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The imaginary crime of money laundering. If the underlying activity is a crime, we already have laws to deal with that. Why is any attempt at financial privacy

The imaginary crime of money laundering. If the underlying activity is a crime, we already have laws to deal with that. Why is any attempt at financial privacy deemed money laundering? Why does making any tool that help law abiding citizens have financial privacy, also guilty of money laundering? Of course, now that most people have bought into money laundering, the goal posts are now getting moved that any attempt at privacy can be considered illegal. You use or provide a messaging service that has unbreakable privacy - we'll make this a crime too! Why should it be illegal to use a crypto tumbler/mixer service? Oh because some people use it for crimes. Then arrest the CEOs of gun companies, because guns can be used to commit crimes!

beaglessss 2y ago
While AML regulations likely have an impact, imo their main secret motive is financial surveillance.
- earnesti 2y ago
  This kind of legislation is crafter by big masses of lawyers, lobbyists, politicians, whatever. Additionally they change all the time. There are many different motivations at play. Maybe it is surveillance, maybe something else, in the end who cares, because it is impossible to read minds.
goatsi 2y ago
The "money laundering" at focus in the article is receiving money directly from people who are being scammed, and moving it quickly enough that the police cannot freeze or recover it when the scam is discovered. That's different from usual money laundering.
mandibles 2y ago
If cash were invented today, it would be illegal.
- automatic6131 2y ago
  [flagged]
  - samatman 2y ago
    This is directly against the guidelines. Please do not conduct yourself in this way here, if you need to insult strangers on the Internet, find somewhere else to do it.
  - Jerrrrrrry 2y ago
    Your irony is poisonous. Not only is the OP comment completely valid, it has both legal, historical, and contextual significance, unlike your comment. Cash-equivalent monetary commodities are, by literal definition, illegal to create, trade, receive, pay taxes, or entice/offer/force employees to accept, without the explicit permission from congress through the US Mint - an authorized office of the Treasury, or a licence as a credible/reputable broker, brokerage, or investment firm through the Security and Exchange Commission. If someone owes you for a debt that has been incurred - public or private, you must accept United States Dollars. An executive order can, has, had, and will almost certainly be passed again, imminently seizing any cache of "valued currency" - regardless of its medium. An EO isn't even needed - so far, the legal coverage of "sactions" has allowed the US to help shape the narrative in the interest of the security of the economy/nation by not allowing an unbacked, un-correctable fiat challenge the stability of the nations currency.
    - JumpCrisscross 2y ago
      > Cash-equivalent monetary commodities are, by literal definition, illegal to create No they're not. U.S. dollars are illegal to forge. But the history of currency in America includes state-chartered currency [1], privately-issued currency [2] and even community currencies [3]. Hell, the entire theory of banking is private banks create cash-like instruments in the form of deposits. > executive order can, has, had, and will almost certainly be passed again, imminently seizing any cache of "valued currency" Source? This has only been done with gold to my knowledge. [1] https://en.wikipedia.org/wiki/Wildcat_banking https://en.wikipedia.org/wiki/Wildcat_banking [2] https://en.wikipedia.org/wiki/Free_banking https://en.wikipedia.org/wiki/Free_banking [3] https://en.wikipedia.org/wiki/List_of_community_currencies_in_the_United_States https://en.wikipedia.org/wiki/List_of_community_currencies_i...
jjulius 2y ago
>Why is any attempt at financial privacy deemed money laundering? Why does making any tool that help law abiding citizens have financial privacy, also guilty of money laundering? These are untrue absolutes.
- beaglessss 2y ago
  There is still an element of truth. If you don't provide KYC for a bank account there is now a crime if it is knowingly allowed. You could go offshore but now you need to report the account. You could form an anonymous LLC but law recently changed an now must report UBO to fincen. You could store cash/gold in an anonymous safe deposit, but FBI raid and steal this. You cant fly with large cash because again feds steal it. You can't carry it out the country in large without reporting it. Crypto, same story, KYC at the exits and P2P offramp actors getting treated as 'unlicensed money transmitter' etc which again triggers KYC. Quickly you realize it's about shutting off all the exits of privacy, not money laundering which only has increased cost consolidating power to more dangerous organizations.
  - earnesti 2y ago
    Not providing KYC is definitely not a crime. It happens all the time. What usually happens is that the bank just terminates the account, after a while.
    - beaglessss 2y ago
      I suspect a lot of people would be eager to know the names of these banks that let customers operate without KYC for awhile.
      - JumpCrisscross 2y ago
        > a lot of people would be eager to know the names of these banks that let customers operate without KYC for awhile Non sequitur. Banks generally have to have KYC to do business, though there are famous exceptions in history. There is no jurisdiction I know of in which as a customer not providing KYC is itself a crime.
soco 2y ago
The underlying is one thing and the overlying another thing. It's one thing to not declare your money and thus be tried for tax evasion only, and another thing putting said money in financial tricks (as we both know that's the only goal of mixers) in order to commit tax evasion. If you want, think like the difference between murder and manslaughter - which also have many degrees and associated crimes like assault, arson, rape... we always try for those as well.
- smeej 2y ago
  > (as we both know that's the only goal of mixers) Do "we" know that's the only goal? I've reported every digital currency-related gain or loss I've ever had on my taxes, but that doesn't mean I wanted the guy I bought my llama wool socks from to be able to trace my whole holdings. I know how easy it is to do. I learned how to do it in an afternoon. Believe it or not, some of us just really don't think the world needs an indelible record of what kind of socks we wear, not because we actually think anybody will care, but because we reject the principle that buying socks should require a data record for third parties. We might be weirder than you, but that doesn't make us dishonest cheats.
  - soco 2y ago
    Fair enough, I take that generalization back.
dataflow 2y ago
> Why is any attempt at financial privacy deemed money laundering? Is it? I thought laundering money is only illegal if it's covering up illegal activity. Otherwise how is that different from e.g. the shell corporations that mask the sources of their funds.
- beaglessss 2y ago
  Almost all large financial transactions or storage useful and active in commerce require KYC or reporting so the magic is the very act of privacy makes it illegal.
  - dataflow 2y ago
    It sounds like you're mixing up a bunch of things. To be clear: do you have a single example of a person who was convicted of the crime of money laundering despite it being proven in court that the underlying activity wasn't illegal?
    - beaglessss 2y ago
      In criminal law people aren't expected to prove what they did wasn't illegal, it is the other way around. What did happen in the case of CZs conviction is the state alleged that lack of KYC allows some actors with illegal funds to pass through, making weak KYC checks an element of money laundering.
      - dataflow 2y ago
        > In criminal law people aren't expected to prove what they did wasn't illegal, it is the other way around. I very much understand that, but you missed my point with that constraint: the point was that if your objection is that legal underlying activity can constitute money laundering, then to prove your objection you need to show an example of provably legal underlying activity. On the other hand, if your complaint is that innocent-before-proven-guilty isn't being upheld by courts, that's a fine complaint, but an entirely separate one from money laundering. > What did happen in the case of CZs conviction is the state alleged that lack of KYC allows some actors with illegal funds to pass through, making weak KYC checks an element of money laundering. In other words he did conceal illegal activity. Hence my point.
ETH_start 2y ago
In this case, the people are actually laundering money. So-called anti-money laundering laws criminalize far more than money laundering, like financial privacy. In any case, I would argue that the focus should be entirely on the crime that generates the illicit revenue, and not the after-the-fact laundering of the proceeds. When the focus is on the latter, laws are inevitably passed that mandate people to submit to warrantless surveillance of their financial transactions. The populace at large should not be made to sacrifice freedom and privacy in a largely futile attempt to track illicit criminal gains after the fact. No useful money — i.e. no money that is unencumbered enough to be practical to use, and that provisions people with a modicum of protection against arbitrary state seizure — will give the state the ability to significantly prevent criminals from profiting from the proceeds of their crimes, merely by tracking and policing its flows.
ajross 2y ago
> Then arrest the CEOs of gun companies, because guns can be used to commit crimes! So, obviously people know this, but it's important to spell out: There is an explicit protection for keeping and bearing arms in the constitution. No such language exists for "financial privacy", in fact the fourth amendment explicitly says the government can search and investigate citizens' property, just that they have to get a warrant based on probable cause.
- potato3732842 2y ago
  It's probably only a matter of time until the SC extends "papers and effects" to mean "your stuff on other people's hard drives" in some capacity. That will probably trigger a bunch of re-litigation around the financial side of things though I have no idea what the consequences would be.
  - ajross 2y ago
    It... already does. You can get a warrant for whatever evidence you need already, no need for any new legislation. The constitutional requirement is for judicial supervision, and that's been pretty solid (not perfect, but good) for almost three centuries now. I'm just saying that there is no "right to financial privacy" anywhere. You have a general right to privacy as granted by the fourth amendment. And courts take that seriously. But it's not absolute and the government is allowed to unmask things for law enforcement.
valicord 2y ago
You're exaggerating of course, but as a matter of principle, if X is a crime, then obscuring the evidence of having done X must surely also be a separate crime in its own right? Otherwise someone would do X, then destroy the evidence and be in the clear, since original X is now impossible to prove.
- samatman 2y ago
  No, it very much should not be. We have an existing sort of crime for knowing participation in that kind of thing, it's called being an accessory. If someone buys, let's say a bike, off an online marketplace, and it turns out to be stolen, they're out the price of the bike. It never belonged to them and gets returned to the owner. But it must be proven that they knew it was stolen for that to qualify as accessory to theft. If you make any action which has the effect of obscuring evidence of crime, regardless of mens rea, into a crime, you will end up prosecuting innocent people. That's why this legal doctrine works the way it does.
  - JumpCrisscross 2y ago
    > If you make any action which has the effect of obscuring evidence of crime, regardless of mens rea, into a crime, you will end up prosecuting innocent people Sure. This isn't how aML law works. Money laundering is specifically disguising the proceeds of illicit activity. If there is no illicit activity, it's not money laundering and it isn't illegal. Using a mixer or running your life exclusively on cash is not illegal.
  - ljf 2y ago
    Not in the UK - there is a crime of handling stolen goods - where you can be asked to prove the steps you took to ensure they aren't stolen, or risk forfiting the good and the money you made selling them. Hence why KYC is so important for pawn shops etc. here. Another UK example - a boat maker made incredibly high powered speedboats - that happened to be very popular with drugs runners. How how was he supposed to know what would be done with them? But still they end up on the most wanted list: https://www.eadt.co.uk/news/21291272.high-speed-boats-sold-drug-couriers/ https://www.eadt.co.uk/news/21291272.high-speed-boats-sold-d...
yieldcrv 2y ago
Hey actually there is good news! I follow this topic and the broken dragnet of AML/KYC a lot The US federal law of Money laundering relies on there being an illicit origin, which means it is impossible to be charged with just money laundering and it can only be a tacked on charge (but it may be the only charge that sticks). Merely obfuscating the origin is not a crime, it’s just stigmatized. Ironically, if you are successful with money laundering, the origin looks licit. The government acts like that never happens, DOJ always issues these pompous press releases about how nobody can hide in our financial system, but they dont know anything.
ywvcbk 2y ago
> any attempt at financial privacy deemed money laundering If by privacy you mean concealing it from the government then yeah, that’s generally illegal in pretty much any place that has income/capital gains/wealth taxes.
- navigate8310 2y ago
  > generally illegal in pretty much any place that has income/capital gains/wealth taxes Authoritarian governments typically enforce fiat currency to monitor citizens, especially those with financial ties to anti-establishment entities. They couldn't care less if you're trading tomatoes.
  - JumpCrisscross 2y ago
    > Authoritarian governments typically enforce fiat currency to monitor citizens Example? Despotic governemnts in the real world are kleptocracies. They use all manners of currencies because their elites spend what they can steal. To the extent we have highly-surveillable money systems, it's ones people freely engage with, e.g. the U.S. dollar and crypto.
    - trompetenaccoun 2y ago
      That isn't generally true, what real world autocratic regime do you have experience with? You can have less government theft than in more democratic countries, because favorable economic conditions are one way of buying compliance. Take the largest dictatorship in the world: China. The CCP does not take "what they can". The tax burden is much lower than basically in any liberal democracy in the West. A lot of taxes that you may think are normal simply do not exist, property tax for example is not a thing. They have heavy foreign exchange restrictions, to keep money in the country. Many people working in China are able to save a lot more of their income than they would if they were in Europe or North America. The catch is you can't freely use all manners of currency, you can't even easily exchange to USD as a Chinese. Foreign stock ownership is restricted. Cryptocurrency is banned. It's basically the complete opposite of what you described.
bigbacaloa 2y ago
[dead]
JumpCrisscross 2y ago
> If the underlying activity is a crime, we already have laws to deal with that This is like complaining about DUIs being illegal because we already have laws banning manslaughter. > Why is any attempt at financial privacy deemed money laundering? It's not. Layering per se isn't illegal. It's suspicious but legal, in the same category as carting a semi-automatic into a grocery store in an open-carry state. > Why does making any tool that help law abiding citizens have financial privacy, also guilty of money laundering? It doesn't. Practically every prosecution of money-laundering services included evidence of knowledge by the operator that their customers included people committing crimes.
- AnthonyMouse 2y ago
  > This is like complaining about DUIs being illegal because we already have laws banning manslaughter. The premise of DUIs is to punish a person acting recklessly. The premise of KYC is to punish a third party for not conducting mass surveillance on predominantly innocent people in case one of them commits a crime. It's hard to see how these are analogous. > Practically every prosecution of money-laundering services included evidence of knowledge by the operator that their customers included people committing crimes. This is quite a fig leaf for any entity operating at scale. The customers of any major bank will obviously include people committing crimes -- they have millions of customers. They also have thousands of employees, and then some percentage of them will be criminals as well. Expecting the intersection of these to be literally zero is an unreasonable standard. More to the point, the underlying problem is what it incentivizes them to do, i.e. manufacture some opaque and arbitrary indicators and then conduct mass surveillance and punish innocent people for running afoul of secret rules.
  - JumpCrisscross 2y ago
    > premise of DUIs is to punish a person acting recklessly. The premise of KYC is to punish a third party for not conducting mass surveillance on predominantly innocent people in case one of them commits a crime. It's hard to see how these are analogous You don't see how a bank not doing KYC and thereby financing terrorists and Pyongyang could be seen as behaving recklessly? > quite a fig leaf for any entity operating at scale Sure. It's why a lot of anti-money laundering isn't prosecuted and why OP's complaint strikes me as silly. > conduct mass surveillance U.S. AML law is actually somewhat terrible for mass surveillance. Records are held at each private institution. This is why, if you've ever been party to wire fraud, it takes the Feds hours to days to gather records. It's pull, not push. The practical arms of mass surveillance are the credit/debit card rails. (And, increasingly, crypto.)
legitster 2y ago
> Why is any attempt at financial privacy deemed money laundering? Ummm. Taxes? Money laundering is very clearly accounting fraud. If embezzlement is a crime, then money laundering is just embezzlement in reverse. I feel like you are down an absolutist rabbithole about privacy. There are certain practical limits to privacy. You cannot blight yourself from other people's vision. You cannot operate in a society (whether it be grocery shopping, owning property, driving a car) without existing in some form. "Privacy" only makes sense in the context and is not some maximalist ideal that you can apply to any situation.
bdjsiqoocwk 2y ago
> If the underlying activity is a crime, we already have laws to deal with that. Why should guns be illegal, we already have a crime against killing. Breathtakingly idiotic.
- lcnPylGDnU4H9OF 2y ago
  That's actually a good argument against outlawing guns. What point are you trying to make?
  - bdjsiqoocwk 2y ago
    I agree it's a good argument. My point is that the argument "the underlying activity is already illegal so the things that make it possible shouldn't be ", is stupid. It comes from a place of ideology. The ideology of "let's organize everything as they should be, not how they are". So I presented a similar arguments (with guns) which I hoped everyone here would see is a good one. And you did, so task successful! :-)
    - lcnPylGDnU4H9OF 2y ago
      > the underlying activity is already illegal so the things that make it possible [should also] be The logic being that an object which can be used for murder should be outlawed by virtue of the fact that it can be used for murder, such as a monkey wrench or a kitchen knife. Like it or not, some people have a use for guns that doesn’t involve violence and it’s reasonable to allow non-violent uses for things when such a use exists. > the underlying activity is already illegal so the things that make it possible [should also] be Oh! It’s like how I could commit criminal fraud by telling a lie in an email and, therefore: SSDs, routers, modems, keyboards, speech; all outlawed because they can be used for crime. It’s just like how I can launder money by keeping my financial life private and therefore a private financial life should be outlawed. I hope you can see why one might reject this line of reasoning. Indeed, the underlying activity is already illegal so things that make it possible don’t need to be. That is not “breathtakingly idiotic”.
vkou 2y ago
> The imaginary crime of money laundering There's nothing imaginary about trying to hide money that you stole from someone, so that it can't be taken back from you.
deleted 2y ago
[deleted]

beaglessss 2y ago

While AML regulations likely have an impact, imo their main secret motive is financial surveillance.

earnesti 2y ago
This kind of legislation is crafter by big masses of lawyers, lobbyists, politicians, whatever. Additionally they change all the time. There are many different motivations at play. Maybe it is surveillance, maybe something else, in the end who cares, because it is impossible to read minds.

goatsi 2y ago

The "money laundering" at focus in the article is receiving money directly from people who are being scammed, and moving it quickly enough that the police cannot freeze or recover it when the scam is discovered. That's different from usual money laundering.

mandibles 2y ago

If cash were invented today, it would be illegal.

automatic6131 2y ago
[flagged]
- samatman 2y ago
  This is directly against the guidelines. Please do not conduct yourself in this way here, if you need to insult strangers on the Internet, find somewhere else to do it.
- Jerrrrrrry 2y ago
  Your irony is poisonous. Not only is the OP comment completely valid, it has both legal, historical, and contextual significance, unlike your comment. Cash-equivalent monetary commodities are, by literal definition, illegal to create, trade, receive, pay taxes, or entice/offer/force employees to accept, without the explicit permission from congress through the US Mint - an authorized office of the Treasury, or a licence as a credible/reputable broker, brokerage, or investment firm through the Security and Exchange Commission. If someone owes you for a debt that has been incurred - public or private, you must accept United States Dollars. An executive order can, has, had, and will almost certainly be passed again, imminently seizing any cache of "valued currency" - regardless of its medium. An EO isn't even needed - so far, the legal coverage of "sactions" has allowed the US to help shape the narrative in the interest of the security of the economy/nation by not allowing an unbacked, un-correctable fiat challenge the stability of the nations currency.
  - JumpCrisscross 2y ago
    > Cash-equivalent monetary commodities are, by literal definition, illegal to create No they're not. U.S. dollars are illegal to forge. But the history of currency in America includes state-chartered currency [1], privately-issued currency [2] and even community currencies [3]. Hell, the entire theory of banking is private banks create cash-like instruments in the form of deposits. > executive order can, has, had, and will almost certainly be passed again, imminently seizing any cache of "valued currency" Source? This has only been done with gold to my knowledge. [1] https://en.wikipedia.org/wiki/Wildcat_banking https://en.wikipedia.org/wiki/Wildcat_banking [2] https://en.wikipedia.org/wiki/Free_banking https://en.wikipedia.org/wiki/Free_banking [3] https://en.wikipedia.org/wiki/List_of_community_currencies_in_the_United_States https://en.wikipedia.org/wiki/List_of_community_currencies_i...

jjulius 2y ago

>Why is any attempt at financial privacy deemed money laundering? Why does making any tool that help law abiding citizens have financial privacy, also guilty of money laundering? These are untrue absolutes.

beaglessss 2y ago
There is still an element of truth. If you don't provide KYC for a bank account there is now a crime if it is knowingly allowed. You could go offshore but now you need to report the account. You could form an anonymous LLC but law recently changed an now must report UBO to fincen. You could store cash/gold in an anonymous safe deposit, but FBI raid and steal this. You cant fly with large cash because again feds steal it. You can't carry it out the country in large without reporting it. Crypto, same story, KYC at the exits and P2P offramp actors getting treated as 'unlicensed money transmitter' etc which again triggers KYC. Quickly you realize it's about shutting off all the exits of privacy, not money laundering which only has increased cost consolidating power to more dangerous organizations.
- earnesti 2y ago
  Not providing KYC is definitely not a crime. It happens all the time. What usually happens is that the bank just terminates the account, after a while.
  - beaglessss 2y ago
    I suspect a lot of people would be eager to know the names of these banks that let customers operate without KYC for awhile.
    - JumpCrisscross 2y ago
      > a lot of people would be eager to know the names of these banks that let customers operate without KYC for awhile Non sequitur. Banks generally have to have KYC to do business, though there are famous exceptions in history. There is no jurisdiction I know of in which as a customer not providing KYC is itself a crime.

soco 2y ago

The underlying is one thing and the overlying another thing. It's one thing to not declare your money and thus be tried for tax evasion only, and another thing putting said money in financial tricks (as we both know that's the only goal of mixers) in order to commit tax evasion. If you want, think like the difference between murder and manslaughter - which also have many degrees and associated crimes like assault, arson, rape... we always try for those as well.

smeej 2y ago
> (as we both know that's the only goal of mixers) Do "we" know that's the only goal? I've reported every digital currency-related gain or loss I've ever had on my taxes, but that doesn't mean I wanted the guy I bought my llama wool socks from to be able to trace my whole holdings. I know how easy it is to do. I learned how to do it in an afternoon. Believe it or not, some of us just really don't think the world needs an indelible record of what kind of socks we wear, not because we actually think anybody will care, but because we reject the principle that buying socks should require a data record for third parties. We might be weirder than you, but that doesn't make us dishonest cheats.
- soco 2y ago
  Fair enough, I take that generalization back.

dataflow 2y ago

> Why is any attempt at financial privacy deemed money laundering? Is it? I thought laundering money is only illegal if it's covering up illegal activity. Otherwise how is that different from e.g. the shell corporations that mask the sources of their funds.

beaglessss 2y ago
Almost all large financial transactions or storage useful and active in commerce require KYC or reporting so the magic is the very act of privacy makes it illegal.
- dataflow 2y ago
  It sounds like you're mixing up a bunch of things. To be clear: do you have a single example of a person who was convicted of the crime of money laundering despite it being proven in court that the underlying activity wasn't illegal?
  - beaglessss 2y ago
    In criminal law people aren't expected to prove what they did wasn't illegal, it is the other way around. What did happen in the case of CZs conviction is the state alleged that lack of KYC allows some actors with illegal funds to pass through, making weak KYC checks an element of money laundering.
    - dataflow 2y ago
      > In criminal law people aren't expected to prove what they did wasn't illegal, it is the other way around. I very much understand that, but you missed my point with that constraint: the point was that if your objection is that legal underlying activity can constitute money laundering, then to prove your objection you need to show an example of provably legal underlying activity. On the other hand, if your complaint is that innocent-before-proven-guilty isn't being upheld by courts, that's a fine complaint, but an entirely separate one from money laundering. > What did happen in the case of CZs conviction is the state alleged that lack of KYC allows some actors with illegal funds to pass through, making weak KYC checks an element of money laundering. In other words he did conceal illegal activity. Hence my point.

ETH_start 2y ago

In this case, the people are actually laundering money. So-called anti-money laundering laws criminalize far more than money laundering, like financial privacy. In any case, I would argue that the focus should be entirely on the crime that generates the illicit revenue, and not the after-the-fact laundering of the proceeds. When the focus is on the latter, laws are inevitably passed that mandate people to submit to warrantless surveillance of their financial transactions. The populace at large should not be made to sacrifice freedom and privacy in a largely futile attempt to track illicit criminal gains after the fact. No useful money — i.e. no money that is unencumbered enough to be practical to use, and that provisions people with a modicum of protection against arbitrary state seizure — will give the state the ability to significantly prevent criminals from profiting from the proceeds of their crimes, merely by tracking and policing its flows.

ajross 2y ago

> Then arrest the CEOs of gun companies, because guns can be used to commit crimes! So, obviously people know this, but it's important to spell out: There is an explicit protection for keeping and bearing arms in the constitution. No such language exists for "financial privacy", in fact the fourth amendment explicitly says the government can search and investigate citizens' property, just that they have to get a warrant based on probable cause.

potato3732842 2y ago
It's probably only a matter of time until the SC extends "papers and effects" to mean "your stuff on other people's hard drives" in some capacity. That will probably trigger a bunch of re-litigation around the financial side of things though I have no idea what the consequences would be.
- ajross 2y ago
  It... already does. You can get a warrant for whatever evidence you need already, no need for any new legislation. The constitutional requirement is for judicial supervision, and that's been pretty solid (not perfect, but good) for almost three centuries now. I'm just saying that there is no "right to financial privacy" anywhere. You have a general right to privacy as granted by the fourth amendment. And courts take that seriously. But it's not absolute and the government is allowed to unmask things for law enforcement.

valicord 2y ago

You're exaggerating of course, but as a matter of principle, if X is a crime, then obscuring the evidence of having done X must surely also be a separate crime in its own right? Otherwise someone would do X, then destroy the evidence and be in the clear, since original X is now impossible to prove.

samatman 2y ago
No, it very much should not be. We have an existing sort of crime for knowing participation in that kind of thing, it's called being an accessory. If someone buys, let's say a bike, off an online marketplace, and it turns out to be stolen, they're out the price of the bike. It never belonged to them and gets returned to the owner. But it must be proven that they knew it was stolen for that to qualify as accessory to theft. If you make any action which has the effect of obscuring evidence of crime, regardless of mens rea, into a crime, you will end up prosecuting innocent people. That's why this legal doctrine works the way it does.
- JumpCrisscross 2y ago
  > If you make any action which has the effect of obscuring evidence of crime, regardless of mens rea, into a crime, you will end up prosecuting innocent people Sure. This isn't how aML law works. Money laundering is specifically disguising the proceeds of illicit activity. If there is no illicit activity, it's not money laundering and it isn't illegal. Using a mixer or running your life exclusively on cash is not illegal.
- ljf 2y ago
  Not in the UK - there is a crime of handling stolen goods - where you can be asked to prove the steps you took to ensure they aren't stolen, or risk forfiting the good and the money you made selling them. Hence why KYC is so important for pawn shops etc. here. Another UK example - a boat maker made incredibly high powered speedboats - that happened to be very popular with drugs runners. How how was he supposed to know what would be done with them? But still they end up on the most wanted list: https://www.eadt.co.uk/news/21291272.high-speed-boats-sold-drug-couriers/ https://www.eadt.co.uk/news/21291272.high-speed-boats-sold-d...

yieldcrv 2y ago

Hey actually there is good news! I follow this topic and the broken dragnet of AML/KYC a lot The US federal law of Money laundering relies on there being an illicit origin, which means it is impossible to be charged with just money laundering and it can only be a tacked on charge (but it may be the only charge that sticks). Merely obfuscating the origin is not a crime, it’s just stigmatized. Ironically, if you are successful with money laundering, the origin looks licit. The government acts like that never happens, DOJ always issues these pompous press releases about how nobody can hide in our financial system, but they dont know anything.

ywvcbk 2y ago

> any attempt at financial privacy deemed money laundering If by privacy you mean concealing it from the government then yeah, that’s generally illegal in pretty much any place that has income/capital gains/wealth taxes.

navigate8310 2y ago
> generally illegal in pretty much any place that has income/capital gains/wealth taxes Authoritarian governments typically enforce fiat currency to monitor citizens, especially those with financial ties to anti-establishment entities. They couldn't care less if you're trading tomatoes.
- JumpCrisscross 2y ago
  > Authoritarian governments typically enforce fiat currency to monitor citizens Example? Despotic governemnts in the real world are kleptocracies. They use all manners of currencies because their elites spend what they can steal. To the extent we have highly-surveillable money systems, it's ones people freely engage with, e.g. the U.S. dollar and crypto.
  - trompetenaccoun 2y ago
    That isn't generally true, what real world autocratic regime do you have experience with? You can have less government theft than in more democratic countries, because favorable economic conditions are one way of buying compliance. Take the largest dictatorship in the world: China. The CCP does not take "what they can". The tax burden is much lower than basically in any liberal democracy in the West. A lot of taxes that you may think are normal simply do not exist, property tax for example is not a thing. They have heavy foreign exchange restrictions, to keep money in the country. Many people working in China are able to save a lot more of their income than they would if they were in Europe or North America. The catch is you can't freely use all manners of currency, you can't even easily exchange to USD as a Chinese. Foreign stock ownership is restricted. Cryptocurrency is banned. It's basically the complete opposite of what you described.

bigbacaloa 2y ago

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JumpCrisscross 2y ago

> If the underlying activity is a crime, we already have laws to deal with that This is like complaining about DUIs being illegal because we already have laws banning manslaughter. > Why is any attempt at financial privacy deemed money laundering? It's not. Layering per se isn't illegal. It's suspicious but legal, in the same category as carting a semi-automatic into a grocery store in an open-carry state. > Why does making any tool that help law abiding citizens have financial privacy, also guilty of money laundering? It doesn't. Practically every prosecution of money-laundering services included evidence of knowledge by the operator that their customers included people committing crimes.

AnthonyMouse 2y ago
> This is like complaining about DUIs being illegal because we already have laws banning manslaughter. The premise of DUIs is to punish a person acting recklessly. The premise of KYC is to punish a third party for not conducting mass surveillance on predominantly innocent people in case one of them commits a crime. It's hard to see how these are analogous. > Practically every prosecution of money-laundering services included evidence of knowledge by the operator that their customers included people committing crimes. This is quite a fig leaf for any entity operating at scale. The customers of any major bank will obviously include people committing crimes -- they have millions of customers. They also have thousands of employees, and then some percentage of them will be criminals as well. Expecting the intersection of these to be literally zero is an unreasonable standard. More to the point, the underlying problem is what it incentivizes them to do, i.e. manufacture some opaque and arbitrary indicators and then conduct mass surveillance and punish innocent people for running afoul of secret rules.
- JumpCrisscross 2y ago
  > premise of DUIs is to punish a person acting recklessly. The premise of KYC is to punish a third party for not conducting mass surveillance on predominantly innocent people in case one of them commits a crime. It's hard to see how these are analogous You don't see how a bank not doing KYC and thereby financing terrorists and Pyongyang could be seen as behaving recklessly? > quite a fig leaf for any entity operating at scale Sure. It's why a lot of anti-money laundering isn't prosecuted and why OP's complaint strikes me as silly. > conduct mass surveillance U.S. AML law is actually somewhat terrible for mass surveillance. Records are held at each private institution. This is why, if you've ever been party to wire fraud, it takes the Feds hours to days to gather records. It's pull, not push. The practical arms of mass surveillance are the credit/debit card rails. (And, increasingly, crypto.)

legitster 2y ago

> Why is any attempt at financial privacy deemed money laundering? Ummm. Taxes? Money laundering is very clearly accounting fraud. If embezzlement is a crime, then money laundering is just embezzlement in reverse. I feel like you are down an absolutist rabbithole about privacy. There are certain practical limits to privacy. You cannot blight yourself from other people's vision. You cannot operate in a society (whether it be grocery shopping, owning property, driving a car) without existing in some form. "Privacy" only makes sense in the context and is not some maximalist ideal that you can apply to any situation.

bdjsiqoocwk 2y ago

> If the underlying activity is a crime, we already have laws to deal with that. Why should guns be illegal, we already have a crime against killing. Breathtakingly idiotic.

lcnPylGDnU4H9OF 2y ago
That's actually a good argument against outlawing guns. What point are you trying to make?
- bdjsiqoocwk 2y ago
  I agree it's a good argument. My point is that the argument "the underlying activity is already illegal so the things that make it possible shouldn't be ", is stupid. It comes from a place of ideology. The ideology of "let's organize everything as they should be, not how they are". So I presented a similar arguments (with guns) which I hoped everyone here would see is a good one. And you did, so task successful! :-)
  - lcnPylGDnU4H9OF 2y ago
    > the underlying activity is already illegal so the things that make it possible [should also] be The logic being that an object which can be used for murder should be outlawed by virtue of the fact that it can be used for murder, such as a monkey wrench or a kitchen knife. Like it or not, some people have a use for guns that doesn’t involve violence and it’s reasonable to allow non-violent uses for things when such a use exists. > the underlying activity is already illegal so the things that make it possible [should also] be Oh! It’s like how I could commit criminal fraud by telling a lie in an email and, therefore: SSDs, routers, modems, keyboards, speech; all outlawed because they can be used for crime. It’s just like how I can launder money by keeping my financial life private and therefore a private financial life should be outlawed. I hope you can see why one might reject this line of reasoning. Indeed, the underlying activity is already illegal so things that make it possible don’t need to be. That is not “breathtakingly idiotic”.

vkou 2y ago

> The imaginary crime of money laundering There's nothing imaginary about trying to hide money that you stole from someone, so that it can't be taken back from you.

deleted 2y ago

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