4 ms·

This is impressive analysis, but have I overlooked the laundering part? Money laundering is providing an explanation about why it is clean, not hiding the reas

This is impressive analysis, but have I overlooked the laundering part? Money laundering is providing an explanation about why it is clean, not hiding the reason that it might be dirty.

wmf 2y ago
Most of the crypto world operates on "assumed clean" (blacklist) thinking so you don't have to fully clean anything.
- yieldcrv 2y ago
  and when the crypto passes through a government’s address it magically becomes clean :)) so the whole blacklist concept is dumb because the same funds have to be reset, but the old chains of transactions are still being passed around as if its a “gotcha” but theyre really irrelevant quickly and reintegrated back into the economy quickly
  - SpicyLemonZest 2y ago
    I don't see what's dumb about it. It seems like blacklisting is the digital equivalent of "I don't want to do business with criminals" - I wouldn't knowingly buy anything from a thief, or from a store that knows some of its suppliers are thieves. If law enforcement has seized the property and auctioned it, then the criminals aren't profiting, so I don't mind.
    - usrusr 2y ago
      If you don't want to do business with criminals, don't buy crime futures. Because that's essentially what crypto are (unless not held and only purchased on demand for whatever oddball transaction you'd want to do that's neither speculation nor directly related to crime): demand outside of pure speculation (which is certainly by far the biggest part) must be completely dominated by demand for paying ransoms, purchasing illegal substances and so on. Even if "your" tokens are perfectly clean, straight from an artisanal miner running their rig purely on solar surplus or something like that, their value still derives almost exclusively from crime use cases, hidden behind no matter how many layers of zero-sum speculation.
      - night862 2y ago
        That is totally absurd.
      - dist-epoch 2y ago
        > demand outside of pure speculation (which is certainly by far the biggest part) > their value still derives almost exclusively from crime use cases you contradict your self in your own post
      - ClumsyPilot 2y ago
        > business with criminals, don't buy crime futures Is your Crime same as my Crime? Suppose I am a software developer living in Russia and I don’t want to pay taxes to a government that commits war crimes, is that a crime? Should a western bank be preventing that? Suppose you were protesting in a dictatorship, and as a result your assets were seized, you have a criminal record, maybe you are collecting donations, should I as a western bank act to stop that ‘crime’? Even simpler if you want to buy some weed, it’s a crime in country A but not in country B. Suppose so live in Country B, should I be concerned?
        acdha 2y ago
        > Suppose I am a software developer living in Russia and I don’t want to pay taxes to a government that commits war crimes, is that a crime? Should a western bank be preventing that? Yes, because that activity cannot be distinguished from thd Russian government evading financial sanctions. It sucks for the innocent party but there are many victims of their government with more serious grievances. > Suppose you were protesting in a dictatorship, and as a result your assets were seized, you have a criminal record, maybe you are collecting donations, should I as a western bank act to stop that ‘crime’? This has the same problem plus the gross negligence of advising anyone living under a repressive government to use a financial system designed to leave an immutable trail for the police to use when prosecuting them and everyone they know. The full retroactive deanonymization is incredibly dangerous for dissidents since it allows the authorities to prosecute them for transactions they made even before they were suspected of anything.
    - yieldcrv 2y ago
      The point is that when a government seizes crypto funds and auctions them off again, the funds are clean for legal purposes but transaction history doesn’t change, it just has an additional transaction. Software that flags aspects of transaction is nullified by the reality that it doesn't actually know that one subsequent transaction cleaned the whole trail. There are hundreds of thousands of governments around the world when factoring in municipal authorities, even governments you don't respect are cleaning funds in the eyes of governments you do respect. In the eyes of the requirements of exchanges that have these automated chain analysis practices. Right now, only a handful of governments do crypto investigations and seizures, but as this increases it only moves towards the nullifying chain analysis, as many funds will be comingled with a flagged transaction but unknown to the software about how these funds have been washed by a nation state’s blessings.
- phyalow 2y ago
  To be fair so does most of the traditional banking system.
  - delusional 2y ago
    This was the case maybe 20 years ago, but modern anti money laundering has moved the needle significantly in recent years. Where I live there are now rather strict limits on what consumers can do without subjugating themselves to what's called "Due-diligence". Which is in fact about NOT assuming cleanliness. Know You Customer is all about not blindly assuming your counterparty is honest.
    - jorvi 2y ago
      Yup. This also why people should only use fintech banks (Revolut, N26, Bunq, etc) as a checking account and should keep the bulk of their money elsewhere. Because of the relatively low-friction signup process, fintech banks are extremely trigger happy with account locks, and at that point you have to go through their permanently-overloaded customer service to get your money transferred to another bank, a process that might take months if you’re unlucky.
      - manquer 2y ago
        Also don’t keep money that that you cannot afford to miss in fintech because they are not banks at all. The FDIC insured bank which actually has money when using these apps is somewhere in the backend and you get stuff like the synapse bankruptcy[1] [1] https://apnews.com/article/synapse-evolve-bank-fintech-accounts-frozen-07ecb45f807a8114cac7438e7a66b512 https://apnews.com/article/synapse-evolve-bank-fintech-accou...
        jorvi 2y ago
        That’s just wrong. Revolut, N26 and Bunq all have banking licenses, which means funds are insured to €100 000, €200 000 if it’s a shared account. It’s not that they “steal” your money, but unlike your local bank, their customer service is much less tactile which means that if you’re up shit’s creek getting out if it gets much harder.

This is impressive analysis, but have I overlooked the laundering part? Money laundering is providing an explanation about why it is clean, not hiding the reason that it might be dirty.

wmf 2y ago

Most of the crypto world operates on "assumed clean" (blacklist) thinking so you don't have to fully clean anything.

yieldcrv 2y ago
and when the crypto passes through a government’s address it magically becomes clean :)) so the whole blacklist concept is dumb because the same funds have to be reset, but the old chains of transactions are still being passed around as if its a “gotcha” but theyre really irrelevant quickly and reintegrated back into the economy quickly
- SpicyLemonZest 2y ago
  I don't see what's dumb about it. It seems like blacklisting is the digital equivalent of "I don't want to do business with criminals" - I wouldn't knowingly buy anything from a thief, or from a store that knows some of its suppliers are thieves. If law enforcement has seized the property and auctioned it, then the criminals aren't profiting, so I don't mind.
  - usrusr 2y ago
    If you don't want to do business with criminals, don't buy crime futures. Because that's essentially what crypto are (unless not held and only purchased on demand for whatever oddball transaction you'd want to do that's neither speculation nor directly related to crime): demand outside of pure speculation (which is certainly by far the biggest part) must be completely dominated by demand for paying ransoms, purchasing illegal substances and so on. Even if "your" tokens are perfectly clean, straight from an artisanal miner running their rig purely on solar surplus or something like that, their value still derives almost exclusively from crime use cases, hidden behind no matter how many layers of zero-sum speculation.
    - night862 2y ago
      That is totally absurd.
    - dist-epoch 2y ago
      > demand outside of pure speculation (which is certainly by far the biggest part) > their value still derives almost exclusively from crime use cases you contradict your self in your own post
    - ClumsyPilot 2y ago
      > business with criminals, don't buy crime futures Is your Crime same as my Crime? Suppose I am a software developer living in Russia and I don’t want to pay taxes to a government that commits war crimes, is that a crime? Should a western bank be preventing that? Suppose you were protesting in a dictatorship, and as a result your assets were seized, you have a criminal record, maybe you are collecting donations, should I as a western bank act to stop that ‘crime’? Even simpler if you want to buy some weed, it’s a crime in country A but not in country B. Suppose so live in Country B, should I be concerned?
      - acdha 2y ago
        > Suppose I am a software developer living in Russia and I don’t want to pay taxes to a government that commits war crimes, is that a crime? Should a western bank be preventing that? Yes, because that activity cannot be distinguished from thd Russian government evading financial sanctions. It sucks for the innocent party but there are many victims of their government with more serious grievances. > Suppose you were protesting in a dictatorship, and as a result your assets were seized, you have a criminal record, maybe you are collecting donations, should I as a western bank act to stop that ‘crime’? This has the same problem plus the gross negligence of advising anyone living under a repressive government to use a financial system designed to leave an immutable trail for the police to use when prosecuting them and everyone they know. The full retroactive deanonymization is incredibly dangerous for dissidents since it allows the authorities to prosecute them for transactions they made even before they were suspected of anything.
  - yieldcrv 2y ago
    The point is that when a government seizes crypto funds and auctions them off again, the funds are clean for legal purposes but transaction history doesn’t change, it just has an additional transaction. Software that flags aspects of transaction is nullified by the reality that it doesn't actually know that one subsequent transaction cleaned the whole trail. There are hundreds of thousands of governments around the world when factoring in municipal authorities, even governments you don't respect are cleaning funds in the eyes of governments you do respect. In the eyes of the requirements of exchanges that have these automated chain analysis practices. Right now, only a handful of governments do crypto investigations and seizures, but as this increases it only moves towards the nullifying chain analysis, as many funds will be comingled with a flagged transaction but unknown to the software about how these funds have been washed by a nation state’s blessings.
phyalow 2y ago
To be fair so does most of the traditional banking system.
- delusional 2y ago
  This was the case maybe 20 years ago, but modern anti money laundering has moved the needle significantly in recent years. Where I live there are now rather strict limits on what consumers can do without subjugating themselves to what's called "Due-diligence". Which is in fact about NOT assuming cleanliness. Know You Customer is all about not blindly assuming your counterparty is honest.
  - jorvi 2y ago
    Yup. This also why people should only use fintech banks (Revolut, N26, Bunq, etc) as a checking account and should keep the bulk of their money elsewhere. Because of the relatively low-friction signup process, fintech banks are extremely trigger happy with account locks, and at that point you have to go through their permanently-overloaded customer service to get your money transferred to another bank, a process that might take months if you’re unlucky.
    - manquer 2y ago
      Also don’t keep money that that you cannot afford to miss in fintech because they are not banks at all. The FDIC insured bank which actually has money when using these apps is somewhere in the backend and you get stuff like the synapse bankruptcy[1] [1] https://apnews.com/article/synapse-evolve-bank-fintech-accounts-frozen-07ecb45f807a8114cac7438e7a66b512 https://apnews.com/article/synapse-evolve-bank-fintech-accou...
      - jorvi 2y ago
        That’s just wrong. Revolut, N26 and Bunq all have banking licenses, which means funds are insured to €100 000, €200 000 if it’s a shared account. It’s not that they “steal” your money, but unlike your local bank, their customer service is much less tactile which means that if you’re up shit’s creek getting out if it gets much harder.