does almost nothing to stop crime: https://www.effectiveaml.org/aml-compliance-oxymoron/ https://www.effectiveaml.org/aml-compliance-oxymoron/ Which is obvious from common sense, considering cartels are not only successfully laundering billions of dollars in illicit drug sales every, but actually distributing billions of dollars worth of highly restricted Schedule I drugs to every city in North America, which is a much more difficult feat than laundering the proceeds of those sales. The special interests that have emerged to provide these enormously illiberal and costly, and dubiously useful AML compliance services, like Elliptic mentioned in the article, will continue pushing for more mass-surveillance of financial transactions and criminalization of privacy.
null0pointer 5y ago
This isn’t an anti anti-money laundering. It’s providing the same information as an anti-money laundering service, the only difference is that its access isn’t limited to large exchanges and banks. I, for one, am happy to see this kind of technology available for the masses. If I were legally accepting bitcoin as payment for my small business or whatever I’d like to be able to check that the bitcoins weren’t involved in criminal activity before accepting them rather than dealing with trouble when trying to deposit them to an exchange.
hamburgerwah 5y ago
Money laundering laws are a fiction perpetrated by authoritarian leaning leaders. It equates to "monetary transactions I don't like for idealogical reasons". In the US for example, there is no monetary transaction that occurs at all that cannot be selectively prosecuted as money laundering. Breaking a $20 dollar bill into smaller bills to use as a tip in a restaurant is a plain violation of 18 U.S.C. § 1956 .
- legulere 5y ago
  I do not know why you are so against persecuting money-laundering, considering it's definition according to Wikipedia: > Money laundering is the process of changing large amounts of money obtained from crimes, such as drug trafficking, into origination from a legitimate source. [...] It is a key operation of the underground economy. In US law it is the practice of engaging in financial transactions to conceal the identity, source, or destination of illegally gained money.
  - Canada 5y ago
    In practice presumes guilt without any evidence to justify suspicion, requiring everyone to report the purpose of every transaction, deputizing all financial services to enforce it, and prohibiting anyone from holding any significant asset, such as cash, in their own custody. The centralization of power is, in my opinion, far worse than the crime it is alleged to prevent.
    - otterley 5y ago
      How is it impacting you personally?
      - Canada 5y ago
        Didn't see this until now. It has impacted me personally, I've had business accounts closed twice without any reasonable explanation, which is a huge crisis when you suddenly lose your ability to receive payments from customers and pay your employees and suppliers. The AML regime is the only reasonable explanation I can think of for a bank to close out a fee paying customer in good standing. I'm certainly not alone in having this happen to me, there's a lot of other people I've talked to who have been swept up in this.
southerntofu 5y ago
"We"re sorry" <-- Why does Google get to decide whether i can access this site or not?!

93 points by parsecs 5y ago

qzw 5y ago

Potential twist: it’s operated by the FBI/Secret Service/IRS/NSA. Would be a great way to compile a list of “addresses of interest.”

Wingman4l7 5y ago
Not far-fetched at all. The FBI has set up at least one carder forum to catch entire networks of credit card thieves, and in the past they set up a whole fake bank to entice money laundering operations from drug cartels: https://www.npr.org/sections/money/2019/02/13/694549634/episode-418-a-fake-bank-for-money-laundering-run-by-the-government https://www.npr.org/sections/money/2019/02/13/694549634/epis...
- CrazyStat 5y ago
  Also the recent ANOM sting [1]. [1] https://en.wikipedia.org/wiki/ANOM https://en.wikipedia.org/wiki/ANOM
  - jmkni 5y ago
    What about the recently launched privacy focused photo app called Stingle - https://arstechnica.com/gadgets/2021/08/foss-mobile-app-stingle-wants-to-privately-securely-back-up-your-photos/ https://arstechnica.com/gadgets/2021/08/foss-mobile-app-stin... If that isn’t an FBI sting I don’t know what is lol
Scoundreller 5y ago
So, how does it work? Can I submit any address for checking? If so, I know some addresses I don’t like. Or do they require you to sign a message with your wallet? If so, you’ve gotta be really dumb to show your hand like that. But I could still see users trying for funzies. How much does it cost to check? (If anything?)
- pphysch 5y ago
  There is definitely noise and false positives as with any honeypot, but there is probably enough signal among the noise to correlate with other datasets and contribute to crime detection models.
vmception 5y ago
> The problem is, cashing out in Monero raises eyebrows on exchanges and mail by cash method is sometimes risky as well. Yeah, Monero doesn't raise eyebrows. This adds another point to FBI/The SS/IRS/NSA. Exchanges only track fund sources because they can see it. Banks don't even do that, so this is a separate higher standard for crypto exchanges that accept surveillance coins. And when exchanges can't see it because the funds came from Monero or Tornado.cash they just revert to bank standards.

ncmncm 5y ago

As I understand it, the international "gold standard" for money laundering is still real estate. The reporting requirements the US pushed onto international banking specifically except real property transactions. Thus, property is the place embezzled money is parked. Vancouver, BC seems to be the favored place to park Chinese money. Of course New York remains popular. American "midwest" farmland is another big sink. I would welcome any updates to this situation; my information might be old.

nonameiguess 5y ago
I have no idea to what extent they actually get used for money laundering, but churches are still the only form of nonprofit in the US that automatically gets exempted from having to file a tax return. I'm sure the whole season five plot of The Wire where this was how drug lords were funneling money to the local politicians was not entirely fictional, given how everything else in the plot was based on the writers' real life experiences. Of course, even on The Wire, this was small time compared to the money laundered through urban reclamation and seafront development projects.
- parsecs 5y ago
  Could this explain some architectural designs in the world that don't make too much sense like the skyscrapers next to a cargo cult of urban sprawl next to massive golf courses in Dubai?
  - charlesdm 5y ago
    Dubai has no income taxes. So this is irrelevant. Companies are not even required to hold records for tax purposes.
    - ryanlol 5y ago
      They are still required to hold records if they want any local bank to work with them.

ProjectArcturis 5y ago

If you did a crime and made money in Bitcoin, deposited at an exchange, traded it for Monero, cashed out, sent it to a different exchange, traded back for BTC, cashed out, and went to a different exchange to turn it to dollars, how would anyone trace that? Someone would need to link internal data from the second and third exchanges in order to even know you ever owned Monero.

stevenjgarner 5y ago
Every time I have tried to "cash out" there has been a significant restriction on the amount of the transaction, or the exchange rate has not been favorable. Isn't quantity a problem, given that many crypto cyber-crimes involve a lot of money?
- wmf 5y ago
  I think my limit is $50K/day which seems like plenty. Maybe shady accounts have lower limits.
paulpauper 5y ago
your transfers would simply be flagged by exchanges and then then any relevant info possibly sent to authorities
piyh 5y ago
You could look for regularity of transactions and build a pattern. It would be like a Tor timing attack. You also can look and probably get intel that the BTC is coming from large Monero transactions and get AML heat on you.
noobly 5y ago
The problem is in laundering this money, i.e entering it into the legal system such that the IRS or whatever approves. You can't just deposit huge sums of unexplained money.
Tangokat 5y ago
You can't just deposit large amounts of Monero to an exchange without a REALLY good reason. Monero is a red flag these days.

unnouinceput 5y ago

Isn't "Anti Anti-Money Laundering" just "Money Laundering"? Or am I missing something in English (not a native speaker)?

deleted 5y ago
[deleted]
p1esk 5y ago
It’s about money laundering which is resistant to anti-money laundering tactics.
- unnouinceput 5y ago
  Sounds like a money laundering criminal that stays in touch with times. You wouldn't call a hitman that drops a fragmentation grenade on his victims soaking in the sun, using a drone, a anti anti-hitman, do you?

CryptoPunk 5y ago

Even if your funds are 100% clean, AML flagging can lead to weeks of funds being frozen. People also regularly get refused bank accounts not because they were convicted of any crime, but because these AML risk assessment systems mark them as suspicious. To convince the bank you're not suspicious, you have to give their employees extremely intimate information about your personal business, and even that doesn't guarantee approval. The asymmetries this creates in possession of private financial information, between the general population, and those who work in the banking sector, undoubtedly leads to the latter attaining a major unfair market advantage in finding investment opportunities, which will contribute to the growth of incomes of those in the financial sector outpacing the growth of income in the economy at large. And we do see those working in the financial sector receiving a significant pay premium: https://www.brookings.edu/research/make-elites-compete-why-the-1-earn-so-much-and-what-to-do-about-it/ https://www.brookings.edu/research/make-elites-compete-why-t... And seeing rapid growth in compensation between 1979 and 2005: https://www.epi.org/publication/ib331-ceo-pay-top-1-percent/ https://www.epi.org/publication/ib331-ceo-pay-top-1-percent/ >>Those in the financial sector were associated with nearly a fourth (23 percent) of the expansion of the income shares of both the top 1.0 and top 0.1 percent. Beyond the inequality AML gatekeeping fosters, the global AML compliance industry costs trillions, and by at least one account, does almost nothing to stop crime: https://www.effectiveaml.org/aml-compliance-oxymoron/ https://www.effectiveaml.org/aml-compliance-oxymoron/ Which is obvious from common sense, considering cartels are not only successfully laundering billions of dollars in illicit drug sales every, but actually distributing billions of dollars worth of highly restricted Schedule I drugs to every city in North America, which is a much more difficult feat than laundering the proceeds of those sales. The special interests that have emerged to provide these enormously illiberal and costly, and dubiously useful AML compliance services, like Elliptic mentioned in the article, will continue pushing for more mass-surveillance of financial transactions and criminalization of privacy.

null0pointer 5y ago

This isn’t an anti anti-money laundering. It’s providing the same information as an anti-money laundering service, the only difference is that its access isn’t limited to large exchanges and banks. I, for one, am happy to see this kind of technology available for the masses. If I were legally accepting bitcoin as payment for my small business or whatever I’d like to be able to check that the bitcoins weren’t involved in criminal activity before accepting them rather than dealing with trouble when trying to deposit them to an exchange.

hamburgerwah 5y ago

Money laundering laws are a fiction perpetrated by authoritarian leaning leaders. It equates to "monetary transactions I don't like for idealogical reasons". In the US for example, there is no monetary transaction that occurs at all that cannot be selectively prosecuted as money laundering. Breaking a $20 dollar bill into smaller bills to use as a tip in a restaurant is a plain violation of 18 U.S.C. § 1956 .

legulere 5y ago
I do not know why you are so against persecuting money-laundering, considering it's definition according to Wikipedia: > Money laundering is the process of changing large amounts of money obtained from crimes, such as drug trafficking, into origination from a legitimate source. [...] It is a key operation of the underground economy. In US law it is the practice of engaging in financial transactions to conceal the identity, source, or destination of illegally gained money.
- Canada 5y ago
  In practice presumes guilt without any evidence to justify suspicion, requiring everyone to report the purpose of every transaction, deputizing all financial services to enforce it, and prohibiting anyone from holding any significant asset, such as cash, in their own custody. The centralization of power is, in my opinion, far worse than the crime it is alleged to prevent.
  - otterley 5y ago
    How is it impacting you personally?
    - Canada 5y ago
      Didn't see this until now. It has impacted me personally, I've had business accounts closed twice without any reasonable explanation, which is a huge crisis when you suddenly lose your ability to receive payments from customers and pay your employees and suppliers. The AML regime is the only reasonable explanation I can think of for a bank to close out a fee paying customer in good standing. I'm certainly not alone in having this happen to me, there's a lot of other people I've talked to who have been swept up in this.

southerntofu 5y ago

"We"re sorry" <-- Why does Google get to decide whether i can access this site or not?!