Comment by mabbo | Hacker News Reader

Comment by mabbo | Hacker News Reader

It sounds as though governments are simply trying to amend existing law around money laundering and terrorist financing to try to deal with the invention of digital currencies. This sort of thing has happened before.

Back in '06 I was an intern in the tech department of FINTRAC, Canada's agency for stopping money laundering and terrorist financing, so my knowledge is outdated and only specific to one country- but everyone has roughly the same rules and goals with these laws- track large money movements to find money laundering operations and stop money from finding it's way to terror groups. They use the $10,000 rule- banks report your info if you move more than that in or out of your account and border security reports it if you move that much in cash across a border.

Over time though, new tricks are always figured out, and laws updated. In '06, it was casinos ("yeah I won big last night, that's where the money came from"), currency exchanges ("oh yeah, we do a huge amount of business and over charge everyone"), and jewelry stores (buy diamonds in cash, carry them over borders instead of money). So reporting laws were updated.

Now the trick is "I bought a lot of bitcoins in 2009 and finally sold them today, that's where the money came from". If the laws aren't updated, money laundering becomes easy again.

What else do we expect governments to do? Now, are these laws well written and not overreaching? I'm not sure, and that's worth debating.

> What else do we expect governments to do?

We expect it to not both support the laws that create a $100B black market for drugs in the first place, and then try to combat the consequences of its own actions and claim it's solving a problem, rather than creating two of them.

I'm very much in favour of legalization of drugs.

But there are other crimes that create illicit money: extortion/blackmail, human/child trafficking/exploitation, murder for hire, theft, ransomware/malware, and whatever new horrible ideas get created next.

Making money laundering harder makes criminal activity less beneficial to commit. And while ending the illegal drug trade will greatly reduce the need for anti-money laundering organizations, it certainly won't end the need entirely.

Sure, and the government should be investigating people who have lots of suspicious cash. That's a lot different than penalizing people with private wealth just because they have it.

How do you expect the government to know about people who have lots of suspicous cash? That's what the reporting laws are intended to help detect...

They shouldn't unless they have reason to investigate me. I live in the US. I have a reasonable expectation of privacy and it shouldn't be a crime to not proactively confirm that I'm not committing crimes.

This seems like a very naive view. Plenty of people will want to launder money to support acts of violence regardless of what laws are on the books. When you want to kill somebody, you want to kill somebody.

It's already illegal to kill people. We don't also need to make it illegal to have $10,000 in cash without telling the government.

It's not really about child porn or drugs or whatever. It's about taxes.

> What else do we expect governments to do?

Stop allying with Saudi Arabia & leave hard working people alone?

End the bogus war on drugs?

Allow innovation to take root?

Not sure.

I mean, yes to those things. I agree. I was sort of meaning what are they to do to stop money laundering. 'Cause like, criminals are always going to exist and the best place to catch them seems to be when they try to clean up the money.

Aren't the largest criminals best at laundering money?

And doesn't the war on drugs create violent criminals?

Doesn't an illegal market in drugs allow terrorists to profit from said market?

It seems to me Joe Schmo takes the brunt of these laws. All the while a bunch of cheap suits get to justify their jobs.

> Aren't the largest criminals best at laundering money?

Interestingly, not with the existing laws. Since you can move up to $10,000 per day without any reports being filed, a criminal laundering under $3.6m/year could theoretically fly under the radar.

> And doesn't the war on drugs create violent criminals?

Yes, but there are plenty of other crimes unrelated to drugs that bring in money. I'm all for decriminalization of drugs (it's a health problem, not a crime problem), but that doesn't mean I'm in favour of allowing money laundering.

I just think you might be missing the forest for the trees here. There's lots of reasons not to want money laundering to be legal. Think of all the other places illicit money comes from; I want those crimes not to pay very well at all.

> Interestingly, not with the existing laws. Since you can move up to $10,000 per day without any reports being filed, a criminal laundering under $3.6m/year could theoretically fly under the radar.

Theoretically!

> Yes, but there are plenty of other crimes unrelated to drugs that bring in money.

> Think of all the other places illicit money comes from

All very handwavey. Whenever I've read anything about money laundering it's about drugs, terrorism, & organised crime. And isn't a large part of organised crime drugs?

Try depositing $9999 at a time in a bank. You'll end up getting prosecuted for trying to circumvent the report laws.

Yeah in Canada they have "suspicious transaction reports" where your banker is like "I dunno what's going on here, but someone ought to look at this guy"

> allowing money laundering

This has nothing to do with money laundering. Money laundering requires that the money is dirty. This is essential making private wealth illegal regardless of the legality of the source.

Banks are required to file Suspicious Activity Reports for any suspicious (very broadly defined) deposits or withdrawals even if the amount is much less than $10k. The feds can also temporarily designate certain geographic regions as 'high risk' which means banks in those regions must comply with much more stringent reporting requirements.

It is also illegal to move money in such a way as to evade the reporting requirements ('structuring', what they nailed Dennis Hastert for).

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