9 ms·

> "He took their cash and sold it to people like me - expats, tourists - for BTC, and sent the BTC to his partner in Miami, who changed it out to USD and put it

by pavlov 4y ago

> "He took their cash and sold it to people like me - expats, tourists - for BTC, and sent the BTC to his partner in Miami, who changed it out to USD and put it into American bank accounts for them." And now assume that the cash in Argentina isn't coming out of mattresses but from criminal activities, and the people receiving USD in America are part of the same cartel. A 5% transaction fee on both sides of the Bitcoin trade is just 9.75% for the complete wash cycle — very low for textbook money laundering.

m00dy 4y ago
well, this is not money laundering...
- gotorazor 4y ago
  but that's exactly what this is. It is money laundering. It just maybe didn't come from cartels and drug trade.
WhyNotHugo 4y ago
> And now assume that the cash in Argentina isn't coming out of mattresses but from criminal activities Nah, it's very common for people to have savings in cash under a mattress. We had crises before where banks essentially kept people's savings and they never saw their money again. Trust is the banking system is non-existent.
- gus_massa 4y ago
  I agree, just nitpicking: Usually is not the bank who keeps the money, but the government. In 2001 the "dollars in the bank" account were exchanged to a government bonds to be paid 10 or 20 years later. I don't remember the details because I had too few and I changed them immediately to pesos. (IIRC I used my pesos to buy stuff, but the transformation dollars-in-bank -> bonds -> pesos -> dollars-in-cash had a 20% or 30% hair cut.)
  - noduerme 4y ago
    Ahh. please, maybe you can help clarify my comment further down. (search "20%") In 2013-15 I never knew exactly how it worked for dollars in the bank or if it was dollars in hand... but a lot of people like government economists in Belgrano and Las Cañitas had a lot of actual $100 dollar bills... (I lived in Cañitas twice and it's a great place to live if you make USD but I was nowhere near the wealth level of people who spent all day running horses and playing Polo)
    - gus_massa 4y ago
      I replied in https://news.ycombinator.com/item?id=34739549 https://news.ycombinator.com/item?id=34739549 Happy to add more details.
wsc981 4y ago
> And now assume that the cash ... Assumption is the mother of all fuck-ups.
noduerme 4y ago
I'm not sure what your argument is. Prevent people from circumventing ridiculous local monetary controls - artificial currency pegs at 10x the value of the currency - because any money they have might be "criminal"? You could also just define criminality as having money, and dispense with the pretense of legality, as has been done so many times in Russia. This is the despotism that normally results where there is no outlet for capital. Although it's true, after a certain number of years in some places, everyone does become a criminal if you treat them this way; that should be obvious.
- throwaway290 4y ago
  You can't fix this with technology. If the government declares having money as illegal the only solution is to change the government. Otherwise these technical loopholes only help that government in the first place. Lack of laundering controls is how Russian dirty money create nice global lifestyle for Putin's henchmen and friends. If they were truly locked in, one would think twice before joining that gang. > because any money they have might be "criminal" Non-criminal money would be a minuscule percentage of the total because, the same way you use to change $500 for the lulz would be used in an organized way to move millions extracted with violence and theft by Russian government and other criminals.
  - noduerme 4y ago
    Hmm. It seems to me that laws and technology have failed to stop that gang. I'm not sure that stopping evil oligarchs - when you cannot - is a good argument for preventing smaller people from saving their money.
    - throwaway290 4y ago
      > It seems to me that laws and technology have failed to stop that gang Laws and sanctions actually hurt them. Law-immune technology is their enabler. If I could choose between a way to send money to my family in Russia the same way that sustains those criminals and not having that way but knowing that putin's gang is being starved of money, I'd choose the latter because the first option is a dead end. > I'm not sure that stopping evil oligarchs - when you cannot - is a good argument for preventing smaller people from saving their money. The theoretical benefit promised to the "smaller people" is far outweighed by the harm it does sustaining those dictatorships, both to the same smaller people and the world. A few honest hundred bucks here and there does not justify millions that prop the regime and kill more people. Sorry if this is inconvenient truth but cryptocoins are helping that regime much more than they are helping people that have to endure it.
4lb0 4y ago
We (Argentinians) save in USD for the last 50 years, at least.
- noduerme 4y ago
  of course. I don't understand these people talking about "criminal" money laundering. They don't know how normal Argentines save. Dollars > Miami. Even a guy who repairs my shoes in Buenos Aires, has a bank account in Florida.
  - newswasboring 4y ago
    Is there something specific about florida in this story? Local laws or personal connections maybe?
    - throwayyy479087 4y ago
      It's close, EVERYTHING there is in Spanish, and it's a nice place to go on vacation.
wongarsu 4y ago
You still have to launder the money, the IRS isn't going to be satisfied with "some guy from Miama wired it to me" when talking about regular sizable sums.
johngladtj 4y ago
Is that supposed to be an argument against it?
mughinn 4y ago
>And now assume that the cash in Argentina isn't coming out of mattresses but from criminal activities Yeah, criminal activities like wanting to work for a company that isn't in Argentina a without 80% tax on your salary Money laundering is moral
celestialcheese 4y ago
Recently, the Chinese/Mexican Cartel laundering operation had been operating at 1-2% fees [1]. This was new and historically you're right, but the amount of money wanting to leave China freed up cash to drive down fees. 1 - https://www.propublica.org/article/china-cartels-xizhi-li-money-laundering#:~:text=%E2%80%9CWith%20the%20Colombians%2C%20it%20had%20been%20an%2018%25%20to%2013%25%20commission%2C%E2%80%9D%20said%20Cindric%2C%20the%20retired%20DEA%20agent.%20%E2%80%9CThe%20Chinese%20are%20doing%20it%20for%201%20to%202%25%20on%20average.%20And%20the%20speed%20at%20which%20they%20do%20it%20is%20unbelievable.%20The%20Chinese%20absorbed%20the%20risk.%20You%20know%20it%20will%20get%20paid.%E2%80%9D https://www.propublica.org/article/china-cartels-xizhi-li-mo...

by pavlov 4y ago

m00dy 4y ago

well, this is not money laundering...

gotorazor 4y ago
but that's exactly what this is. It is money laundering. It just maybe didn't come from cartels and drug trade.

WhyNotHugo 4y ago

> And now assume that the cash in Argentina isn't coming out of mattresses but from criminal activities Nah, it's very common for people to have savings in cash under a mattress. We had crises before where banks essentially kept people's savings and they never saw their money again. Trust is the banking system is non-existent.

gus_massa 4y ago
I agree, just nitpicking: Usually is not the bank who keeps the money, but the government. In 2001 the "dollars in the bank" account were exchanged to a government bonds to be paid 10 or 20 years later. I don't remember the details because I had too few and I changed them immediately to pesos. (IIRC I used my pesos to buy stuff, but the transformation dollars-in-bank -> bonds -> pesos -> dollars-in-cash had a 20% or 30% hair cut.)
- noduerme 4y ago
  Ahh. please, maybe you can help clarify my comment further down. (search "20%") In 2013-15 I never knew exactly how it worked for dollars in the bank or if it was dollars in hand... but a lot of people like government economists in Belgrano and Las Cañitas had a lot of actual $100 dollar bills... (I lived in Cañitas twice and it's a great place to live if you make USD but I was nowhere near the wealth level of people who spent all day running horses and playing Polo)
  - gus_massa 4y ago
    I replied in https://news.ycombinator.com/item?id=34739549 https://news.ycombinator.com/item?id=34739549 Happy to add more details.

wsc981 4y ago

> And now assume that the cash ... Assumption is the mother of all fuck-ups.

noduerme 4y ago

I'm not sure what your argument is. Prevent people from circumventing ridiculous local monetary controls - artificial currency pegs at 10x the value of the currency - because any money they have might be "criminal"? You could also just define criminality as having money, and dispense with the pretense of legality, as has been done so many times in Russia. This is the despotism that normally results where there is no outlet for capital. Although it's true, after a certain number of years in some places, everyone does become a criminal if you treat them this way; that should be obvious.

throwaway290 4y ago
You can't fix this with technology. If the government declares having money as illegal the only solution is to change the government. Otherwise these technical loopholes only help that government in the first place. Lack of laundering controls is how Russian dirty money create nice global lifestyle for Putin's henchmen and friends. If they were truly locked in, one would think twice before joining that gang. > because any money they have might be "criminal" Non-criminal money would be a minuscule percentage of the total because, the same way you use to change $500 for the lulz would be used in an organized way to move millions extracted with violence and theft by Russian government and other criminals.
- noduerme 4y ago
  Hmm. It seems to me that laws and technology have failed to stop that gang. I'm not sure that stopping evil oligarchs - when you cannot - is a good argument for preventing smaller people from saving their money.
  - throwaway290 4y ago
    > It seems to me that laws and technology have failed to stop that gang Laws and sanctions actually hurt them. Law-immune technology is their enabler. If I could choose between a way to send money to my family in Russia the same way that sustains those criminals and not having that way but knowing that putin's gang is being starved of money, I'd choose the latter because the first option is a dead end. > I'm not sure that stopping evil oligarchs - when you cannot - is a good argument for preventing smaller people from saving their money. The theoretical benefit promised to the "smaller people" is far outweighed by the harm it does sustaining those dictatorships, both to the same smaller people and the world. A few honest hundred bucks here and there does not justify millions that prop the regime and kill more people. Sorry if this is inconvenient truth but cryptocoins are helping that regime much more than they are helping people that have to endure it.

4lb0 4y ago

We (Argentinians) save in USD for the last 50 years, at least.

noduerme 4y ago
of course. I don't understand these people talking about "criminal" money laundering. They don't know how normal Argentines save. Dollars > Miami. Even a guy who repairs my shoes in Buenos Aires, has a bank account in Florida.
- newswasboring 4y ago
  Is there something specific about florida in this story? Local laws or personal connections maybe?
  - throwayyy479087 4y ago
    It's close, EVERYTHING there is in Spanish, and it's a nice place to go on vacation.

wongarsu 4y ago

You still have to launder the money, the IRS isn't going to be satisfied with "some guy from Miama wired it to me" when talking about regular sizable sums.

johngladtj 4y ago

Is that supposed to be an argument against it?

mughinn 4y ago

>And now assume that the cash in Argentina isn't coming out of mattresses but from criminal activities Yeah, criminal activities like wanting to work for a company that isn't in Argentina a without 80% tax on your salary Money laundering is moral

celestialcheese 4y ago

Recently, the Chinese/Mexican Cartel laundering operation had been operating at 1-2% fees [1]. This was new and historically you're right, but the amount of money wanting to leave China freed up cash to drive down fees. 1 - https://www.propublica.org/article/china-cartels-xizhi-li-money-laundering#:~:text=%E2%80%9CWith%20the%20Colombians%2C%20it%20had%20been%20an%2018%25%20to%2013%25%20commission%2C%E2%80%9D%20said%20Cindric%2C%20the%20retired%20DEA%20agent.%20%E2%80%9CThe%20Chinese%20are%20doing%20it%20for%201%20to%202%25%20on%20average.%20And%20the%20speed%20at%20which%20they%20do%20it%20is%20unbelievable.%20The%20Chinese%20absorbed%20the%20risk.%20You%20know%20it%20will%20get%20paid.%E2%80%9D https://www.propublica.org/article/china-cartels-xizhi-li-mo...