18 ms·

The Bond villain compliance strategy

552 points by takinola 3y ago

jgilias 3y ago
It’s interesting how the market’s reaction to this was basically - nothingburger, tick tock, next block.
monero-xmr 3y ago
Man the anti-crypto news piles on like clockwork as the bull begins anew. Crypto is finance without borders. It is literally the cypherpunk dream come alive - money issued on computers, censorable by no one, existing only as numbers. You could ban crypto with every government on earth and it would be severely reduced in price, but it would not die - it would just delay its inevitability. This is because cryptocurrency is an ideology - one of anti-state money, pro freedom, decentralized, empowering individuals. A circular economy of crypto does exist - it’s small vs. the speculation, but people do receive crypto and spend crypto without ever cashing out to fiat. As that economy grows, there is no longer anything the state can do to stop it. But the state won’t stop crypto. That time has passed. Some in power saw the threat, but mostly the elites called it “rat poison squared” and laughed at it. Now crypto is so big you have major Republican presidential candidates issuing pro-crypto policy platforms and senators and powerful representatives defending it in committee hearings. It’s all over. The real solution is to out compete crypto. Why do people like it? How can state currency do better? If you can’t solve that puzzle, then you aren’t going to defeat it.
- viknesh 3y ago
  Are there any factual assertions that you disagree with in the piece? Otherwise this seems to be more anti-Binance than crypto itself (although the author's viewpoint on crypto is clear).
  - monero-xmr 3y ago
    I am extremely deep in this space since nearly the beginning. My take on Binance is it started like many YOLO exchanges back in the 2017 boom but pioneered the exchange token model. They had very good customer service and onboarded nearly everyone. The model was FAFO with the understanding they would pay a fine later. If the US government had the nuts they would have shut it down. They didn’t, and CZ probably won’t get any jail just like Bitmex’s Arthur Hayes. If they do put him in jail it’s a pittance vs. his massive equity stake and wealth. As an addendum, the Tether Truthers assumed that when the US government was done sifting through their subpoenas, the Truth about Tether would be revealed and it would collapse. Just like with the NY AG, didn’t happen won’t happen - Tether is backed at this point after 8 quarters of high interest rates. I was way, way more worried about crypto 2 years ago than I am now. The bad actors are being shaken out, the SEC mostly lost vs. Ripple, and the US and the world itself is yo-yoing back to conservative government after a period of progressive governments. All of this bodes well for crypto and its anti-state ethos.
- cyberax 3y ago
  Replace "crypto" with "drugs" and your message will remain basically the same.
- 243423443 3y ago
  > A circular economy of crypto does exist - it’s small vs. the speculation, but people do receive crypto and spend crypto without ever cashing out to fiat. Can you provide examples that do not involve extortion or drugs?
  - monero-xmr 3y ago
    Servers, VPNs, software engineers that work in the crypto space. You can get a flavor at https://kycnot.me/ https://kycnot.me/
    - heyitsguay 3y ago
      So... Not just crime, but also the digital infrastructure that facilitates it.
      - dmichulke 3y ago
        Criminals also eat, drink and drive cars. Why would paying for food in crypto be OK but digital infrastructure not? Do you think privacy is undeserved for one but not the other? Should all transactions be public / visible by the state?
        astrange 3y ago
        Transactions in most crypto are even more visible to the state than in normal banking, because they're in an uneditable public database that never loses history.
        Kwpolska 3y ago
        Crypto tumblers are a thing, and they make the public history unreadable. Bank transactions aren't public, but the government can get access, and stuff like money laundering is easier to detect than with crypto.
        3y ago
- rocqua 3y ago
  "Crypto is finance without borders" is not a positive statement. Borders are important for security. Especially because states have varying degrees of ill-intent towards each other's citizens. But more important than borders is jurisdiction of regulators. At least a significant portion of crimes are also evil. Lack of regulation really helps those evil things happen. Generally financial regulation is one of the more effective forms of crime prevention. There's certainly regulation so stupid it almost reaches malice. There's probably regulation that is intentionally malicious. That needs to be solved, but solving it by saying 'only regulation as the cryptocurrencies currently allow' throws out way too much regulation. It lets too many evil things all of a sudden happen.
  - dmichulke 3y ago
    > Especially because states have varying degrees of ill-intent towards each other's citizens. I think the major risk crypto people see is not other states, but their own state. > At least a significant portion of crimes are also evil. Likewise, a portion of non-crimes is evil. For example money printing. And it's huge, we're talking trillions. The same trillions that can't be traced once they enter the Pentagon. Generally, there seems to no longer be a moral authority the state wields, crimes and evil decoupled a long time ago, and people now see that they can choose who fleeces them and how.
  - slackfan 3y ago
    Borders are important for the security of governments, and very little else. A reminder that passports and mandatory travel restrictions outside of a few countries didn't come into existence till WWI. Border enforcement by governments as a whole has caused more death and human suffering than literally any other action by any nation state in the world.
  - Aerbil313 3y ago
    The single issue is that real world has borders in the form of nation-state borders and barriers (regulations) to the money transfer between entities. Crypto does not, and this leads to a conflict. I am personally all in for a no-borders real world as long as there are no states which don’t believe in my ideology. But such a thing is utopia and doesn’t exist yet.
- RandomLensman 3y ago
  State currencies are outcompeting crypto, including by considering it an asset denominated in said state currencies.
kdkirsch 3y ago
I really appreciated the deep insightful analysis wrapped in an excellent metaphor.
IIAOPSW 3y ago
I'm deeply disappointed that this isn't the strict bylaws, policy, and procedure documents for SPECTRE and its affiliates and controlled entities. I wanted to read the Henchman Code of Conduct, Infiltration Response and Prevention Procedure, and Workplace Health and Safety Guidelines for a shadowy, criminal org.
- smnrchrds 3y ago
  > I wanted to read the Henchman Code of Conduct Rule 1. Die fast, die often.
  - BiteCode_dev 3y ago
    And break things
- EdwardDiego 3y ago
  The International Brotherhood of Henchsters union will negotiate better henching health and safety policies on behalf of all goons, thugs, hired thugs, minions, and of course henchpeople. We all know that henching is an inherently risky job. Fighting some of the world's most tuxedo clad Scottish sociopaths is often dangerous, but that doesn't mean we can't reduce unnecessary risks. Risks that cause lost productivity on your Doomstar project through avoidable injuries, recruitment delays, and the difficulty of removing tangled bodies from the drill you're using to get to the Earth's core. We demand: 1. Adequate hand-rails on ledges, bridges, and _especially_ around piranha tanks, snake pits, etc. 2. Murder as a punishment for failing your boss "for the last time" now requires two written warnings beforehand. 3. Volcano bases must have adequate fire and lava escapes.
- deleted 3y ago
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- hlandau 3y ago
  Old but obligatory link, the Evil Overlord List: http://www.eviloverlord.com/lists/overlord.html http://www.eviloverlord.com/lists/overlord.html
pants2 3y ago
[flagged]
- EdwardDiego 3y ago
  Why are crypto companies exempt from doing due diligence on regulatory regimes? Every other business has to know the law and comply. And if you think the SEC isn't doing its bit by giving you guidelines, well, guess what, don't start a business in a space with such regulatory uncertainty. Also, listen to the people who know their shit who say "Gee, that ICO sure looks like a security, be really risky doing that without regulatory clarity". But, they did it anyway, and made a lot of money from greater fools, which is of course why they did it. So, please stop blaming the SEC for the deliberate decisions of businesses who were motivated by mass profit, ffs.
  - pants2 3y ago
    I'm blaming the SEC for not making clear rules and for sitting on their behinds for years letting crypto exchanges do whatever they want in the US. They have done an extremely poor job of protecting Americans from financial fraud in the crypto sector. Who can blame the companies jumping on the profit train? If you have a drug problem in your city it does little help to blame the drug dealers, you blame the people that are supposed to arrest the drug dealers.
    - growse 3y ago
      I sympathise with this, and part of it's down to the glacial pace of regulators (which as a consumer I find frustrating). At the same time, for a number of years there was a lot of perceived legitimacy to a lot of crypto exchanges. Sure, there were obvious scams, but some of the bigger players were putting on a convincing "this is actually useful and beneficial to consumers" trenchcoat. I also see the perspective from the SEC of "let's not be too hasty", and to wait to see how it shook out. In hindsight, sure. Obviously scams and they should have been shut down years ago.
    - pja 3y ago
      The rules were always clear, it's just that crypto people didn't like them & wanted new rules specially made for them. Crypto exchanges were always money transmitters that were required to follow KYC regulations, ICOs were always securities & needed to follow SEC regulations. And so on & on. Using cryptography doesn't make you magically immune to regulation.
roenxi 3y ago
Alexandra Elbakyan powers a big chunk of the worlds knowledge archiving almost singlehandedly. A tiny group of ringleaders powers who knows how much torrenting. The evidence I've seen so far is that coordinating a global blockade on anything tech is too expensive to manage. And getting more so as this more reliable alternative to the traditional banking system grows. The economics here are not on the side of governments. The enforcement costs are high. The costs to individuals in acquiring and using crypto are low. The benefits of running a monetary system that bypasses the high costs of the global regulatory state are extremely high (in some sense, the outrageous costs of running the bitcoin network represents the implied drag of regulation). Even if being imprisoned is an inevitable result, there are a lot of people where the intervening high life of running a huge crypto exchange must be attractive. The times are exciting. Unless we see capital controls the likes of which have never been tried (a possibility, the authoritarians must be stewing over crypto) might find these apparent victories by the regulator as Pyrrhic. Unlike most financial assets, once I've bought a cryptocurrency the only option they have is to come to my house and seize it. That isn't a feasible option at scale.
- deleted 3y ago
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- RandomLensman 3y ago
  Crypto doesn't need to be enforced out of existence, it already cannot compete with other money, so it remains a niche thing. Enforcing things on niches is easy to some extent (or rather not even needed).
- pas 3y ago
  regulators don't have problem with crypto, they have problem with Crypto. more seriously, there's zero problem with the technology. you can send money to anyone you want using a complicated game of crypto whisper phone, but everyone in the chain has to file tax returns or whatever is required in the jurisdictions along the path. patio's piece opens with the insight that Crypto companies want to be eveywhere while being nowhere. if Crypto wants to really be everywhere, then they can do what all big tech (and non-tech) inter-multi-continental conglomerate does, open branch offices, do the frustrating work of finding local regulation experts, navigating the immense labyrinth of global vs local realpolitik, etc. they should/could have started with registering the fucking tokens. it makes zero sense that they contested this, because they already do KYC for their own fucking anti-fraud purposes. https://en.wikipedia.org/wiki/Regulation_A#Testing_The_Waters https://en.wikipedia.org/wiki/Regulation_A#Testing_The_Water...
1B05H1N 3y ago
In case anyone wants to read the US Treasury announcement: https://home.treasury.gov/news/press-releases/jy1925 https://home.treasury.gov/news/press-releases/jy1925 """ ...Binance willfully failed to report well over 100,000 suspicious transactions that it processed as a result of its deficient controls, including transactions involving terrorist organizations, ransomware, child sexual exploitation material, frauds, and scams. Terrorist Financing. Binance failed to report to FinCEN transactions associated with terrorist groups including Al Qaeda, the Islamic State of Iraq and Syria (ISIS), Hamas’ Al-Qassam Brigades, and Palestinian Islamic Jihad (PIJ). Ransomware. Despite being one of the largest receivers of ransomware proceeds, and transacting in millions of dollars of ransomware proceeds from attacks involving at least 24 different strains of ransomware, Binance failed to report these transactions. Child Sexual Abuse Materials. Binance never reported transactions with websites devoted to selling child sexual abuse materials, including Dark Scandals. Darknet Markets, Scams, and Other Illicit Activity. Despite sending and receiving virtual assets proceeds from large-scale hacks, account takeovers, and darknet markets dealing in illegal narcotics, counterfeit and fraud-related goods and services, as well as other illegal contraband, Binance never reported any such transactions. """
- verisimi 3y ago
  > transactions involving terrorist organizations, ransomware, child sexual exploitation material, frauds, and scams These justifications.
- xenator 3y ago
  [flagged]
- robocat 3y ago
  They left out copyright infractions. I bought a car service manual and the seller wanted to be paid using Binance.
- concordDance 3y ago
  The ability of people to freely exchange a store of value is something governments don't like. They want the power to veto transactions and declare people or entire countries impossible to trade with.
galaxyLogic 3y ago
The word crypto comes from the Ancient Greek word kruptós, which means "hidden" or "secret". (a quote from AI) Thus it is not a big surprise that some shady things might be going on as relates to it. Crime wants to be secret.
- seabass-labrax 3y ago
  Cryptocurrency (abbreviated 'crypto') is made possible by cryptography (also abbreviated 'crypto', but few call it that nowadays). Cryptography is from the Greek for secret because it involves doing various things with 'secret keys'. What you use it for may or may not involve secrecy - here are just a few of the most prominent examples: - Authentication to prove your identity (no secrecy) - Encryption to keep information private except to certain keyholders (secrecy) - Signing to prove that information is as originally published (no secrecy)
keiferski 3y ago
I’m no fan of Binance, but to label them as Bond villains while spending zero effort on trying to understand the ideology behind cryptocurrencies (at least, what was supposed to be the ideology) and why being a distributed business without a physical address is desirable from that point of view – and not just because they’re evil greedy people (of which Binance may still be) – makes this essay not very interesting. It would have been a much better piece had the author attempted to understand the decentralization ideology and then squared that with the apparently very real crimes so widespread in crypto. Edit: found the essay that this link reminded me of: a comparison of Jason Bourne to James Bond, from a societal perspective. A good piece to read after this original link. https://exple.tive.org/blarg/2015/09/20/bourne-aesthetic/ https://exple.tive.org/blarg/2015/09/20/bourne-aesthetic/
- fake-name 3y ago
  Have you considered that the author did try to understand the underlying ideology? It seems pretty accurate to me.
  - keiferski 3y ago
    Well, I can’t read his mind, but considering that he didn’t mention anything about it, I think we can assume that he hasn’t. Even if he did, my criticism was about the essay, not the guy himself.
  - olalonde 3y ago
    > He has long been adjacent to money and power, but craves more. > They have no passport and fly no flags; these concepts are thoroughly beneath them. Yeah, this is not an intellectually honest characterization of libertarian and anti-authoritarian ideology. I'd be very, very surprised if Patrick didn't actually understand that.
    - tovej 3y ago
      [flagged]
Animats 3y ago
Here's the list of SEC crypto enforcement actions.[1] They start about two or three cases a month. 30 cases so far this year. At first, they focused on the out and out scams. Then, they shut down the ICO industry by sending out letters asking why each ICO wasn't registered as a security. Then they went after some of the NFT guys. They went after some paid influencers. Now they're going after the bigger exchanges. Plus, along the way, the usual out and out scams: "fraud for misappropriating at least $12 million of offering proceeds to purchase luxury goods including sports cars, watches, and a 555-carat black diamond..." The SEC's position is simple: the same rules apply to crypto as to other financial products. After FTX, nobody is seriously opposing that any more. The "crypto is special" argument is dead. The scams are not even original - the scams are Ponzi schemes, pump and dump, front-running, insider trading, and just plain stealing customer assets. All of those were known before 1900. The crypto crowd isn't really that innovative. [1] https://www.sec.gov/spotlight/cybersecurity-enforcement-actions https://www.sec.gov/spotlight/cybersecurity-enforcement-acti...
- injeolmi_love 3y ago
  There are over 1.8 million crypto tokens. If the SEC is going to shut down the industry, they’ll need to at least start shutting down more projects per month than are starting up.
  - growse 3y ago
    Where's the tax dollars to pay for this?
    - PoignardAzur 3y ago
      If the fines are high enough, seems like it could be self-financing.
      - ajb 3y ago
        Usually this kind of enforcement attempts to reimburse victims, or failing that, goes to general funds. Anything else is a moral hazard for enforcement (eg, USA local police confiscations)
anon_trader 3y ago
While crypto might not be the ideal solution, it's hard to not notice that modern AML/KYC banking laws are rapidly degrading into complete bullshit, and it is nice to have a workaround. I've just read an article how Russian emigrants around the world (that's up to several million people, more than some European countries) are struggling with opening and maintaining bank accounts, and have to resort to all kinds of workarounds, crypto and Binance included. You might not have any sympathy for them, especially in current circumstances, but they did nothing wrong, and won't cease to exist just because of your lack of sympathy. Where I live now, there is a growing number of street currency exchange shops which will gladly and openly accept your USDT and hand over cash in either local currency or USD $100 bills; no documents ever asked, of course. That kind of infrastructure did not exist a mere couple years ago. You might think, why don't just ban it all, but, I'll say it again, the problem with this line of thinking is that if you, as the government, declare large enough numbers of mostly innocent people criminal or "undesirable", they won't magically vanish into thin air overnight; to the contrary, you've just made life harder for your own law enforcement, as real criminals will now have a much larger crowd to blend in. For many countries where it is difficult to legally buy or transfer USD at international market rates (either because of sanctions or capital controls), there is a thriving USD/USDT/BTC black market, involving, in extreme cases, the majority of population; see Argentina or Venezuela for example. Labeling all of them as "criminals" achieves you nothing.
- null0pointer 3y ago
  This comment was marked [dead] when I read it. I vouched it back into visibility. I wish people would respond with a comment if they disagree, rather than reporting it. Meta-comment aside, there’s another population segment who suffer from overbearing AML/KYC regulations - homeless people. Many homeless people do not have any form of ID and hence cannot open a bank account. What option do they have? I would argue for low value accounts, say <$5000 annual transaction volume, AML/KYC enforcement should not be required. $5000 is such a small amount in the grand scheme of money laundering that the government should really focus on the bigger fish. Splitting your laundered money into many bank accounts would, or could, fall under existing structuring laws and would be easily detectable by any bank. I haven’t even mentioned that in many countries, such as the US, you have absolutely no guaranteed right to banking access. Your access to banking can be shut off overnight by any one of the various middle men involved. Until these things are solved, and legal persons can be guaranteed access to banking then crypto is necessary.
skrebbel 3y ago
I recognize that this is partly taste and some will hate the style here, but wow how did patio11 get even better at writing? Every sentence is a delight.
JaDogg 3y ago
We should strive to eliminate finance, not to go back to the past when each lord had their own currency. Cryptocurrency is hindering human progress.
- matheusmoreira 3y ago
  A fully automated post scarcity society would be nice.
  - JaDogg 3y ago
    Indeed.
    - hanniabu 3y ago
      You're contradicting your original post by agreeing
      - matheusmoreira 3y ago
        How so? Economies only exist because of scarcity. A post scarcity society would naturally have no need for an economy.
      - JaDogg 3y ago
        How, post scarcity (star-trek like) world does not need currency or finance at all.
- miohtama 3y ago
  If compared to the national currencies Bitcoin is 16th largest, larger than 100+ national currencies https://coinmarketcap.com/fiat-currencies/ https://coinmarketcap.com/fiat-currencies/ So the development is towards other direction - less currencies of lords.
  - JaDogg 3y ago
    Disagree, I am talking about whole set of cryptocurrencies. see here: https://coinmarketcap.com/all/views/all/ https://coinmarketcap.com/all/views/all/.
smallnix 3y ago
> And also Binance gleefully and knowingly banked [...] child pornographers. That’s not an allegation; that has been confessed to. I would like to learn more about that. Does anyone have a source?
- resolutebat 3y ago
  > More than 1,000 transactions took place involving three marketplaces that dealt in child pornography and related material, FinCEN said. An administrator of one of those sites, Dark Scandals, was indicted in 2020. The site featured violent rape videos. https://news.bloomberglaw.com/crypto/binance-lapses-boosted-terrorists-hackers-sanctions-violators https://news.bloomberglaw.com/crypto/binance-lapses-boosted-...
- deleted 3y ago
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olalonde 3y ago
The article's viewpoint relies on accepting AML regulations and financial surveillance as beneficial. In my view, CZ is not a villain; he ran a popular business without defrauding customers. There were no victims. His wrongdoing lies in not taking his "police" role seriously enough. As per AML regulations, he had a duty to investigate customers and de-platform those that he considered criminal, all without due process of course. However, he chose not to strictly adhere to this role. Yes he broke laws, unethical laws that do more harm than good. I don't know to what degree CZ was motivated by personal gain vs principle but I don't believe he deserves the "Bond villain" label.
- jgilias 3y ago
  I think the “Bond villain” label is more to point towards the way of doing the operation. Which is pretty fitting imo, from the point of view of being everywhere and nowhere at the same time.
- rtpg 3y ago
  I think people dismiss how much AML regulations are directly linked to preventing crime from being efficient. There’s a reason that scammers ask for gift cards, and it’s not “just” because of traceability reasons (mules have always been a thing) Countries have varying levels of fraud and organized scams, and I think stuff like AML compliance flows play a bigger part than people appreciate
  - jgilias 3y ago
    Yes, and one could argue that banning end to end encryption and doing preventive monitoring of all communications would render crime even less efficient. I think it’s just natural that in a democratic society people fall on different parts of the spectrum when it comes to thinking of what the correct trade-off should be. Recently Lyn Alden posted how her wire transfer to her family in Egypt to cover some mortgage payments got blocked. I mean, if a celebrity (in some circles) with known family ties to Egypt experiences this, what chances do we mere mortals have? Making a 10k payment to an African country basically lands you in AML red “don’t do business with” lists. And sure enough, maybe most people doing this are financing terrorists, what do I know. But I think there’s a meaningful debate to be had here.
quijoteuniv 3y ago
Difficult to not think about other Tech CEOs when reading this, and most very rich people that did not inherit the money to start with. If you look IMO they all have in common that they have at least once done something morally questionable/ illegal, usually at their beginnings. The ability then is that they have manage to mantain themselves out of the reprimands, or had made enough money that they could buy themselves out of it. Name one and i promised i find something.
- HPsquared 3y ago
  Doesn't the same apply to everyone though? "Show me the man and I'll show you the crime" https://en.m.wikipedia.org/wiki/Give_me_the_man_and_I_will_give_you_the_case_against_him https://en.m.wikipedia.org/wiki/Give_me_the_man_and_I_will_g...
  - quijoteuniv 3y ago
    It does sound pretty totalitarian but i guess there must be a difference (at least karmically) between stealing food to give to your family and profiting in the millions with election manipulation. And anyway what is the point in defending billionaire narcissist CEOs?
bambax 3y ago
This is about crypto and Binance. It's a little too long IMHO -- the last paragraph says it all, and plainly enough: > I do not know if we’ll ever have a world with this scale of crypto businesses without the crime. The crime was the product. An opportunity to transform global financial infrastructure was greatly overstated and has not come to pass. I do not expect this to change.
- Shatnerz 3y ago
  Can any financial system exist without financial crimes? Just look at HSBC. Nearly all of Binance's failures also happened at HSBC which continues to operate within the law simply by paying fines as the cost of business every so often.
  - bambax 3y ago
    The big difference between crypto and regular finance isn't the crimes; it's that finance has other uses than crime, and crypto doesn't.
    - Shatnerz 3y ago
      The transfer of value is pretty nice. International transfers via crypto are often cheaper than wire fees. Domestic transfers can be faster via cryptocurrency depending on where you are at. ACH is painfully slow. SEPA is a a bit better. That being said there is a tradeoff. You lose clawback mechanisms in favor of independence and control.
  - htrp 3y ago
    The financial sevices industry considers fraud as a feature. Just in moderation
- deleted 3y ago
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- pas 3y ago
  But the product was gambling and funvestment (buy funky pictures, silly named coins/tokens), the crime was doing it unregistered. (And it's not like the constant whack-a-mole evasion did not cost them anything.) Right now these serious claims (that the main product was money laundering for ISIS et al.) are unsubstantiated.
nickdothutton 3y ago
Google Riggs Bank and BCCI.
- deleted 3y ago
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TacticalCoder 3y ago
> Your users and counterparties understand it to be a lie the entire time, of course. I'm not sure users feel that way. Maybe users just believe they live in a free world and do nothing wrong by buying $100 USD of Solana or Shiba coins. The evil, evil, evil person, outside of government's reach, who sneakily installed the crypto.com app (oh, the horror!): surely he needs to be send to some re-education camp to be taught the merits of the state and why we need less options and more state? > We are a nation of laws. I’d support reforming some of them; a lot of the AML/KYC regulatory apparatus harms individuals who have done no wrong Yup. It is insane. It is the bane of my existence. I'm not a drug dealer, I'm not selling firearms, I'm not kidnapping kids to sell their organs, I'm not funding terrorism. Leave me the FUCK alone. > However, in the interim, one cannot simply gleefully ignore the laws because the opportunity to do so allows you to become wealthy beyond the dreams of avarice. But is it unthinkable, for state lovers, to imagine a world where people would be free to decide if they buy or not cryptocurrencies? I know it's a very ugly word: freedom. But shouldn't people have more of it and not less?
- deleted 3y ago
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- davedx 3y ago
  Freedom isn't the only goal of society. It's in tension with other things like security, privacy, and so on. Libertarians are dumbasses because they wilfully ignore this.
  - Andrex 3y ago
    Libertarians are just anarchists with extra steps.
- IsaacL 3y ago
  I agree with you politically and spiritually. However, Patrick Mackenzie is a person of the highest calibre (see, e.g., this: https://worksinprogress.co/issue/the-story-of-vaccinateca/ https://worksinprogress.co/issue/the-story-of-vaccinateca/). There is a need for laws, and there is a need for laws that respect freedom. As of 2023, the details of how a freedom-respecting social system would work have only been scantily developed. If men like patio11 aren't convinced by the pro-freedom case, why would anyone else be? The libertarian movement has supported many bad actors. Cryptography has supported many evil acts. Libertarianism is not bad and cryptography is not evil; but no-one serious will follow us until we clean up our act. (It's not enough to say that the current system is bad or worse. The current system is terrible. But we should be aiming to set things right, not simply tweak things on the margin.)
samirillian 3y ago
I almost liked the tone this was written in until I got to "totes". It's a fine line between clever and cloying. Depressing how much of that article I understood.
- deleted 3y ago
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ano-ther 3y ago
I like “slow database enthusiasts”. > We had all the technology required to CC regulators on every banking transaction years before slow database enthusiasts decided all transactions would eventually be publicly readable and persisted forever. We simply chose not to implement it. It would have been quite expensive and infringed on the privacy of many ordinary people and firms.
- deleted 3y ago
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eastern 3y ago
I don't care about Binance or CZ or even crypto but it was worthwhile wading through the article just to learn this: "The U.S.’s point of view on the matter, elucidated at length in any indictment for financial crimes, is that if you have ever touched an electronic dollar, that dollar passed through New York, and therefore you’ve consented to the jurisdiction of the United States. Dollarization is very intentionally wielded like a club to accomplish the U.S.’s goals."
- justaj 3y ago
  So wait, does this mean that if an exchange is far outside of the US jurisdiction, it can be subject to the US laws simply by trading in dollars? How is that even remotely legal?
  - wolf550e 3y ago
    The US military and the US as a large market you want to trade with make it legal.
  - appplication 3y ago
    Why wouldn’t it be? The exclusive purpose of crypto is to circumvent existing regulation for financial transfers. The US government would obviously not be so rosy about that idea, nor would it recognize the “sovereignty” of crypto such that its laws would not apply.
    - justaj 3y ago
      Because I was under the impression that once you buy certain currency, you're allowed to do with it whatever you want. Certainly if you're outside of the jurisdiction of the entity that issues said currency.
      - lmz 3y ago
        Cash yes (it's just another physical token), but bank account / "electronic" dollars are ultimately backed by US bank accounts under US jurisdiction.
k__ 3y ago
[flagged]
- deleted 3y ago
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xkcd1963 3y ago
I think the writer overstates the power of the global finance institution, whatever it is. If someone would decide to make all banking transactions publicly readable and persistent forever, other people would just create an alternative global finance institution. There is no omnipotence "allowing" shenanigans to happen.
deleted 3y ago
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spacecadet 3y ago
Its very interesting to me that we went from "dont be evil" to full on Bond Villain leading every sudo-tech company in 20 years. I guess the initial lies that pushed the dont be evil line set the tone that you say one thing and do another...
- vinniepukh 3y ago
  sudo as in “superuser do” or as in “pseudo-“
- lordfrito 3y ago
  It's been heartbreaking to watch this unfold slowly over my lifetime. The techno optimism I had in the 90s has been crushed by profound despair for the human species, as I watch the salivating sociopaths among us getting accolades as they invent brand new ways to use this technology to subjugate the rest of us. These are our new role models?
  - nerdponx 3y ago
    People have always been like this. I don't know why anybody believed it would be different this time around.
    - spacecadet 3y ago
      So true. I didn't- Just felt like pointing out the irony.
  - pavlov 3y ago
    In just 25 years, we went from the early Internet’s “information wants to be free” to the crypto mindset of “we must insert expensive scarcity into digital realms”. And often it’s even the same people. I’m baffled by the Marc Andreessens of this world.
- deleted 3y ago
  [deleted]
WaitWaitWha 3y ago
I know this will read like I am a luddite, but hear me out. I would love to consider crypto as a type of medium of exchange. Unfortunately, as soon as crypto came out, I saw governments of many nations moving into it in some way, shape, or form. They gave it two options, either government has full control over time or eradication, with a few outliers. The US SEC was vacillating on how to deal with crypto for quite some time, and they are not alone. Is it property or legal tender, both, or neither? Now they have planted their stake. Cash is a tangible and disconnected way for payment for goods and services. Disconnected, as in the government (mostly) does not have instantaneous method to cripple the existence of cash. It requires significantly more interaction than just disable, for our example a government run, centralized crypto exchange (lest we forget, however you feel about politics, when governments froze or seized banked assets). 1. fear of the government wiping out all crypto assets in an instance because one disagrees with them, or more likely by an accident or hackers. 2. no transactions can be conducted if there is no electricity or device to conduct the exchange of crypto. There are many nations where power outages are scheduled as a matter of fact, or worse, power on times are scheduled. The dependence on a device is a bit more acceptable but the cost between a paper clip that holds the paper cash versus a cellular phone is still enormous.
- moldach 3y ago
  Author: "Someone needs to write an East Asian studies paper on how Tokyo became Switzerland for Asian crypto enthusiasts due to a combination of governance, network connectivity, latency, and geopolitical risk. I nominate anyone other than me." Done: "Tokyo: Asia's Crypto Haven. Unraveling the Swiss Connection in Governance and Technology" https://instabooks.ai/products/dce8add9-2d5c-ecdf-860a-38bb31e1951e?variant=47370753802586 https://instabooks.ai/products/dce8add9-2d5c-ecdf-860a-38bb3... Feel free to fact check it
- cherryteastain 3y ago
  > no transactions can be conducted if there is no electricity or device to conduct the exchange of crypto Same is true for fiat. Vast majority of transaction volume happens in computers these days.
Footnote7341 3y ago
People should have the human right to use their money anonymously in ways that they want, as an abstraction of cash, as an abstraction of human value.
- skullone 3y ago
  And when crimes totalling hundreds of billions happen, who will you call?
  - deleted 3y ago
    [deleted]
  - ponector 3y ago
    Better call Saul!
- martinky24 3y ago
  This is some delusional, misinformed, crypto bro kool aid type propaganda lol
  - Footnote7341 3y ago
    Justify to me where my rights should end on the spectrum of trading someone a piece of fruit for another piece of fruit, or giving him precious metals for it, or giving him fiat, or giving him electronic dollars, or giving him monero. please pick the point on that line where my rights should end and I should be submitted to bureaucracy, KYC, etc.
    - takinola 3y ago
      No one interferes with your ability to exchange money for fruit. However, exchanging money for a hitman's services, financing terrorists, selling illegal substances, etc are very much curtailed and for good reason. Society has determined you don't have the right to exchange money for those purposes. If you want that right, you have to change the society (by ballot or revolution, as may be applicable to your situation).
akudha 3y ago
The thing that amazes me about these people/companies - why do they think they can escape the reach of U.S government? It is the most powerful and vicious entity there is, if they want to get you, they will. What makes these people think that they are smarter or luckier than their fellow law breakers that came before them. Unlike SBF (who seems dumber than a rock), CZ doesn’t seem that dumb. I don’t understand this at all
- rossdavidh 3y ago
  There were lots of examples of "better to ask for forgiveness as a rich person than permission as a poor person", that they saw. Tech companies entered finance, taxi-driving, health-advice-dispensing, etc. and didn't fall into line with existing laws and regulations for years, until after they got rich. They were, no question, incorrect, but if you're wanting to believe it could work (because you really wanted to get rich), you could convince yourself of it.
- bear141 3y ago
  You, like everyone else, have never read about the smartest/luckiest criminals in the world because they don’t get caught.
  - akudha 3y ago
    Ok, fair enough. But the question still remains - what are the odds of not getting caught? Just because a handful of people win the lottery every year doesn’t mean you and I will, correct? In the case of lottery, all I am gonna lose is a few dollars that I paid for the ticket, but doing illegal activities can cost me my freedom and life.
  - jncfhnb 3y ago
    And they don’t get caught because they don’t take too much. So less interesting
- deleted 3y ago
  [deleted]
- 3y ago
silexia 3y ago
Superb writing, "Binance operated in many jurisdictions. The U.K.: kicked out. France: under investigation. Germany, the Netherlands, etc, etc, they required non-teams of non-employees at non-headquarters to keep track of all the places they weren’t registered doing their non-crimes."
throwaway2037 3y ago
Who did the art? That image is so cool. I don't see any attribution. (I assume someone like patio11 is paying a graphic artist to create art for his blog.)
- patio11 3y ago
  In the alt text, but it is DALL-E.
  - throwaway2037 3y ago
    Woah, that is crazy that DALL-E is so good now.

552 points by takinola 3y ago

It’s interesting how the market’s reaction to this was basically - nothingburger, tick tock, next block.

Man the anti-crypto news piles on like clockwork as the bull begins anew. Crypto is finance without borders. It is literally the cypherpunk dream come alive - money issued on computers, censorable by no one, existing only as numbers. You could ban crypto with every government on earth and it would be severely reduced in price, but it would not die - it would just delay its inevitability. This is because cryptocurrency is an ideology - one of anti-state money, pro freedom, decentralized, empowering individuals. A circular economy of crypto does exist - it’s small vs. the speculation, but people do receive crypto and spend crypto without ever cashing out to fiat. As that economy grows, there is no longer anything the state can do to stop it. But the state won’t stop crypto. That time has passed. Some in power saw the threat, but mostly the elites called it “rat poison squared” and laughed at it. Now crypto is so big you have major Republican presidential candidates issuing pro-crypto policy platforms and senators and powerful representatives defending it in committee hearings. It’s all over. The real solution is to out compete crypto. Why do people like it? How can state currency do better? If you can’t solve that puzzle, then you aren’t going to defeat it.

viknesh 3y ago
Are there any factual assertions that you disagree with in the piece? Otherwise this seems to be more anti-Binance than crypto itself (although the author's viewpoint on crypto is clear).
- monero-xmr 3y ago
  I am extremely deep in this space since nearly the beginning. My take on Binance is it started like many YOLO exchanges back in the 2017 boom but pioneered the exchange token model. They had very good customer service and onboarded nearly everyone. The model was FAFO with the understanding they would pay a fine later. If the US government had the nuts they would have shut it down. They didn’t, and CZ probably won’t get any jail just like Bitmex’s Arthur Hayes. If they do put him in jail it’s a pittance vs. his massive equity stake and wealth. As an addendum, the Tether Truthers assumed that when the US government was done sifting through their subpoenas, the Truth about Tether would be revealed and it would collapse. Just like with the NY AG, didn’t happen won’t happen - Tether is backed at this point after 8 quarters of high interest rates. I was way, way more worried about crypto 2 years ago than I am now. The bad actors are being shaken out, the SEC mostly lost vs. Ripple, and the US and the world itself is yo-yoing back to conservative government after a period of progressive governments. All of this bodes well for crypto and its anti-state ethos.
cyberax 3y ago
Replace "crypto" with "drugs" and your message will remain basically the same.
243423443 3y ago
> A circular economy of crypto does exist - it’s small vs. the speculation, but people do receive crypto and spend crypto without ever cashing out to fiat. Can you provide examples that do not involve extortion or drugs?
- monero-xmr 3y ago
  Servers, VPNs, software engineers that work in the crypto space. You can get a flavor at https://kycnot.me/ https://kycnot.me/
  - heyitsguay 3y ago
    So... Not just crime, but also the digital infrastructure that facilitates it.
    - dmichulke 3y ago
      Criminals also eat, drink and drive cars. Why would paying for food in crypto be OK but digital infrastructure not? Do you think privacy is undeserved for one but not the other? Should all transactions be public / visible by the state?
      - astrange 3y ago
        Transactions in most crypto are even more visible to the state than in normal banking, because they're in an uneditable public database that never loses history.
        Kwpolska 3y ago
        Crypto tumblers are a thing, and they make the public history unreadable. Bank transactions aren't public, but the government can get access, and stuff like money laundering is easier to detect than with crypto.
        3y ago
rocqua 3y ago
"Crypto is finance without borders" is not a positive statement. Borders are important for security. Especially because states have varying degrees of ill-intent towards each other's citizens. But more important than borders is jurisdiction of regulators. At least a significant portion of crimes are also evil. Lack of regulation really helps those evil things happen. Generally financial regulation is one of the more effective forms of crime prevention. There's certainly regulation so stupid it almost reaches malice. There's probably regulation that is intentionally malicious. That needs to be solved, but solving it by saying 'only regulation as the cryptocurrencies currently allow' throws out way too much regulation. It lets too many evil things all of a sudden happen.
- dmichulke 3y ago
  > Especially because states have varying degrees of ill-intent towards each other's citizens. I think the major risk crypto people see is not other states, but their own state. > At least a significant portion of crimes are also evil. Likewise, a portion of non-crimes is evil. For example money printing. And it's huge, we're talking trillions. The same trillions that can't be traced once they enter the Pentagon. Generally, there seems to no longer be a moral authority the state wields, crimes and evil decoupled a long time ago, and people now see that they can choose who fleeces them and how.
- slackfan 3y ago
  Borders are important for the security of governments, and very little else. A reminder that passports and mandatory travel restrictions outside of a few countries didn't come into existence till WWI. Border enforcement by governments as a whole has caused more death and human suffering than literally any other action by any nation state in the world.
- Aerbil313 3y ago
  The single issue is that real world has borders in the form of nation-state borders and barriers (regulations) to the money transfer between entities. Crypto does not, and this leads to a conflict. I am personally all in for a no-borders real world as long as there are no states which don’t believe in my ideology. But such a thing is utopia and doesn’t exist yet.
RandomLensman 3y ago
State currencies are outcompeting crypto, including by considering it an asset denominated in said state currencies.

kdkirsch 3y ago

I really appreciated the deep insightful analysis wrapped in an excellent metaphor.

IIAOPSW 3y ago

I'm deeply disappointed that this isn't the strict bylaws, policy, and procedure documents for SPECTRE and its affiliates and controlled entities. I wanted to read the Henchman Code of Conduct, Infiltration Response and Prevention Procedure, and Workplace Health and Safety Guidelines for a shadowy, criminal org.

smnrchrds 3y ago
> I wanted to read the Henchman Code of Conduct Rule 1. Die fast, die often.
- BiteCode_dev 3y ago
  And break things
EdwardDiego 3y ago
The International Brotherhood of Henchsters union will negotiate better henching health and safety policies on behalf of all goons, thugs, hired thugs, minions, and of course henchpeople. We all know that henching is an inherently risky job. Fighting some of the world's most tuxedo clad Scottish sociopaths is often dangerous, but that doesn't mean we can't reduce unnecessary risks. Risks that cause lost productivity on your Doomstar project through avoidable injuries, recruitment delays, and the difficulty of removing tangled bodies from the drill you're using to get to the Earth's core. We demand: 1. Adequate hand-rails on ledges, bridges, and _especially_ around piranha tanks, snake pits, etc. 2. Murder as a punishment for failing your boss "for the last time" now requires two written warnings beforehand. 3. Volcano bases must have adequate fire and lava escapes.
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hlandau 3y ago
Old but obligatory link, the Evil Overlord List: http://www.eviloverlord.com/lists/overlord.html http://www.eviloverlord.com/lists/overlord.html

pants2 3y ago

[flagged]

EdwardDiego 3y ago
Why are crypto companies exempt from doing due diligence on regulatory regimes? Every other business has to know the law and comply. And if you think the SEC isn't doing its bit by giving you guidelines, well, guess what, don't start a business in a space with such regulatory uncertainty. Also, listen to the people who know their shit who say "Gee, that ICO sure looks like a security, be really risky doing that without regulatory clarity". But, they did it anyway, and made a lot of money from greater fools, which is of course why they did it. So, please stop blaming the SEC for the deliberate decisions of businesses who were motivated by mass profit, ffs.
- pants2 3y ago
  I'm blaming the SEC for not making clear rules and for sitting on their behinds for years letting crypto exchanges do whatever they want in the US. They have done an extremely poor job of protecting Americans from financial fraud in the crypto sector. Who can blame the companies jumping on the profit train? If you have a drug problem in your city it does little help to blame the drug dealers, you blame the people that are supposed to arrest the drug dealers.
  - growse 3y ago
    I sympathise with this, and part of it's down to the glacial pace of regulators (which as a consumer I find frustrating). At the same time, for a number of years there was a lot of perceived legitimacy to a lot of crypto exchanges. Sure, there were obvious scams, but some of the bigger players were putting on a convincing "this is actually useful and beneficial to consumers" trenchcoat. I also see the perspective from the SEC of "let's not be too hasty", and to wait to see how it shook out. In hindsight, sure. Obviously scams and they should have been shut down years ago.
  - pja 3y ago
    The rules were always clear, it's just that crypto people didn't like them & wanted new rules specially made for them. Crypto exchanges were always money transmitters that were required to follow KYC regulations, ICOs were always securities & needed to follow SEC regulations. And so on & on. Using cryptography doesn't make you magically immune to regulation.

roenxi 3y ago

Alexandra Elbakyan powers a big chunk of the worlds knowledge archiving almost singlehandedly. A tiny group of ringleaders powers who knows how much torrenting. The evidence I've seen so far is that coordinating a global blockade on anything tech is too expensive to manage. And getting more so as this more reliable alternative to the traditional banking system grows. The economics here are not on the side of governments. The enforcement costs are high. The costs to individuals in acquiring and using crypto are low. The benefits of running a monetary system that bypasses the high costs of the global regulatory state are extremely high (in some sense, the outrageous costs of running the bitcoin network represents the implied drag of regulation). Even if being imprisoned is an inevitable result, there are a lot of people where the intervening high life of running a huge crypto exchange must be attractive. The times are exciting. Unless we see capital controls the likes of which have never been tried (a possibility, the authoritarians must be stewing over crypto) might find these apparent victories by the regulator as Pyrrhic. Unlike most financial assets, once I've bought a cryptocurrency the only option they have is to come to my house and seize it. That isn't a feasible option at scale.

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RandomLensman 3y ago
Crypto doesn't need to be enforced out of existence, it already cannot compete with other money, so it remains a niche thing. Enforcing things on niches is easy to some extent (or rather not even needed).
pas 3y ago
regulators don't have problem with crypto, they have problem with Crypto. more seriously, there's zero problem with the technology. you can send money to anyone you want using a complicated game of crypto whisper phone, but everyone in the chain has to file tax returns or whatever is required in the jurisdictions along the path. patio's piece opens with the insight that Crypto companies want to be eveywhere while being nowhere. if Crypto wants to really be everywhere, then they can do what all big tech (and non-tech) inter-multi-continental conglomerate does, open branch offices, do the frustrating work of finding local regulation experts, navigating the immense labyrinth of global vs local realpolitik, etc. they should/could have started with registering the fucking tokens. it makes zero sense that they contested this, because they already do KYC for their own fucking anti-fraud purposes. https://en.wikipedia.org/wiki/Regulation_A#Testing_The_Waters https://en.wikipedia.org/wiki/Regulation_A#Testing_The_Water...

1B05H1N 3y ago

In case anyone wants to read the US Treasury announcement: https://home.treasury.gov/news/press-releases/jy1925 https://home.treasury.gov/news/press-releases/jy1925 """ ...Binance willfully failed to report well over 100,000 suspicious transactions that it processed as a result of its deficient controls, including transactions involving terrorist organizations, ransomware, child sexual exploitation material, frauds, and scams. Terrorist Financing. Binance failed to report to FinCEN transactions associated with terrorist groups including Al Qaeda, the Islamic State of Iraq and Syria (ISIS), Hamas’ Al-Qassam Brigades, and Palestinian Islamic Jihad (PIJ). Ransomware. Despite being one of the largest receivers of ransomware proceeds, and transacting in millions of dollars of ransomware proceeds from attacks involving at least 24 different strains of ransomware, Binance failed to report these transactions. Child Sexual Abuse Materials. Binance never reported transactions with websites devoted to selling child sexual abuse materials, including Dark Scandals. Darknet Markets, Scams, and Other Illicit Activity. Despite sending and receiving virtual assets proceeds from large-scale hacks, account takeovers, and darknet markets dealing in illegal narcotics, counterfeit and fraud-related goods and services, as well as other illegal contraband, Binance never reported any such transactions. """

verisimi 3y ago
> transactions involving terrorist organizations, ransomware, child sexual exploitation material, frauds, and scams These justifications.
xenator 3y ago
[flagged]
robocat 3y ago
They left out copyright infractions. I bought a car service manual and the seller wanted to be paid using Binance.
concordDance 3y ago
The ability of people to freely exchange a store of value is something governments don't like. They want the power to veto transactions and declare people or entire countries impossible to trade with.

galaxyLogic 3y ago

The word crypto comes from the Ancient Greek word kruptós, which means "hidden" or "secret". (a quote from AI) Thus it is not a big surprise that some shady things might be going on as relates to it. Crime wants to be secret.

seabass-labrax 3y ago
Cryptocurrency (abbreviated 'crypto') is made possible by cryptography (also abbreviated 'crypto', but few call it that nowadays). Cryptography is from the Greek for secret because it involves doing various things with 'secret keys'. What you use it for may or may not involve secrecy - here are just a few of the most prominent examples: - Authentication to prove your identity (no secrecy) - Encryption to keep information private except to certain keyholders (secrecy) - Signing to prove that information is as originally published (no secrecy)

keiferski 3y ago

I’m no fan of Binance, but to label them as Bond villains while spending zero effort on trying to understand the ideology behind cryptocurrencies (at least, what was supposed to be the ideology) and why being a distributed business without a physical address is desirable from that point of view – and not just because they’re evil greedy people (of which Binance may still be) – makes this essay not very interesting. It would have been a much better piece had the author attempted to understand the decentralization ideology and then squared that with the apparently very real crimes so widespread in crypto. Edit: found the essay that this link reminded me of: a comparison of Jason Bourne to James Bond, from a societal perspective. A good piece to read after this original link. https://exple.tive.org/blarg/2015/09/20/bourne-aesthetic/ https://exple.tive.org/blarg/2015/09/20/bourne-aesthetic/

fake-name 3y ago
Have you considered that the author did try to understand the underlying ideology? It seems pretty accurate to me.
- keiferski 3y ago
  Well, I can’t read his mind, but considering that he didn’t mention anything about it, I think we can assume that he hasn’t. Even if he did, my criticism was about the essay, not the guy himself.
- olalonde 3y ago
  > He has long been adjacent to money and power, but craves more. > They have no passport and fly no flags; these concepts are thoroughly beneath them. Yeah, this is not an intellectually honest characterization of libertarian and anti-authoritarian ideology. I'd be very, very surprised if Patrick didn't actually understand that.
  - tovej 3y ago
    [flagged]

Animats 3y ago

Here's the list of SEC crypto enforcement actions.[1] They start about two or three cases a month. 30 cases so far this year. At first, they focused on the out and out scams. Then, they shut down the ICO industry by sending out letters asking why each ICO wasn't registered as a security. Then they went after some of the NFT guys. They went after some paid influencers. Now they're going after the bigger exchanges. Plus, along the way, the usual out and out scams: "fraud for misappropriating at least $12 million of offering proceeds to purchase luxury goods including sports cars, watches, and a 555-carat black diamond..." The SEC's position is simple: the same rules apply to crypto as to other financial products. After FTX, nobody is seriously opposing that any more. The "crypto is special" argument is dead. The scams are not even original - the scams are Ponzi schemes, pump and dump, front-running, insider trading, and just plain stealing customer assets. All of those were known before 1900. The crypto crowd isn't really that innovative. [1] https://www.sec.gov/spotlight/cybersecurity-enforcement-actions https://www.sec.gov/spotlight/cybersecurity-enforcement-acti...

injeolmi_love 3y ago
There are over 1.8 million crypto tokens. If the SEC is going to shut down the industry, they’ll need to at least start shutting down more projects per month than are starting up.
- growse 3y ago
  Where's the tax dollars to pay for this?
  - PoignardAzur 3y ago
    If the fines are high enough, seems like it could be self-financing.
    - ajb 3y ago
      Usually this kind of enforcement attempts to reimburse victims, or failing that, goes to general funds. Anything else is a moral hazard for enforcement (eg, USA local police confiscations)

anon_trader 3y ago

While crypto might not be the ideal solution, it's hard to not notice that modern AML/KYC banking laws are rapidly degrading into complete bullshit, and it is nice to have a workaround. I've just read an article how Russian emigrants around the world (that's up to several million people, more than some European countries) are struggling with opening and maintaining bank accounts, and have to resort to all kinds of workarounds, crypto and Binance included. You might not have any sympathy for them, especially in current circumstances, but they did nothing wrong, and won't cease to exist just because of your lack of sympathy. Where I live now, there is a growing number of street currency exchange shops which will gladly and openly accept your USDT and hand over cash in either local currency or USD $100 bills; no documents ever asked, of course. That kind of infrastructure did not exist a mere couple years ago. You might think, why don't just ban it all, but, I'll say it again, the problem with this line of thinking is that if you, as the government, declare large enough numbers of mostly innocent people criminal or "undesirable", they won't magically vanish into thin air overnight; to the contrary, you've just made life harder for your own law enforcement, as real criminals will now have a much larger crowd to blend in. For many countries where it is difficult to legally buy or transfer USD at international market rates (either because of sanctions or capital controls), there is a thriving USD/USDT/BTC black market, involving, in extreme cases, the majority of population; see Argentina or Venezuela for example. Labeling all of them as "criminals" achieves you nothing.

null0pointer 3y ago
This comment was marked [dead] when I read it. I vouched it back into visibility. I wish people would respond with a comment if they disagree, rather than reporting it. Meta-comment aside, there’s another population segment who suffer from overbearing AML/KYC regulations - homeless people. Many homeless people do not have any form of ID and hence cannot open a bank account. What option do they have? I would argue for low value accounts, say <$5000 annual transaction volume, AML/KYC enforcement should not be required. $5000 is such a small amount in the grand scheme of money laundering that the government should really focus on the bigger fish. Splitting your laundered money into many bank accounts would, or could, fall under existing structuring laws and would be easily detectable by any bank. I haven’t even mentioned that in many countries, such as the US, you have absolutely no guaranteed right to banking access. Your access to banking can be shut off overnight by any one of the various middle men involved. Until these things are solved, and legal persons can be guaranteed access to banking then crypto is necessary.

skrebbel 3y ago

I recognize that this is partly taste and some will hate the style here, but wow how did patio11 get even better at writing? Every sentence is a delight.

JaDogg 3y ago

We should strive to eliminate finance, not to go back to the past when each lord had their own currency. Cryptocurrency is hindering human progress.

matheusmoreira 3y ago
A fully automated post scarcity society would be nice.
- JaDogg 3y ago
  Indeed.
  - hanniabu 3y ago
    You're contradicting your original post by agreeing
    - matheusmoreira 3y ago
      How so? Economies only exist because of scarcity. A post scarcity society would naturally have no need for an economy.
    - JaDogg 3y ago
      How, post scarcity (star-trek like) world does not need currency or finance at all.
miohtama 3y ago
If compared to the national currencies Bitcoin is 16th largest, larger than 100+ national currencies https://coinmarketcap.com/fiat-currencies/ https://coinmarketcap.com/fiat-currencies/ So the development is towards other direction - less currencies of lords.
- JaDogg 3y ago
  Disagree, I am talking about whole set of cryptocurrencies. see here: https://coinmarketcap.com/all/views/all/ https://coinmarketcap.com/all/views/all/.

smallnix 3y ago

> And also Binance gleefully and knowingly banked [...] child pornographers. That’s not an allegation; that has been confessed to. I would like to learn more about that. Does anyone have a source?

resolutebat 3y ago
> More than 1,000 transactions took place involving three marketplaces that dealt in child pornography and related material, FinCEN said. An administrator of one of those sites, Dark Scandals, was indicted in 2020. The site featured violent rape videos. https://news.bloomberglaw.com/crypto/binance-lapses-boosted-terrorists-hackers-sanctions-violators https://news.bloomberglaw.com/crypto/binance-lapses-boosted-...
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[deleted]

olalonde 3y ago

The article's viewpoint relies on accepting AML regulations and financial surveillance as beneficial. In my view, CZ is not a villain; he ran a popular business without defrauding customers. There were no victims. His wrongdoing lies in not taking his "police" role seriously enough. As per AML regulations, he had a duty to investigate customers and de-platform those that he considered criminal, all without due process of course. However, he chose not to strictly adhere to this role. Yes he broke laws, unethical laws that do more harm than good. I don't know to what degree CZ was motivated by personal gain vs principle but I don't believe he deserves the "Bond villain" label.

jgilias 3y ago
I think the “Bond villain” label is more to point towards the way of doing the operation. Which is pretty fitting imo, from the point of view of being everywhere and nowhere at the same time.
rtpg 3y ago
I think people dismiss how much AML regulations are directly linked to preventing crime from being efficient. There’s a reason that scammers ask for gift cards, and it’s not “just” because of traceability reasons (mules have always been a thing) Countries have varying levels of fraud and organized scams, and I think stuff like AML compliance flows play a bigger part than people appreciate
- jgilias 3y ago
  Yes, and one could argue that banning end to end encryption and doing preventive monitoring of all communications would render crime even less efficient. I think it’s just natural that in a democratic society people fall on different parts of the spectrum when it comes to thinking of what the correct trade-off should be. Recently Lyn Alden posted how her wire transfer to her family in Egypt to cover some mortgage payments got blocked. I mean, if a celebrity (in some circles) with known family ties to Egypt experiences this, what chances do we mere mortals have? Making a 10k payment to an African country basically lands you in AML red “don’t do business with” lists. And sure enough, maybe most people doing this are financing terrorists, what do I know. But I think there’s a meaningful debate to be had here.

quijoteuniv 3y ago

Difficult to not think about other Tech CEOs when reading this, and most very rich people that did not inherit the money to start with. If you look IMO they all have in common that they have at least once done something morally questionable/ illegal, usually at their beginnings. The ability then is that they have manage to mantain themselves out of the reprimands, or had made enough money that they could buy themselves out of it. Name one and i promised i find something.

HPsquared 3y ago
Doesn't the same apply to everyone though? "Show me the man and I'll show you the crime" https://en.m.wikipedia.org/wiki/Give_me_the_man_and_I_will_give_you_the_case_against_him https://en.m.wikipedia.org/wiki/Give_me_the_man_and_I_will_g...
- quijoteuniv 3y ago
  It does sound pretty totalitarian but i guess there must be a difference (at least karmically) between stealing food to give to your family and profiting in the millions with election manipulation. And anyway what is the point in defending billionaire narcissist CEOs?

bambax 3y ago

This is about crypto and Binance. It's a little too long IMHO -- the last paragraph says it all, and plainly enough: > I do not know if we’ll ever have a world with this scale of crypto businesses without the crime. The crime was the product. An opportunity to transform global financial infrastructure was greatly overstated and has not come to pass. I do not expect this to change.

Shatnerz 3y ago
Can any financial system exist without financial crimes? Just look at HSBC. Nearly all of Binance's failures also happened at HSBC which continues to operate within the law simply by paying fines as the cost of business every so often.
- bambax 3y ago
  The big difference between crypto and regular finance isn't the crimes; it's that finance has other uses than crime, and crypto doesn't.
  - Shatnerz 3y ago
    The transfer of value is pretty nice. International transfers via crypto are often cheaper than wire fees. Domestic transfers can be faster via cryptocurrency depending on where you are at. ACH is painfully slow. SEPA is a a bit better. That being said there is a tradeoff. You lose clawback mechanisms in favor of independence and control.
- htrp 3y ago
  The financial sevices industry considers fraud as a feature. Just in moderation
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pas 3y ago
But the product was gambling and funvestment (buy funky pictures, silly named coins/tokens), the crime was doing it unregistered. (And it's not like the constant whack-a-mole evasion did not cost them anything.) Right now these serious claims (that the main product was money laundering for ISIS et al.) are unsubstantiated.

nickdothutton 3y ago

Google Riggs Bank and BCCI.

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TacticalCoder 3y ago

> Your users and counterparties understand it to be a lie the entire time, of course. I'm not sure users feel that way. Maybe users just believe they live in a free world and do nothing wrong by buying $100 USD of Solana or Shiba coins. The evil, evil, evil person, outside of government's reach, who sneakily installed the crypto.com app (oh, the horror!): surely he needs to be send to some re-education camp to be taught the merits of the state and why we need less options and more state? > We are a nation of laws. I’d support reforming some of them; a lot of the AML/KYC regulatory apparatus harms individuals who have done no wrong Yup. It is insane. It is the bane of my existence. I'm not a drug dealer, I'm not selling firearms, I'm not kidnapping kids to sell their organs, I'm not funding terrorism. Leave me the FUCK alone. > However, in the interim, one cannot simply gleefully ignore the laws because the opportunity to do so allows you to become wealthy beyond the dreams of avarice. But is it unthinkable, for state lovers, to imagine a world where people would be free to decide if they buy or not cryptocurrencies? I know it's a very ugly word: freedom. But shouldn't people have more of it and not less?

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davedx 3y ago
Freedom isn't the only goal of society. It's in tension with other things like security, privacy, and so on. Libertarians are dumbasses because they wilfully ignore this.
- Andrex 3y ago
  Libertarians are just anarchists with extra steps.
IsaacL 3y ago
I agree with you politically and spiritually. However, Patrick Mackenzie is a person of the highest calibre (see, e.g., this: https://worksinprogress.co/issue/the-story-of-vaccinateca/ https://worksinprogress.co/issue/the-story-of-vaccinateca/). There is a need for laws, and there is a need for laws that respect freedom. As of 2023, the details of how a freedom-respecting social system would work have only been scantily developed. If men like patio11 aren't convinced by the pro-freedom case, why would anyone else be? The libertarian movement has supported many bad actors. Cryptography has supported many evil acts. Libertarianism is not bad and cryptography is not evil; but no-one serious will follow us until we clean up our act. (It's not enough to say that the current system is bad or worse. The current system is terrible. But we should be aiming to set things right, not simply tweak things on the margin.)

samirillian 3y ago

I almost liked the tone this was written in until I got to "totes". It's a fine line between clever and cloying. Depressing how much of that article I understood.

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ano-ther 3y ago

I like “slow database enthusiasts”. > We had all the technology required to CC regulators on every banking transaction years before slow database enthusiasts decided all transactions would eventually be publicly readable and persisted forever. We simply chose not to implement it. It would have been quite expensive and infringed on the privacy of many ordinary people and firms.

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eastern 3y ago

I don't care about Binance or CZ or even crypto but it was worthwhile wading through the article just to learn this: "The U.S.’s point of view on the matter, elucidated at length in any indictment for financial crimes, is that if you have ever touched an electronic dollar, that dollar passed through New York, and therefore you’ve consented to the jurisdiction of the United States. Dollarization is very intentionally wielded like a club to accomplish the U.S.’s goals."

justaj 3y ago
So wait, does this mean that if an exchange is far outside of the US jurisdiction, it can be subject to the US laws simply by trading in dollars? How is that even remotely legal?
- wolf550e 3y ago
  The US military and the US as a large market you want to trade with make it legal.
- appplication 3y ago
  Why wouldn’t it be? The exclusive purpose of crypto is to circumvent existing regulation for financial transfers. The US government would obviously not be so rosy about that idea, nor would it recognize the “sovereignty” of crypto such that its laws would not apply.
  - justaj 3y ago
    Because I was under the impression that once you buy certain currency, you're allowed to do with it whatever you want. Certainly if you're outside of the jurisdiction of the entity that issues said currency.
    - lmz 3y ago
      Cash yes (it's just another physical token), but bank account / "electronic" dollars are ultimately backed by US bank accounts under US jurisdiction.

k__ 3y ago

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xkcd1963 3y ago

I think the writer overstates the power of the global finance institution, whatever it is. If someone would decide to make all banking transactions publicly readable and persistent forever, other people would just create an alternative global finance institution. There is no omnipotence "allowing" shenanigans to happen.

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spacecadet 3y ago

Its very interesting to me that we went from "dont be evil" to full on Bond Villain leading every sudo-tech company in 20 years. I guess the initial lies that pushed the dont be evil line set the tone that you say one thing and do another...

vinniepukh 3y ago
sudo as in “superuser do” or as in “pseudo-“
lordfrito 3y ago
It's been heartbreaking to watch this unfold slowly over my lifetime. The techno optimism I had in the 90s has been crushed by profound despair for the human species, as I watch the salivating sociopaths among us getting accolades as they invent brand new ways to use this technology to subjugate the rest of us. These are our new role models?
- nerdponx 3y ago
  People have always been like this. I don't know why anybody believed it would be different this time around.
  - spacecadet 3y ago
    So true. I didn't- Just felt like pointing out the irony.
- pavlov 3y ago
  In just 25 years, we went from the early Internet’s “information wants to be free” to the crypto mindset of “we must insert expensive scarcity into digital realms”. And often it’s even the same people. I’m baffled by the Marc Andreessens of this world.
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WaitWaitWha 3y ago

I know this will read like I am a luddite, but hear me out. I would love to consider crypto as a type of medium of exchange. Unfortunately, as soon as crypto came out, I saw governments of many nations moving into it in some way, shape, or form. They gave it two options, either government has full control over time or eradication, with a few outliers. The US SEC was vacillating on how to deal with crypto for quite some time, and they are not alone. Is it property or legal tender, both, or neither? Now they have planted their stake. Cash is a tangible and disconnected way for payment for goods and services. Disconnected, as in the government (mostly) does not have instantaneous method to cripple the existence of cash. It requires significantly more interaction than just disable, for our example a government run, centralized crypto exchange (lest we forget, however you feel about politics, when governments froze or seized banked assets). 1. fear of the government wiping out all crypto assets in an instance because one disagrees with them, or more likely by an accident or hackers. 2. no transactions can be conducted if there is no electricity or device to conduct the exchange of crypto. There are many nations where power outages are scheduled as a matter of fact, or worse, power on times are scheduled. The dependence on a device is a bit more acceptable but the cost between a paper clip that holds the paper cash versus a cellular phone is still enormous.

moldach 3y ago
Author: "Someone needs to write an East Asian studies paper on how Tokyo became Switzerland for Asian crypto enthusiasts due to a combination of governance, network connectivity, latency, and geopolitical risk. I nominate anyone other than me." Done: "Tokyo: Asia's Crypto Haven. Unraveling the Swiss Connection in Governance and Technology" https://instabooks.ai/products/dce8add9-2d5c-ecdf-860a-38bb31e1951e?variant=47370753802586 https://instabooks.ai/products/dce8add9-2d5c-ecdf-860a-38bb3... Feel free to fact check it
cherryteastain 3y ago
> no transactions can be conducted if there is no electricity or device to conduct the exchange of crypto Same is true for fiat. Vast majority of transaction volume happens in computers these days.

Footnote7341 3y ago

People should have the human right to use their money anonymously in ways that they want, as an abstraction of cash, as an abstraction of human value.

skullone 3y ago
And when crimes totalling hundreds of billions happen, who will you call?
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- ponector 3y ago
  Better call Saul!
martinky24 3y ago
This is some delusional, misinformed, crypto bro kool aid type propaganda lol
- Footnote7341 3y ago
  Justify to me where my rights should end on the spectrum of trading someone a piece of fruit for another piece of fruit, or giving him precious metals for it, or giving him fiat, or giving him electronic dollars, or giving him monero. please pick the point on that line where my rights should end and I should be submitted to bureaucracy, KYC, etc.
  - takinola 3y ago
    No one interferes with your ability to exchange money for fruit. However, exchanging money for a hitman's services, financing terrorists, selling illegal substances, etc are very much curtailed and for good reason. Society has determined you don't have the right to exchange money for those purposes. If you want that right, you have to change the society (by ballot or revolution, as may be applicable to your situation).

akudha 3y ago

The thing that amazes me about these people/companies - why do they think they can escape the reach of U.S government? It is the most powerful and vicious entity there is, if they want to get you, they will. What makes these people think that they are smarter or luckier than their fellow law breakers that came before them. Unlike SBF (who seems dumber than a rock), CZ doesn’t seem that dumb. I don’t understand this at all

rossdavidh 3y ago
There were lots of examples of "better to ask for forgiveness as a rich person than permission as a poor person", that they saw. Tech companies entered finance, taxi-driving, health-advice-dispensing, etc. and didn't fall into line with existing laws and regulations for years, until after they got rich. They were, no question, incorrect, but if you're wanting to believe it could work (because you really wanted to get rich), you could convince yourself of it.
bear141 3y ago
You, like everyone else, have never read about the smartest/luckiest criminals in the world because they don’t get caught.
- akudha 3y ago
  Ok, fair enough. But the question still remains - what are the odds of not getting caught? Just because a handful of people win the lottery every year doesn’t mean you and I will, correct? In the case of lottery, all I am gonna lose is a few dollars that I paid for the ticket, but doing illegal activities can cost me my freedom and life.
- jncfhnb 3y ago
  And they don’t get caught because they don’t take too much. So less interesting
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silexia 3y ago

Superb writing, "Binance operated in many jurisdictions. The U.K.: kicked out. France: under investigation. Germany, the Netherlands, etc, etc, they required non-teams of non-employees at non-headquarters to keep track of all the places they weren’t registered doing their non-crimes."

throwaway2037 3y ago

Who did the art? That image is so cool. I don't see any attribution. (I assume someone like patio11 is paying a graphic artist to create art for his blog.)

patio11 3y ago
In the alt text, but it is DALL-E.
- throwaway2037 3y ago
  Woah, that is crazy that DALL-E is so good now.