6 ms·

How is this different tho from USD -> Swiss Franc -> USD? I don't see how that cleans the money...

minimax 14y ago
Bitcoin crosses borders more easily than CHF. Try this: Money in Saudi Arabia -> mt gox -> bitcoin -> mt gox -> terrorists inside the USA
- kiba 14y ago
  Terrorists don't need much money to kill. All you have to do is recruit a dude in the US, give him information on how to purchase an AR-15, and the dude can start killing people at the malls or any other soft targets. Or actually just kill people with pistols. Seung-Hui Cho, the Virginia Tech mass killer, kills 35 people with his Glock 19 and Walther P22. The attacker is basically undetectable until he start his assault, and the probability of success is quite high. He can even use his car to ram into the mall door and run down individuals before he start his shooting spree. The only hope for civilians at that point is that a policeman or a civilian with a pistol to start shooting back. The operation can be done with the attacker saving money for those purchase of weapons by working at his usual job. You don't need to send funds. (Of course, if it was that easy, why don't terrorists do it more often?)
  - stfu 14y ago
    Exactly the point. All the money laundering talk is complete bs when it comes to terrorism. There is only one reason, and that is that government wants their taxes.
    - vanwaril 14y ago
      Which is a very valid reason.
    - objclxt 14y ago
      I don't think that's strictly true. It's generally thought that one of the biggest bank robberies in the UK (the Northern Bank Robbery) was pulled off by the Provisional IRA. Terrorist organisations do need to launder money - it may just not be the same terrorist organisations that you are thinking of.
cynicalkane 14y ago
Banks are under the same political pressure as Mt Gox is, they're just better at handling pressure and playing nicely with politicians, so you don't hear about it as much. Ever tried to send money to Somalia? If you think that's a silly question, there are a lot of Somalians here in Minneapolis who would like to feed their families back home (and a lot of banks who would like to make money by helping out). But politics makes that very, very hard. This is just one example.
- vacri 14y ago
  My friend's Russian father lived in Serbia with his mother when he was a young child. He was entitled to a wage in rubles - he was employed by the Russian government - and he had a nice little triangle going. The Russians had pegged the ruble to the US dollar (or close enough) to avoid looking weak, so the ruble was artificially inflated. Yugoslavia didn't do that, so it had a much weaker currency. He would make his paycheck go ruble > USD > yugoslav currency (can't recall the name) and he made quite a bit of 'free' money that way.
- stfu 14y ago
  For things like these Hawala systems are existing ( http://en.wikipedia.org/wiki/Hawala http://en.wikipedia.org/wiki/Hawala ). Really a great tool to cut out banks and government control in financial transactions. I wish this somewhat would find its way into the digital age.
  - hendzen 14y ago
    Ripple [0] has some similarities to a digital Hawala system. [0] - https://ripple.com/ https://ripple.com/
    - junto 14y ago
      Interesting project. Has it got any traction?
    - tixocloud 14y ago
      There doesn't seem to be any information about who's behind this? I can see OpenCoin Inc but their site seems to be down. HN effect at work perhaps?
elemeno 14y ago
Pretty much every step of USD -> CHF -> USD for large enough denominations is dealt with by firms that have strict requirements regarding recording transactions and verifying the identity of their customers due to anti-money laundering laws.
gph 14y ago
Because that first step of USD(cash) -> Swiss Franc has to go through a bank and/or Forex exchange which has to follow U.S. anti-money laundering regulations. If you attempt to place a large amount of cash into a bank or forex account you will have a lot of paperwork to fill out to reasonably prove that it isn't illegitimately gained money. Whether those regulations are actually effective is questionable (see HSBC, BoA, etc.), but that's the rationale.
- sv123 14y ago
  Isn't that the same with Mt. gox? How do you get the money to them without going through a bank?
  - gph 14y ago
    I'm not really familiar with Mt. gox, but I'd assume you can send in a money order or perhaps even cash. I don't know anything about Dwolla either, maybe they have a method of bypassing banks? I might be wrong so if someone knows better please correct me. Edit: Did a little bit of digging[1], looks like they accept wire transfers (e.g. Western Union), and I'm sure there would be ways through those e-currency and other services to deposit large amounts of unregulated money. [1]https://support.mtgox.com/entries/20490576-Withdrawals-and-Deposits https://support.mtgox.com/entries/20490576-Withdrawals-and-D...
- runeks 14y ago
  Mt. Gox is AML compliant. I had to send in various ID for them to accept SEPA transfers to my account.
deleted 14y ago
[deleted]
nwzpaperman 14y ago
Bitcoin doesn't launder money, but does enable the barter economy to be more liquid and scalable. Barter is very difficult to tax, so there is the issue. I have personally discussed this with a friend that is a federal reserve spokesman, so anyone that wants to argue otherwise should consider that first.
- knowaveragejoe 14y ago
  A suitable argument could be made for both.
  - deleted 14y ago
    [deleted]
- fnordfnordfnord 14y ago
  Is barter against the law?
  - oillio 14y ago
    It is not against the law. However, you are supposed to report barter transactions to the IRS. What percentage are actually reported is probably not all that high, but I have not seen any research on the topic.
- pbreit 14y ago
  Cash is difficult to tax. I don't have a friend in the fed.
  - nwzpaperman 14y ago
    What's your daily ATM withdrawal limit? Familiar with the letters SAR? Mere suspicion of structuring requires a report. If you know any local people that work at a bank, ask he or she how many SARs are filed in the one branch per week, on average. A major federal reserve branch maybe has $30 billion in cash on hand at any given time. The marginalization of the US cash market is almost complete after the past decade. Lastly, consider the possiblity that those back scatter xray machines aren't about weapons.
ig1 14y ago
If you try and change a significant amount of currency banks will require you to go through "know-your-client" verification and anti-money laundering checks. I'm assuming Mt Gox didn't do that.
dragonwriter 14y ago
> How is this different tho from USD -> Swiss Franc -> USD? It isn't, which is why there are big stacks of anti-money-laundering regulations that governments impose on banking and forex.

Bitcoin crosses borders more easily than CHF. Try this: Money in Saudi Arabia -> mt gox -> bitcoin -> mt gox -> terrorists inside the USA

kiba 14y ago
Terrorists don't need much money to kill. All you have to do is recruit a dude in the US, give him information on how to purchase an AR-15, and the dude can start killing people at the malls or any other soft targets. Or actually just kill people with pistols. Seung-Hui Cho, the Virginia Tech mass killer, kills 35 people with his Glock 19 and Walther P22. The attacker is basically undetectable until he start his assault, and the probability of success is quite high. He can even use his car to ram into the mall door and run down individuals before he start his shooting spree. The only hope for civilians at that point is that a policeman or a civilian with a pistol to start shooting back. The operation can be done with the attacker saving money for those purchase of weapons by working at his usual job. You don't need to send funds. (Of course, if it was that easy, why don't terrorists do it more often?)
- stfu 14y ago
  Exactly the point. All the money laundering talk is complete bs when it comes to terrorism. There is only one reason, and that is that government wants their taxes.
  - vanwaril 14y ago
    Which is a very valid reason.
  - objclxt 14y ago
    I don't think that's strictly true. It's generally thought that one of the biggest bank robberies in the UK (the Northern Bank Robbery) was pulled off by the Provisional IRA. Terrorist organisations do need to launder money - it may just not be the same terrorist organisations that you are thinking of.

cynicalkane 14y ago

Banks are under the same political pressure as Mt Gox is, they're just better at handling pressure and playing nicely with politicians, so you don't hear about it as much. Ever tried to send money to Somalia? If you think that's a silly question, there are a lot of Somalians here in Minneapolis who would like to feed their families back home (and a lot of banks who would like to make money by helping out). But politics makes that very, very hard. This is just one example.

vacri 14y ago
My friend's Russian father lived in Serbia with his mother when he was a young child. He was entitled to a wage in rubles - he was employed by the Russian government - and he had a nice little triangle going. The Russians had pegged the ruble to the US dollar (or close enough) to avoid looking weak, so the ruble was artificially inflated. Yugoslavia didn't do that, so it had a much weaker currency. He would make his paycheck go ruble > USD > yugoslav currency (can't recall the name) and he made quite a bit of 'free' money that way.
stfu 14y ago
For things like these Hawala systems are existing ( http://en.wikipedia.org/wiki/Hawala http://en.wikipedia.org/wiki/Hawala ). Really a great tool to cut out banks and government control in financial transactions. I wish this somewhat would find its way into the digital age.
- hendzen 14y ago
  Ripple [0] has some similarities to a digital Hawala system. [0] - https://ripple.com/ https://ripple.com/
  - junto 14y ago
    Interesting project. Has it got any traction?
  - tixocloud 14y ago
    There doesn't seem to be any information about who's behind this? I can see OpenCoin Inc but their site seems to be down. HN effect at work perhaps?

elemeno 14y ago

Pretty much every step of USD -> CHF -> USD for large enough denominations is dealt with by firms that have strict requirements regarding recording transactions and verifying the identity of their customers due to anti-money laundering laws.

gph 14y ago

Because that first step of USD(cash) -> Swiss Franc has to go through a bank and/or Forex exchange which has to follow U.S. anti-money laundering regulations. If you attempt to place a large amount of cash into a bank or forex account you will have a lot of paperwork to fill out to reasonably prove that it isn't illegitimately gained money. Whether those regulations are actually effective is questionable (see HSBC, BoA, etc.), but that's the rationale.

sv123 14y ago
Isn't that the same with Mt. gox? How do you get the money to them without going through a bank?
- gph 14y ago
  I'm not really familiar with Mt. gox, but I'd assume you can send in a money order or perhaps even cash. I don't know anything about Dwolla either, maybe they have a method of bypassing banks? I might be wrong so if someone knows better please correct me. Edit: Did a little bit of digging[1], looks like they accept wire transfers (e.g. Western Union), and I'm sure there would be ways through those e-currency and other services to deposit large amounts of unregulated money. [1]https://support.mtgox.com/entries/20490576-Withdrawals-and-Deposits https://support.mtgox.com/entries/20490576-Withdrawals-and-D...
runeks 14y ago
Mt. Gox is AML compliant. I had to send in various ID for them to accept SEPA transfers to my account.

deleted 14y ago

[deleted]

nwzpaperman 14y ago

Bitcoin doesn't launder money, but does enable the barter economy to be more liquid and scalable. Barter is very difficult to tax, so there is the issue. I have personally discussed this with a friend that is a federal reserve spokesman, so anyone that wants to argue otherwise should consider that first.

knowaveragejoe 14y ago
A suitable argument could be made for both.
- deleted 14y ago
  [deleted]
fnordfnordfnord 14y ago
Is barter against the law?
- oillio 14y ago
  It is not against the law. However, you are supposed to report barter transactions to the IRS. What percentage are actually reported is probably not all that high, but I have not seen any research on the topic.
pbreit 14y ago
Cash is difficult to tax. I don't have a friend in the fed.
- nwzpaperman 14y ago
  What's your daily ATM withdrawal limit? Familiar with the letters SAR? Mere suspicion of structuring requires a report. If you know any local people that work at a bank, ask he or she how many SARs are filed in the one branch per week, on average. A major federal reserve branch maybe has $30 billion in cash on hand at any given time. The marginalization of the US cash market is almost complete after the past decade. Lastly, consider the possiblity that those back scatter xray machines aren't about weapons.

ig1 14y ago

If you try and change a significant amount of currency banks will require you to go through "know-your-client" verification and anti-money laundering checks. I'm assuming Mt Gox didn't do that.

dragonwriter 14y ago

> How is this different tho from USD -> Swiss Franc -> USD? It isn't, which is why there are big stacks of anti-money-laundering regulations that governments impose on banking and forex.