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Let's pop back to the big picture here. One of the functions of the Treasury Department is to prevent money laundering. And, by prevent, I mean make onerous for

Let's pop back to the big picture here. One of the functions of the Treasury Department is to prevent money laundering. And, by prevent, I mean make onerous for large amounts of money. Like millions or tens of millions or hundreds of millions of dollars. Think Mexican drug cartel money. One way to do that is to log all exchange or transmission transactions above a certain size -- which is what licensed money changers and transmitters have to do. You're not prohibited from performing these transactions, you just have to give them your name and SSN or Taxpayer ID. Sure, there are ways around this, like buying a million rubber duckies in China, then shipping them to the US and selling them at carnivals. But -again- try to import a million of anything, and US Customs will want to know your name and SSN. If you're talking about changing $100 or even $1,000 into BTC, the government doesn't really care. You might think, can't the criminals just split their transactions into small enough chunks that they can avoid the law altogether? Sure, maybe they could (and certainly they do) -- but at some point, having to conduct a thousand individual exchange transactions to move a million bucks starts to get onerous, and is also likely to leave a data trail -- there will be correlations somewhere. It's never going to be impossible to exchange BTC for USD untraceably. The point here, which should come as no surprise, is that the government intends to make it impossible to exchange large amounts of value anonymously without it being annoying, time-consuming and costly.

nwzpaperman 14y ago
The Secret Service is actually the agency tasked with protecting the dollar. SS is under DHS now.
- wilfra 14y ago
  They protect it from counterfeiting - they don't regulate money laundering.
ISL 14y ago
It is, furthermore, illegal in the US to transfer money in small quantities with intent to avoid the reporting requirements. http://en.wikipedia.org/wiki/Structuring http://en.wikipedia.org/wiki/Structuring If any employee in a financial institution thinks you might be structuring transactions, they are obligated to notify authorities.
cookiecaper 14y ago
FYI most reputable Bitcoin exchanges are compliant with "anti-money laundering" regulations ("AML") and require valid identification on record for anyone making transactions of significant size. You'd have to use a shady online btc brokerage or exchange the btc in local cash-based deals if you want to circumvent the international AML laws.
- eurleif 14y ago
  https://bitfloor.com/ https://bitfloor.com/ which is not a particular shady site (in fact, apparently they're already registered with FinCEN) allows you to buy BitCoins by depositing cash into their Bank of America account. There's an upper limit, of course, but there's no ID required, so nothing stops someone from driving to multiple Bank of America locations.
  - PeterisP 14y ago
    If you don't attract attention, then yes, "nothing stops someone from driving to multiple Bank of America locations" but intentionally doing that to skirt the limits actually is prohibited - it's a crime, just not as easily detectable. If you do it in a large enough amount or you become suspected of some other issue, monitored and this comes up - then you'll be prosecuted for that.
    - eurleif 14y ago
      But the point is that it would be pretty easy to do it without getting caught. You could send multiple people to multiple banks, across a wide area. The cost of manpower and fuel would eat a percentage, sure, but presumably any form of money laundering does. Which explains why the feds are interested in BitCoin.
      - PeterisP 14y ago
        Sure, it is not hard to do money laundering, and the risk of getting caught isn't that high - but my point is that even if you technically stay below the reporting limit, you're still facing prison if you get caught in the end; so it's not a trivial decision to make.
n3rdy 14y ago
> Sure, there are ways around this, like buying a million rubber duckies in China, then shipping them to the US and selling them at carnivals. But -again- try to import a million of anything, and US Customs will want to know your name and SSN. Importing and selling that volume of products also kind of defeats the purpose of running a drug cartel. Drug money is quick and easy, rubber ducky money, not so much (which is quite counter-intuitive if you ask me). At some point you will become more involved in the rubber ducky game, funded by drug money. I didn't choose the duck life. The duck life chose me.
- seldo 14y ago
  I'm not sure how much you know about the drug business, but no part of the chain of illegal narcotic production, from the farmers to the chemists to the smugglers to the dealers, is quick or easy. The barons get where they are by taking enormous risks, and are constantly under mortal threat from other drug cartels, backstabbers and governments. If it were easy, drugs would be cheaper. Stick to ducks, is what I'm saying.
tomp 14y ago
> One of the functions of the Treasury Department is to prevent money laundering. [...] Think Mexican drug cartel money. Or, just open a UBS account on the Caribbean.
belorn 14y ago
The US has not gone very far yet with their anti money laundering program. In Sweden, we have got to the point where one can only withdraw a maximum amount of $200/$1000 a day (it depend on the ATM, where common one is the $200 version). There is also a hard limit of $2000 a week. Alternative, one can "request" a larger withdraw from the bank which means two consecutive physical visits to a designated bank office, with a week between, and during designated hours (10-14). At the bank, they may ask you questions regarding the nature of the money withdraw, and is allowed to deny you if they feel the answer is unsatisfactory. As a side note, an ID is also always required for any money transfer no matter transaction size. They also removed the option for SMS payments (it was considered too anonymous). The effect from this have been that the most common form of donations to red-cross and the likes has dropped with 90%. Last, any transaction (all sizes) is logged and shared internationally with EU and US.
- muyuu 14y ago
  Wow that's very little money especially in somewhere as expensive as Stockholm. So, basically people don't use cash much at all there, right?
  - ersii 14y ago
    You can pay with a debit/credit card almost everywhere. And most do. Local hot dog cart? Sure! At least in the big cities, like Stockholm, Göteborg (Gothenburg), Malmö, Uppsala - cards are the main way of paying. You don't often see bills/coins changing hands. Want to know something else that's funny in Sweden regarding debit/credit cards? There's almost no cards that give a percentage/cash back - and if they do, there's a high yearly fee - or a low pay out.
  - belorn 14y ago
    The common type of expenses is almost exclusively done through credit cards. Food, travel, gas, and bills have gone so far that its difficult (and often more expensive) to use physical cash rather than something bound to the bank account. Its perfectly viable to live/visit stockholm and not have any physical cash on you. Of course one would have to live with the fact that the bank takes transaction fees (if your not using a Swedish bank), and that any purchase is logged.

nwzpaperman 14y ago

The Secret Service is actually the agency tasked with protecting the dollar. SS is under DHS now.

wilfra 14y ago
They protect it from counterfeiting - they don't regulate money laundering.

ISL 14y ago

It is, furthermore, illegal in the US to transfer money in small quantities with intent to avoid the reporting requirements. http://en.wikipedia.org/wiki/Structuring http://en.wikipedia.org/wiki/Structuring If any employee in a financial institution thinks you might be structuring transactions, they are obligated to notify authorities.

cookiecaper 14y ago

FYI most reputable Bitcoin exchanges are compliant with "anti-money laundering" regulations ("AML") and require valid identification on record for anyone making transactions of significant size. You'd have to use a shady online btc brokerage or exchange the btc in local cash-based deals if you want to circumvent the international AML laws.

eurleif 14y ago
https://bitfloor.com/ https://bitfloor.com/ which is not a particular shady site (in fact, apparently they're already registered with FinCEN) allows you to buy BitCoins by depositing cash into their Bank of America account. There's an upper limit, of course, but there's no ID required, so nothing stops someone from driving to multiple Bank of America locations.
- PeterisP 14y ago
  If you don't attract attention, then yes, "nothing stops someone from driving to multiple Bank of America locations" but intentionally doing that to skirt the limits actually is prohibited - it's a crime, just not as easily detectable. If you do it in a large enough amount or you become suspected of some other issue, monitored and this comes up - then you'll be prosecuted for that.
  - eurleif 14y ago
    But the point is that it would be pretty easy to do it without getting caught. You could send multiple people to multiple banks, across a wide area. The cost of manpower and fuel would eat a percentage, sure, but presumably any form of money laundering does. Which explains why the feds are interested in BitCoin.
    - PeterisP 14y ago
      Sure, it is not hard to do money laundering, and the risk of getting caught isn't that high - but my point is that even if you technically stay below the reporting limit, you're still facing prison if you get caught in the end; so it's not a trivial decision to make.

n3rdy 14y ago

> Sure, there are ways around this, like buying a million rubber duckies in China, then shipping them to the US and selling them at carnivals. But -again- try to import a million of anything, and US Customs will want to know your name and SSN. Importing and selling that volume of products also kind of defeats the purpose of running a drug cartel. Drug money is quick and easy, rubber ducky money, not so much (which is quite counter-intuitive if you ask me). At some point you will become more involved in the rubber ducky game, funded by drug money. I didn't choose the duck life. The duck life chose me.

seldo 14y ago
I'm not sure how much you know about the drug business, but no part of the chain of illegal narcotic production, from the farmers to the chemists to the smugglers to the dealers, is quick or easy. The barons get where they are by taking enormous risks, and are constantly under mortal threat from other drug cartels, backstabbers and governments. If it were easy, drugs would be cheaper. Stick to ducks, is what I'm saying.

tomp 14y ago

> One of the functions of the Treasury Department is to prevent money laundering. [...] Think Mexican drug cartel money. Or, just open a UBS account on the Caribbean.

belorn 14y ago

The US has not gone very far yet with their anti money laundering program. In Sweden, we have got to the point where one can only withdraw a maximum amount of $200/$1000 a day (it depend on the ATM, where common one is the $200 version). There is also a hard limit of $2000 a week. Alternative, one can "request" a larger withdraw from the bank which means two consecutive physical visits to a designated bank office, with a week between, and during designated hours (10-14). At the bank, they may ask you questions regarding the nature of the money withdraw, and is allowed to deny you if they feel the answer is unsatisfactory. As a side note, an ID is also always required for any money transfer no matter transaction size. They also removed the option for SMS payments (it was considered too anonymous). The effect from this have been that the most common form of donations to red-cross and the likes has dropped with 90%. Last, any transaction (all sizes) is logged and shared internationally with EU and US.

muyuu 14y ago
Wow that's very little money especially in somewhere as expensive as Stockholm. So, basically people don't use cash much at all there, right?
- ersii 14y ago
  You can pay with a debit/credit card almost everywhere. And most do. Local hot dog cart? Sure! At least in the big cities, like Stockholm, Göteborg (Gothenburg), Malmö, Uppsala - cards are the main way of paying. You don't often see bills/coins changing hands. Want to know something else that's funny in Sweden regarding debit/credit cards? There's almost no cards that give a percentage/cash back - and if they do, there's a high yearly fee - or a low pay out.
- belorn 14y ago
  The common type of expenses is almost exclusively done through credit cards. Food, travel, gas, and bills have gone so far that its difficult (and often more expensive) to use physical cash rather than something bound to the bank account. Its perfectly viable to live/visit stockholm and not have any physical cash on you. Of course one would have to live with the fact that the bank takes transaction fees (if your not using a Swedish bank), and that any purchase is logged.