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Is it legal to mix cash in a jar? How is Bitcoin mixing any different?
- JKCalhoun 3y agoSo if even one person is found to have been paid in crypto for a contract killing then the whole pool of crypto is afterward tainted? Am I following this correctly?
- deleted 3y ago[deleted]
- deleted 3y ago[deleted]
- superb_dev 3y agoNo, there were two other criteria listed
- ppqqrr 3y agoYou're exactly right - tainted, because the contract killer's money becomes clean (laundered) at the expense of the rest of the money. Now, as to whether everyone who had money in that pool will be found guilty by "Big Bad Government", which I think is what distresses you - the answer is no. There are additional criteria, as the article mentions.
- LegibleCrimson 3y agoSort of. If one person has been paid in crypto for a contract killing and other participants either know that they are facilitating the laundering of illegally-obtained money or suspect as such, then they are culpable. I haven't really been paying much attention to the mixer thing and I'm not an expert, but the gist is that if you build a big cash blender with the explicit purpose of masking the origin of money, then you are very clearly and willfully facilitating money laundering. If you participate in this money blender, then you are probably assisting in money laundering. The whole thing is shady by nature.
- ric2b 3y ago> if you build a big cash blender with the explicit purpose of masking the origin of money, then you are very clearly and willfully facilitating money laundering. Or you want to increase your privacy, maybe you don't want your employer to know where you spend your salary, or how much you are able to save.
- salawat 3y agoThe illegal thing is breaking the traversible chain of provenance of funds. All money transmitters by law MUST keep those records as a condition of being licensed to engage in the business of money transferance on the behalf of a third party. If you came into possession of a money transmission framework, and you ran accounts for someone else without doing KYC, or integrating with OFAC, and were found to have transacted in a way that facilitated illegal activity or sanctions violation, you are now strictly liable for those violations. If you wish to participate in the act of moving money, you must make law enforcement's job tractable. It is a pre-requisite of the business vertical in the United States. In brass tacks plain, layman english: The United States Financial System is a grafted on appendage of Law Enforcement. Every legal department in a financial services company is responsible for setting up a dedicated division responsible for facilitating an integration with Law Enforcement. Is that clear? I'm not making any judgements as to whether it should be that way, mind, just telling it how it is. Mixers were never practically legal in any way shape or form. They just weren't explicitly stated by the name "Mixer" as being illegal by statute or Administrative dicta. Not a lawyer, just been part of implementing and auditing my fair share of systems.
- chx 3y agoNo, it's step one. There are two more steps to take. One more is taken: the conceal step. Now the question, do the others know whether the crypto is from a contract killing. To quote the article: > Chris and the other participants suspect the possibility that dirty money is entering the jar, but they don't do due diligence, then they could be found guilty of money laundering. Say, Chris finds themselves in front of judge and jury for money laundering. An expert for the prosecutor might be able to convince the jury the ratio of criminals among crypto mixers users are so high they should have done due diligence. Which, of course, you can't do if the mixer works properly. This convincing will be immensely helped by the OFAC putting mixer addresses on the SDN list. Thus, the only way to make sure you stay on the straight and narrow is to not use crypto mixers.
- asynchronous 3y agoMaybe I’m missing more information about laundering laws, but I don’t see how this legal argument concerning actual US dollars applies to a ethereal digital currency.
- striking 3y agoCould a digital currency not be considered "property involved in a financial transaction [that] represents the proceeds of some form of unlawful activity" ?
- cameron_b 3y agoThere is precedent for police to imagine that All currency is related to illegal activity, presumably under the shaky grounds of "otherwise you'd use a bank" [0] But if the blockchain clearly has some dark blotches on it, then in the eyes of the police ( perhaps not completely the law ) it confirms that the pot is tainted. So, I would say in this legal environment, it would be very difficult to have both trust in the mechanics of a digital currency and also status beyond reproach of "involved in... unlawful activity" [0] https://www.msn.com/en-us/news/us/flying-with-cash-law-enforcement-can-seize-your-money-without-telling-you-why/ar-AA1jGagB https://www.msn.com/en-us/news/us/flying-with-cash-law-enfor...
- micromacrofoot 3y agocontrary to what many people believe, there’s nothing special about digital currency that makes things less illegal than they are with traditional US currency
- polygamous_bat 3y agoIf it didn’t apply then you could buy Monopoly money from a third party called let’s say Mether, mix it in a jar, and sell Monopoly money back to Mether. If a law is defeated by something as simple as that, what’s the point of having the law? It’s like saying if you commit crimes wearing gloves you get to walk because there are no fingerprints.
- 3y ago
- amelius 3y agoFalsehoods programmers believe about laundering laws ...
- drc500free 3y agoFalsehoods programmers believe about laws and courts usually boil down to incorrectly thinking that it's impossible to prove intent.
- bombcar 3y agoProgrammers also thing the law is code and the judge a compiler, and if you find a bug you win.
- Crunchified 3y agoCash is just one of those freedoms things big government hates. Through money-laundering laws, gov gets to stick its nose into ALL of our lives to treat us all as the potential criminals they know we are. The latest thing their ever-tightening regulations do is to threaten our bank accounts based on mere suspicious behavior.
- rzl1235 3y ago[dead]
- neaden 3y agoWho do you think makes the cash? And you are aware it all has serial numbers and at times with things like bank robberies they use those to track it down.
- Crunchified 3y agoProper cash is a source of freedom. It doesn't even have serial numbers. It has weight and defined properties, but they took all that away from us quite a while ago. Until recently, the paper with numbers and faces on it still served as a fairly usable facsimile, but the powers-that-be continue to take those "privileges" away from us, the undeserved underfolk. Just wait until CBDCs are thrust upon us - that'll take care of the last vestiges of freedom that cash currency, and previously real money, had given us. They have changed the concept of money, a natural right, into a constructed privilege.
- cameron_b 3y ago"Oh, what a tangled web we weave,/ When first we practise to deceive!" https://en.wikipedia.org/wiki/Marmion_(poem) https://en.wikipedia.org/wiki/Marmion_(poem)
- pton_xd 3y agoI don't get the analogy. If I have $100 from an unknown source, and then I put it into the jar and get $100 back out, I still have $100 from an unknown source. I can't say, "well, I got the $100 from the jar." The rules of the jar are you have to put $100 in to get $100 out. So, where did the initial $100 come from? Still unknown!
- asylteltine 3y agoThe point is if you mix cash with the intent to conceal the source, that’s illegal. The law is about intent
- sokoloff 3y agoIs it illegal in all cases? Or only in cases where the source of my original money was illegal? If my source of money is inconvenient or embarrassing but legal, it’s not at all obvious to me that tumbling cash is illegal. The limited research I did suggests it’s illegal iff the source of my original money is not legal.
- clbrmbr 3y agoThis is what the article is about. It’s a good read. Very clearly explained.
- ric2b 3y agoBut the arguments against coin mixers basically claim that if someone wants increased privacy that means they're criminals, and so all coin mixing should be illegal.
- LegibleCrimson 3y agoIf you have $100 in $10 bills from an unknown source and suspect that it might have come from illegal activity, stick it into a jar where 100 people have each put $100, and then pull out $100 at random in an attempt to disconnect from its potentially illegal nature, that is called money laundering. If you know that your money is legally obtained and put it in the same jar (for privacy purposes, for instance), you probably know that you are facilitating somebody else's money laundering (but are unlikely to be charged for it).
- hurryer 3y agoYou don't even need to go to crypto. Try opening a joint bank account for you and 10 other strangers you don't know so that you can pool together some digital funds for mixing them up a little and see how the bank feels about that.
- toomuchtodo 3y agoThere was a fintech that just shutdown that was doing group bank accounts like this, but the name escapes me. Their postmortem was posted here (didn’t raise when raising was easy because they didn’t need the money, and then they lost their banking partner). Firefighters were one of their user stories.
- neaden 3y agoWhat was the use case for fire fighters? DIY life insurance?
- toomuchtodo 3y agoShared grocery expenses because they live together.
- ajross 3y agoFWIW: an mixed account for shared expenses is 100% legal and definitely not money laundering as long as you do the accounting and can show that it all paid for groceries. People get hung up on the specifics of AML/KYC regulations and tend to forget the context. That's sort of what the linked article is about.
- toomuchtodo 3y agoAgreed, I provided more for context that it can be done, within the context you mentioned. (i take annual mandatory AML/KYC training as part of my fintech dayjob compliance program)
- deleted 3y ago
- renewiltord 3y agoVenmo won't let you take out more than 4999.99 in a single swoop. I frequently have $10k+ in there. I suppose I'm technically "structuring" when I withdraw, but there's no other way for me to get the money out and I haven't gotten in trouble yet. If I do get in trouble, I'll post here and hopefully Venmo will have figured out how to withdraw more.
- Deprecate9151 3y agoIf you're doing it because of a hard cap on the withdrawal amount it's not structuring. You have to be doing it with the specific intent to avoid required reporting.
- renewiltord 3y agoRight. I agree. That's how I'm saying it's similar to the OP: it's the intent that makes it one or the other.
- buildbuildbuild 3y agoYou don't have to be doing anything wrong. You only need to appear suspicious to a compliance algorithm and you're suddenly unbanked with no explanation or recourse. Today's banks are over-compliant and won't care to dig into your intent. See: https://www.nytimes.com/2023/11/05/business/banks-accounts-close-suddenly.html https://www.nytimes.com/2023/11/05/business/banks-accounts-c...
- knorker 3y agoI'm so sick of these cryptocurrency people thinking they have invented something new and clever, where it's just centuries old fraud and money laundering, with some math on top. You can't just "declare" that the algorithm you just made up isn't money laundering, by the power granted to you from having written the procedure down, after having thought about things de novo, with zero actual knowledge of finance and the law.
- BLKNSLVR 3y agoThis isn't about cryptocurrency, it's about 'mixing services' for cryptocurrency. Off-topic: Cryptocurrency is / was 'new and clever' in that it combined a bunch of existing technologies into something that previously did not exist. Something "new" about cryptocurrency is that it's a currency that lies outside the control of any government. No commentary on whether that's a good thing or a bad thing, but in my mind it's undoubtedly 'new and clever' (in full knowledge that most of the world would rate that as arguable).
- chii 3y ago> it's a currency that lies outside the control of any government and yet, most gov't that want to ban it has done so. So is it really outside their control?
- BLKNSLVR 3y agoThey may ban it, but are they doing, or can they do, anything to enforce said ban? If enforcement isn't possible, can it be considered controlled? China has 'banned' Bitcoin n times. That in itself tells me how well, or otherwise, it can be controlled. Monero is crypto-non-grata in many countries. That just means obtaining it requires visiting slightly dirtier and slightly darker alleyways.
- knorker 3y agoSo just like every other crime, then?
- dekhn 3y agohttps://xkcd.com/1494/ https://xkcd.com/1494/
- demondemidi 3y agoI wish only lawyers could comment on this topic. /monkey's paw curls one finger/
- water-data-dude 3y agoRelevant xkcd: https://xkcd.com/1494/ https://xkcd.com/1494/
- rtpg 3y agoThis is a super common argument strategy "on the internet" (but also at work with people who are too annoying for their own good, including myself). Just stripping away context until suddenly the thing you're saying is fine. People throwing out metaphors and similes as if shuffling around numbers on a hard drive and throwing pieces of metal and paper into a jar are the same thing. And nobody is really immune to this line of thinking! There are people who scoff at "mixing cash into the jar is not illegal" but will state that "math can't be made illegal" or "you can't copyright numbers". I'm definitely not immune to it.
- devwastaken 3y ago"can't" in that context is itself a metaphor for "you should not because of the obvious consequences".
- rtpg 3y agoYeah there's definitely a deeper argument there, but I think it still falls into a similar category of ignoring context in many cases. The "can't" variants often imply that it would cross the Rubicon on some issue. My contention is that usually, the supposed Rubibon has already been crossed ages (often centuries!) ago. Of course "crossing the Rubicon" itself is a social construct, so at least those arguments can warp reality enough to become self-fulfilling. If everyone is convinced that something is impossible, it becomes very hard to argue that doing it is reasonable. EDIT: and to be clear, I am not looking to litigate the illegal number issue. I've heard the arguments, this isn't a question of ignorance. It's a question of having different base axioms. I reserve my right to be extremely wrong on this issue to prove a point in an internet discussion
- LargeTomato 3y agoEvery so often I read a HN comment that is salient and useful. It changes how I think about an argument and I occasionally use the HN comment as a basis for an argument in real life. This HN comment is one such comment.
- newZWhoDis 3y agoThe reality is laws and civil order are an illusion, there’s what gets men with guns sent to your house and what does not.
- jazzyjackson 3y agoAm i right to think that preventing cash mixing is a big reason states/governments in general dislike casinos and even at-home games of poker? I tend to think of money less as personal property or some commodity and more as a piece of software we're licensed to use; ie, the money issuers write the rules for what can be done with these bearer bonds, else you're breaking the agreement with jail as a consequence
- anigbrowl 3y agoSeems like there's a word or two missing in the opening sentence
- jazzyjackson 3y agothanks s/started/states
- AmericanChopper 3y ago> Only one last criteria is lacking. Chris and the other strangers must participate in a "knowing" way. They must be aware that the property involved is criminally-derived. Another way of saying that is that the only missing criteria is an actual crime. All activity that doesn’t involve crime is non-criminal, so it’s a bit of a leap to imply that something is borderline criminal because one minor detail is absent, with that minor detail being the presence of an actual crime.
- nocoiner 3y agoJeez, if he’s not careful, he’s going to wind up doing an unregistered securities offering before this is all over.
- bouncycastle 3y agothe term "money laundering" is the anti-euphemism of "financial privacy". It's a highly successful attack on privacy. It's been drilled into our heads that privacy is bad, and it won't stop there.
- MattPalmer1086 3y agoNo, it's not an attack on privacy, it's an attempt to block criminal activity and funding terrorism. The effect is that you can't have full financial privacy. I worked on financial and messaging privacy tech and cryptography. I came to the conclusion that there were very few genuine and good reasons for complete anonymity and privacy in finance. This doesn't mean that everything should be completely public, but equally everything being completely hidden is not a desirable state for society either, unless you are a criminal.
- bouncycastle 3y agoThere are plenty of genuine reasons. One reason off the top of my head is that you cannot pay bounties to informants for rewards if they give reliable tip-offs. You need full anonymity for that. So crime / terrorist fighting is actually being hampered. Poor privacy weakens security in general, doesn't matter what type of data it is. Meanwhile breaking privacy does not stop terrorists or criminals. They always find a way. again, "money laundering" is really data privacy when you distil the issue, and the term certainly is an anti euphemism, specifically made up to attack privacy.
- MattPalmer1086 3y agoI would respectfully disagree with most of what you said. Security and privacy are not the same thing. In some cases, privacy is also a security concern (e.g. criticising the state in repressive regimes) but mostly absolute privacy is not required, only partial privacy. In most cases, a lack of privacy does not massively weaken security. For the record, I am passionate about privacy. I intensely dislike surveillance capitalism and think that the state should not be able to conduct mass surveillance. Warrants for targeted surveillance should be controlled by the courts. However, this has to be balanced against real money laundering and other criminal enablement concerns (such as ransomware and other crimes enabled by untraceable payments). Money laundering is simply how organised crime take the proceeds of their activity and legitimise it. It is extremely naive to frame attempts to detect and control this as an attack on privacy, even if this is an undesirable effect of it. My point is that absolutism in privacy is as bad as absolutism tends to be anywhere else it appears. The real world needs balance. We definitely need privacy, but not absolute privacy at the cost of everything else. Update: I would just like to respond to your point that these controls have not stopped terrorism or money laundering, and that they will always find a way. I don't disagree with that, but having no control at all over this would enable them to a far greater extent and lower their costs substantially.
- TuringNYC 3y agoIANAL but Intent matters, not just for this, but for lots of things
- freeAgent 3y agoYes, knowledge and intent are both written into the relevant law.
- deleted 3y ago[deleted]
- prepend 3y agoIt’s illegal when you provide it as a financial service and don’t follow KYC.
- drivingmenuts 3y agoSeems to me that, as much as one might wish otherwise, Bitcoin is not the same as cash.
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- abstrusemoose 3y agoOh god.
- doubleg72 3y agoWho is JP Koning? I have never seen this blog before and he has a lot of interesting posts.