Combating Money Laundering, Terrorist Financing, and Counterfeiting Act(reddit.com)
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Combating Money Laundering, Terrorist Financing, and Counterfeiting Act
https://www.reddit.com/r/Bitcoin/comments/6hbis7/us_congress_going_full_1984_on_bitcoin_and_assets/
97 comments
> What else do we expect governments to do?
We expect it to not both support the laws that create a $100B black market for drugs in the first place, and then try to combat the consequences of its own actions and claim it's solving a problem, rather than creating two of them.
We expect it to not both support the laws that create a $100B black market for drugs in the first place, and then try to combat the consequences of its own actions and claim it's solving a problem, rather than creating two of them.
I'm very much in favour of legalization of drugs.
But there are other crimes that create illicit money: extortion/blackmail, human/child trafficking/exploitation, murder for hire, theft, ransomware/malware, and whatever new horrible ideas get created next.
Making money laundering harder makes criminal activity less beneficial to commit. And while ending the illegal drug trade will greatly reduce the need for anti-money laundering organizations, it certainly won't end the need entirely.
But there are other crimes that create illicit money: extortion/blackmail, human/child trafficking/exploitation, murder for hire, theft, ransomware/malware, and whatever new horrible ideas get created next.
Making money laundering harder makes criminal activity less beneficial to commit. And while ending the illegal drug trade will greatly reduce the need for anti-money laundering organizations, it certainly won't end the need entirely.
Sure, and the government should be investigating people who have lots of suspicious cash. That's a lot different than penalizing people with private wealth just because they have it.
How do you expect the government to know about people who have lots of suspicous cash? That's what the reporting laws are intended to help detect...
They shouldn't unless they have reason to investigate me. I live in the US. I have a reasonable expectation of privacy and it shouldn't be a crime to not proactively confirm that I'm not committing crimes.
This seems like a very naive view. Plenty of people will want to launder money to support acts of violence regardless of what laws are on the books. When you want to kill somebody, you want to kill somebody.
> What else do we expect governments to do?
Stop allying with Saudi Arabia & leave hard working people alone?
End the bogus war on drugs?
Allow innovation to take root?
Not sure.
Stop allying with Saudi Arabia & leave hard working people alone?
End the bogus war on drugs?
Allow innovation to take root?
Not sure.
I mean, yes to those things. I agree. I was sort of meaning what are they to do to stop money laundering. 'Cause like, criminals are always going to exist and the best place to catch them seems to be when they try to clean up the money.
Aren't the largest criminals best at laundering money?
And doesn't the war on drugs create violent criminals?
Doesn't an illegal market in drugs allow terrorists to profit from said market?
It seems to me Joe Schmo takes the brunt of these laws. All the while a bunch of cheap suits get to justify their jobs.
And doesn't the war on drugs create violent criminals?
Doesn't an illegal market in drugs allow terrorists to profit from said market?
It seems to me Joe Schmo takes the brunt of these laws. All the while a bunch of cheap suits get to justify their jobs.
> Aren't the largest criminals best at laundering money?
Interestingly, not with the existing laws. Since you can move up to $10,000 per day without any reports being filed, a criminal laundering under $3.6m/year could theoretically fly under the radar.
> And doesn't the war on drugs create violent criminals?
Yes, but there are plenty of other crimes unrelated to drugs that bring in money. I'm all for decriminalization of drugs (it's a health problem, not a crime problem), but that doesn't mean I'm in favour of allowing money laundering.
I just think you might be missing the forest for the trees here. There's lots of reasons not to want money laundering to be legal. Think of all the other places illicit money comes from; I want those crimes not to pay very well at all.
Interestingly, not with the existing laws. Since you can move up to $10,000 per day without any reports being filed, a criminal laundering under $3.6m/year could theoretically fly under the radar.
> And doesn't the war on drugs create violent criminals?
Yes, but there are plenty of other crimes unrelated to drugs that bring in money. I'm all for decriminalization of drugs (it's a health problem, not a crime problem), but that doesn't mean I'm in favour of allowing money laundering.
I just think you might be missing the forest for the trees here. There's lots of reasons not to want money laundering to be legal. Think of all the other places illicit money comes from; I want those crimes not to pay very well at all.
Banks are required to file Suspicious Activity Reports for any suspicious (very broadly defined) deposits or withdrawals even if the amount is much less than $10k. The feds can also temporarily designate certain geographic regions as 'high risk' which means banks in those regions must comply with much more stringent reporting requirements.
It is also illegal to move money in such a way as to evade the reporting requirements ('structuring', what they nailed Dennis Hastert for).
It is also illegal to move money in such a way as to evade the reporting requirements ('structuring', what they nailed Dennis Hastert for).
> Interestingly, not with the existing laws. Since you can move up to $10,000 per day without any reports being filed, a criminal laundering under $3.6m/year could theoretically fly under the radar.
Theoretically!
> Yes, but there are plenty of other crimes unrelated to drugs that bring in money.
> Think of all the other places illicit money comes from
All very handwavey. Whenever I've read anything about money laundering it's about drugs, terrorism, & organised crime. And isn't a large part of organised crime drugs?
Theoretically!
> Yes, but there are plenty of other crimes unrelated to drugs that bring in money.
> Think of all the other places illicit money comes from
All very handwavey. Whenever I've read anything about money laundering it's about drugs, terrorism, & organised crime. And isn't a large part of organised crime drugs?
> allowing money laundering
This has nothing to do with money laundering. Money laundering requires that the money is dirty. This is essential making private wealth illegal regardless of the legality of the source.
This has nothing to do with money laundering. Money laundering requires that the money is dirty. This is essential making private wealth illegal regardless of the legality of the source.
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Is there an analysis somewhere that isn't so, uh, /r/bitcoin? There's a kind of occasional Chicken Little style there that seems to add more heat than light.
Yes, and please don't take this as a snarky comment:
ctrl+f "digital currencies" and you will see exactly how involved the bill is with Bitcoin.
You are right to suspect this is the reddit crowd over-reacting, and the amendment to the title is probably better. Basically, there is a proposition to include the words "Digital Currenc(ies/y)" into a few places in the bill.
I am somewhat reminded of an earlier court case from Florida where the judge dismissed charges involving Bitcoin because there was no legal definition for it. This bill is basically addressing that and presenting a legal framework for Money Laundering and Terrorist Financing investigations to allow investigation of Bitcoin as well.
The fallout from this can be interpretted by others, but this isn't a specific bill or "1984" attack on Bitcoin, it's adding digital currencies as part of a legal framework for two specific crimes.
edit: added "investigations" to the second paragraph to clarify that it presented a legal framework for such investigations.
ctrl+f "digital currencies" and you will see exactly how involved the bill is with Bitcoin.
You are right to suspect this is the reddit crowd over-reacting, and the amendment to the title is probably better. Basically, there is a proposition to include the words "Digital Currenc(ies/y)" into a few places in the bill.
I am somewhat reminded of an earlier court case from Florida where the judge dismissed charges involving Bitcoin because there was no legal definition for it. This bill is basically addressing that and presenting a legal framework for Money Laundering and Terrorist Financing investigations to allow investigation of Bitcoin as well.
The fallout from this can be interpretted by others, but this isn't a specific bill or "1984" attack on Bitcoin, it's adding digital currencies as part of a legal framework for two specific crimes.
edit: added "investigations" to the second paragraph to clarify that it presented a legal framework for such investigations.
But ETH is not a currency - it's GAS!
Gas that acts very much like a currency insofar as it is a store of value due to its utility and scarcity.
This is pedantry at its worst.
This is pedantry at its worst.
Occasional?
Just a reminder when talking about this with people: Money laundering is not an actual crime that harms anyone. It's a made-up thing to make prosecutors lives easier by lowering the bar on what they can go after people for. We need to undo the marketing that governments push out and media plays along with. It's sad that not telling the government your every financial move is seen as wrong in any remotely free society.
Money laundering itself might not be something that harms anyone, the problem is it's often done to conceal actions that have harmed someone or will harm someone. If I'm selling drugs or weapons, someone is going to start asking where all this money came from. It's easier for my legal case to say "my laundromat" or "my car wash" than it is for me to say "selling crack and Glocks".
You could make the case that money laundering itself should not be considered a crime, but it should be strongly considered with other evidence of wrong-doing. There are very few legitimate reasons to go out of your way to conceal the source of your income, so in doing so you're already behaving suspiciously.
Like it's not illegal to swerve back and forth in your car without ever leaving your lane, but if a cop see you doing it you're probably going to get pulled over. Because the only reasons you'd be swerving like that tend to be actual illegal activities.
You could make the case that money laundering itself should not be considered a crime, but it should be strongly considered with other evidence of wrong-doing. There are very few legitimate reasons to go out of your way to conceal the source of your income, so in doing so you're already behaving suspiciously.
Like it's not illegal to swerve back and forth in your car without ever leaving your lane, but if a cop see you doing it you're probably going to get pulled over. Because the only reasons you'd be swerving like that tend to be actual illegal activities.
Cultivating, processing & producing drugs shouldn't be legal in the first place. Governments create cartels by making it illegal. In Mexico, cartels also run local some governments, states & also control many activities such as cattle sales, used auto parts, metals, meat, fish, flowers, etc... if you dare to buy from an unauthorized supplier or sell to someone other than them, you are beaten, extorted, or killed. On top of that they also kidnap, steal and require monthly payments to let businesses operate.
Terrorism is state funded and preventing laundering won't do much.
Laundering helps people in countries like Mexico, where a large part of the tax revenue goes into the hands of few. Why fund a state that is run by gangsters?
Terrorism is state funded and preventing laundering won't do much.
Laundering helps people in countries like Mexico, where a large part of the tax revenue goes into the hands of few. Why fund a state that is run by gangsters?
Your point is taken, but surely you will agree that there are at least some ways to make money surreptitiously that should be illegal?
> Like it's not illegal to swerve back and forth in your car without ever leaving your lane, but if a cop see you doing it you're probably going to get pulled over.
Well traffic law has similar catch-all like 'disorderly conduct' laws: 'careless driving'. Up to the officer's discretion, basically.
Well traffic law has similar catch-all like 'disorderly conduct' laws: 'careless driving'. Up to the officer's discretion, basically.
They don't need AML stuff to have this. If someone's laundromat is doing record income, sure, fine, hang out and watch them a bit and see if they look like a lead for a real crime.
I'd also note that encryption is "not be something that harms anyone" but "often done to conceal actions ... harm".
I'd also note that encryption is "not be something that harms anyone" but "often done to conceal actions ... harm".
I actually had a line in there that said "Unlike encryption, there are very few legitimate reasons..." but I took it out because it seemed like too specific of an example so if someone brought it up I would argue it then, and not before.
This particular money laundering debate is very unlike the encryption debate. Actually, you could argue that money laundering is a very specific type of encryption, you're just encrypting the source of your income by adding noise instead of encrypting digital data.
Let's see just some of the reasons you'd use encryption:
So bad people can't find your passwords
So bad people can't get into your bank account
So bad people can't see what websites you've been visiting
So bad people can't see your pictures
So bad people can't steal your intellectual property
And why would you need this type of privacy?
So criminals and bad people can't injure you using your private information
So corrupt governments can't see what information you've been reading/writing/sharing
So you can have some assurance that your email/social media/etc accounts are fully controlled by you, and likewise for those you're interacting with
Now let's see some of the reasons you'd launder money:
So the government can't see where you got the money.
That's it.
And why would you need this type of privacy?
So the government doesn't know you committed a crime to get that money.
That's it.
People don't launder money because they're ashamed to admit they work at Microsoft. People don't launder money to hide their employer from criminals who want to hurt them. People don't launder money to hide it from other citizens. People don't launder money from legitimate businesses. People launder money so the government doesn't know that they got the money illegally. That's it.
There's a lot of legitimate reasons to encrypt various things, and no one has ever argued that encryption is only ever used for legal and good purposes. The argument is that while encryption is sometimes used for crimes, the good things it enables outweigh the bad things. But there's only one reason to launder money, and that's because you earned it illegally.
This particular money laundering debate is very unlike the encryption debate. Actually, you could argue that money laundering is a very specific type of encryption, you're just encrypting the source of your income by adding noise instead of encrypting digital data.
Let's see just some of the reasons you'd use encryption:
So bad people can't find your passwords
So bad people can't get into your bank account
So bad people can't see what websites you've been visiting
So bad people can't see your pictures
So bad people can't steal your intellectual property
And why would you need this type of privacy?
So criminals and bad people can't injure you using your private information
So corrupt governments can't see what information you've been reading/writing/sharing
So you can have some assurance that your email/social media/etc accounts are fully controlled by you, and likewise for those you're interacting with
Now let's see some of the reasons you'd launder money:
So the government can't see where you got the money.
That's it.
And why would you need this type of privacy?
So the government doesn't know you committed a crime to get that money.
That's it.
People don't launder money because they're ashamed to admit they work at Microsoft. People don't launder money to hide their employer from criminals who want to hurt them. People don't launder money to hide it from other citizens. People don't launder money from legitimate businesses. People launder money so the government doesn't know that they got the money illegally. That's it.
There's a lot of legitimate reasons to encrypt various things, and no one has ever argued that encryption is only ever used for legal and good purposes. The argument is that while encryption is sometimes used for crimes, the good things it enables outweigh the bad things. But there's only one reason to launder money, and that's because you earned it illegally.
It sounds like you're trying to argue against the person you're replying to, but aren't you both saying essentially the same thing? It's a made up thing that makes prosecutors lives easier when they're trying to catch somebody committing a real crime.
Every law is a made-up thing. There's no inherent laws of man that govern the world divined by God himself.
What the parent is trying to argue is that the entire idea of money laundering should be forgotten and there should be no negative public perception of money laundering. What I'm arguing is sure, maybe people shouldn't go to jail for money laundering by itself, but there are zero legitimate reasons to launder money. The very fact that someone has gone to any length to hide the source of their income means they've committed a crime. Not the crime of money laundering, but the crime of whatever they did to earn the money. Because if they didn't commit a crime to earn it, they wouldn't go through the trouble of hiding it. Money laundering is probable cause for further investigation.
His argument sounds to me like people who argue that since the Constitution doesn't say the government can collect taxes, that means taxation is theft and we shouldn't pay them. It's the libertarian ideal that money is private property, humans are inherently good (unless they've won an election), and laws don't apply to you if you just believe it hard enough. Unfortunately that's not the way the world works. In reality, where there is smoke there is fire, and where there is money laundering there is someone concealing a crime.
What the parent is trying to argue is that the entire idea of money laundering should be forgotten and there should be no negative public perception of money laundering. What I'm arguing is sure, maybe people shouldn't go to jail for money laundering by itself, but there are zero legitimate reasons to launder money. The very fact that someone has gone to any length to hide the source of their income means they've committed a crime. Not the crime of money laundering, but the crime of whatever they did to earn the money. Because if they didn't commit a crime to earn it, they wouldn't go through the trouble of hiding it. Money laundering is probable cause for further investigation.
His argument sounds to me like people who argue that since the Constitution doesn't say the government can collect taxes, that means taxation is theft and we shouldn't pay them. It's the libertarian ideal that money is private property, humans are inherently good (unless they've won an election), and laws don't apply to you if you just believe it hard enough. Unfortunately that's not the way the world works. In reality, where there is smoke there is fire, and where there is money laundering there is someone concealing a crime.
Really? Zero? What if I work in something I'm embarrassed about and want to front it through something more respectable? Or what about the simple idea that I shouldn't have to tell anyone about my income sources?
I agree that a front is a reason for someone to be suspicious. Find a laundromat doing a million a day? Sure, investigate them. But that alone should not be a crime.
I agree that a front is a reason for someone to be suspicious. Find a laundromat doing a million a day? Sure, investigate them. But that alone should not be a crime.
>what about the simple idea that I shouldn't have to tell anyone about my income sources?
That's not even an argument. That's the lack of an argument. That's throwing a temper tantrum and saying "but I don't wanna!"
It's a sovereign citizen argument and I love seeing YouTube videos of people telling the police that exact thing.
That's not even an argument. That's the lack of an argument. That's throwing a temper tantrum and saying "but I don't wanna!"
It's a sovereign citizen argument and I love seeing YouTube videos of people telling the police that exact thing.
What does "made up" mean?
Someone who launders money for a hitman or human trafficker is enabling the hitman/trafficker's business.
If you help bury a body, you're guilty of something. If you help clean a violent criminal's money, you're guilty of something.
The launderer's guilt is only "made up" in-so-far as murder or human trafficking are "made up".
(Re: Drugs, sure. The correct solution here is to legalize drugs.)
Someone who launders money for a hitman or human trafficker is enabling the hitman/trafficker's business.
If you help bury a body, you're guilty of something. If you help clean a violent criminal's money, you're guilty of something.
The launderer's guilt is only "made up" in-so-far as murder or human trafficking are "made up".
(Re: Drugs, sure. The correct solution here is to legalize drugs.)
> It's a made up thing that makes prosecutors lives easier when they're trying to catch somebody committing a real crime.
“Crime” is not a thing that exists aside from laws defining them; all crimes defined in law are equally “made up” (and, for the same reason, equally “real crimes”.)
“Crime” is not a thing that exists aside from laws defining them; all crimes defined in law are equally “made up” (and, for the same reason, equally “real crimes”.)
Same could be said about a lot of things that most people would agree should be illegal, like tax evasion. Yes, you are not hurting anyone directly, but we as a society have decided that you shouldn't be able to do that.
Can you give me a reason why money laundering should be legal? It seems that the only reason why you'd want to do it is because you're covering up for other illegal activities. Taking money from one source and making it seems like it comes from another source seems exactly like fraud to me.
Can you give me a reason why money laundering should be legal? It seems that the only reason why you'd want to do it is because you're covering up for other illegal activities. Taking money from one source and making it seems like it comes from another source seems exactly like fraud to me.
Taxation is more of a tricky topic, but yes, we all agree everyone owes taxes so not paying them is a crime.
But money "laundering"? Who is the fraud against? What if I make a ton of money by running my own camsite. But I want to pretend I'm a successful software company. So my camsite buys a license from my software company that eats up all the profit. There's nothing wrong with any of this.
Doing the same, but with an illegal source, should be just as legal. Go after the real crimes (e.g. killing people for money).
But money "laundering"? Who is the fraud against? What if I make a ton of money by running my own camsite. But I want to pretend I'm a successful software company. So my camsite buys a license from my software company that eats up all the profit. There's nothing wrong with any of this.
Doing the same, but with an illegal source, should be just as legal. Go after the real crimes (e.g. killing people for money).
No one in the history of ever has ever laundered money to try to convince the government that their legitimate enterprise was in fact a completely different legitimate enterprise. In fact that could be illegal too if you were using that information to convince investors that your software company was more profitable than it was. That is indeed fraud.
I mean, by your own argument fleeing the scene of a crime isn't hurting anyone. I mean, I didn't run anyone over while I was fleeing. Sure, I may have shot that guy, but the simple act of running away after I shot him didn't hurt anyone. Because apparently it doesn't matter that the act of running away from the scene is directly linked to the crime I just committed, and it doesn't matter that the only way you can prove I shot him is by catching me running away and then comparing my gun to the bullet inside the victim. Fleeing the scene of a crime is just a made up law. There's no victim.
Go after the real crimes! Like the one I just committed that you found out about because you saw me running away with a gun in my hand...
I mean, by your own argument fleeing the scene of a crime isn't hurting anyone. I mean, I didn't run anyone over while I was fleeing. Sure, I may have shot that guy, but the simple act of running away after I shot him didn't hurt anyone. Because apparently it doesn't matter that the act of running away from the scene is directly linked to the crime I just committed, and it doesn't matter that the only way you can prove I shot him is by catching me running away and then comparing my gun to the bullet inside the victim. Fleeing the scene of a crime is just a made up law. There's no victim.
Go after the real crimes! Like the one I just committed that you found out about because you saw me running away with a gun in my hand...
Yes, exactly - sounds like we are in agreement. Fleeing the scene isn't hurting anyone in general (might be a traffic issue though). It'd be unfair to tack on an extra charge of "ran away after murdering someone".
It's still (negative) evidence against someone, and if you see someone running down the street, a cop is perfectly justified to look in the direction they came and see if it looks like a crime was just committed.
To the point: People should be completely free to move their money around however they please, without having to tell anyone about it, full stop. If this attracts suspicion, fine, so do a lot of things.
It's still (negative) evidence against someone, and if you see someone running down the street, a cop is perfectly justified to look in the direction they came and see if it looks like a crime was just committed.
To the point: People should be completely free to move their money around however they please, without having to tell anyone about it, full stop. If this attracts suspicion, fine, so do a lot of things.
The only thing I really have a disagreement with is the way I perceive your tone. Specifically "It's a made-up thing... We need to undo the marketing...".
What I'm trying to argue is, sure maybe money laundering shouldn't be a crime by itself, but it's not victimless and pure. There is no legitimate reason to launder money. Your claim in another comment that you might be embarrassed by your income source is not related in any way to money laundering. Money laundering isn't hiding the source of your income from people who might pick on you, it's hiding your source of income from the government. And the government only cares where you got your money if your source of income is illegal. They're not looking at your job and laughing at you. They're not going to send a Secret Service agent to your house and call you names. They're going to say "is that illegal? nope... did he pay his taxes? yep." and move on.
To be clear: lying to your wife about where you got your money is not money laundering. That's completely legal. Money laundering is telling the government you earned your money from a completely different enterprise to hide the fact that you obtained it illegally.
You know actually researching this and arguing it here has completely changed my opinion. I'm now 100% comfortable with the idea of money laundering being illegal and people going to jail for it. I'm not even joking. I'm changing my stance. Money laundering should be a crime. It is, at the very least, obstruction of justice.
What I'm trying to argue is, sure maybe money laundering shouldn't be a crime by itself, but it's not victimless and pure. There is no legitimate reason to launder money. Your claim in another comment that you might be embarrassed by your income source is not related in any way to money laundering. Money laundering isn't hiding the source of your income from people who might pick on you, it's hiding your source of income from the government. And the government only cares where you got your money if your source of income is illegal. They're not looking at your job and laughing at you. They're not going to send a Secret Service agent to your house and call you names. They're going to say "is that illegal? nope... did he pay his taxes? yep." and move on.
To be clear: lying to your wife about where you got your money is not money laundering. That's completely legal. Money laundering is telling the government you earned your money from a completely different enterprise to hide the fact that you obtained it illegally.
You know actually researching this and arguing it here has completely changed my opinion. I'm now 100% comfortable with the idea of money laundering being illegal and people going to jail for it. I'm not even joking. I'm changing my stance. Money laundering should be a crime. It is, at the very least, obstruction of justice.
The implications of the mindset of "money laundering is a crime" is the problem. It's how we get this invasive government reporting requirements on our own money - which apply whether or not you are actually laundering. It is how we end up with these $10K rules, and people getting hit for structuring. (Which is even more absurd. Create a law to make people get reported at $10K. Then create another law so if they do less than $10K suspiciously, that's a crime, too!)
So, if AML tactics were not so draconian and far-fetched, if it was just a tacked-on charge (like how they'll throw wire fraud on to everything), then it'd be an annoyance and unfair, but not so harmful. Instead, we have this fearful environment because people think laundering is some terrible crime, and that makes it more acceptable to have things like civil forfeiture.
So, if AML tactics were not so draconian and far-fetched, if it was just a tacked-on charge (like how they'll throw wire fraud on to everything), then it'd be an annoyance and unfair, but not so harmful. Instead, we have this fearful environment because people think laundering is some terrible crime, and that makes it more acceptable to have things like civil forfeiture.
Money laundering is a crime because only criminals have to hide the source of their income when it's paid in bank notes issued by the government. Don't like it? Ask your employer to pay you in untraceable gold doubloons instead of government-issued bank notes.
It's been a great conversation. It's rare that someone with a strong but controversial opinion on the Internet sticks around to defend it when they've been challenged. I respect your viewpoint even if I disagree with it.
It's been a great conversation. It's rare that someone with a strong but controversial opinion on the Internet sticks around to defend it when they've been challenged. I respect your viewpoint even if I disagree with it.
>Taxation is more of a tricky topic, but yes, we all agree everyone owes taxes so not paying them is a crime.
So... If someone does (perhaps completely legal) contract work, accepts payment in BTC and makes their purchases with BTC, how are you going to know what they owe in taxes?
So... If someone does (perhaps completely legal) contract work, accepts payment in BTC and makes their purchases with BTC, how are you going to know what they owe in taxes?
The victimless crime argument has never been very persuasive for me. Its lack of persuasion stems from how such things 'cover' a much wider gamut than a few cherry picked situations, and how it ignores the very real victims that are often created by the activities.
Money laundering, by its definition, is the act of concealing the source or purpose of funds for the purposes of evading taxation or concealing other illegal activities.
Money laundering, by its definition, is the act of concealing the source or purpose of funds for the purposes of evading taxation or concealing other illegal activities.
So the folks that get screwed by depositing 9500 in cash each week from their business were doing something wrong?
No they aren't. But they are doing something that criminals also do, so that generally merits investigation. Consider the older male birdwatcher sitting on a park bench watching a school playground with binoculars hoping to see a rare Kirtland Warbler.
So you have to consider how rare it is to deposit $9,500 week after week after week, versus depositing between $500, and $12,500 in a reasonable spectrum of values over the weeks. And even if you have a business that pays exactly $9,500 a week, then when someone asks you "How is it that you always have $9,500 to deposit each week in cash." and you give an explanation of your local ice cream van which buys $5,000 in ice cream each week and generally sells out, which at the prices on your van comes to $9,500. Then that investigator says "Ah, ok, thank you very much." and leaves you alone because you haven't done anything wrong. They might pass along that information to the IRS which would expect to see a K-1 or a Schedule C for an owner operator business that was doing $9,500 a week in gross revenue. And if for some reason they had gone that far and found that the person dutifully reported their income and paid such taxes that were due. Then again, there would be nothing to say or do.
If you look at the text of the bill you will see that the definitions are pretty clear:
So you have to consider how rare it is to deposit $9,500 week after week after week, versus depositing between $500, and $12,500 in a reasonable spectrum of values over the weeks. And even if you have a business that pays exactly $9,500 a week, then when someone asks you "How is it that you always have $9,500 to deposit each week in cash." and you give an explanation of your local ice cream van which buys $5,000 in ice cream each week and generally sells out, which at the prices on your van comes to $9,500. Then that investigator says "Ah, ok, thank you very much." and leaves you alone because you haven't done anything wrong. They might pass along that information to the IRS which would expect to see a K-1 or a Schedule C for an owner operator business that was doing $9,500 a week in gross revenue. And if for some reason they had gone that far and found that the person dutifully reported their income and paid such taxes that were due. Then again, there would be nothing to say or do.
If you look at the text of the bill you will see that the definitions are pretty clear:
“(B) knowing that the transaction—
“(i) conceals or disguises, or is intended to conceal or disguise, the
nature, source, location, ownership, or control of the proceeds of some form of unlawful activity; or
“(ii) avoids, or is intended to avoid, a transaction reporting requirement under State or Federal law,”;
and
(2) in paragraph (2)(B), by striking “knowing that” and all that follows through “Federal law,”
and inserting the following:
“(B) knowing that—
“(i) the monetary instrument or funds involved in the transportation, transmission, or transfer
represent the proceeds of some form of unlawful activity; and
“(ii) the transportation, transmission, or transfer—
“(I) conceals or disguises, or is intended to conceal or disguise, the nature, source, location,
ownership, or control of the proceeds of some form of unlawful activity; or
“(II) avoids, or is intended to avoid, a transaction reporting requirement under State or Federal law,”.
Basically you can use cash, bitcoin, and gift cards all you want for *legitimate* purposes, it is only when you use them to conceal or transact illegal activities do they become 'money laundering'.Except you shouldn't have to justify it. Using your example, watching kids is legal. So you should be able to go sit there and say "I like watching kids". Now maybe that's suspicious, but apart from people then watching you, there shouldn't be any repercussions.
At any rate, it's bad enough there are reporting laws. Then they make it illegal to try to avoid reporting laws? That's just an extra layer of absurdity.
At any rate, it's bad enough there are reporting laws. Then they make it illegal to try to avoid reporting laws? That's just an extra layer of absurdity.
Give me a single scenario where money laundering should be considered legal.
I think the actual money laundering should be illegal. What bothers me is that, in chasing money laundering cases, it makes what is supposed simple things, very painful. I'm US lawful permanent resident, but European citizen too. Now, because of US regulations, pretty much ALL European banks do not want anything to do with me. If I ask to open a bank account, they'd rather not to. If I want to open an investment account in EU, they pretty much say "we do not want your business". If I transfer money from MY account in EU into MY account in US, I most likely have to JUSTIFY it. If I ask for a wire transfer, some foreign financial institution respond "oh, you are a US person, we don't want to deal with the reporting requirements". It's like the fight of terrorists: I think we all agree we should prevent the next 9/11. But when you have to pass through TSA, you cannot bring your laptop, you need to handover all your passwords, etc - even though terrorism is "illegal", you wonder if we are fighting it right.
Money laundering is not the term we should be using. Money laundering only applies where the source of money is dirty.
I can give you many examples where "having at least $10,000" should be considered legal. Money laundering is evidence of a crime, it should not be a crime itself.
I can give you many examples where "having at least $10,000" should be considered legal. Money laundering is evidence of a crime, it should not be a crime itself.
Is it illegal to have $10,000? If you're referring to financial reporting requirements, the law is just that the bank has to report when you make large deposits (and I think withdrawals as well) it's not a crime, though it is a crime to intentionally deposit multiple amounts less than $10,000 to try and evade the reporting requirements. If you're referring to civil asset forfeiture or something, then I agree work needs to be done to reign in the practice.
It can be illegal doing things even with less than $10K at a time, due to structuring laws. Your business insurance only covers up to $10K cash, so you make deposits of $9500 each week? Cool, enjoy your legal problems.
And you should not have to report the money you carry if you, for instance, travel.
And you should not have to report the money you carry if you, for instance, travel.
In literally every single scenario? It should never be illegal to conceal your actions. Yeah, this makes prosecutors' jobs harder. That's the cost of a free society.
So, injecting illegally-gotten dollars into a business to inflate revenue and so you can spend it shouldn't be illegal? Lying on federal documents and committing fraud?
If my business wants to sell me a token for $5M, that should be my right. The real crime is how I got that $5M, not that I decided to put it into another business.
Where's the fraud? If I want to run a pizza shop and record a million orders to myself that I never actually deliver, so what?
Where's the fraud? If I want to run a pizza shop and record a million orders to myself that I never actually deliver, so what?
If you record a million orders to yourself, that's not money laundering. Though, unless you already paid tax on that money you're using to purchase the "pizzas," you are committing tax evasion. Because you're essentially giving pre-tax dollars to your private company.
Until the million orders are paid with by the money I made illegally?
I mean yeah. Money laundering is just tax evasion and fraud with illegally gotten money. We treat it differently than regular tax evasion because it's a more serious crime, much like how pre-meditated homicide is treated differently than regular homicide. Does that make sense?
No. You've got the tax evasion (if any - certainly you could set it up so you're paying the full taxes) plus the illegal activity, so two crimes already there.
In fact, it's less serious for society if you launder it, because then you're paying taxes on money you wouldn't otherwise pay taxes on.
In fact, it's less serious for society if you launder it, because then you're paying taxes on money you wouldn't otherwise pay taxes on.
"Money laundering" is illegal by definition, so this is a meaningless question. Try rephrasing it.
I meant a scenario of an activity currently considered money laundering the OP thinks should not be illegal. "should" is the operative word here. Does that make things more clear?
Why would you launder money if not to hide something? Moving money around, itself, is not illegal either.
Why use encryption if not hiding something?
>detailing a strategy to interdict and detect [...] digital currencies [...] at border crossings and other ports of entry for the United States;
Uh what? They want to detect the presence of crypto currency at the border? How would that even work? Something tells me none of the sponsors for this bill know any specifics for how bitcoin et al. work.
Uh what? They want to detect the presence of crypto currency at the border? How would that even work? Something tells me none of the sponsors for this bill know any specifics for how bitcoin et al. work.
My assumption would be if they were to see someone with a foreign address come and try to cash out 1000 BTC in USD (or even 10BTC currently) on one of the exchanges, then they would want to know where those bitcoins came from. It would be able to combat another form of layering (with the normal process of placement, layering, and integration). So "at border crossings" here would probably mean any bitcoin exchange operating in the US that deals with foreign entities.
That would be a strange way to word it, wouldn't it? More likely they want to scan your device and use it against you if you are "carrying" undeclared "currency".
You don't "carry" crypto currency though, you hold the private key to an address. I don't see how they could determine some random binary blob on your laptop/flash drive/etc. is in fact a private key that is responsible for a number of coins. What if I used an Electrum wallet and just kept the master seed saved, then it's just a string of random words. I could just as easily memorize that or physically write it down somewhere instead.
I think that's why they have a part about determining if technology can be invented to detect this. And a lot of these laws seem to have a point of making easy things illegal, so they have more ways to go after you if they need to.
Kind of silly given that with Bitcoin anyone can see all transactions ever made.
Mixing is a thing.
Mixing is to Bitcoin as cash is to real money, except with Bitcoin nobody who doesn't have anything to hide uses mixing. It makes it easy to separate the criminals from the normal people. Sounds like a governments dream to me.
The thing I don't understand about mixing is that shouldn't it pretty much always be taken as an indication of money laundering? I can't think of any reason someone would need to mix / tumble coin if it were all legit.
Seems to me that receiving bitcoin from an address known for mixing should be an automatic red flag.
Seems to me that receiving bitcoin from an address known for mixing should be an automatic red flag.
Financial privacy. You can still report it on your taxes. Maybe some of the coins you now own were stolen and you just happened to get them from the exchange and you are concerned about the fungability of bitcoin in your legal jurisdiction.
You might not want to paint a target on yourself by making known how much cryptocurrency you have, hence you'd like to keep it a secret.
You could say the same thing if you'd live in Sweden and with "normal" money: "Taking out money from the ATM should be automatic red flag, since no one uses fiat except criminals to buy drugs."
You could say the same thing if you'd live in Sweden and with "normal" money: "Taking out money from the ATM should be automatic red flag, since no one uses fiat except criminals to buy drugs."
You might be running a business and not want to let your competitors know how much you are spending on advertising, R&D, and such like.
Doesn't really answer the Government's (legitimate IMO) question: "You just sold $25,000 of bitcoin on {US_Based_exchange}, where did it come from?" Mix it all you want, it wont save you from an IRS audit or other formal Government inquiry if they so choose.
Attempts to obfuscate sources of assets on a completely public blockchain could probably qualify as money laundering, in and of itself. Its not really much different than the cash -> casino chips -> cash launder (which gets reported to the government, or is supposed to).
Attempts to obfuscate sources of assets on a completely public blockchain could probably qualify as money laundering, in and of itself. Its not really much different than the cash -> casino chips -> cash launder (which gets reported to the government, or is supposed to).
It's a lot easier though. "I made it camming, here are the tx records". Or "they're donations to my project X". Or "people bought in to my last ICO". Sure you will need a bit more work than that, but Bitcoin makes it far easier to setup a ton of transactions coming to you.
Does this mean that someone with a $10K credit card could be picked up and have their assets stripped? What about those business guys with oversea bank accounts that are undeclared? I wonder if anyone would use this law to stop political opponents..
It's reporting requirements, not making it illegal to have money.
If you've ever bought a car or house, or really made any purchase over $10,000, your bank filed a report to the government with every detail they know about you and every detail about the transaction made. That's not paranoid delusions, that's publicly known law.
https://en.m.wikipedia.org/wiki/Financial_intelligence#Unite...
If you've ever bought a car or house, or really made any purchase over $10,000, your bank filed a report to the government with every detail they know about you and every detail about the transaction made. That's not paranoid delusions, that's publicly known law.
https://en.m.wikipedia.org/wiki/Financial_intelligence#Unite...
This is not true.
The Currency Transaction Report only covers cash transactions. That means green pieces of paper with pictures of dead presidents on them, not electronic money in a bank account.
Deposit or withdraw cash, buy money orders or cashiers checks with cash, buy a car or house with cash, and if it's over $10,000, it gets reported.
But if you write use a check, credit card, ACH or wire transfer, that's not cash and the bank doesn't have to file a Currency Transaction Report.
That's because these transactions are already in the banking system, so there's already a good audit trail of what money is moving where.
The Currency Transaction Report only covers cash transactions. That means green pieces of paper with pictures of dead presidents on them, not electronic money in a bank account.
Deposit or withdraw cash, buy money orders or cashiers checks with cash, buy a car or house with cash, and if it's over $10,000, it gets reported.
But if you write use a check, credit card, ACH or wire transfer, that's not cash and the bank doesn't have to file a Currency Transaction Report.
That's because these transactions are already in the banking system, so there's already a good audit trail of what money is moving where.
Partially true.
In the US, there is also this thing called Suspicious Activity Reports. They are triggered with any transaction >$3,000 (typically cash-equivalents; but that can be wide reaching). There are some requirements where banks must report but there is also the discretionary part. This is where banks can be held liable for not reporting suspicious activity. Because of that, it is safe to assume most banks report every transaction above $3,000 of any type.
But let's face it, most bank databases probably have something like this going on; GRANT SELECT ON Transactions TO USGOVT
In the US, there is also this thing called Suspicious Activity Reports. They are triggered with any transaction >$3,000 (typically cash-equivalents; but that can be wide reaching). There are some requirements where banks must report but there is also the discretionary part. This is where banks can be held liable for not reporting suspicious activity. Because of that, it is safe to assume most banks report every transaction above $3,000 of any type.
But let's face it, most bank databases probably have something like this going on; GRANT SELECT ON Transactions TO USGOVT
Must depend on the country. In Canada, it's all transactions over 10k. I worked on the software that reads and analyzes the database of those records (a decade ago).
No, as the law is written for Customs, the 10k value is specifically about money going through the border to be declared. A credit card isn't an actual asset, and hence doesn't need to be declared.
As for the undeclared accounts, theoretically this should be covered by the FBAR form that US citizens are supposed to file if they keep money in foreign banks. I'm not quite sure how involved the IRS gets in investigating undeclared accounts, but as of right now it looks to be on the honor system. When I filed my FBAR, it didn't even ask for any real verification of the assets I claimed in a foreign account, it just asked for the total value and to plug in the calculations to see if I owed anything.
As for using this as a weapon, highly doubtful. The bill mostly modifies existing law to either modernize it or to add punctuation for clarity purposes, and the counterfitting/laundering claims are pretty straight forward. For example, for counterfitting, they want to add the clause:
“ Whoever, with intent to defraud, has custody, control, or possession of any material, tool, machinery, or other equipment that can be used to make, alter, forge, or counterfeit any obligation or other security of any foreign government, bank, or corporation; or”.
Basically, unless they were already doing some pretty suspect stuff, you'd have to go through a lot of work to set up a condition where you could attack an opponent with it. Same with the "funding terrorism" sections; the burden of proof it looks for is pretty high to use this as a political weapon, when shitposting on twitter and facebook would probably be just as effective.
As for the undeclared accounts, theoretically this should be covered by the FBAR form that US citizens are supposed to file if they keep money in foreign banks. I'm not quite sure how involved the IRS gets in investigating undeclared accounts, but as of right now it looks to be on the honor system. When I filed my FBAR, it didn't even ask for any real verification of the assets I claimed in a foreign account, it just asked for the total value and to plug in the calculations to see if I owed anything.
As for using this as a weapon, highly doubtful. The bill mostly modifies existing law to either modernize it or to add punctuation for clarity purposes, and the counterfitting/laundering claims are pretty straight forward. For example, for counterfitting, they want to add the clause:
“ Whoever, with intent to defraud, has custody, control, or possession of any material, tool, machinery, or other equipment that can be used to make, alter, forge, or counterfeit any obligation or other security of any foreign government, bank, or corporation; or”.
Basically, unless they were already doing some pretty suspect stuff, you'd have to go through a lot of work to set up a condition where you could attack an opponent with it. Same with the "funding terrorism" sections; the burden of proof it looks for is pretty high to use this as a political weapon, when shitposting on twitter and facebook would probably be just as effective.
The $10,000 applies to "monetary instruments" (not CCs) you are carrying over the boarder. Also that's already a thing, it's part of you customs declaration card you are required to fill out. - https://www.cbp.gov/travel/us-citizens/sample-declaration-fo...
“(7) ‘prepaid access device’ means an electronic device or vehicle, such as a card, plate, code, number, electronic serial number, mobile identification number, personal identification number, or other instrument, that provides a portal to funds or the value of funds that have been paid in advance and can be retrievable and transferable at some point in the future.”.
Would this not also cover carrying a debit card linked to an account that contains >$10k?
Would this not also cover carrying a debit card linked to an account that contains >$10k?
I don't think a debit card (linked to a bank account) would be considered "paid in advance". If you had a prepaid card, then it would.
Some other most wondrous endowments from the seraphic beneficence of Pecuniaria:
1. https://en.wikipedia.org/wiki/Know_your_customer
2. https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance...
1. https://en.wikipedia.org/wiki/Know_your_customer
2. https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance...
None of this is particularly new information. I mean he mentions that bill at the top but no real discussion about it's contents. John Oliver did a great piece on civil asset forfeiture a while back and the $10,000 rule has been around forever. I'm not saying this isn't a bill that we should care about but this post is useless bullshit.
Did you read the link[0]? It seems there are amendments to the current bill.
[0]: https://www.congress.gov/bill/115th-congress/senate-bill/124...
[0]: https://www.congress.gov/bill/115th-congress/senate-bill/124...
The answer here is Monero.
Back in '06 I was an intern in the tech department of FINTRAC, Canada's agency for stopping money laundering and terrorist financing, so my knowledge is outdated and only specific to one country- but everyone has roughly the same rules and goals with these laws- track large money movements to find money laundering operations and stop money from finding it's way to terror groups. They use the $10,000 rule- banks report your info if you move more than that in or out of your account and border security reports it if you move that much in cash across a border.
Over time though, new tricks are always figured out, and laws updated. In '06, it was casinos ("yeah I won big last night, that's where the money came from"), currency exchanges ("oh yeah, we do a huge amount of business and over charge everyone"), and jewelry stores (buy diamonds in cash, carry them over borders instead of money). So reporting laws were updated.
Now the trick is "I bought a lot of bitcoins in 2009 and finally sold them today, that's where the money came from". If the laws aren't updated, money laundering becomes easy again.
What else do we expect governments to do? Now, are these laws well written and not overreaching? I'm not sure, and that's worth debating.