5 ms·

I know I'm expressing a minority opinion on this, but I'd much rather have an unregulated system where I was able to send and receive money without any sort of

I know I'm expressing a minority opinion on this, but I'd much rather have an unregulated system where I was able to send and receive money without any sort of hassle or oversight, even if criminals and people frowned upon by the people who run SWIFT are able to do the same.

drexlspivey 4y ago
I think you just described cryptocurrencies? Or did I miss the joke?
- repomies69 4y ago
  AML/KYC laws apply to cryptocurrencies as well, in fact more so because they are by default more suspicious. Try depositing big amount of BTC to an exchange, you will get questions.
wpietri 4y ago
That will seem swell to you until better-funded criminals want a piece of your assets, money, or labor. There are very good societal reasons to keep crime to a manageable level.
- etherael 4y ago
  So crime was not at a manageable level prior to say 1970, when none of these AMLKYC laws existed? And crime has not been at a manageable level after say 2008 when crypto came into existence and made it impossible to actually enforce? Man, for that brief shining window we really had perfection.
  - wpietri 4y ago
    Yes, actually, the American mafia has declined severely since its heyday. There are surely many reasons, as it's part of a broader decline in crime in recent decades, but the increased difficulty of cleaning dirty money is part of it. And crime has definitely gone up because of cryptocurrency. I'm not sure how much it has affected the more traditional sorts of crime, as I don't think it's much of a help in turning dirty cash into clean assets thanks difficulty of exchange and the ledger acting as "prosecution futures". But ransomware has grown massively thanks to cryptocurrency. And ransomware gangs have grown correspondingly in size and sophistication thanks to having all that money to spend.
    - etherael 4y ago
      Specific instances in the decline in power of particular organised criminal enterprises is much more believable than "crime", I'll grant that much.
    - novok 4y ago
      AML regulations prevent about %0.05 of criminal proceeds from being 'harvested' and the cost of these compliance regimes costs vastly more than the value they bring. And it enables a vast financial surveillance system and a huge industry of AML analysts doing pointless busy work writing SARs nobody cares about. The US mafia declined because of the rico act and the fact that there was less racism and better integration of italian americans. The current ethnic crime groups of today are different. IMO AML is security theatre, much like the post 9/11 flying regulations making everyone's lives worse, especially if your name is Mohammed sending money to family back home in the home country.
      - wpietri 4y ago
        > AML regulations prevent about %0.05 of criminal proceeds from being 'harvested' and the cost of these compliance regimes costs vastly more than the value they bring. I look forward to your proving these two very numerical claims. But you can't just count existing criminal proceeds. That'd be saying, "The current level of speeding is so low that we can get rid of traffic cops." You have to measure the crime prevented, too.
        novok 4y ago
        Read the studies the original article links to? AML is a boil the ocean way to prevent crime, except the ocean isn't being boiled because there isn't enough energy to actually boil the financial system. Instead it just annoys everyone with the financial equivalent of the ineffective TSA, where the TSA's own auditors bring everything and anything through with ease. With all the money and human time used to prevent crime via AML, that could've been redirected to far more productive things. Especially in a country like the USA, where crime prevention issues are fairly obvious but not acted upon, such as robbery, murder, assault, rape, car break ins, property theft, damage, etc in California which aren't things effected much by AML either way.
- dsfyu404ed 4y ago
  >That will seem swell to you until better-funded criminals want a piece of your assets, money, or labor. And the status quo where the banks take a bigger cut to pay for their big compliance departments and the government takes a bigger cut to pay for auditing those compliance departments is somehow better? X-percent not in your pocket is X-percent not in your pocket no matter how you cut it. At least in the proposed "stop giving a crap" case nobody will be denied access to boring routine financial products because they have a 3rd cousin with the same name as a Turkish mob boss.
  - wpietri 4y ago
    Yes, the status quo is definitely better. The numbers on total AML cost vary widely, and I think the high-end numbers are suspicious because there are incentives to inflate them. But taking them at face value, AML costs the US financial industry about 1% of revenue. That is nothing compared to the costs of crime in high-crime/high-corruption societies. And looking at dollars alone doesn't paint a true picture. Criminal enterprises work through violence and add risk throughout the economy. E.g., if your business is doing well, a protection racket is not going to take 1% and call it a day. They'll take everything they think they can get. And if not, they break your leg. That serves as a strong disincentive to creating successful businesses. Do the FDIC have disputes with the OCC? Probably. But unlike criminal gangs, they don't settle them with shooting wars in the streets.
    - dsfyu404ed 4y ago
      >That is nothing compared to the costs of crime in high-crime/high-corruption societies. Is it really though? How much was the US (or any other equally developed country) losing to crime and corruption prior to all this KYC/AML BS? Not that much. Letting a mobster have a bank account doesn't magically turn your country into Nigeria. If anything it makes your country better because the mobster doesn't have to store that value another way and then protect it (with violence). >Criminal enterprises work through violence and add risk throughout the economy So like government but with less abstraction? > But unlike criminal gangs, they don't settle them with shooting wars in the streets. Only because they don't have to. Being an above the table enterprise they can just go to the government court system and get their (credible threat of) violence that way. All this violence you're complaining about w.r.t. organized crime is just their (low buck, because due process and diffusion of responsibility sufficient to dissuade revenge are expensive) way of settling business disputes.

drexlspivey 4y ago

I think you just described cryptocurrencies? Or did I miss the joke?

repomies69 4y ago
AML/KYC laws apply to cryptocurrencies as well, in fact more so because they are by default more suspicious. Try depositing big amount of BTC to an exchange, you will get questions.

wpietri 4y ago

That will seem swell to you until better-funded criminals want a piece of your assets, money, or labor. There are very good societal reasons to keep crime to a manageable level.

etherael 4y ago
So crime was not at a manageable level prior to say 1970, when none of these AMLKYC laws existed? And crime has not been at a manageable level after say 2008 when crypto came into existence and made it impossible to actually enforce? Man, for that brief shining window we really had perfection.
- wpietri 4y ago
  Yes, actually, the American mafia has declined severely since its heyday. There are surely many reasons, as it's part of a broader decline in crime in recent decades, but the increased difficulty of cleaning dirty money is part of it. And crime has definitely gone up because of cryptocurrency. I'm not sure how much it has affected the more traditional sorts of crime, as I don't think it's much of a help in turning dirty cash into clean assets thanks difficulty of exchange and the ledger acting as "prosecution futures". But ransomware has grown massively thanks to cryptocurrency. And ransomware gangs have grown correspondingly in size and sophistication thanks to having all that money to spend.
  - etherael 4y ago
    Specific instances in the decline in power of particular organised criminal enterprises is much more believable than "crime", I'll grant that much.
  - novok 4y ago
    AML regulations prevent about %0.05 of criminal proceeds from being 'harvested' and the cost of these compliance regimes costs vastly more than the value they bring. And it enables a vast financial surveillance system and a huge industry of AML analysts doing pointless busy work writing SARs nobody cares about. The US mafia declined because of the rico act and the fact that there was less racism and better integration of italian americans. The current ethnic crime groups of today are different. IMO AML is security theatre, much like the post 9/11 flying regulations making everyone's lives worse, especially if your name is Mohammed sending money to family back home in the home country.
    - wpietri 4y ago
      > AML regulations prevent about %0.05 of criminal proceeds from being 'harvested' and the cost of these compliance regimes costs vastly more than the value they bring. I look forward to your proving these two very numerical claims. But you can't just count existing criminal proceeds. That'd be saying, "The current level of speeding is so low that we can get rid of traffic cops." You have to measure the crime prevented, too.
      - novok 4y ago
        Read the studies the original article links to? AML is a boil the ocean way to prevent crime, except the ocean isn't being boiled because there isn't enough energy to actually boil the financial system. Instead it just annoys everyone with the financial equivalent of the ineffective TSA, where the TSA's own auditors bring everything and anything through with ease. With all the money and human time used to prevent crime via AML, that could've been redirected to far more productive things. Especially in a country like the USA, where crime prevention issues are fairly obvious but not acted upon, such as robbery, murder, assault, rape, car break ins, property theft, damage, etc in California which aren't things effected much by AML either way.
dsfyu404ed 4y ago
>That will seem swell to you until better-funded criminals want a piece of your assets, money, or labor. And the status quo where the banks take a bigger cut to pay for their big compliance departments and the government takes a bigger cut to pay for auditing those compliance departments is somehow better? X-percent not in your pocket is X-percent not in your pocket no matter how you cut it. At least in the proposed "stop giving a crap" case nobody will be denied access to boring routine financial products because they have a 3rd cousin with the same name as a Turkish mob boss.
- wpietri 4y ago
  Yes, the status quo is definitely better. The numbers on total AML cost vary widely, and I think the high-end numbers are suspicious because there are incentives to inflate them. But taking them at face value, AML costs the US financial industry about 1% of revenue. That is nothing compared to the costs of crime in high-crime/high-corruption societies. And looking at dollars alone doesn't paint a true picture. Criminal enterprises work through violence and add risk throughout the economy. E.g., if your business is doing well, a protection racket is not going to take 1% and call it a day. They'll take everything they think they can get. And if not, they break your leg. That serves as a strong disincentive to creating successful businesses. Do the FDIC have disputes with the OCC? Probably. But unlike criminal gangs, they don't settle them with shooting wars in the streets.
  - dsfyu404ed 4y ago
    >That is nothing compared to the costs of crime in high-crime/high-corruption societies. Is it really though? How much was the US (or any other equally developed country) losing to crime and corruption prior to all this KYC/AML BS? Not that much. Letting a mobster have a bank account doesn't magically turn your country into Nigeria. If anything it makes your country better because the mobster doesn't have to store that value another way and then protect it (with violence). >Criminal enterprises work through violence and add risk throughout the economy So like government but with less abstraction? > But unlike criminal gangs, they don't settle them with shooting wars in the streets. Only because they don't have to. Being an above the table enterprise they can just go to the government court system and get their (credible threat of) violence that way. All this violence you're complaining about w.r.t. organized crime is just their (low buck, because due process and diffusion of responsibility sufficient to dissuade revenge are expensive) way of settling business disputes.