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This is a valid criticism and part of why privacy-by-default MUST become the new norm for major cryptos if they’re going to thrive. A lot of people don’t under

by zionic 5y ago

This is a valid criticism and part of why privacy-by-default MUST become the new norm for major cryptos if they’re going to thrive. A lot of people don’t understand that when you deposit to say, Coinbase, they are looking at the COMPLETE history of your wallet back to genesis. If there’s anything they don’t like your funds are toast.

axiosgunnar 5y ago
What does being toast mean? Do they confiscate your deposit and give nothing in return?
- hamiltonians 5y ago
  they can close your account and limit to only withdrawls
ajross 5y ago
Just to be clear, though: this means that you view the evasion of existing AML statutes as a precondition for crypto "thriving". It's the same problem. Coinbase isn't doing this to be evil or centralized or controlling, they're literally just following the law. Now, I'm sure there's a place for a reasoned discussion about the breadth of laundering regulation and how it might be improved. But your position seems to be an absolutist one (that AML simply can't be allowed in crypto), and it's not clear to me if you realize that.
- javert 5y ago
  > Coinbase isn't doing this to be evil or centralized or controlling, they're literally just following the law. Nah, they're definitely in the business of regulatory capture. But they have to be. If they don't capture the regulators, someone else will.
hamiltonians 5y ago
wouldn,t this lead to lots of false positives
- rdbell 5y ago
  It can lead to false positives. Only the government is allowed to sell tainted coins. Very convenient rule for law enforcement agencies.
odonnellryan 5y ago
You can't have it both ways. If you want an exchange where you can buy crypto with USD these exchanges need to protect themselves from fraud.
- gitfan86 5y ago
  This is the problem with crypto. People want all of the positives of removing centralization AND they want the positives of centralizing those same things. They want "Distributed Code is Law" AND "Openseas validates NFTs"
  - CuriousCosmic 5y ago
    You can kind of have both but it's an outright hard problem. If you have a functional governance system, you can implement some form of vetocratic de-listing mechanism. It doesn't have to stop the de-listed item from trading but it is a mechanism for a community to collectively decide what is and what isn't a scam/forgery/theft/etc. This same system generalises to a central source of trust for a given network, service, or protocol where the control is decentralised. Now this falls back to the first condition which is to have a functional governance system. Any failure in the governance system is now a failure in your system for deriving trust. Can it be done? Yes. Has it been done properly yet or even really been done at all? No not really. This isn't to say that it's impossible but we aren't there yet by any stretch of the imagination.
    - odonnellryan 5y ago
      For that problem it could work, but it would never work for the problem that exchanges face where people get their credit cards stolen, or a government seizes some user's BTC, etc.. and the exchange gets hit with big chargebacks and other fees.

by zionic 5y ago

axiosgunnar 5y ago

What does being toast mean? Do they confiscate your deposit and give nothing in return?

hamiltonians 5y ago
they can close your account and limit to only withdrawls

ajross 5y ago

Just to be clear, though: this means that you view the evasion of existing AML statutes as a precondition for crypto "thriving". It's the same problem. Coinbase isn't doing this to be evil or centralized or controlling, they're literally just following the law. Now, I'm sure there's a place for a reasoned discussion about the breadth of laundering regulation and how it might be improved. But your position seems to be an absolutist one (that AML simply can't be allowed in crypto), and it's not clear to me if you realize that.

javert 5y ago
> Coinbase isn't doing this to be evil or centralized or controlling, they're literally just following the law. Nah, they're definitely in the business of regulatory capture. But they have to be. If they don't capture the regulators, someone else will.

hamiltonians 5y ago

wouldn,t this lead to lots of false positives

rdbell 5y ago
It can lead to false positives. Only the government is allowed to sell tainted coins. Very convenient rule for law enforcement agencies.

odonnellryan 5y ago

You can't have it both ways. If you want an exchange where you can buy crypto with USD these exchanges need to protect themselves from fraud.

gitfan86 5y ago
This is the problem with crypto. People want all of the positives of removing centralization AND they want the positives of centralizing those same things. They want "Distributed Code is Law" AND "Openseas validates NFTs"
- CuriousCosmic 5y ago
  You can kind of have both but it's an outright hard problem. If you have a functional governance system, you can implement some form of vetocratic de-listing mechanism. It doesn't have to stop the de-listed item from trading but it is a mechanism for a community to collectively decide what is and what isn't a scam/forgery/theft/etc. This same system generalises to a central source of trust for a given network, service, or protocol where the control is decentralised. Now this falls back to the first condition which is to have a functional governance system. Any failure in the governance system is now a failure in your system for deriving trust. Can it be done? Yes. Has it been done properly yet or even really been done at all? No not really. This isn't to say that it's impossible but we aren't there yet by any stretch of the imagination.
  - odonnellryan 5y ago
    For that problem it could work, but it would never work for the problem that exchanges face where people get their credit cards stolen, or a government seizes some user's BTC, etc.. and the exchange gets hit with big chargebacks and other fees.