U.S. Treasury Issues First-Ever Sanctions on a Virtual Currency Mixer(home.treasury.gov)
home.treasury.gov
U.S. Treasury Issues First-Ever Sanctions on a Virtual Currency Mixer
https://home.treasury.gov/news/press-releases/jy0768
22 comments
It does not work like that. Money laundering is outlawed by the US Code Title 18, and as such it is the law of the land. If someone contests it, for example based on the 4th Amendment, and the issue gets to the Supreme Court, and the Supreme Court overturns that provision, then, yes money laundering becomes a non-crime. Until then, it is a crime. Of course, you are free to petition your representative, or to just contact the EFF foundation, or pick any of a large number of ways to push your opinion. But other people have their own opinions too. And the outcome of the collective opinion as of now is that money laundering is a crime.
Replying to myself here. Maybe I jumped the gun.
The OP claimed that money laundering is not a crime, and that is patently false.
However, maybe he simply meant that the application of the KYC/AML regulations may result in violations of the 4th amendment. In other words people getting their assets seized by the government, without the government demonstrating probable cause.
Upon further reflection, I have to admit that such an outcome cannot be ruled out. The government itself would not seize the assets of the suspect, but the banks subject to the KYC/AML regulations may freeze their accounts when they see red flags. The end result, as seen from the suspect's point of view is the same.
To be honest, I don't feel very comfortable about this. It does feel a bit like the government is indirectly seizing assets without a warrant.
I will leave my comment without any conclusion, because I don't have any to share.
The OP claimed that money laundering is not a crime, and that is patently false.
However, maybe he simply meant that the application of the KYC/AML regulations may result in violations of the 4th amendment. In other words people getting their assets seized by the government, without the government demonstrating probable cause.
Upon further reflection, I have to admit that such an outcome cannot be ruled out. The government itself would not seize the assets of the suspect, but the banks subject to the KYC/AML regulations may freeze their accounts when they see red flags. The end result, as seen from the suspect's point of view is the same.
To be honest, I don't feel very comfortable about this. It does feel a bit like the government is indirectly seizing assets without a warrant.
I will leave my comment without any conclusion, because I don't have any to share.
Where is the right form a corporation and to run a bank enshrined in the constitution?
There should be, it is a failure of the founding fathers that they did not forsee the importance of finance. I honestly expected better from Franklin.
Don't blame Franklin, the founding fathers set up a great governmental architecture with plug-in support via constitutional amendments, a legislative body for authoring new code, and a judicial system for integration testing our code of laws.
They foresaw that there would be much they could not foresee and gave ample means of updating the constitution. Just now it's been 250 years, it's rife with feature bloat and spaghetti code where small changes have unforeseen consequences, and our legislature is afraid to touch the code despite our many, egregious, surmounting problems.
They foresaw that there would be much they could not foresee and gave ample means of updating the constitution. Just now it's been 250 years, it's rife with feature bloat and spaghetti code where small changes have unforeseen consequences, and our legislature is afraid to touch the code despite our many, egregious, surmounting problems.
Where can I subscribe to more code allegories?
I don't have more but the government for makes a really good one.
Someone on here once described our laws as being written in a very advanced programming language, where they are upheld based on intent rather than exact wording.
Someone on here once described our laws as being written in a very advanced programming language, where they are upheld based on intent rather than exact wording.
It is almost as if money laundering were a crime.
tornado.cash 'might' be next if they went after blender.io
blender.io is a centralized service run by people which AML laws can target, since they are facilitating third party transactions, some of which are criminal in origin.
Tornado.cash is decentralized software, and there is no law that can be envoked to prohibit people from using it for their own transactions, unless it can be proven their own transactions are illicit in origin, in which case they can already be booked for the original crime.
This is of course how it should be. We don't need AML laws as any case of money laundering would require an underlying crime that generated the illicit revenue, and proving that crime occurred - which is a prerequisite for proving money laundering occurred - would be sufficient to put that criminal behind bars.
And what we have now are financial surveillance laws misnamed anti-money laundering laws. Their purpose is not to criminalize actual money laundering, which is redundant for reasons just explained. Their purpose is to criminalize services that protect their clients' financial privacy, by:
* not demanding they disclose private financial information to prove their transactions are non-criminal in origin before facilitating them (providing presumption of innocence)
* not requiring them to disclose personal information (KYC) before facilitating their transactions, and
* not reporting that personal information to government surveillance agencies without a warrant (e.g. FinCEN reporting requirements).
I think every one welcomes stopping the flow of illicit revenue, but efforts to accomplish that should not come at the expense of core principles of a free society, like the right to privacy, and the presumption of innocence.
This is especially so given there is considerable evidence that so-called AML laws are highly ineffective despite all the costs they impose in both financial terms and in terms of basic rights:
https://www.tandfonline.com/doi/full/10.1080/25741292.2020.1...
Tornado.cash is decentralized software, and there is no law that can be envoked to prohibit people from using it for their own transactions, unless it can be proven their own transactions are illicit in origin, in which case they can already be booked for the original crime.
This is of course how it should be. We don't need AML laws as any case of money laundering would require an underlying crime that generated the illicit revenue, and proving that crime occurred - which is a prerequisite for proving money laundering occurred - would be sufficient to put that criminal behind bars.
And what we have now are financial surveillance laws misnamed anti-money laundering laws. Their purpose is not to criminalize actual money laundering, which is redundant for reasons just explained. Their purpose is to criminalize services that protect their clients' financial privacy, by:
* not demanding they disclose private financial information to prove their transactions are non-criminal in origin before facilitating them (providing presumption of innocence)
* not requiring them to disclose personal information (KYC) before facilitating their transactions, and
* not reporting that personal information to government surveillance agencies without a warrant (e.g. FinCEN reporting requirements).
I think every one welcomes stopping the flow of illicit revenue, but efforts to accomplish that should not come at the expense of core principles of a free society, like the right to privacy, and the presumption of innocence.
This is especially so given there is considerable evidence that so-called AML laws are highly ineffective despite all the costs they impose in both financial terms and in terms of basic rights:
https://www.tandfonline.com/doi/full/10.1080/25741292.2020.1...
By using tornado.cash the cryptocurrency you feed it facilitates tornado.cash’s use by people who launder money. In effect, you are facilitating money laundering.
I dont agree with it at all but I absolutely see the writing on the wall for “unhosted wallets” and Monero. The USA even somehow managed to nearly eliminate IRL cash transactions during the last two years — in Houston, most businesses have signs saying “due to ongoing coin shortage we cannot take cash”.
I dont agree with it at all but I absolutely see the writing on the wall for “unhosted wallets” and Monero. The USA even somehow managed to nearly eliminate IRL cash transactions during the last two years — in Houston, most businesses have signs saying “due to ongoing coin shortage we cannot take cash”.
I don’t think the treasury can sanction a smart contract or force financial instructions to absolutely reject transactions from one
Do that court challenge
Do that court challenge
The can sanction the businesses using it, POS that touch it, and banks that it was withdrawn from.
People have a right to transactional privacy (or more so, the government hasnt created any obligation against that), which most blockchains remove by default, restoring that baseline isn’t controversial. Onlookers and financial institutions cant see where you physical cash was, and they cant see your banking transactions. It requires voluntary disclosure or a subpoena.
Financial institutions operate on assumptions that a customer’s money is clean/fungible, and rely on the customer’s own admissions, except when a public ledger is involved. Simply restoring the baseline makes them not have any obligation to auto flag your transactions.
> POS that touch it
Sorry you got scammed irrecoverably. Everyone should be unlinking their transactions for a baseline of privacy.
Because of the US citizens involved, the treasury would have an issue with the sanction of an autonomous privacy vending machine, it would require Congress to pass a sanction similar to the online gambling funds ban. But here there would still likely be tricky legal issues for Congress to circumvent.
Financial institutions operate on assumptions that a customer’s money is clean/fungible, and rely on the customer’s own admissions, except when a public ledger is involved. Simply restoring the baseline makes them not have any obligation to auto flag your transactions.
> POS that touch it
Sorry you got scammed irrecoverably. Everyone should be unlinking their transactions for a baseline of privacy.
Because of the US citizens involved, the treasury would have an issue with the sanction of an autonomous privacy vending machine, it would require Congress to pass a sanction similar to the online gambling funds ban. But here there would still likely be tricky legal issues for Congress to circumvent.
That would be an extraordinary stretch of the sanctions law, comparable to sanctioning any business that uses cash, by virtue of its effect of expanding the anonymity set that uses cash and thereby assisting sanctioned entities in concealing their transactions.
The comparison with cash is flawed for 2 reasons:
1. Unlike so called "cryptocurrencies" you can't easily do cross-border transactions with large amount of cash.
2. Not sure about US and its states and territories, but in many countries in the world cash transactions are limited to relatively low amounts. And these amounts are shrinking every year.
1. Unlike so called "cryptocurrencies" you can't easily do cross-border transactions with large amount of cash.
2. Not sure about US and its states and territories, but in many countries in the world cash transactions are limited to relatively low amounts. And these amounts are shrinking every year.
With respect to 1, the principle of increasing the anonymity set, and thereby facilitating criminal concealment of funds, is the same, when using cash, and it is on this principle that the parent comment suggested companies that use privacy smart contracts could be sanctioned.
2. is a different issue. Yes the War on Cash is real, and it is extremely dangerous.
2. is a different issue. Yes the War on Cash is real, and it is extremely dangerous.
Adding to this, I would challenge a smart contract sanction on 1st (free expression, leveraging citizens united for money as speech), 4th (regarding privacy, and the equivalent privacy of other transaction methods), 5th and 14th amendment grounds (both forms of equal treatment in comparison to other transaction methods)
Maybe an article or two as well
Maybe an article or two as well
To the best of my understanding, AML law, as currently written, doesn't work like that. It governs those who administer financial services.
When originally written it did not apply to cash and was not conceived of with decentralized financial applications in mind.
If the law applied as you suggest, any one using cash could be deemed to be facilitating money laundering by enlarging the pool of anonymized money that criminals use.
If the law applied as you suggest, any one using cash could be deemed to be facilitating money laundering by enlarging the pool of anonymized money that criminals use.
A small part of me wants to unironically say “this is good for crypto”, in the “any press is good press” sense. It’s recognition of a uniquely “crypto” concept (blending to obscure blockchain transactions) by a very “high” power.
But it's also good to see regulatory bodies getting into the technical aspects of crypto scams
KYC/AML is a violation of the 4th Amendment.