U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry(decrypt.co)
decrypt.co
U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry
https://decrypt.co/78038/senate-votes-for-amendment-that-threatens-crypto-industry
173 comments
Your comment is completely unrelated to the matter at hand, and the article.
The controversy here is about this law potentially placing reporting obligations on software developers who never have any custody of client funds. Sort of like requiring the developers of Excel to report on users of Excel using it to manage their money.
> I've also been struck by the proliferation of bank-like services without bank-like obligations. This stretches from fractional-reserve and maturity-transforming services like Tether to exchanges/dealers like Binance and ersatz money transmitters like BitPay.
All these centralized services that have some involvement with crypto already comply with a large number of regulations, and usually do much more stringent KYC than non-crypto payment processors do.
The controversy here is about this law potentially placing reporting obligations on software developers who never have any custody of client funds. Sort of like requiring the developers of Excel to report on users of Excel using it to manage their money.
> I've also been struck by the proliferation of bank-like services without bank-like obligations. This stretches from fractional-reserve and maturity-transforming services like Tether to exchanges/dealers like Binance and ersatz money transmitters like BitPay.
All these centralized services that have some involvement with crypto already comply with a large number of regulations, and usually do much more stringent KYC than non-crypto payment processors do.
> reporting obligations on software developers who never have any custody of client funds
Custody doesn't haven an agreed-upon definition when it comes to crypto. That's the nut of the challenge. If we want reporting, someone who, in a traditional setting, would not have had to report, will when it comes to cryptocurrencies.
> these centralized services that have some involvement with crypto already comply with a large number of regulations
Many do. Many don't. Tether and Binance are exemplars of pathological noncompliance.
Custody doesn't haven an agreed-upon definition when it comes to crypto. That's the nut of the challenge. If we want reporting, someone who, in a traditional setting, would not have had to report, will when it comes to cryptocurrencies.
> these centralized services that have some involvement with crypto already comply with a large number of regulations
Many do. Many don't. Tether and Binance are exemplars of pathological noncompliance.
> Custody doesn't have an agreed-upon definition when it comes to crypto.
This is not true, custody is very well understood when it comes to blockchain assets. Legal definitions of ownership are another question altogether that do require continual legislative attention, see Wyoming’s work in this area.[1]
You’ve also repeated the sins of the top comment by glossing over the actual issues with this provision by focusing on facts that almost everyone in the cryptocurrency space are in total agreement on.
> Tether and Binance are exemplars of pathological noncompliance.
The amendments to this provision are focusing on who should be excluded from these new requirements, of which Binance & Tether (or terms that could be construed to mean Binance or Tether) are nowhere to be found. The exceptions focus on miners, node operators, noncustodial software providers, and alternative consensus mechanism validators.
[1] https://www.google.com/amp/s/slate.com/technology/2021/06/wy...
This is not true, custody is very well understood when it comes to blockchain assets. Legal definitions of ownership are another question altogether that do require continual legislative attention, see Wyoming’s work in this area.[1]
You’ve also repeated the sins of the top comment by glossing over the actual issues with this provision by focusing on facts that almost everyone in the cryptocurrency space are in total agreement on.
> Tether and Binance are exemplars of pathological noncompliance.
The amendments to this provision are focusing on who should be excluded from these new requirements, of which Binance & Tether (or terms that could be construed to mean Binance or Tether) are nowhere to be found. The exceptions focus on miners, node operators, noncustodial software providers, and alternative consensus mechanism validators.
[1] https://www.google.com/amp/s/slate.com/technology/2021/06/wy...
Could you please share an example or two where custody of funds is not clearly defined?
I'm not in finance, and to me this sounds weird. Unclear custody looks to me as an obvious opportunity to plainly steal someone's funds.
I'm not in finance, and to me this sounds weird. Unclear custody looks to me as an obvious opportunity to plainly steal someone's funds.
The basic example most others are built on is a locked smart contract, where none of the participants can control the funds until the smart contract is programmed to release them. Most crypto developers conceptualize this scenario as the smart contract having custody (you can only steal the money if you trick the smart contract into giving it to you), but the smart contract can't exactly report things to the IRS.
How does the tax system work for financial instruments implemented by pen-and-paper contracts? Seems to me very similar to owning shares in Special Purpose Vehicles, with the (perhaps important) difference that a judge can't overrule the contract.. but they can still bind the owners right?
Part of me wonders if you could create a contractual "shim" that judges can read, which mirrors what the smart contract does and dictates behavior of the parties for matters outside the contract itself. Sort of like the template contracts used for mortgage-backed securities.
Part of me wonders if you could create a contractual "shim" that judges can read, which mirrors what the smart contract does and dictates behavior of the parties for matters outside the contract itself. Sort of like the template contracts used for mortgage-backed securities.
The difference is that the SPV is itself a legal entity responsible for keeping track of who owns it. (That's not to say it's a silver bullet, since SPVs can be and quite regularly are used to try and play accounting tricks to hide stuff from tax authorities.)
I’m anti-crypto cause not enough people can understand how it works as a value store.
It’s fascist to peddle what is effectively magic as truth of reality when it’s just another man-made concept power brokers will (already have?), manipulate for their outsized gain.
Nation state money schemes are low tech and well known; they haven’t changed much. We don’t need to make a meta-value store to exchange for nation state currency, at great material expense. I’d propose the opposite; we stop treating people like concepts we must pressure to import our perspectives and preferences.
It’s unverified, but I’m pretty sure if we just made medicine, offered education, and built technology for those ends rather than moved at the drumbeat of elder rich to validate their once youthful existence, and pipe dreams none of us will live to verify came true, humanity would be in a much better place.
Talk about energy vampires; don’t focus on living a varied and full life! Focus on validating the rich! Focus on consuming what we can make the best margin on! Watch our ads so you never forget us!
And then once they’re empowered… my privacy! My freedom of speech!
Nice work.
It’s fascist to peddle what is effectively magic as truth of reality when it’s just another man-made concept power brokers will (already have?), manipulate for their outsized gain.
Nation state money schemes are low tech and well known; they haven’t changed much. We don’t need to make a meta-value store to exchange for nation state currency, at great material expense. I’d propose the opposite; we stop treating people like concepts we must pressure to import our perspectives and preferences.
It’s unverified, but I’m pretty sure if we just made medicine, offered education, and built technology for those ends rather than moved at the drumbeat of elder rich to validate their once youthful existence, and pipe dreams none of us will live to verify came true, humanity would be in a much better place.
Talk about energy vampires; don’t focus on living a varied and full life! Focus on validating the rich! Focus on consuming what we can make the best margin on! Watch our ads so you never forget us!
And then once they’re empowered… my privacy! My freedom of speech!
Nice work.
> If the answer is there should be no AML, KYC and/or reporting by cryptocurrency companies, we have no common ground on this argument.
this hits the nail on the head, imo. its the central argument. i dont think its as unambiguous as you say, though.
payment processors are _right now_ acting as extrajudicial legislators. many LEGAL business, like porn and weed, are restricted from operating on major payment networks.
this is assuming you and your government are on the same side. there are many places in the world where crypto is a boon to the oppressed.
not to detract from your point. crypto has a clear and direct path to cybercrime. just saying its not so clear.
this hits the nail on the head, imo. its the central argument. i dont think its as unambiguous as you say, though.
payment processors are _right now_ acting as extrajudicial legislators. many LEGAL business, like porn and weed, are restricted from operating on major payment networks.
this is assuming you and your government are on the same side. there are many places in the world where crypto is a boon to the oppressed.
not to detract from your point. crypto has a clear and direct path to cybercrime. just saying its not so clear.
> payment processors are _right now_ acting as extrajudicial legislators. many LEGAL business, like porn and weed, are restricted from operating on major payment networks.
The thing is, at least for weed companies, that they technically are not legal on federal level where banks are regulated. The Obama, Trxmp and Biden admins simply have chosen for now to ignore the issue on executive level since Congress is completely and utterly dysfunctional, which is something the next admin/President can easily turn over and prosecute everyone involved, even for actions years past.
For porn (as well as, where legal, sex work and gambling), the problem is the immense amount of fraud associated with it. Horny people caught by their s/o's or company expense teams stumbling on CC bills or plain old "post nut clarity" has led to many fraudulent "card has been stolen" chargebacks, as did actual fraud by people using stolen CCs to sign up for porn sites and resell these accounts on the Internet, and additionally to that there are lots of legitimate chargebacks (dark patterns in account signup aka pre-checked "recurring" options, low quality content). And add to that the various issues regarding legality of services rendered (which may be different depending on where the seller and/or the buyer are located and where the service takes place).
And if that wasn't enough, the US likes to enforce their laws on companies based in the US also abroad... which means even here in Europe where sex work, porn and (in sometimes utterly incomprehensible ways) gambling are legal in most our states, we still have the problem that the US companies export their morality codes onto us Europeans (see also: facebook's nipplegate).
The result is legitimate businesses and mixed-content businesses (reddit, onlyfans) being struck by obscene merchant fees or being denied service altogether since it's frankly infeasible for non-local services, especially in physical sex work, to be in compliance with the myriad of rules ranging from global international agreements against drug usage and human trafficking over federal and state law to county/town ordinances.
I agree that these businesses deserve access to banking (alone to reduce the incentive to rob them of their physical cash!), but seriously the solution to that is a reform of banking, sex work and gambling legislation - not cryptocoins.
The thing is, at least for weed companies, that they technically are not legal on federal level where banks are regulated. The Obama, Trxmp and Biden admins simply have chosen for now to ignore the issue on executive level since Congress is completely and utterly dysfunctional, which is something the next admin/President can easily turn over and prosecute everyone involved, even for actions years past.
For porn (as well as, where legal, sex work and gambling), the problem is the immense amount of fraud associated with it. Horny people caught by their s/o's or company expense teams stumbling on CC bills or plain old "post nut clarity" has led to many fraudulent "card has been stolen" chargebacks, as did actual fraud by people using stolen CCs to sign up for porn sites and resell these accounts on the Internet, and additionally to that there are lots of legitimate chargebacks (dark patterns in account signup aka pre-checked "recurring" options, low quality content). And add to that the various issues regarding legality of services rendered (which may be different depending on where the seller and/or the buyer are located and where the service takes place).
And if that wasn't enough, the US likes to enforce their laws on companies based in the US also abroad... which means even here in Europe where sex work, porn and (in sometimes utterly incomprehensible ways) gambling are legal in most our states, we still have the problem that the US companies export their morality codes onto us Europeans (see also: facebook's nipplegate).
The result is legitimate businesses and mixed-content businesses (reddit, onlyfans) being struck by obscene merchant fees or being denied service altogether since it's frankly infeasible for non-local services, especially in physical sex work, to be in compliance with the myriad of rules ranging from global international agreements against drug usage and human trafficking over federal and state law to county/town ordinances.
I agree that these businesses deserve access to banking (alone to reduce the incentive to rob them of their physical cash!), but seriously the solution to that is a reform of banking, sex work and gambling legislation - not cryptocoins.
To elaborate, the customer's liability on unauthorized charges is capped by law on card transactions, so the merchant has to eat the cost of the alleged fraud or the cost of disputing the alleged fraud (plus the cost of the alleged fraud because their dispute will almost certainly fail).
Moving the cost of fraud to the buyer will change the buyer's behavior in a way that the seller wouldn't want, so this is just one more cryptocurrency solution in search of a problem.
Moving the cost of fraud to the buyer will change the buyer's behavior in a way that the seller wouldn't want, so this is just one more cryptocurrency solution in search of a problem.
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> If the answer is there should be no AML, KYC (edit: know-your-customer rules) and/or reporting by cryptocurrency companies, we have no common ground on this argument.
I still don't understand this. KYC has devolved into something unreasonable and it needs to be removed from the existing system, not extended.
When KYC was originally implemented, your bank was where you deposited your paycheck, paid your mortgage and withdrew some cash every few weeks for your expenses. If your bank knew who you were, they knew where you lived and where you worked. The first is a matter of public record and the second isn't exactly a big secret. Maybe you also had a car loan.
Today it has been extended to everything you buy on the internet or with a credit card, and people now buy everything on the internet and with credit cards. It ties your government identity to the books you read, the medical care you receive, genetic tests, what you eat, the establishments you patronize, your location history if you go anywhere and buy gas or anything else, who else was there at the same time, it's your whole life.
We need the ability to buy a copy of Das Kapital or a drink at a gay bar without being put on a List.
I still don't understand this. KYC has devolved into something unreasonable and it needs to be removed from the existing system, not extended.
When KYC was originally implemented, your bank was where you deposited your paycheck, paid your mortgage and withdrew some cash every few weeks for your expenses. If your bank knew who you were, they knew where you lived and where you worked. The first is a matter of public record and the second isn't exactly a big secret. Maybe you also had a car loan.
Today it has been extended to everything you buy on the internet or with a credit card, and people now buy everything on the internet and with credit cards. It ties your government identity to the books you read, the medical care you receive, genetic tests, what you eat, the establishments you patronize, your location history if you go anywhere and buy gas or anything else, who else was there at the same time, it's your whole life.
We need the ability to buy a copy of Das Kapital or a drink at a gay bar without being put on a List.
Cryptocurrency doesn't help you buy a drink or a book. It does, however, help the rich avoid taxes and launder money.
> Cryptocurrency doesn't help you buy a drink or a book.
It is possible to buy a drink or a book with cryptocurrency. A law that requires the book or drink seller to KYC the buyer would make this difficult without putting the buyer at risk.
Of course, most sellers of drinks and books don't accept cryptocurrency. Which is why KYC needs to be removed from applying to credit cards rather than being extended to cryptocurrency.
> It does, however, help the rich avoid taxes and launder money.
Which is the thing laws can have no effect on, because they can't actually change how cryptocurrency works. The laws an exchange in the US is subject to don't apply to one in Venezuela or Russia. If you can exchange a million dollars worth of Bitcoin for dollars or gold bars anywhere in the world then it will be worth it for anyone dealing in large sums to go there when they want to cash out. That's already happened. It's the consequence of its existence and you can't put the genie back in the bottle.
All the laws do is invade the privacy of law-abiding people and put vulnerable populations at risk. Criminals don't follow laws.
It is possible to buy a drink or a book with cryptocurrency. A law that requires the book or drink seller to KYC the buyer would make this difficult without putting the buyer at risk.
Of course, most sellers of drinks and books don't accept cryptocurrency. Which is why KYC needs to be removed from applying to credit cards rather than being extended to cryptocurrency.
> It does, however, help the rich avoid taxes and launder money.
Which is the thing laws can have no effect on, because they can't actually change how cryptocurrency works. The laws an exchange in the US is subject to don't apply to one in Venezuela or Russia. If you can exchange a million dollars worth of Bitcoin for dollars or gold bars anywhere in the world then it will be worth it for anyone dealing in large sums to go there when they want to cash out. That's already happened. It's the consequence of its existence and you can't put the genie back in the bottle.
All the laws do is invade the privacy of law-abiding people and put vulnerable populations at risk. Criminals don't follow laws.
The entire point of cryptocurrency is precisely to enable bank-like services without bank-like obligations, to enable individuals to be their own bank and manage their own money if they want to.
You're right that it's unsurprising that the US Senate does not care about this problem. On the other hand, I'm pretty sure that the cryptocurrency world does not care about the US Senate. This will just end up being another "I promise I'm not a US person" checkbox when you sign up for cryptocurrency services.
You're right that it's unsurprising that the US Senate does not care about this problem. On the other hand, I'm pretty sure that the cryptocurrency world does not care about the US Senate. This will just end up being another "I promise I'm not a US person" checkbox when you sign up for cryptocurrency services.
> point of cryptocurrency is precisely to enable bank-like services without bank-like obligations
Crypto has shown some rules are unnecessary or even harmful. They should be repealed, across the board. In other cases, many cases, it's reinforced some rules' necessity. Their scope should be broadened. That's what's going on here.
If the sole value of cryptocurrencies is in evading the rules, it's going to have a tough time.
> the cryptocurrency world does not care about the US Senate
Whether someone cares about the law isn't relevant to lawmaking or enforcement. (This attitude is also counterproductive. It leads to disengagement, which virtually guarantees more-onerous rules than would have been necessary.)
> will just end up being another "I promise I'm not a US person" checkbox when you sign up for cryptocurrency services
This, alone, is insufficient. AML duties aren't discharged by an "I promise I'm not a money launderer or tax evader" checkbox.
Crypto has shown some rules are unnecessary or even harmful. They should be repealed, across the board. In other cases, many cases, it's reinforced some rules' necessity. Their scope should be broadened. That's what's going on here.
If the sole value of cryptocurrencies is in evading the rules, it's going to have a tough time.
> the cryptocurrency world does not care about the US Senate
Whether someone cares about the law isn't relevant to lawmaking or enforcement. (This attitude is also counterproductive. It leads to disengagement, which virtually guarantees more-onerous rules than would have been necessary.)
> will just end up being another "I promise I'm not a US person" checkbox when you sign up for cryptocurrency services
This, alone, is insufficient. AML duties aren't discharged by an "I promise I'm not a money launderer or tax evader" checkbox.
> This, alone, is insufficient. AML duties aren't discharged by an "I promise I'm not a money launderer or tax evader" checkbox.
A Maltese company operating a server in Russia is under no obligation to follow US law for a customer who attests that he's Israeli. American KYC/AML provisions do not extend to the entire globe, and non-American entities are under no legal obligation to comply with them.
It is true that the US has a long arm of pressure that exists in the form of the SWIFT banking system. But the thing about crypto native companies is they never touch SWIFT to begin with. So unless you propose deploying the 101st Airborne to Valletta, how do you propose forcing foreign crypto companies from complying with US regulations.
A Maltese company operating a server in Russia is under no obligation to follow US law for a customer who attests that he's Israeli. American KYC/AML provisions do not extend to the entire globe, and non-American entities are under no legal obligation to comply with them.
It is true that the US has a long arm of pressure that exists in the form of the SWIFT banking system. But the thing about crypto native companies is they never touch SWIFT to begin with. So unless you propose deploying the 101st Airborne to Valletta, how do you propose forcing foreign crypto companies from complying with US regulations.
In fact this is how it works for real banks too. If you sign up for a bank account outside the US it's routine that they ask you if you are American, because they do not want to comply with onerous US regulations. It's a big problem for Americans who live abroad, who cannot access banking services in the country they are resident in.
It was more inconvenient in the past, but with things like (transfer)wise/paypal/stablecoins+crypto it's not that big an issue.
Easier for me to be bankless as an american abroad than to try bother to jump through all the hoops and getting a "real" bank account.
Easier for me to be bankless as an american abroad than to try bother to jump through all the hoops and getting a "real" bank account.
Have you actually tried this? I'm living abroad and I can tell you it's nearly impossible to be bankless, if you want to continue living in that place and have the government be OK with it.
At some point you need a long-term visa, which means you need a job, and that job will require you to have a (local) bank account.
Need to pay bills? You can't pay in cryptocurrency, and they expect local currency. Some may accept credit cards, but most will probably only accept debit or bank transfer. Ones that accept credit cards may only accept national cards.
If you're a US citizen and you have a bank account in the US (or credit cards), and they find out you're no longer residing in the US, they'll probably close your accounts to avoid dealing with FACTA. You'll need to setup special bank accounts, and may also need to switch your brokerage accounts.
At some point credit card companies will realize you're living somewhere else and will close your accounts, because they're intended to be used on vacation in other countries, but not long-term.
To use crypto, you need to convert it into fiat, and you can't do that without a bank account.
At some point you need a long-term visa, which means you need a job, and that job will require you to have a (local) bank account.
Need to pay bills? You can't pay in cryptocurrency, and they expect local currency. Some may accept credit cards, but most will probably only accept debit or bank transfer. Ones that accept credit cards may only accept national cards.
If you're a US citizen and you have a bank account in the US (or credit cards), and they find out you're no longer residing in the US, they'll probably close your accounts to avoid dealing with FACTA. You'll need to setup special bank accounts, and may also need to switch your brokerage accounts.
At some point credit card companies will realize you're living somewhere else and will close your accounts, because they're intended to be used on vacation in other countries, but not long-term.
To use crypto, you need to convert it into fiat, and you can't do that without a bank account.
I've been living abroad for almost six years, I've been working remotely, and for the visa I've needed for where I've wanted to be I do not need a local bank account (I can renew every year or every two years which is the most they allow for foreigners anyways).
I don't use credit cards and never had. When I need fiat, I swap with "friends" locally who want crypto or who do have accounts (they "shill" crypto brokerages on television stations shows [and their ads on other show slots] in the country i'm in and there are more local users of crypto than people who actually have regular brokerage accounts to trade local stocks in the country). And there are local websites where I can actually pay for bills with crypto but I see no real need to when its relatively easy for me to get cash (cash top ups for alot of apps that can be used to pay for lots of things from bills, goods/services and food). Any brokerage accounts I've had (IB and robinhood), I've long drained the funds/liquidated assets and these days I'm really only exposed to what I can trade on a dex.
Other foreigners I've talked usually jump through some hoops to have a local "agent" to set up accounts for them that they have control over, but i cannot be bothered. Less exposure to bailoutistan, the better.
To use crypto, you need to find someone else who will swap for it, and over the past 10 years, that has increased enough for me to be ok with the work arounds. May not be ok for the way you want to live your life, but it works for me.
One day i'll be "stateless", but a lot more work to happen on that front with many others for that to come into fruition… ;)
I don't use credit cards and never had. When I need fiat, I swap with "friends" locally who want crypto or who do have accounts (they "shill" crypto brokerages on television stations shows [and their ads on other show slots] in the country i'm in and there are more local users of crypto than people who actually have regular brokerage accounts to trade local stocks in the country). And there are local websites where I can actually pay for bills with crypto but I see no real need to when its relatively easy for me to get cash (cash top ups for alot of apps that can be used to pay for lots of things from bills, goods/services and food). Any brokerage accounts I've had (IB and robinhood), I've long drained the funds/liquidated assets and these days I'm really only exposed to what I can trade on a dex.
Other foreigners I've talked usually jump through some hoops to have a local "agent" to set up accounts for them that they have control over, but i cannot be bothered. Less exposure to bailoutistan, the better.
To use crypto, you need to find someone else who will swap for it, and over the past 10 years, that has increased enough for me to be ok with the work arounds. May not be ok for the way you want to live your life, but it works for me.
One day i'll be "stateless", but a lot more work to happen on that front with many others for that to come into fruition… ;)
> which virtually guarantees more-onerous rules than would have been necessary.
I see this as a good thing™, since more onerous rules will probably negatively affect a lot more people who may not even care about cryptocurrency just because they may be doing something that could be used for interacting with them.
The more invasive the better!
I see this as a good thing™, since more onerous rules will probably negatively affect a lot more people who may not even care about cryptocurrency just because they may be doing something that could be used for interacting with them.
The more invasive the better!
> The entire point of cryptocurrency is precisely to enable bank-like services without bank-like obligations, to enable individuals to be their own bank and manage their own money if they want to.
From what I understand of the actual cryptocurrency markets, very few people are actually interested in being their own bank. A lot of the cryptocurrency industry seems to be structured around providing bank-like services to cryptocurrency users.
From what I understand of the actual cryptocurrency markets, very few people are actually interested in being their own bank. A lot of the cryptocurrency industry seems to be structured around providing bank-like services to cryptocurrency users.
> This will just end up being another "I promise I'm not a US person" checkbox when you sign up for cryptocurrency services.
And that's only for centralized services… permissionless decentralized protocols with no articles of incorporation running on decentralized systems… this diktat is just the senate pissing in the wind…
Might as well be like clergy in the Ottoman Empire standing in the way of the printing press by saying it was a sin and it was invented by infidels…
And that's only for centralized services… permissionless decentralized protocols with no articles of incorporation running on decentralized systems… this diktat is just the senate pissing in the wind…
Might as well be like clergy in the Ottoman Empire standing in the way of the printing press by saying it was a sin and it was invented by infidels…
The bill expands the definition of broker to include anyone who facilities the transfer of crypto: miners, wallet providers, smart contract devs. These people are now made responsible for collecting transaction records for the IRS. That's just not how cryptocurrency works. Miners, smart contract devs, don't know who is transacting with who. It's effectively a ban on cryptocurrency.
You're not wrong, that is a maximalist interpretation of the language. Portman has tried to clarify, but there is always a gap between legislative intent and what the rulemaking process (i.e. Treasury) ends up doing with the statute. It's terrible language but not the end of the world (yet).
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I don't want to sound unsympathetic, because the situation really does suck for cryptocurrency devs, but it's not obvious to me that they should get to unilaterally decide how it works. The bill defines a broker as "any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person", and it seems reasonable that anyone who's transferring assets on behalf of someone else should know who that someone else is.
More broadly, if you've ever wondered how industries can go to Congress with a straight face and argue for crazy regulatory exemptions, this is what it feels like from the other side. I like crypto devs a lot more than I like, say, Exxon, but I still don't think we should have carveouts just to protect their business model.
More broadly, if you've ever wondered how industries can go to Congress with a straight face and argue for crazy regulatory exemptions, this is what it feels like from the other side. I like crypto devs a lot more than I like, say, Exxon, but I still don't think we should have carveouts just to protect their business model.
> Wyden's amendment is a result of reasonable concerns expressed by miners
I'm honestly kind of surprised Wyden's amendment didn't get accepted. I guess I misunderstood the level of support it actually had; it seemed reasonable to me and I thought that most of the interest groups had gotten onboard with it.
Maybe that's an area where I'm just in a bubble.
I'm honestly kind of surprised Wyden's amendment didn't get accepted. I guess I misunderstood the level of support it actually had; it seemed reasonable to me and I thought that most of the interest groups had gotten onboard with it.
Maybe that's an area where I'm just in a bubble.
I hear that later another amendment was pushed forward by sensors that perviously had voiced support for the Wyden amendment. This new amendment supposedly provided no solutions to done of the problems, but immediately found support from the White House as well and is rumored to have been pushed by the Treasury who doesn't like crypto.
It "felt like" some common ground between the wyden and portman (and its successor) amendments would be found. It was complicated by Senate procedural votes that made amendments much harder, and an overlying concern about CBO scoring of the budget impact of the bill. It can still be amended by unanimous consent (all 100 senators)but wyden or portman will have to blink and all the bill-haters will have to acquiesce.
Since I had to Google it:
AML - Anti Money Laundering
KYC - Know Your Customer (i.e. ID verification)
AML - Anti Money Laundering
KYC - Know Your Customer (i.e. ID verification)
KYC is not just ID verification. It's Know Your Customer, not "Know who you customer is". It goes deeper.
But the power and potential disruption of cryptocurrency is the anonymity. It's the benefits of cash brought to the digital world. I understand the dangers of the criminal element, but underground economies benefit oppressed people when governments turn tyrannical. If you're response to that is only that "it can't happen here", I don't know what to say. They can and do happen faster than anyone realizes. And they are not quick to give power back.
If your argument is that governments should not regulate cryptocurrency because the point of cryptocurrency is to evade government regulation, you should expect cryptocurrency to become illegal rather than regulated.
Not solely for the point of evading government regulation. I said it's useful to get around oppressive governments. Governments usually become tyrannies so gradual you don't notice. But it's faster than you think.
> underground economies benefit oppressed people when governments turn tyrannical
They also benefit the rich and powerful by enabling tax evasion and graft. Pyongyang, Tehran and Caracas make regular use of illicit trade and money laundering to facilitate upward wealth transfer.
Yours is a legitimate point. It's an argument for curtailing the power of law and government. That's fine. We can debate that. But until America decides it doesn't want to collect taxes anymore, the reporting is sort of required.
They also benefit the rich and powerful by enabling tax evasion and graft. Pyongyang, Tehran and Caracas make regular use of illicit trade and money laundering to facilitate upward wealth transfer.
Yours is a legitimate point. It's an argument for curtailing the power of law and government. That's fine. We can debate that. But until America decides it doesn't want to collect taxes anymore, the reporting is sort of required.
Cash and anonymous digital transactions also benefit the lower end as well.
Many poor families, including immigrants, get through life daily with an underground, cash only, economy.
It's not just a tool of the rich and wealthy.
Taxation on assets and income is THEFT.
Many poor families, including immigrants, get through life daily with an underground, cash only, economy.
It's not just a tool of the rich and wealthy.
Taxation on assets and income is THEFT.
A lot of people work in the underground economy. It's useful when excessive government regulations prevent "undesirables" from being hired.
When they cash it in for dollars, they have to report it their gains. That's already built in. This bill pushes further into the crypto space.
> But the power and potential disruption of cryptocurrency is the anonymity.
Depends on the ones you use. Certainly the privacy coins like Monero are the ones that do better than most of the other coins out there.
Depends on the ones you use. Certainly the privacy coins like Monero are the ones that do better than most of the other coins out there.
Almost every exchange I know of has mandatory KYC/AML now.
What makes you anti-crypto specifically? To me, crypto means cryptography, that enables both digital signatures and encryption. Are you against end-to-end encryption as well, for the same reasons? Let me dive into the root issue head-on.
I understand you only had in mind cryptocurrencies, but there is a far wider issue at play here, that must be discussed substantively.
This is generally about removing the middleman (Big Finance) from transactions, just as, say, scuttlebutt and bittorrent removed the middleman (Big Tech) from communications.
Now, there are (at least) two aspects by which they can be removed. One is control: they can’t prevent you from publishing X or sending Y. This causes people to be free to publish potentially seditious material, or otherwise objectionable or illegal material (eg child pornogrophy, or copies violating copyright law).
The other is removing them from having to collect data and report. Without middlemen, the government has a harder time going after everyone. For example, having every maker of a desktop printer or copier report metadata on what was printed, is infeasible. BUT in the past, when printing machinery was expensive, you could control what was published and sanction those who didn’t have the “letters patent” authorizing the printing of a specific book or magazine. You could make sure to control what was distributed widely. With federated services like Mastodon or Matrix, the government can make a bill tomorrow to require them to report metadata on all speech they host, to make sure none of it is dangerous.
This reminds of the disastrous SOPA bill that HN was pretty much against, but it has the exact same concerns, just in the area of speech rather than financial transactions: https://en.m.wikipedia.org/wiki/Stop_Online_Piracy_Act
So today, if governments allow people to have “unhosted” wallets, there could be a lot of flaunting of capital controls (by sending $2 billion internationally very quickly) and tax evasion (by not reporting certain sales of houses for crypto, for instance). This would have implications for money laundering and funding unsavory groups etc.
At the same time, however, for small amounts, people want to be able to transact freely, such as buying a pizza with cash. This might become impossible to do given where governments are going: they have nearly eliminated anonymous cash transactions and will do so with crypto as well. When it comes to financial transactions, they will insist that everything will be “hosted” by a third party who can be punished if they allow certain transactions to happen. This is in preparstion for massive centralization of the monetary system in the hands of the central banks, you will have an account at the central bank which picks winners and losers, instead of “so-called” stablecoins which present competition to them.
The problem is that this elimination of petty cash can easily lead to a “social credit system” like we have in China, and gradual tightening of screws on any participant in the economy.
Thankfully, the US government has not taken the same approach with speech (probably due to the first amendment) and Big Tech platforms can be disrupted (eg with https://qbix.com/blog/2021/01/15/open-source-communities/)
The only exception the US makes is for copyright enforcement, and there, you can see much the same argument and attempts to ban people from being able to use end-to-end encryption to host files using BitTorret, say. The difference is, there are no “gateways” to the regular system so the battle was lost.
However, that is NOT true in other countries, which have less respect for freedom of speech. If we as a global community allow these governments to insist on NEVER replacing middlemen with technology, if we let them ban end-to-end encryption until anyone using it is suspicious in and of themselves,then they will ALWAYS have someone to squeeze to make sure the “wrong” types of transactions or speech is chilld - no matter how small - until it is eradicated.
To all the downvoters who hit the button literally 30 seconds after I posted: can you please maybe comment as to why?
I understand you only had in mind cryptocurrencies, but there is a far wider issue at play here, that must be discussed substantively.
This is generally about removing the middleman (Big Finance) from transactions, just as, say, scuttlebutt and bittorrent removed the middleman (Big Tech) from communications.
Now, there are (at least) two aspects by which they can be removed. One is control: they can’t prevent you from publishing X or sending Y. This causes people to be free to publish potentially seditious material, or otherwise objectionable or illegal material (eg child pornogrophy, or copies violating copyright law).
The other is removing them from having to collect data and report. Without middlemen, the government has a harder time going after everyone. For example, having every maker of a desktop printer or copier report metadata on what was printed, is infeasible. BUT in the past, when printing machinery was expensive, you could control what was published and sanction those who didn’t have the “letters patent” authorizing the printing of a specific book or magazine. You could make sure to control what was distributed widely. With federated services like Mastodon or Matrix, the government can make a bill tomorrow to require them to report metadata on all speech they host, to make sure none of it is dangerous.
This reminds of the disastrous SOPA bill that HN was pretty much against, but it has the exact same concerns, just in the area of speech rather than financial transactions: https://en.m.wikipedia.org/wiki/Stop_Online_Piracy_Act
So today, if governments allow people to have “unhosted” wallets, there could be a lot of flaunting of capital controls (by sending $2 billion internationally very quickly) and tax evasion (by not reporting certain sales of houses for crypto, for instance). This would have implications for money laundering and funding unsavory groups etc.
At the same time, however, for small amounts, people want to be able to transact freely, such as buying a pizza with cash. This might become impossible to do given where governments are going: they have nearly eliminated anonymous cash transactions and will do so with crypto as well. When it comes to financial transactions, they will insist that everything will be “hosted” by a third party who can be punished if they allow certain transactions to happen. This is in preparstion for massive centralization of the monetary system in the hands of the central banks, you will have an account at the central bank which picks winners and losers, instead of “so-called” stablecoins which present competition to them.
The problem is that this elimination of petty cash can easily lead to a “social credit system” like we have in China, and gradual tightening of screws on any participant in the economy.
Thankfully, the US government has not taken the same approach with speech (probably due to the first amendment) and Big Tech platforms can be disrupted (eg with https://qbix.com/blog/2021/01/15/open-source-communities/)
The only exception the US makes is for copyright enforcement, and there, you can see much the same argument and attempts to ban people from being able to use end-to-end encryption to host files using BitTorret, say. The difference is, there are no “gateways” to the regular system so the battle was lost.
However, that is NOT true in other countries, which have less respect for freedom of speech. If we as a global community allow these governments to insist on NEVER replacing middlemen with technology, if we let them ban end-to-end encryption until anyone using it is suspicious in and of themselves,then they will ALWAYS have someone to squeeze to make sure the “wrong” types of transactions or speech is chilld - no matter how small - until it is eradicated.
To all the downvoters who hit the button literally 30 seconds after I posted: can you please maybe comment as to why?
> What makes you anti-crypto specifically? To me, crypto means cryptography, that enables both digital signatures and encryption. Are you against end-to-end encryption as well, for the same reasons?
This is an unreasonable contortion of the OP’s comment. Conflating cryptocurrency (an industry rife with scams) to cryptography (a branch of discrete mathematics) belies precisely the reason people don’t take cryptocurrency boosters seriously.
This is an unreasonable contortion of the OP’s comment. Conflating cryptocurrency (an industry rife with scams) to cryptography (a branch of discrete mathematics) belies precisely the reason people don’t take cryptocurrency boosters seriously.
It is shameful the cryptocurrency community hijacked the term crypto. Cryptography is the very thing cryptocurrency relies on to make their technology working in the first place (if we may call it 'working', YMMV). Cryptography is used in vastly more important systems, it is much more important than cryptocurrency. I mean, without cryptography you could not even use something like Git to develop software such as Bitcoin. You wouldn't be able to distribute a C library securely, something on which Bitcoin relies on.
And it goes deeper than that, including a point that woodruffw totally misses (perhaps he read only the first paragraph of what I wrote?)
If you are against anonymous cryptocurrency transactions, should you not also be against all end-to-end encryption? After all, it could conceal cryptocurrency transactions!
Or any of an endlessly growing amount of potentially dangerous information or assets, transferred peer to peer.
If you read what I wrote carefully, I clarify the issue so the substance can be discussed, rather than gotcha questions about equivocating words like “crypto”, as what woodruffw has done.
The issue is broken down into two things: 1) control over one’s own speech/identity/brand/etc so no one can take it from you, and 2) anonymity and freedom from consequences for illegal speech or transactions (according to the local lass in different countries).
I think nearly everyone is in favor of #1. The question is about #2. It is an interesting one - and notice that I myself do not advocate a position in my comment, just lay out the two issues and ask which direction you would be more comfortable for society to go in.
If you are against anonymous cryptocurrency transactions, should you not also be against all end-to-end encryption? After all, it could conceal cryptocurrency transactions!
Or any of an endlessly growing amount of potentially dangerous information or assets, transferred peer to peer.
If you read what I wrote carefully, I clarify the issue so the substance can be discussed, rather than gotcha questions about equivocating words like “crypto”, as what woodruffw has done.
The issue is broken down into two things: 1) control over one’s own speech/identity/brand/etc so no one can take it from you, and 2) anonymity and freedom from consequences for illegal speech or transactions (according to the local lass in different countries).
I think nearly everyone is in favor of #1. The question is about #2. It is an interesting one - and notice that I myself do not advocate a position in my comment, just lay out the two issues and ask which direction you would be more comfortable for society to go in.
> If you are against anonymous cryptocurrency transactions, should you not also be against all end-to-end encryption? After all, it could conceal cryptocurrency transactions!
This conflation of free expression and hiding your finances would get you laughed out of any courtroom in America. I strongly support E2EE encryption and do work that directly supports a number of E2EE efforts; the idea that this requires me to support unfettered money laundering is facile.
And no, there is no such conflation on my part. Once again: cryptocurrency is, by and large a collection of scam artists and shysters. Cryptography is a branch of discrete mathematics.
This conflation of free expression and hiding your finances would get you laughed out of any courtroom in America. I strongly support E2EE encryption and do work that directly supports a number of E2EE efforts; the idea that this requires me to support unfettered money laundering is facile.
And no, there is no such conflation on my part. Once again: cryptocurrency is, by and large a collection of scam artists and shysters. Cryptography is a branch of discrete mathematics.
Please read what I am actually writing. I will try a different format. Perhaps you can respond POINT BY POINT to show that you have read it and have a substantive argument about it, rather than about your personal feelings about what a name du jour should mean:
1. End-to-end encrypted communication opens the barn door, you can conceal any anonymous cryptocurrency transactions in there, as well as darknets, smart contracts for silk road, etc. If you allow one, you allow the other.
2. Conversely, as the EFF often points out, making a backdoor in any crypto means effectively backdooring all of it. According to their stance, you either allow all of it, or nothing. (I happen to disagree with that, but there it is.)
3. There are more countries in the world than "America" (you meant USA, I am sure). Many of those countries take a much more dim view of freedom of expression online, than we do here. We need to design our software for people around the world, not just care about the USA. Many people on HN are not in the USA. Here is just a small list of things that currently go wrong when we don't have "unhosted" communication (https://qbix.com/blog/2019/03/08/how-qbix-platform-can-chang...)
4. Contrary to your statement, the USA's courtrooms would not "laugh" the parallels out of the room. I will post just a small sampling of bills with the same intent in spirit, to restrict end-to-end encryption. I want to be clear that this is only the stuff done in the open, and doesn't include the secret actions by the NSA, or agencies that serve national security letters, etc.
4a. The MPAA and RIAA lobbied Congress to implement "reasonable" reporting measures to ban access to many sites that provide end to end encryption: https://en.wikipedia.org/wiki/Stop_Online_Piracy_Act
4b. After success in shutting down Craigslist and Backpage sex personals, Congress wanted to go further, and require every site to do this: https://en.wikipedia.org/wiki/Stop_Enabling_Sex_Traffickers_...
4c. Section 230 protections repeal: https://www.cbsnews.com/news/what-is-section-230-and-why-do-...
4d. The EARN IT act, just recently: http://cyberlaw.stanford.edu/blog/2020/01/earn-it-act-how-ba...
4e. LAED act, even more recent: http://cyberlaw.stanford.edu/blog/2020/06/there%E2%80%99s-no...
4f: Trump's attorney general was vocally against encryption, and lauded the proposed bill banning it: https://apnews.com/article/ny-state-wire-technology-ap-top-n...
https://apnews.com/article/ny-state-wire-technology-ap-top-n...
PLEASE address 1, 2, 3, and 4a - 4f
1. End-to-end encrypted communication opens the barn door, you can conceal any anonymous cryptocurrency transactions in there, as well as darknets, smart contracts for silk road, etc. If you allow one, you allow the other.
2. Conversely, as the EFF often points out, making a backdoor in any crypto means effectively backdooring all of it. According to their stance, you either allow all of it, or nothing. (I happen to disagree with that, but there it is.)
3. There are more countries in the world than "America" (you meant USA, I am sure). Many of those countries take a much more dim view of freedom of expression online, than we do here. We need to design our software for people around the world, not just care about the USA. Many people on HN are not in the USA. Here is just a small list of things that currently go wrong when we don't have "unhosted" communication (https://qbix.com/blog/2019/03/08/how-qbix-platform-can-chang...)
4. Contrary to your statement, the USA's courtrooms would not "laugh" the parallels out of the room. I will post just a small sampling of bills with the same intent in spirit, to restrict end-to-end encryption. I want to be clear that this is only the stuff done in the open, and doesn't include the secret actions by the NSA, or agencies that serve national security letters, etc.
4a. The MPAA and RIAA lobbied Congress to implement "reasonable" reporting measures to ban access to many sites that provide end to end encryption: https://en.wikipedia.org/wiki/Stop_Online_Piracy_Act
4b. After success in shutting down Craigslist and Backpage sex personals, Congress wanted to go further, and require every site to do this: https://en.wikipedia.org/wiki/Stop_Enabling_Sex_Traffickers_...
4c. Section 230 protections repeal: https://www.cbsnews.com/news/what-is-section-230-and-why-do-...
4d. The EARN IT act, just recently: http://cyberlaw.stanford.edu/blog/2020/01/earn-it-act-how-ba...
4e. LAED act, even more recent: http://cyberlaw.stanford.edu/blog/2020/06/there%E2%80%99s-no...
4f: Trump's attorney general was vocally against encryption, and lauded the proposed bill banning it: https://apnews.com/article/ny-state-wire-technology-ap-top-n...
https://apnews.com/article/ny-state-wire-technology-ap-top-n...
PLEASE address 1, 2, 3, and 4a - 4f
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I’m not going to do that, because I’m not going to spend any particular amount of time or effort defending a position that’s self evident among actual cryptographers.
Money laundering is not free speech, and supporting E2EE does not somehow magically mean that I have to support or be okay with burning coal so that people can crack hashes. If you want to argue about cryptography itself, I suggest finding someone who’s actually against privacy and encryption.
Money laundering is not free speech, and supporting E2EE does not somehow magically mean that I have to support or be okay with burning coal so that people can crack hashes. If you want to argue about cryptography itself, I suggest finding someone who’s actually against privacy and encryption.
Well, at least I was able to get you to tap out instantly. Okay.
Please understand, your strawman is very shallow and doesn't address the core issues at all. Yes, we all know that money laundering is not free speech. AND?
Besides money laundering, end-to-end encryption enables:
On the other hand, if we don't have the ability to do "small things" anonymously, like pay for food and shelter with cash, our societies will become more centralized and authoritarian, as we have seen with the social credit system, crackdown on religious activity throughout China, and the coming central bank digital currencies across all countries. The FATF actions will make it a global regime, and the deplatforming and social credit systems may become the norm depending on how the geopolitical players like USA and China leverage these global organizations.
PS: I am probably more vocal against proof-of-work than you are. See my public statements in ArsTechnica, BBC, Newsweek: https://arstechnica.com/information-technology/2018/03/there...: Magarshak went on to note that he has long criticized what he says is an "arms race to waste electricity to solve hashes." Such arms races are created by currency mining based on what's known as "proof of work" computing.
Please understand, your strawman is very shallow and doesn't address the core issues at all. Yes, we all know that money laundering is not free speech. AND?
Besides money laundering, end-to-end encryption enables:
Terrorists and criminals coordinating violent activities
Planning shadowy Silk Road type sales and arrangements
Violating copyright and robbing the RIAA and MPAA of profits
Posting child pornography
Enabling sex trafficking
and much more
On the other hand, if we don't have the ability to do "small things" anonymously, like pay for food and shelter with cash, our societies will become more centralized and authoritarian, as we have seen with the social credit system, crackdown on religious activity throughout China, and the coming central bank digital currencies across all countries. The FATF actions will make it a global regime, and the deplatforming and social credit systems may become the norm depending on how the geopolitical players like USA and China leverage these global organizations.
PS: I am probably more vocal against proof-of-work than you are. See my public statements in ArsTechnica, BBC, Newsweek: https://arstechnica.com/information-technology/2018/03/there...: Magarshak went on to note that he has long criticized what he says is an "arms race to waste electricity to solve hashes." Such arms races are created by currency mining based on what's known as "proof of work" computing.
With regards to #2 there is a global conflict of interest. For example, someone in Texas might be pro gun, and therefore release STL files for a firearm under a FOSS license. Whereas in my country, the possession of a firearm is heavily restricted to people with a proper license (which I am a proponent of, but my bias is my cultural background growing up in said country). Likewise, I might be pro cryptocurrency for a country like Venezuela, while the government/establishment of Venezuela might feel otherwise.
One nice thing with regards to #2 is that targeted surveillance can still exist even with cryptocurrency, E2EE, etc. If someone who works in an average 9to5 job suddenly owns a Porsche, that could be suspicious to warrant an investigation. Just because the data isn't available via OSINT or via coercion of platform/data owner, doesn't mean it cannot be obtained. It just costs more resources, and that's a tricky sunk cost for e.g. law enforcement. That's why they don't like either; it increases their workload which costs society money. Its not they cannot work around it; they can. Just not via previously (ab)used mass surveillance tactics. Like I said, I believe that's a nice thing, but it has cons (such as indeed the increased cost/workload).
Now, I believe we need to discuss all these pros and cons with an open mind, but unfortunately there are too many personal interests involved which skew a proper discussion. For example, cryptocurrency adapts have an interest in their asset remaining relevant.
One nice thing with regards to #2 is that targeted surveillance can still exist even with cryptocurrency, E2EE, etc. If someone who works in an average 9to5 job suddenly owns a Porsche, that could be suspicious to warrant an investigation. Just because the data isn't available via OSINT or via coercion of platform/data owner, doesn't mean it cannot be obtained. It just costs more resources, and that's a tricky sunk cost for e.g. law enforcement. That's why they don't like either; it increases their workload which costs society money. Its not they cannot work around it; they can. Just not via previously (ab)used mass surveillance tactics. Like I said, I believe that's a nice thing, but it has cons (such as indeed the increased cost/workload).
Now, I believe we need to discuss all these pros and cons with an open mind, but unfortunately there are too many personal interests involved which skew a proper discussion. For example, cryptocurrency adapts have an interest in their asset remaining relevant.
If you are against anonymous cryptocurrency transactions, should you not also be against all end-to-end encryption?
Only if you hold the belief that money is a form of free speech. Otherwise, money is just valuable property that you have to account for on your yearly/monthly tax statement to the government.
Only if you hold the belief that money is a form of free speech. Otherwise, money is just valuable property that you have to account for on your yearly/monthly tax statement to the government.
No, I believe that once you allow end to end encrypted free speech, you allow many dangerous things. Including cryptocurrency transactions, silk road sales for all kinds of bad things, sex trafficking and child pornography… you also allow terrorists to plan their activities, etc.
Yes I think that is just as dangerous, if not more, than monetary transactions.
Therefore, if your position is that people should not be allowed to have self-hosted wallets (“unhosted” wallets) and app stores should have to ban them from the stores, then you should consider whether the same position should be applied to E2E software across the board, and for the same reasons of opening a dangerous pandora’s box.
See the sister comment and my reply to it
Yes I think that is just as dangerous, if not more, than monetary transactions.
Therefore, if your position is that people should not be allowed to have self-hosted wallets (“unhosted” wallets) and app stores should have to ban them from the stores, then you should consider whether the same position should be applied to E2E software across the board, and for the same reasons of opening a dangerous pandora’s box.
See the sister comment and my reply to it
What makes you anti-crypto specifically?
Edit: see my sister comment for much more info
Edit: see my sister comment for much more info
Not OP, but the absence of AML/KYC appears to be (very explicitly) one of their points against cryptocurrencies.
From a proponent's perspective that's a big point in favour of cryptocurrencies. AML has been completely ineffective; there's absolutely zero evidence to show it's reduced drug usage or terrorism, drug gangs now are richer than ever before. What it has been effective at is making banking and achieving financial privacy way harder for the average individual. AML is like the war on drugs: it makes normal people's lives more miserable while being completely ineffective at stopping the thing it's supposed to stop, and is used as an excuse to give authoritarian governments more and more power.
> AML has been completely ineffective; there's absolutely zero evidence to show it's reduced drug usage or terrorism, drug gangs now are richer than ever before.
AML is not itself an anti-drug-trafficking or anti-terrorism law. It’s a law designed to make money laundering more difficult by requiring banks to keep and submit more information on large transactions. Normal American citizens also launder and embezzle money, and AML laws have arguably been pretty effective against the baseline petty financial crime that defined American upper class finance during the previous century.
Besides, the assertion that drug traffickers are “richer than before” needs substantiation and clarification. They can be “richer” than before in terms of cash on hand (particularly outside of USD), but it doesn’t mean all that much if they can’t wash it back into legitimate looking finances. But I don’t even necessarily believe that first half.
Finally, AML is a set of US laws. If you want to claim that the US is an authoritarian government, go ahead; just don’t contort your argument through some abstract Bad Guy. They don’t have access to your bank records.
AML is not itself an anti-drug-trafficking or anti-terrorism law. It’s a law designed to make money laundering more difficult by requiring banks to keep and submit more information on large transactions. Normal American citizens also launder and embezzle money, and AML laws have arguably been pretty effective against the baseline petty financial crime that defined American upper class finance during the previous century.
Besides, the assertion that drug traffickers are “richer than before” needs substantiation and clarification. They can be “richer” than before in terms of cash on hand (particularly outside of USD), but it doesn’t mean all that much if they can’t wash it back into legitimate looking finances. But I don’t even necessarily believe that first half.
Finally, AML is a set of US laws. If you want to claim that the US is an authoritarian government, go ahead; just don’t contort your argument through some abstract Bad Guy. They don’t have access to your bank records.
AML / CTF is enacted in the US through US laws (of course).
But, they're a Basel Committee initiative, where legislation is broadly mirrored around countries that have 95% of world GDP:
https://www.bis.org/list/bcbs/tid_199/index.htm
Central banks have come together to either help manage the order of world banking, or to allow evil Rothschild overlords to run the world, depending on which bit of the internet you're looking at.
But, they're a Basel Committee initiative, where legislation is broadly mirrored around countries that have 95% of world GDP:
https://www.bis.org/list/bcbs/tid_199/index.htm
Central banks have come together to either help manage the order of world banking, or to allow evil Rothschild overlords to run the world, depending on which bit of the internet you're looking at.
The legislation, sure. But not the infrastructure or data: Turkey can legislate whatever it wants, but they’re never going to see my bank records (except for under some truly extraordinary and unlikely circumstances).
To that same argument, saying there is no evidence that it has reduced black market behavior is the exact same concept that would drive 'There's no evidence that it hasn't reduced bad actors".
AML isn't like the war on drugs because that's a silly pointless war, it's more like traffic laws. Are they still broken? All of the time.
Would you rather drive on roads without them?
It's that simple, AML makes the job harder to do which is known to be effective at making harder to do, or at least introduces fear of doing.
AML isn't like the war on drugs because that's a silly pointless war, it's more like traffic laws. Are they still broken? All of the time.
Would you rather drive on roads without them?
It's that simple, AML makes the job harder to do which is known to be effective at making harder to do, or at least introduces fear of doing.
Cryptocurrency is also a hedge against tyranny. There seems to be a naive belief that it can never happen here, just because it never has.
>There seems to be a naive belief that it can never happen here, just because it never has.
What do you mean it never has? FDR literally stole everybody's gold in 1933 and got away with it.
What do you mean it never has? FDR literally stole everybody's gold in 1933 and got away with it.
Good point. Tyranny is not all or nothing gambit.
FDR was, in a sense, the Trump of the Democratic party. Hated by the industrialists, and he welcomed their hatred.
Big populist, had the Japanese put into internment camps, turned back ships full of Jewish refugees fleeing the Holocaust, and so forth.
Big populist, had the Japanese put into internment camps, turned back ships full of Jewish refugees fleeing the Holocaust, and so forth.
> There seems to be a naive belief that it can never happen here, just because it never has.
I’m sorry, but is the argument here that cryptocurrencies will somehow be instrumental in preventing the rise of fascism? Because that’s what the quote is from, although the chief motivator in the novel is independent journalism, not internet funny money.
I’m sorry, but is the argument here that cryptocurrencies will somehow be instrumental in preventing the rise of fascism? Because that’s what the quote is from, although the chief motivator in the novel is independent journalism, not internet funny money.
Well, they are instrumental in oppressive governments like Iran and Venezuela. The whole objective behind cryptocurrency is a digital cash. If you are unconcerned about it happening in US, I don't know what basis you have for that, other than it has never has. It could happen here just as easily. And faster than you think. And corrupt governments are not known for being quick to give rights back.
But this is a different scenario: Iran and Venezuela were ostensibly repressive long before cryptocurrencies became viable mechanisms for exfiltrating wealth from either country. And besides, the introduction of cryptocurrencies doesn’t seem to have helped much in terms of making either country less repressive (much less eliminating basic privation in either).
To whit: what bulwark, precisely, are cryptocurrencies providing here?
To whit: what bulwark, precisely, are cryptocurrencies providing here?
Iran and Venezuela would not have the crypto tool if it had not been for a free society in which they can operate. The fact they were tyrannical oppressive regimes before crypto came along is besides the point. They have them now and are proving useful for their citizens. I don't know how you say they haven't helped "much". I've heard they are proving very useful. Maybe not in overthrowing the regime, but at least in helping them to survive.
It's definitely useful in the hyperinflation environments happening in those countries.
It's definitely useful in the hyperinflation environments happening in those countries.
If you're worried that this legislation makes cryptocurrencies unable to fight government oppression, they were never able to fight government oppression to begin with.
If you still think they can fight government oppression, and if you believe government oppression is the reason for cryptocurrencies, there is nothing to worry about for this legislation.
If you still think they can fight government oppression, and if you believe government oppression is the reason for cryptocurrencies, there is nothing to worry about for this legislation.
> From a proponent's perspective [throwing out laws] a big point in favour of cryptocurrencies.
I agree. The main goal of cryptocurrencies is crime. You may not like the laws, but that doesn't change that the main goal is crime.
And this is why it'll never be mainstream. Turns out extremely few people actually want the ultralibertarian dystopia where there is no taxes, no drug laws, no reversibility, no accountability, no economic sovereignity, etc… etc…
Coiners are like the people who say "abolish the police" and mean it literally. They want to burn down everything about society because surely out of the rubbles will rise a phoenix of perfection. Surely now that we've thrown out not just the baby with the bathwater, but also bulldozed the whole city the baby was in, the next baby will never even need a bath because it'll magically never get dirty.
I agree. The main goal of cryptocurrencies is crime. You may not like the laws, but that doesn't change that the main goal is crime.
And this is why it'll never be mainstream. Turns out extremely few people actually want the ultralibertarian dystopia where there is no taxes, no drug laws, no reversibility, no accountability, no economic sovereignity, etc… etc…
Coiners are like the people who say "abolish the police" and mean it literally. They want to burn down everything about society because surely out of the rubbles will rise a phoenix of perfection. Surely now that we've thrown out not just the baby with the bathwater, but also bulldozed the whole city the baby was in, the next baby will never even need a bath because it'll magically never get dirty.
Everything in the article leads me to believe this only threatens the “cryptocurrency” industry, but I don’t have the actual text to the amendment. Is anything threatening “crypto” itself?
No, and I hate that people shorten cryptocurrency to crypto.
The term “derivatives” is widely used for financial derivatives like options and swaps. It’s gained such widespread adoption that it by far dwarfs the original meaning of the instantaneous rate of change in calculus.
I think the simpler answer is that when a word has two meanings, one a widely used category of financial instruments and the other a narrowly defined branch of advanced mathematics, the former will almost always dominate everyday discussion.
I think the simpler answer is that when a word has two meanings, one a widely used category of financial instruments and the other a narrowly defined branch of advanced mathematics, the former will almost always dominate everyday discussion.
The term 'derivative' is rarely ambiguous, where as 'crypto' often is. That's a key difference here.
Cryptography is more widely used than cryptocurrency. That people don't understand they're using it doesn't change the fact that "threatens the cryptography industry" is more scary than "threatens the cryptocurrency industry" especially since cryptocurrency relies on cryptography so it would be directly threatened as a consequence.
Possibility, I have heard “derivatives” most commonly used as a math term not a financial one. But it’s got plenty of other meanings: https://www.merriam-webster.com/dictionary/derivative
As in "something that originates from something else"
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Derivatives industry means one thing though, and doesn’t mean the mathematics industry. It’s not ambiguous either
>that it by far dwarfs the original meaning of the instantaneous rate of change in calculus.
That's not even the original meaning. According to etymology section on wiktionary, it dates back to middle french and latin, before issac newton was even born.
https://en.wiktionary.org/wiki/derivative#Etymology
That's not even the original meaning. According to etymology section on wiktionary, it dates back to middle french and latin, before issac newton was even born.
https://en.wiktionary.org/wiki/derivative#Etymology
Seconded.
I also hate that they shorten proof-of-work algorithm to "algo" (often just referring to the hash function used in the widely used Hashcash PoW).
The prefix "crypto" means hidden or disguised in English. Neither cryptocurrency nor cryptography have a monopoly on it. The way people get exercised about this issue you'd think that "cryptography" is the only word in the English language to use the prefix "crypto-".
The thing is that cryptocurrency is really a niche application of cryptography, where cryptography is very broadly used. So it's a little like if people started using "petroleum" to mean petroleum jelly. Sure, nobody is aware of cryptography's effect on their life. But it is a key ingredient in everything including cryptocurrency.
comment from a previous discussion: https://news.ycombinator.com/item?id=28075226
>the following categories do not count as brokers:
>(A) validating distributed ledger transactions
>(B) selling hardware or software for which the sole function is to permit a person to control private keys which are used for accessing digital assets on a distributed ledger, or
>(C) developing digital assets or their cor- responding protocols for use by other persons, provided that such other persons are not cus- tomers of the person developing such assets or protocols.
>the following categories do not count as brokers:
>(A) validating distributed ledger transactions
>(B) selling hardware or software for which the sole function is to permit a person to control private keys which are used for accessing digital assets on a distributed ledger, or
>(C) developing digital assets or their cor- responding protocols for use by other persons, provided that such other persons are not cus- tomers of the person developing such assets or protocols.
That's Wyden's amendment to this amendment. The amendment in question here is saying that a "broker" now includes anyone
> responsible for and regularly providing any service effectuating transfers of digital assets
(incidentally, I don't see how category (B) or even category (C) from Wyden's amendment could be reasonable construed as being included in the original text--those are products not services. I will concede that I can see how category (A) can be construed, although I doubt it would be so construed).
[Also note that "digital assets" is defined elsewhere in the amendment, although the news media didn't report on the precise text for digital asset, so I don't have it handy. But it's basically a reasonable definition.]
> responsible for and regularly providing any service effectuating transfers of digital assets
(incidentally, I don't see how category (B) or even category (C) from Wyden's amendment could be reasonable construed as being included in the original text--those are products not services. I will concede that I can see how category (A) can be construed, although I doubt it would be so construed).
[Also note that "digital assets" is defined elsewhere in the amendment, although the news media didn't report on the precise text for digital asset, so I don't have it handy. But it's basically a reasonable definition.]
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Yes thank you. I was alarmed in light of the Apple stuff that this is yet another attack on security.
I don't really follow any cryptocurrency news but wasn't one of the main appeals early on that it would be independent from any governments? Specifically that it could be a currency not subject to the oversight and sanctions of the US treasury? I guess "cryptocurrency" is different from "cryptocurrency industry", but it still seems like the ecosystem as a whole should be more resilient to actions from the US government. Otherwise what's the point?
Governments can't control it in a sense that they can't create more of it and can't sensor transactions(sanctions) .
If you think of it as the same idea of gold, the government can't make more it. They can limit transactions to a degree, but they can't really stop one person from handing another person a suitcase full of gold. They can make laws around it, but they will not necessarily be enforced. There is of course oversight over gold, but the government doesn't have as much control as fiat. Namely they can't make an infinite amount just by passing a bill.
The government can make as many laws as they want, whether they are enforced or not is another matter.
If you think of it as the same idea of gold, the government can't make more it. They can limit transactions to a degree, but they can't really stop one person from handing another person a suitcase full of gold. They can make laws around it, but they will not necessarily be enforced. There is of course oversight over gold, but the government doesn't have as much control as fiat. Namely they can't make an infinite amount just by passing a bill.
The government can make as many laws as they want, whether they are enforced or not is another matter.
Governments can control it. In the end of the day, sure they can't control that gold, but moving gold itself is a problem. You can't go to a dealership to buy something with your gold suitcase. In order to do anything useful with that stored wealth you need to convert it to cash and that's where they get you. That's how they control it.
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Cryptocurrency is extremely resilient to government action. Regardless of what happens with this legislation, I can virtually guarantee you that crypto will still exist in a decade. Obviously the market agrees, as the major coins and tokens have reached 3 month highs while this legislation was unfolding.
The reason I oppose hamfisted laws in crypto is the same reason I oppose the War on Drugs. Is the government even remotely competent to eliminate illicit drugs or even reduce the supply of illicit drugs? Not even close. But is the government capable of finding a few poor bastards and ruin their lives to make publicity stunts? Absolutely.
Just like with drug laws, the primary victims are going to be the disadvantaged and disconnected. Just like with drugs, the elites will be able to insulate themselves from the rules. Two out of three of our past presidents suffered no consequences from their admitted illicit drug use, while millions of poor minorities were locked up.
I’m a professional crypto dev, and I’m not sweating this at all. Our venture funded startup can easily afford high powered lawyers to make sure we’re compliant. Now what about the 17 year old hacker who quickly uploads a smart contract that he thinks does something cool, and all of a sudden is looking at two decades in federal prison because Elizabeth Warren wants to nail a sacrificial “shadowy super coder” to the wall.
The reason I oppose hamfisted laws in crypto is the same reason I oppose the War on Drugs. Is the government even remotely competent to eliminate illicit drugs or even reduce the supply of illicit drugs? Not even close. But is the government capable of finding a few poor bastards and ruin their lives to make publicity stunts? Absolutely.
Just like with drug laws, the primary victims are going to be the disadvantaged and disconnected. Just like with drugs, the elites will be able to insulate themselves from the rules. Two out of three of our past presidents suffered no consequences from their admitted illicit drug use, while millions of poor minorities were locked up.
I’m a professional crypto dev, and I’m not sweating this at all. Our venture funded startup can easily afford high powered lawyers to make sure we’re compliant. Now what about the 17 year old hacker who quickly uploads a smart contract that he thinks does something cool, and all of a sudden is looking at two decades in federal prison because Elizabeth Warren wants to nail a sacrificial “shadowy super coder” to the wall.
Drug laws caused the average person to be terrified of drugs. If the average person becomes as scared of crypto as they are of drugs, crypto may exist, it won't be a mainstream product.
There are no vc funded cocaine or heroine companies.
There are no vc funded cocaine or heroine companies.
Except crypto is global, and even easier to move across borders than drugs. Despite the government's sincerest hopes, American laws don't extend to foreign countries.
So, yes there will still be tons of VC funded crypto startups, they'll just be based in Malta or Israel or Singapore. And even in the most draconian enforcement regime, the US government will be incapable of stopping even 1% of American citizens who choose to interact with these protocols. VPNs are ubiquitous, highly secure and dirt cheap.
It is possible to nearly completely stamp out crypto usage in a single country, just as it is possible to nearly completely stamp out drug usage in a single country. But it requires CCP-level authoritarianism. Neither US voters nor the US judiciary has the stomach for that. You'd have to be extremely anti-crypto to think it justifies the creation of a Chinese-style great firewall and the associated surveillance state.
So, yes there will still be tons of VC funded crypto startups, they'll just be based in Malta or Israel or Singapore. And even in the most draconian enforcement regime, the US government will be incapable of stopping even 1% of American citizens who choose to interact with these protocols. VPNs are ubiquitous, highly secure and dirt cheap.
It is possible to nearly completely stamp out crypto usage in a single country, just as it is possible to nearly completely stamp out drug usage in a single country. But it requires CCP-level authoritarianism. Neither US voters nor the US judiciary has the stomach for that. You'd have to be extremely anti-crypto to think it justifies the creation of a Chinese-style great firewall and the associated surveillance state.
> You'd have to be extremely anti-crypto to think it justifies the creation of a Chinese-style great firewall and the associated surveillance state.
Even then, I see plenty of chinese users (talking in mandarin) on various forums/servers using decentralized protocols, hardly that effective.
Pipe dream laws for pipe dream deficit spending to continue to prop up zombie companies and industries.
Even then, I see plenty of chinese users (talking in mandarin) on various forums/servers using decentralized protocols, hardly that effective.
Pipe dream laws for pipe dream deficit spending to continue to prop up zombie companies and industries.
In jest, I'd point out Purdue and the Sacklers
If you need to hire high powered lawyers to be able to use crypto, isn't that demonstrating that crypto has failed to be a universal, government-independent currency? Or am I misunderstanding something and that was never the point?
My point is that you don't need a lawyer to use crypto. Just the same that you don't need a lawyer to order LSD off the dark net. And 99% of people who do both, do so without a lawyer. The rising price of crypto clearly shows the market shows no fear about this measure slowing down widespread adoption.
But for a small percent of unlucky people, mostly disadvantaged people without connections who can't afford the lawyers to insulate themselves from legal risk, the government will come in and randomly ruin their lives. No enlightened society should ever criminalize a victimless behavior, unless it's capable of widespread enforcement. Like the war on drugs, criminalizing an activity that you know you can't stop only ruins lives, without actually stopping the thing you're ostensibly worried about.
But for a small percent of unlucky people, mostly disadvantaged people without connections who can't afford the lawyers to insulate themselves from legal risk, the government will come in and randomly ruin their lives. No enlightened society should ever criminalize a victimless behavior, unless it's capable of widespread enforcement. Like the war on drugs, criminalizing an activity that you know you can't stop only ruins lives, without actually stopping the thing you're ostensibly worried about.
> wasn't one of the main appeals early on that it would be independent from any governments?
The government has the guns[1]. And a structured (albeit imperfect) way of having the people's voice be heard. It could never be independent in the way that coiners dream.
To a rounding error nobody wants the government not to be able to control the money.
Child support, theft, jury-awarded penalties, etc… etc…
People actually do want a judicial system. Is that controversial now?
[1] And don't give me 2nd amendment. This is what Biden meant when he said that the USG has nukes. It's not a threat, but a statement of fact that the people cannot outgun the armed forces. The USD is ulmitately backed by the nuclear triad, with many layers before that.
The government has the guns[1]. And a structured (albeit imperfect) way of having the people's voice be heard. It could never be independent in the way that coiners dream.
To a rounding error nobody wants the government not to be able to control the money.
Child support, theft, jury-awarded penalties, etc… etc…
People actually do want a judicial system. Is that controversial now?
[1] And don't give me 2nd amendment. This is what Biden meant when he said that the USG has nukes. It's not a threat, but a statement of fact that the people cannot outgun the armed forces. The USD is ulmitately backed by the nuclear triad, with many layers before that.
WINNERS: Large corporations and financial institutions. They can afford the now-required overhead for all kinds of services, including transaction processing with fees and rewards, i.e., mining, and make a nice profit at high volumes.
LOSERS: Smaller service providers. They cannot afford the now-required overhead because they don't have sufficient economies of scale.
LOSERS: Smaller service providers. They cannot afford the now-required overhead because they don't have sufficient economies of scale.
WINNERS: Rule of law
LOSERS: Criminals who saw so much hope in trivially laundering their ill gotten gains now see that as slightly less likely.
LOSERS: Criminals who saw so much hope in trivially laundering their ill gotten gains now see that as slightly less likely.
What? You expected the U.S. Government to not go after maintaining the levers it needs to project power through economic control of who is allowed to transact what?
There are less heavy ham-fisted approaches they could take. But they don't seem inclined or even interested in knowing the topic well enough to figure out how to do so.
Oh my goodness. Here is Portman himself in his own words:
“The Treasury Department, the nonpartisan Congressional Joint Committee on Taxation and others believe that the current language is clear and that the reporting requirements only covers brokers, but my view is that we should work to clarify this given the potential for confusion on an extremely important issue. In particular, we want to be sure miners and stakers and others now or in the future who play a key role by validating transactions, or sellers of hardware or software for digital wallets, or node operators, or others who are not brokers are clearly exempted.”
Video: https://youtu.be/p0auPbbDQnY
AND YET the Warner-Portman-Sinema (note the Portman in there!) amendment doesn’t specifically exclude stakers or validators who may now or in the future secure the networks, and certainly not the catch-all “others who are not brokers”? Only exempts proof-of-work miners? Yet he claims it was already “clearly exempted” in the proposed bill at the time of his speech and the amendment was supposed to clarify that??
I wonder if the Senator’s own words on the floor, and assurances that the Treasury and others hold the same view, could be used in court cases to clarify the meaning of “broker” later on, in favor of the defendants (Ethereum proof of stake miners, say) when they will invariably be served papers and prosecuted for not reporting.
Seriously, how can you say one thing and do another so blatantly? This is worse than “if you like your plan you can keep it”.
Will the Treasury and others likewise say one thing in private (as he reports) and quickly flip when it comes to making examples out of non-reporting POS miners?
“The Treasury Department, the nonpartisan Congressional Joint Committee on Taxation and others believe that the current language is clear and that the reporting requirements only covers brokers, but my view is that we should work to clarify this given the potential for confusion on an extremely important issue. In particular, we want to be sure miners and stakers and others now or in the future who play a key role by validating transactions, or sellers of hardware or software for digital wallets, or node operators, or others who are not brokers are clearly exempted.”
Video: https://youtu.be/p0auPbbDQnY
AND YET the Warner-Portman-Sinema (note the Portman in there!) amendment doesn’t specifically exclude stakers or validators who may now or in the future secure the networks, and certainly not the catch-all “others who are not brokers”? Only exempts proof-of-work miners? Yet he claims it was already “clearly exempted” in the proposed bill at the time of his speech and the amendment was supposed to clarify that??
I wonder if the Senator’s own words on the floor, and assurances that the Treasury and others hold the same view, could be used in court cases to clarify the meaning of “broker” later on, in favor of the defendants (Ethereum proof of stake miners, say) when they will invariably be served papers and prosecuted for not reporting.
Seriously, how can you say one thing and do another so blatantly? This is worse than “if you like your plan you can keep it”.
Will the Treasury and others likewise say one thing in private (as he reports) and quickly flip when it comes to making examples out of non-reporting POS miners?
Relevant Senate links appear to be:
• https://www.senate.gov/legislative/LIS/roll_call_lists/roll_...
• https://www.finance.senate.gov/imo/media/doc/Wyden%20Lummis%...
• https://www.senate.gov/legislative/LIS/roll_call_lists/roll_...
• https://www.finance.senate.gov/imo/media/doc/Wyden%20Lummis%...
There are a whopping 505 amendments for this bill.
Thank you for the direct link to the Wyden/Lummis/Toomey amendment.
I don't know how anyone can keep track of what a final bill would look like - seriously need something like Git to even keep up.
I think I understand now when folks in Congress complain they "don't know what they're voting for". They need better tools.
Here are all 505 if anyone is interested: https://www.congress.gov/amendment/117th-congress/senate-ame...
Thank you for the direct link to the Wyden/Lummis/Toomey amendment.
I don't know how anyone can keep track of what a final bill would look like - seriously need something like Git to even keep up.
I think I understand now when folks in Congress complain they "don't know what they're voting for". They need better tools.
Here are all 505 if anyone is interested: https://www.congress.gov/amendment/117th-congress/senate-ame...
Many people start coding at a young age. Imagine your kid having to report their dapp to the IRS. It's not about the money. It's about the control.
The situation is probably worse for adults. Why go through the hassle of developing dapps when it means dealing with the IRS and potentially jail, etc.? Personally I've abandoned working on completely harmless dapps because of threats from the state. It's stifling for independent development.
On the other hand, when people compare this to China banning mining, I think the USA is far friendlier to crypto than China, because, as the ascending fiat superpower, China has much more to lose. As the dollar continues to devalue, the USA would most likely prefer a future based on Ethereum rather than the Yuan.
The situation is probably worse for adults. Why go through the hassle of developing dapps when it means dealing with the IRS and potentially jail, etc.? Personally I've abandoned working on completely harmless dapps because of threats from the state. It's stifling for independent development.
On the other hand, when people compare this to China banning mining, I think the USA is far friendlier to crypto than China, because, as the ascending fiat superpower, China has much more to lose. As the dollar continues to devalue, the USA would most likely prefer a future based on Ethereum rather than the Yuan.
Many people start wood working at a young age. If they want to build a house, they need to acuire permits, comply with zoning regulation, comply with building codes, get sign off from a certified engineer.
Not all coding is the same. If you want to work to code in a regulated industry, you need to play by the regulations. Finance is a regulated industry, not a sandbox.
Not all coding is the same. If you want to work to code in a regulated industry, you need to play by the regulations. Finance is a regulated industry, not a sandbox.
Yeah but at the same time if you mint a few beautifully patterned - 300 hours-of-work each - wood coins and trade them; it’s not finance and it’s unregulated.
Just to be clear, "crypto" is short for cryptocurrencies?
This legislation does or does not impact other cryptography use cases?
My concern comes from government's long standing opposition to personal cryptography. eg Clipper chip in phones.
This legislation does or does not impact other cryptography use cases?
My concern comes from government's long standing opposition to personal cryptography. eg Clipper chip in phones.
As someone who has been sorely disappointed by much of how crypto has developed since it's early days and is somewhat a crypto pessimist, I'm extremely disturbed that something which could outright kill US Crypto is being rammed into a infrastructure spending bill. If you want to ban crypto, fine, that's a position which could be taken, debated, and discussed. But it should be done separately and given sufficient time for public feedback. Stuffing it into this bill is asinine to the nth degree.
It's not being "stuffed" into a bill, it's an amendment that had voting on it. There was a competing amendment that didn't get the support this one did.
Come on... He's not complaining about lack of voting. Obviously everyone is abiding by formal procedures. The problem is when congress passes bills under one name while it contains a myriad of unrelated legislation. This is bad for public transparency.
It's the infrastructure bill itself that contains the poorly considered provisions which (arguably) require miners and unhosted wallet developers to collect and report transaction information to the IRS. The competing proposed amendments to mitigate this have yet to be subjected to a vote.
Maybe because they know it is unpopular and they can't buy off senators who will only vote for it because it contains unrelated provisions they want?
Hey, the crypto industry has Ted Cruz in its corner, so that's, uh, okay, well, never mind.
I guess I don’t understand what the amendment actually does. If you’re a crypto miner, you already have to report your own income from that activity to the government; failure to do so is already a crime, namely tax evasion. And if you’re not a custodian, by definition your own activity is the only activity that you have data on, right? What new reporting does this actually mandate?
This mandates miners (and developers, and others who are not custodians) reporting data on others that they do not and cannot have.
Right, that's what the article says, but what specific data would they be required to report and in what context?
What are the reporting requirements? Will they lead to taxation? Overhead computing resource per block/transaction validated?
Is this reporting only, or will it result in additional taxes?
This seems light on details, and I really don't know what opinion to have on this without understanding what the requirements are. Nothing I've read succinctly explains this.
Is this reporting only, or will it result in additional taxes?
This seems light on details, and I really don't know what opinion to have on this without understanding what the requirements are. Nothing I've read succinctly explains this.
The same reporting requirements as banks. So the amendment is basically saying that anything that looks bank-ish in cryptocurrency terms will actually be treated as a bank for KYC/AML requirements. The consternation is that the "anything that looks bank-ish" is too broadly defined, but from my reading, it really isn't.
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Blegh. I think that cryptocurrency was a well-intentioned experiment trying to solve real problems, but that it has broadly failed, and that some of the knock-on effects of speculation on top of the cryptocurrency ecosystem are just unambiguously harmful at this point.
It's not just the environmental concerns from PoW; I have concerns about privacy, about how coins have derailed (in my mind) more legitimate efforts to improve modern financial systems. And I have cultural concerns about how this plays into some of the worst instincts of modern society towards speculation and artificial scarcity purely for their own sake, disconnected from any problems or utility. NFTs are the type of technology that honestly shouldn't have been developed, they're pointless and exploitative.
But as much as I do kind of want cryptocurrency to crash and die, I really don't want to do it this way. I've seen some people argue that this wouldn't apply to software developers, but I don't like that the question is under debate at all. The idea that it theoretically might is terrifying, if it's not intended to apply to developers why wouldn't we clarify that in the bill to assuage those fears? And even where miners are concerned: I would like to see mining (particularly PoW mining) eventually become unprofitable, but pushing those people into the category of brokers seems really problematic and short-sighted.
My worry is both that this will open the door to a lot more unnecessary data collection, and that further down the road it might hinder efforts to make better alternatives to the current cryptocurrency industry. The financial concerns are real, but the really troubling part to me is the reporting requirement. Software developers shouldn't be collecting this kind of information, neither should miners.
I also haven't seen a lot of consensus about what technologies the label "digital asset" could apply to in the future, and that worries me a lot as well. I am not a legal expert, I don't feel qualified at all to speculate on how this stuff is determined. A smaller group of people saying that "obviously X made-up digital token or point system or game item wouldn't count" -- that's not super-reassuring to me because I'm not smart enough to evaluate the accuracy of their claims. I want to see more qualified legal experts weigh in. I don't want to see games suddenly collecting a lot of personal information just because technically someone could sell a digital item to another player for money.
I like Wyden's amendment: it still goes after brokers, but it makes it clear who a broker is (and importantly, isn't). And I thought that there was pretty decent bipartisan support for Wyden's amendment. It's really frustrating that support seemed to only be good enough to get 29 votes.
It's not just the environmental concerns from PoW; I have concerns about privacy, about how coins have derailed (in my mind) more legitimate efforts to improve modern financial systems. And I have cultural concerns about how this plays into some of the worst instincts of modern society towards speculation and artificial scarcity purely for their own sake, disconnected from any problems or utility. NFTs are the type of technology that honestly shouldn't have been developed, they're pointless and exploitative.
But as much as I do kind of want cryptocurrency to crash and die, I really don't want to do it this way. I've seen some people argue that this wouldn't apply to software developers, but I don't like that the question is under debate at all. The idea that it theoretically might is terrifying, if it's not intended to apply to developers why wouldn't we clarify that in the bill to assuage those fears? And even where miners are concerned: I would like to see mining (particularly PoW mining) eventually become unprofitable, but pushing those people into the category of brokers seems really problematic and short-sighted.
My worry is both that this will open the door to a lot more unnecessary data collection, and that further down the road it might hinder efforts to make better alternatives to the current cryptocurrency industry. The financial concerns are real, but the really troubling part to me is the reporting requirement. Software developers shouldn't be collecting this kind of information, neither should miners.
I also haven't seen a lot of consensus about what technologies the label "digital asset" could apply to in the future, and that worries me a lot as well. I am not a legal expert, I don't feel qualified at all to speculate on how this stuff is determined. A smaller group of people saying that "obviously X made-up digital token or point system or game item wouldn't count" -- that's not super-reassuring to me because I'm not smart enough to evaluate the accuracy of their claims. I want to see more qualified legal experts weigh in. I don't want to see games suddenly collecting a lot of personal information just because technically someone could sell a digital item to another player for money.
I like Wyden's amendment: it still goes after brokers, but it makes it clear who a broker is (and importantly, isn't). And I thought that there was pretty decent bipartisan support for Wyden's amendment. It's really frustrating that support seemed to only be good enough to get 29 votes.
>>>> I think that cryptocurrency was a well-intentioned experiment trying to solve real problems...
I'm not so optimistic. I've seen too many technological experiments unleashed on humanity, such as Facebook, to where I am much more skeptical about the original intentions of their inventors.
I'm not so optimistic. I've seen too many technological experiments unleashed on humanity, such as Facebook, to where I am much more skeptical about the original intentions of their inventors.
They've updated the title. The title now reads: "U.S. Senate Bill Threatening Crypto Industry Moves Forward"
No it's fine. It's just the cryptocurrency/smart contract industry.
Crypto will be just fine.
Crypto will be just fine.
Doesnt go into effect until 2023. Theres going to be time for them to tweak this.
Strangely, crypto has gone up in spite of this news. This seems worse then China banning mining, which caused a pretty significant drop earlier this year.
Why would this not effect the market in a similar fashion. As far as I understand it, this effectively bans crypto mining in the US. Am I missing something?
Why would this not effect the market in a similar fashion. As far as I understand it, this effectively bans crypto mining in the US. Am I missing something?
If you think the crypto-market moves on news, then you have missed on some sweet gains. The news effect is getting reduced since every single time it proves that it doesn't matter.
Bitcoin price is lead mainly by retail demand. Speculators are quick to panic on the way down, but the return of retail demand end up in a new bubble. This is mostly the byproduct of lack of faith on the foundations of the price. These effects are less felt now that the market has matured.
Of course this is purely my opinion and observation. So take that with a bag of salt.
Bitcoin price is lead mainly by retail demand. Speculators are quick to panic on the way down, but the return of retail demand end up in a new bubble. This is mostly the byproduct of lack of faith on the foundations of the price. These effects are less felt now that the market has matured.
Of course this is purely my opinion and observation. So take that with a bag of salt.
Rush to buy before regulatiob kicks in? I mean the whole crypto rallies until now were not because of government help . Until recently banks would close your account if you bought cryptos
Because whenever there is bad news for cryptocurrency Tether prints a billion dollars worth of coins out of thin air to artificially inflate the price of BTC
I am no fan of the ongoing Tether fraud and share this view, however, instead of cynically declaring this to be the case, it'd be nice to see evidence of that occurring right now.
Bitcoin crypto is the future of secure IPO communications.
discussed previously: https://news.ycombinator.com/item?id=28074809
Unless I'm misunderstanding something; I think this article is saying that the amendment being discussed in the post you linked failed to pass?
So I guess now we're back to the previous previous discussion where the EFF was decrying the bill as a privacy disaster: https://news.ycombinator.com/item?id=28045227
So I guess now we're back to the previous previous discussion where the EFF was decrying the bill as a privacy disaster: https://news.ycombinator.com/item?id=28045227
If they kill crypto, we will always still have barter.
If they kill barter, then we've got serious problems.
If they kill barter, then we've got serious problems.
The only winner? Senate.
The only winner? Senate
If you think all cryptocurrencies are scams or think blockchains do nothing useful, please skip this comment.
If you think things like decentralized finance, storage and identity have the potential to improve our lives and offer some of the only genuine alternatives to an increasingly privacy-hostile status quo, please look into the shambolic legislative process that threatens the entire blockchain industry in the United States. This is the time to act and ensure that cryptocurrency provisions are debated meaningfully in Congress before any relevant legislation is passed. What the Senate is doing right now reeks of both outright incompetence and malice. There are many, many companies and builders active on HN who are about to have their existence challenged.
If you think things like decentralized finance, storage and identity have the potential to improve our lives and offer some of the only genuine alternatives to an increasingly privacy-hostile status quo, please look into the shambolic legislative process that threatens the entire blockchain industry in the United States. This is the time to act and ensure that cryptocurrency provisions are debated meaningfully in Congress before any relevant legislation is passed. What the Senate is doing right now reeks of both outright incompetence and malice. There are many, many companies and builders active on HN who are about to have their existence challenged.
you have artificially tried to divide people into one of two extreme camps! cryptocurrency is either totally useless or the savior of the world!
Most of us do not believe either of those things. At the moment I apllaud any legislation that outs the brakes on current crypto currencies. The damage they have been doing to the world so people can gamble/speculate has been immense, its a tragedy. Money transferring to the lucky all while burning through energy.
Most of us do not believe either of those things. At the moment I apllaud any legislation that outs the brakes on current crypto currencies. The damage they have been doing to the world so people can gamble/speculate has been immense, its a tragedy. Money transferring to the lucky all while burning through energy.
If your primary concern is the superfluous waste of energy you should be vehemently opposed to this amendment. It specifically exempts proof-of-work blockchains, while essentially outlawing alternatives.
It will drastically slow down innovation, and keep the majority of crypto activity on electricity guzzling proof of work chains. Already major Ethereum community members are discussing delaying or canceling the transition away from proof-of-work scheduled for the end of the year.
It will drastically slow down innovation, and keep the majority of crypto activity on electricity guzzling proof of work chains. Already major Ethereum community members are discussing delaying or canceling the transition away from proof-of-work scheduled for the end of the year.
You do understand that nobody forces anyone to gamble or speculate with cryptocurrencies, right?
You do understand that everyone is forced to endure the consequences of people gambling or speculate with cryptocurrencies, right?
See: Nvidia ship shortage, Bitcoin CO2 emissions, tons of ASICS destruction because miners are literally stealing electricity, ....
It's the same reason why psychoactive drugs are forbidden: no one forces you to use them, but everyone has to deal with the negative consequences of their usage. I don't think we should put drug users in prison, but I d'ont want to see a meth store at every street corner either.
See: Nvidia ship shortage, Bitcoin CO2 emissions, tons of ASICS destruction because miners are literally stealing electricity, ....
It's the same reason why psychoactive drugs are forbidden: no one forces you to use them, but everyone has to deal with the negative consequences of their usage. I don't think we should put drug users in prison, but I d'ont want to see a meth store at every street corner either.
Nvidia chip shortage? It only leads to cheaper prices long term, innovation, etc. sorry you are sad about not gaming in 4k.
Bitcoins co2 will get better, its also less than the energy used in trafitional finance (buildings, employee's, security, mining, etc). If anything crypro mining is encouraging green energy and able to locate itself to use otherwise wasted energy.
The war on drugs is one of the most useless and innefective policies EVER. It was created on racist terms to combat hippies and black activists, to protect monopolies (tabacco, big pharma) and it has led to the largest non violent prison state in history and made criminal cartels immensely wealthy. Not to mention the billions wasted and the millions dead. Look at Portugal, making drugs legal is the way forward.
Prohibition doesnt work. If you are afraid of cheats, gambling and pollution.. look no further than the big banks caught over and over laundering money for cartels and arms dealers the world over and to the largest polluter peotecting them, the military.
Bitcoins co2 will get better, its also less than the energy used in trafitional finance (buildings, employee's, security, mining, etc). If anything crypro mining is encouraging green energy and able to locate itself to use otherwise wasted energy.
The war on drugs is one of the most useless and innefective policies EVER. It was created on racist terms to combat hippies and black activists, to protect monopolies (tabacco, big pharma) and it has led to the largest non violent prison state in history and made criminal cartels immensely wealthy. Not to mention the billions wasted and the millions dead. Look at Portugal, making drugs legal is the way forward.
Prohibition doesnt work. If you are afraid of cheats, gambling and pollution.. look no further than the big banks caught over and over laundering money for cartels and arms dealers the world over and to the largest polluter peotecting them, the military.
I think we need to ban Christmas lights too, after all we all have to endure the consequences of people using electricy for stupid things like creating a decentralized financial system without the government stealing everyone
I guess we need a government to regulate all these things, the same way they did with the victorious war on drugs.
At least you don't have a meth store at every street corner, right, what a win
I guess we need a government to regulate all these things, the same way they did with the victorious war on drugs.
At least you don't have a meth store at every street corner, right, what a win
Same can be said for stocks, yet the crash of 1929 still happened and laws were written to help protect consumers and the economy
The response to 1929 wasn’t to functionally outlaw the existence of stocks.
This law does not functionally outlaw the existence of cryptocurrency, it clarifies requirements to operators that they cannot escape AML.
I would expect a court to find that PoS is close enough to PoW as Congress intends this legislation, without digressing into the various types of PoS. While poorly written, it is likely that pure network operations will be ok long term.
I would expect a court to find that PoS is close enough to PoW as Congress intends this legislation, without digressing into the various types of PoS. While poorly written, it is likely that pure network operations will be ok long term.
Except it does. Because as written it includes miners in that group. Miners have no possible way of having the full identity of the parties involved in every transaction they verify and it would be impossible to comply with this reporting. That effectively outlaws it.
Did you read the amendment? It explicitly exempts miners, the devs, and pure wallets
The United States Senate has voted in favor of the Warner-Sinema-Portman amendment to President Biden’s infrastructure bill in a landslide of 68-29 late on Sunday evening.
"The Warner-Sinema-Portman amendment has been widely criticized by the crypto community for imposing tax reporting requirements on non-custodial actors like miners and software developers who don’t record customer information."
The one that exempts miners has not been adopted (the rival Wyden-Toomey-Luumis amendment).
"The Warner-Sinema-Portman amendment has been widely criticized by the crypto community for imposing tax reporting requirements on non-custodial actors like miners and software developers who don’t record customer information."
The one that exempts miners has not been adopted (the rival Wyden-Toomey-Luumis amendment).
The reporting on this topic is inconsistent, but there's two amendments in play here.
AIUI, this is saying that the first amendment (which enacts the reporting requirement in the first place) has been accepted. The second amendment (which adds the explicit exemptions you mentioned) hasn't been decided on yet as far as I can tell.
AIUI, this is saying that the first amendment (which enacts the reporting requirement in the first place) has been accepted. The second amendment (which adds the explicit exemptions you mentioned) hasn't been decided on yet as far as I can tell.
That explains it, I have not seen the "first" ever reported as an amendment and only as part of the infra bill as if it was already in there
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How does being required to track data about taxation challenge the existence of the builders you mention?
I can see how it might for the companies - people who use crypto for tax and authority avoidance seem likely to stop using any service that complies with this law.
I don't see how this bill threatens any human's existence.
I can see how it might for the companies - people who use crypto for tax and authority avoidance seem likely to stop using any service that complies with this law.
I don't see how this bill threatens any human's existence.
> I don't see how this bill threatens any human's existence.
It doesn't.
> How does being required to track data about taxation challenge the existence of the builders you mention?
Suppose US law says that it is illegal to "mine" a block of bitcoin unless you keep records of the true name, address, and social security number of every person whose transaction occurs within that block and provide that information to US banking regulators on demand.
Since the information available to miners does not include true name, address, and social security number, the only way to comply with such a requirement would be to not mine blocks for bitcoin.
(There's another option -- go ahead and violate this law. If the US government doesn't have a beef with you then they'll just choose not to prosecute you. If they DO have a beef with you then you can try arguing in court that the law is unconstitutional. This will take years and extremely large legal fees and it might or might not be successful.)
I don't have a problem with requiring Coinbase or Biance to maintain records of information available to them. I DO have some concerns with mandating that no transactions may be done anonymously except those done in cash -- although I understand that some may disagree on this. But I strongly oppose imposing impossible-to-meet requirements on those who write code for cryptocurrencies, perform "mining" of cryptocurrencies, or who hold and/or spend cryptocurrencies themselves.
It doesn't.
> How does being required to track data about taxation challenge the existence of the builders you mention?
Suppose US law says that it is illegal to "mine" a block of bitcoin unless you keep records of the true name, address, and social security number of every person whose transaction occurs within that block and provide that information to US banking regulators on demand.
Since the information available to miners does not include true name, address, and social security number, the only way to comply with such a requirement would be to not mine blocks for bitcoin.
(There's another option -- go ahead and violate this law. If the US government doesn't have a beef with you then they'll just choose not to prosecute you. If they DO have a beef with you then you can try arguing in court that the law is unconstitutional. This will take years and extremely large legal fees and it might or might not be successful.)
I don't have a problem with requiring Coinbase or Biance to maintain records of information available to them. I DO have some concerns with mandating that no transactions may be done anonymously except those done in cash -- although I understand that some may disagree on this. But I strongly oppose imposing impossible-to-meet requirements on those who write code for cryptocurrencies, perform "mining" of cryptocurrencies, or who hold and/or spend cryptocurrencies themselves.
Thanks for explaining your perspective.
I guess I was too elliptical, because I mostly already understood what you've explained here - I thought the OP was making way too strong a claim.
Instead of just saying that, I asked why he thought the builders in question had their existence threatened.
The builders in question may not be able to legally build the systems they want to in the US, but that's really not threatening their existence.
I guess I was too elliptical, because I mostly already understood what you've explained here - I thought the OP was making way too strong a claim.
Instead of just saying that, I asked why he thought the builders in question had their existence threatened.
The builders in question may not be able to legally build the systems they want to in the US, but that's really not threatening their existence.
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I've also been struck by the proliferation of bank-like services without bank-like obligations. This stretches from fractional-reserve and maturity-transforming services like Tether to exchanges/dealers like Binance and ersatz money transmitters like BitPay.
We need AML (edit: anti-money laundering) and tax reporting at those nexuses. If the answer is there should be no AML, KYC (edit: know-your-customer rules) and/or reporting by cryptocurrency companies, we have no common ground on this argument. To date, this is what I have most-commonly heard. If that's what the Senate is hearing, it's unsurprising they consider the debate closed. If the argument is a reasonable tweak to who has to report, or what or the form in which it must be reported, policy makers are listening. (Wyden's amendment is a result of reasonable concerns expressed by miners.)