6 ms·

This is exactly why I am horrified by the number of bitcoin companies cropping up. I can only assume many of them have no idea what they are potentially exposin

by brd 13y ago

This is exactly why I am horrified by the number of bitcoin companies cropping up. I can only assume many of them have no idea what they are potentially exposing themselves to from a legal perspective.

humanrebar 13y ago
> I can only assume many of them have no idea what they are potentially exposing themselves to from a legal perspective. Or an ethical perspective even.
- jbigelow76 13y ago
  Can you expand on this? Because the way I'm reading it it sounds like since it "could" be a tool for money laundering the OP shouldn't be doing it. But by that logic a car "could" be used to facilitate a bank robbery and therefore the salesman needs to consider those ethical ramifications.
  - orik 13y ago
    There's a huge difference between this and a car salesman. A car salesman goes through all sorts of paperwork and meets with the person they are selling the car too, and they hand the keys over. This is much more similar to the service where you take a photo of a Key and you get mailed a copy of it for 5$; except it's semi-anonymous with bitcoin.
    - maxerickson 13y ago
      Cars are probably one of the worst possible examples, since most transactions require the title.
    - 0xdeadbeefbabe 13y ago
      I think he's asking about ethics. Just because this could be used for money laundering doesn't mean it must be used for money laundering.
    - fnordfnordfnord 13y ago
      Are you proposing that a car salesman might refuse to sell someone a car on the chance that the buyer could be a criminal of some sort?
      - ygjb 13y ago
        No, just that the paper trail generated by purchasing a car from a dealership is undesirable for a criminal. This is why conventional financial institutions and services are undesirable for most criminals.
        fnordfnordfnord 13y ago
        Bitcoin transactions go in a public ledger. Although there are methods to obfuscate transaction history. >This is why conventional financial institutions and services are undesirable for most criminals. I think reality is in disagreement with you, as counter-intuitive as that may seem.
  - humanrebar 13y ago
    Just because someone can do something (technically and legally), it doesn't mean he should do it. I was trying to comment on the course of the discussion here -- there are a lot of comments about regulations and criminal liability but not many about ethical responsibility. Clearly the most important issue is the factual one... whether there is more than incidental money laundering happening here. If I had an ad placement business that only placed scammy ads or if I developed software that allowed people to be oppressed, I would also have issues. I would think that enabling criminal behavior is in the same broad category. As far as cars, there's no issue selling a car. However, if your cars had armor plating and hidden compartment for guns, you have an ethical responsibility to find out if your customers are generally up to no good. If there is still a business to be made from legitimate customers, then maybe there's a way to ensure they're the only ones you do business with.
  - redthrowaway 13y ago
    It's far more akin to a guy who sells guns out of his trunk in a dark alley. Chances are, it's being used for crime, even if there are legitimate uses for it.
    - pc86 13y ago
      No, because selling guns out of your trunk is a crime more often than not. This is a poor analogy.
      - dragonwriter 13y ago
        > No, because selling guns out of your trunk is a crime more often than not. So is operating an unlicensed money transmission business -- in the US, this is likely to be both a state and federal crime -- or a licensed money transmission business without adhering to appropriate anti-money-laundering controls. > This is a poor analogy. Seems to be a spot-on analogy.
      - bradleysmith 13y ago
        Actually, it is not a crime in most US states. Person-to-person firearm sales are a wonderful example of a seller choosing to assess the intention of the buyer, and the moral ambiguity that this represents. A person can legally sell firearms out of his trunk in a great many places asking for nothing more than proof of age of the buyer. This method of sale represents ~40% of all gun sales in the US. It would be safe to assume that the majority of guns purchased with the intention to commit crime are purchased person-to-person. There's a good breakdown of nationwide person-to-person regulations here[1]. [1] - http://smartgunlaws.org/private-sales-policy-summary/ http://smartgunlaws.org/private-sales-policy-summary/
      - clavalle 13y ago
        Not usually. Private sales of firearms are cash and carry most of the time. Thus the debate over gun show sales.
    - logfromblammo 13y ago
      One marked advantage to buying a gun for cash in a private sale is that the state won't know that you have it. While I don't necessarily believe that would lead to acts of malice such as confiscation raids, it has already led to bonehead moves such as publishing over the public network the names and addresses of all registered gun owners in an area. Also, people buy illegal moonshine when legit liquor stores are available. People buy cigarettes sold in the wrong state or from a tribal reservation. Buying a gun from an alley is a possible choice for someone who would otherwise prefer to bypass taxes, paperwork, and bureaucracy--illegal, of course, but not necessarily a prelude to a different crime.
  - deeths 13y ago
    The difference is that government regulators (in the US at least, but presumably in many other countries soon) have stated that they consider bitcoin exchanges to be money transmitters and therefore regulate them in ways that prevent money laundering (http://blogs.reuters.com/financial-regulatory-forum/2014/01/06/u-s-treasury-cautions-bitcoin-businesses-on-compliance-duties-advocate-cites-chilling-effect/ http://blogs.reuters.com/financial-regulatory-forum/2014/01/...). I suspect most lawyers/regulators would consider changing bitcoin into gift cards is legally like transmitting to cash. Cars are regulated also, for instance to post a license plate that can be used to identify the owner's name and address, in part because they can be used in crimes. This isn't _just_ an issue of if the seller is being ethical; it's an issue of whether they're following the law.
  - jasonlotito 13y ago
    It's all about due diligence. Selling gift cards for bitcoins isn't illegal. However, you need to be aware that it can be easily exploited for money laundering, and you need to take steps to prevent that. And don't think money laundering is something that just happens in the movies. It's a very real problem, and deserves being attended to. As for your car example, I'll leave that to the other comments already rebutting it.
- logfromblammo 13y ago
  I'm not entirely convinced that money laundering is unethical in its own right. Certainly, profiting from unethical activity is only once removed from unethical. That would make obfuscating the taint on unethical-once-removed funds an act that is unethical-twice-removed. Clearly, there has to be some point at which we can no longer care, because I'm not certain that (metaphorically) there is a coin circulating that hasn't been dipped in blood at least once. Otherwise, the farmer who sells a hog to the butcher that sells sliced ham to the mafia capo's wife also shares the taint. And even that presumes that the money to be laundered is profit from an unethical act, rather than one merely prohibited by government edict. I personally do not find marijuana-based commerce to be unethical. Therefore, I don't particularly feel as though a seller of sinsemilla on Silk Road should feel bad about wanting to be able to spend his profits without getting pinched, even if it means a murderer-for-hire could theoretically also prevent someone from following his money. It isn't the money that's dirty or clean. It's the person holding it. Thus, I believe the criminalization of money laundering practices is simply an effort by the governments to solidify their control over the financial sectors, and to make their efforts at fighting crime less labor-intensive. Even if all money were perfectly untraceable, police could still solve crimes by examining the evidence of the crime, rather than the evidence that someone got paid for it. Of course, states seem to think that is rather a useful tool to have, so I expect that this business will be raided and shut down sooner or later. My advice is to cash out (in actual cash, no less) on the unexpected success as soon as possible, and then exit the business entirely before someone decides to make an example of it.
  - work_account_1 13y ago
    Money laundering is an act of assisting someone in getting away with a crime. If you inadvertently do so, you're not guilty of money laundering. The intent has to be there.
    - conductr 13y ago
      Maybe that's the way you feel it should be, but it's not that way in the US. It's more a form of negligence. If you don't follow AML rules, you are negligent thus guilty.
- dmm 13y ago
  Money laundering is not unethical. It wasn't even illegal in the US until 1986. At the time the law was passed we were promised it would only be used against organized crime that couldn't be stopped any other way.
  - work_account_1 13y ago
    How exactly is money laundering not unethical? What's so ethical about assisting someone in getting away with a crime?
    - lprubin 13y ago
      I think you need to explain why money laundering is unethical. Because there are plenty of laws passed by various governments that many people feel would be unethical to follow. To use an extreme example, was it unethical to hide jews from the Nazi's?
      - dnsco 13y ago
        This conversation is officially over http://en.wikipedia.org/wiki/Godwin's_law http://en.wikipedia.org/wiki/Godwin's_law
        deleted 13y ago
        [deleted]
        Zidewinder 13y ago
        Fuck off. So he used an extreme example, doesn't mean his point is invalid. Godwin's Law is not supposed to be used as an excuse to shut down uncomfortable conversations.
        0xdeadbeefbabe 13y ago
        Godwin's law makes the money laundering law attractive in comparison.
      - 13y ago
jorganisak 13y ago
So goes disruption.
ultramancool 13y ago
For most of them it's no problem, they're just selling their product or service in an additional way. However, something like this is scary as it's basically one hit easy money laundering. Not a bad idea if you're running the service anonymously. You'll make a good profit for sure. Otherwise there could be substantial risks and it may be better off to shut it down before feds get involved.
- daeyun 13y ago
  > Not a bad idea if you're running the service anonymously. Isn't running an anonymous (or unregistered) money transmitting service itself illegal?
  - deleted 13y ago
    [deleted]
    - celticninja 13y ago
      I think the issue here is that you could use a stolen card to buy Starbucks cards and sell them to this guy for btc. This guy is then going to swallow the loss when the fraud is detected. Credit card thief gets away with bitcoin.
- deleted 13y ago
  [deleted]

by brd 13y ago

humanrebar 13y ago

> I can only assume many of them have no idea what they are potentially exposing themselves to from a legal perspective. Or an ethical perspective even.

jbigelow76 13y ago
Can you expand on this? Because the way I'm reading it it sounds like since it "could" be a tool for money laundering the OP shouldn't be doing it. But by that logic a car "could" be used to facilitate a bank robbery and therefore the salesman needs to consider those ethical ramifications.
- orik 13y ago
  There's a huge difference between this and a car salesman. A car salesman goes through all sorts of paperwork and meets with the person they are selling the car too, and they hand the keys over. This is much more similar to the service where you take a photo of a Key and you get mailed a copy of it for 5$; except it's semi-anonymous with bitcoin.
  - maxerickson 13y ago
    Cars are probably one of the worst possible examples, since most transactions require the title.
  - 0xdeadbeefbabe 13y ago
    I think he's asking about ethics. Just because this could be used for money laundering doesn't mean it must be used for money laundering.
  - fnordfnordfnord 13y ago
    Are you proposing that a car salesman might refuse to sell someone a car on the chance that the buyer could be a criminal of some sort?
    - ygjb 13y ago
      No, just that the paper trail generated by purchasing a car from a dealership is undesirable for a criminal. This is why conventional financial institutions and services are undesirable for most criminals.
      - fnordfnordfnord 13y ago
        Bitcoin transactions go in a public ledger. Although there are methods to obfuscate transaction history. >This is why conventional financial institutions and services are undesirable for most criminals. I think reality is in disagreement with you, as counter-intuitive as that may seem.
- humanrebar 13y ago
  Just because someone can do something (technically and legally), it doesn't mean he should do it. I was trying to comment on the course of the discussion here -- there are a lot of comments about regulations and criminal liability but not many about ethical responsibility. Clearly the most important issue is the factual one... whether there is more than incidental money laundering happening here. If I had an ad placement business that only placed scammy ads or if I developed software that allowed people to be oppressed, I would also have issues. I would think that enabling criminal behavior is in the same broad category. As far as cars, there's no issue selling a car. However, if your cars had armor plating and hidden compartment for guns, you have an ethical responsibility to find out if your customers are generally up to no good. If there is still a business to be made from legitimate customers, then maybe there's a way to ensure they're the only ones you do business with.
- redthrowaway 13y ago
  It's far more akin to a guy who sells guns out of his trunk in a dark alley. Chances are, it's being used for crime, even if there are legitimate uses for it.
  - pc86 13y ago
    No, because selling guns out of your trunk is a crime more often than not. This is a poor analogy.
    - dragonwriter 13y ago
      > No, because selling guns out of your trunk is a crime more often than not. So is operating an unlicensed money transmission business -- in the US, this is likely to be both a state and federal crime -- or a licensed money transmission business without adhering to appropriate anti-money-laundering controls. > This is a poor analogy. Seems to be a spot-on analogy.
    - bradleysmith 13y ago
      Actually, it is not a crime in most US states. Person-to-person firearm sales are a wonderful example of a seller choosing to assess the intention of the buyer, and the moral ambiguity that this represents. A person can legally sell firearms out of his trunk in a great many places asking for nothing more than proof of age of the buyer. This method of sale represents ~40% of all gun sales in the US. It would be safe to assume that the majority of guns purchased with the intention to commit crime are purchased person-to-person. There's a good breakdown of nationwide person-to-person regulations here[1]. [1] - http://smartgunlaws.org/private-sales-policy-summary/ http://smartgunlaws.org/private-sales-policy-summary/
    - clavalle 13y ago
      Not usually. Private sales of firearms are cash and carry most of the time. Thus the debate over gun show sales.
  - logfromblammo 13y ago
    One marked advantage to buying a gun for cash in a private sale is that the state won't know that you have it. While I don't necessarily believe that would lead to acts of malice such as confiscation raids, it has already led to bonehead moves such as publishing over the public network the names and addresses of all registered gun owners in an area. Also, people buy illegal moonshine when legit liquor stores are available. People buy cigarettes sold in the wrong state or from a tribal reservation. Buying a gun from an alley is a possible choice for someone who would otherwise prefer to bypass taxes, paperwork, and bureaucracy--illegal, of course, but not necessarily a prelude to a different crime.
- deeths 13y ago
  The difference is that government regulators (in the US at least, but presumably in many other countries soon) have stated that they consider bitcoin exchanges to be money transmitters and therefore regulate them in ways that prevent money laundering (http://blogs.reuters.com/financial-regulatory-forum/2014/01/06/u-s-treasury-cautions-bitcoin-businesses-on-compliance-duties-advocate-cites-chilling-effect/ http://blogs.reuters.com/financial-regulatory-forum/2014/01/...). I suspect most lawyers/regulators would consider changing bitcoin into gift cards is legally like transmitting to cash. Cars are regulated also, for instance to post a license plate that can be used to identify the owner's name and address, in part because they can be used in crimes. This isn't _just_ an issue of if the seller is being ethical; it's an issue of whether they're following the law.
- jasonlotito 13y ago
  It's all about due diligence. Selling gift cards for bitcoins isn't illegal. However, you need to be aware that it can be easily exploited for money laundering, and you need to take steps to prevent that. And don't think money laundering is something that just happens in the movies. It's a very real problem, and deserves being attended to. As for your car example, I'll leave that to the other comments already rebutting it.
logfromblammo 13y ago
I'm not entirely convinced that money laundering is unethical in its own right. Certainly, profiting from unethical activity is only once removed from unethical. That would make obfuscating the taint on unethical-once-removed funds an act that is unethical-twice-removed. Clearly, there has to be some point at which we can no longer care, because I'm not certain that (metaphorically) there is a coin circulating that hasn't been dipped in blood at least once. Otherwise, the farmer who sells a hog to the butcher that sells sliced ham to the mafia capo's wife also shares the taint. And even that presumes that the money to be laundered is profit from an unethical act, rather than one merely prohibited by government edict. I personally do not find marijuana-based commerce to be unethical. Therefore, I don't particularly feel as though a seller of sinsemilla on Silk Road should feel bad about wanting to be able to spend his profits without getting pinched, even if it means a murderer-for-hire could theoretically also prevent someone from following his money. It isn't the money that's dirty or clean. It's the person holding it. Thus, I believe the criminalization of money laundering practices is simply an effort by the governments to solidify their control over the financial sectors, and to make their efforts at fighting crime less labor-intensive. Even if all money were perfectly untraceable, police could still solve crimes by examining the evidence of the crime, rather than the evidence that someone got paid for it. Of course, states seem to think that is rather a useful tool to have, so I expect that this business will be raided and shut down sooner or later. My advice is to cash out (in actual cash, no less) on the unexpected success as soon as possible, and then exit the business entirely before someone decides to make an example of it.
- work_account_1 13y ago
  Money laundering is an act of assisting someone in getting away with a crime. If you inadvertently do so, you're not guilty of money laundering. The intent has to be there.
  - conductr 13y ago
    Maybe that's the way you feel it should be, but it's not that way in the US. It's more a form of negligence. If you don't follow AML rules, you are negligent thus guilty.
dmm 13y ago
Money laundering is not unethical. It wasn't even illegal in the US until 1986. At the time the law was passed we were promised it would only be used against organized crime that couldn't be stopped any other way.
- work_account_1 13y ago
  How exactly is money laundering not unethical? What's so ethical about assisting someone in getting away with a crime?
  - lprubin 13y ago
    I think you need to explain why money laundering is unethical. Because there are plenty of laws passed by various governments that many people feel would be unethical to follow. To use an extreme example, was it unethical to hide jews from the Nazi's?
    - dnsco 13y ago
      This conversation is officially over http://en.wikipedia.org/wiki/Godwin's_law http://en.wikipedia.org/wiki/Godwin's_law
      - deleted 13y ago
        [deleted]
      - Zidewinder 13y ago
        Fuck off. So he used an extreme example, doesn't mean his point is invalid. Godwin's Law is not supposed to be used as an excuse to shut down uncomfortable conversations.
        0xdeadbeefbabe 13y ago
        Godwin's law makes the money laundering law attractive in comparison.
    - 13y ago

jorganisak 13y ago

So goes disruption.

ultramancool 13y ago

For most of them it's no problem, they're just selling their product or service in an additional way. However, something like this is scary as it's basically one hit easy money laundering. Not a bad idea if you're running the service anonymously. You'll make a good profit for sure. Otherwise there could be substantial risks and it may be better off to shut it down before feds get involved.

daeyun 13y ago
> Not a bad idea if you're running the service anonymously. Isn't running an anonymous (or unregistered) money transmitting service itself illegal?
- deleted 13y ago
  [deleted]
  - celticninja 13y ago
    I think the issue here is that you could use a stolen card to buy Starbucks cards and sell them to this guy for btc. This guy is then going to swallow the loss when the fraud is detected. Credit card thief gets away with bitcoin.
deleted 13y ago
[deleted]