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Why the feds took down one of Bitcoin’s largest exchanges

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Re: Why the feds took down one of Bitcoin’s largest exchanges

#101

Post by justifier »

ineedasername wrote: post #8

This is what I never understood about bitcoins's reputation, especially earlier on, about its supposed anonymity. I suppose that's much less the case now. But it always seemed odd that people considered it at all anonymous when the blockchain kept a record of everything. Sure it might not be immediately identifiable with a specific individual, but unless it was a wholly closed system, entry & exit points would always…

blockchain has what i call 'effective anonymity'

if you buy 'into' BTC in an anonymous manner and make purchases 'within' BTC the transactions are wholly traceable but the source is anonymous

anonymity is lost when moving 'out' of BTC 'into' other currencies that require, or have subsequent effect, of identifying the user

Re: Why the feds took down one of Bitcoin’s largest exchanges

#103

Post by thephyber »

dboreham wrote: post #66
rothbardrand wrote: post #53

Earlier quoted context omitted.

The money laundering statutes are so broad that you are a felon under them if you take money out of your savings and put it in your checking in order to make your credit card payment one month. Even if all three are at the same bank and none of the money is the result of a criminal activity.

Citation?

I highly doubt that scenario exists without some other incriminating action, behavior, or police observation.

Civil Asset Forfeiture is an attack on private property and the legal principle of "innocent until proven guilty", but there has to be _some_ suspicion of a crime (usually alleged drug paraphernalia) or simple corruption on the part of the police and/or judges.

There is a money-laundering-related charge, IIRC called "structuring", in which the reporting threshold of $10k/day/person is intentionally avoided (eg. by $9,999 transactions on consecutive days). This isn't usually charged "out of the blue". In the recent Hastert structuring case[1], he told a bank employee that he was avoiding the reporting threshold even though his money transfers weren't actually money laundering after profiting from a crime.

There is a lot that I disdain about money laundering laws and civil asset forfeiture, but I'm not inclined to believe that "rothbard-rand" (the surnames of two famous Libertarians) has no dogs in this fight, so to speak.

[1] https://en.wikipedia.org/wiki/Dennis_Hastert#Indictment

Re: Why the feds took down one of Bitcoin’s largest exchanges

#104

Post by closeparen »

MichaelGG wrote: post #51
rkowalick wrote: post #47

Earlier quoted context omitted.

This is basically money laundering, right?

It's privacy. Money laundering is a fake crime and propaganda by governments with prosecutors unable to find real crime. It's as bad as calling copyright infringement "theft" or even "piracy", though the later term has been pretty watered down. Or how banks push the idea of "Identity theft" as if someone stole your identity versus the bank failing to verify your identity. We don't call encryption "information launder…

This is pretty easy to reason about: the electorate benefits from information privacy more than it could benefit from thought police.

The electorate would benefit less from total financial privacy than it does from the ability to enforce taxes and civil judgements.

Re: Why the feds took down one of Bitcoin’s largest exchanges

#105

Post by MichaelGG »

eropple wrote: post #83
MichaelGG wrote: post #79

Earlier quoted context omitted.

There wouldn't be a second transaction (the front store) if it weren't for trying to pay taxes on the first. So that's not really a defensible line of reasoning. Only, perhaps, if the tax rates would differ.

It doesn't matter why they exist: they are different transactions and taxes are assessed separately.

Sure, so if you want to use circular logic to say the real crime of money laundering is tax evasion, when money laundering actually results in more taxes being paid, that's fine. But don't expect that to be a persuasive moral argument for making money laundering a crime.

Re: Why the feds took down one of Bitcoin’s largest exchanges

#106

Post by MichaelGG »

konschubert wrote: post #89
MichaelGG wrote: post #77

Earlier quoted context omitted.

I mean it's a made up victimless crime that only serves prosecutors. It's on the moral level of asset seizure and worse than "crimes" like wire fraud. Prosecutors are free to think someone's doing something wrong. Investigators might be able to get warrants under such suspicions (iffy but perhaps acceptable). But they should need to find actual wrongdoing to be able to convict people, and this last part is what is la…

It is only money laundering if is done with money that is the result of a crime. Just like a trader is only a fence when he trades stolen good. Therefore, by definition, money laundering is assisting a crime. If the crime had a victim, then, by proxy, laundering the money of the crime is not victimless either.

Simply not true. Look up Hawala, a money transfer system that's been around for over 1000 years. Use it in the US and be prepared to deal with money laundering charges, regardless of the lack of crime. Or just try having your small business make repeated $9000 deposits of completely legit and clean money.

Money laundering is now about not reporting all your financial movements to the government. It's surpassed the even controversial idea of using it against criminals in lieu of real crimes.

Re: Why the feds took down one of Bitcoin’s largest exchanges

#107

Post by mirimir »

MichaelGG wrote: post #106
konschubert wrote: post #89

Earlier quoted context omitted.

It is only money laundering if is done with money that is the result of a crime. Just like a trader is only a fence when he trades stolen good. Therefore, by definition, money laundering is assisting a crime. If the crime had a victim, then, by proxy, laundering the money of the crime is not victimless either.

Simply not true. Look up Hawala, a money transfer system that's been around for over 1000 years. Use it in the US and be prepared to deal with money laundering charges, regardless of the lack of crime. Or just try having your small business make repeated $9000 deposits of completely legit and clean money. Money laundering is now about not reporting all your financial movements to the government. It's surpassed the ev…

Right, and if you're lucky, they'll just steal all your money.

Re: Why the feds took down one of Bitcoin’s largest exchanges

#108

Post by curun1r »

MichaelGG wrote: post #82
celticninja wrote: post #78

Earlier quoted context omitted.

You are paying some tax, just not all the required tax. Specifically you are evading income taxes. As I recall in the US at least, there is an option on your IRS form to report any income derived from illegality so that the relevant tax can be paid. Whether anyone has ever done so I don't know but something like that could have kept Capone out of prison.

If you illegally sell $10 worth of drugs, then record your front store of selling $10 of Tylenol (that you don't actually buy or sell) then the $10 of drug money has been fully taxed.

There's taxes from the supply chain of Tylenol that don't get paid when it's $10 in illegal drugs that are actually sold. Much like Bitcoin, with a black market you can only tax at the egress points when the money needs to touch a regulated financial entity whereas an all-legal system can tax any time money changes hands.

Re: Why the feds took down one of Bitcoin’s largest exchanges

#109

Post by home_boi »

MichaelGG wrote: post #51
rkowalick wrote: post #47

Earlier quoted context omitted.

This is basically money laundering, right?

It's privacy. Money laundering is a fake crime and propaganda by governments with prosecutors unable to find real crime. It's as bad as calling copyright infringement "theft" or even "piracy", though the later term has been pretty watered down. Or how banks push the idea of "Identity theft" as if someone stole your identity versus the bank failing to verify your identity. We don't call encryption "information launder…

From the utilitarian perspective, what is the point of financial privacy (from the government)? It looks like money laundering and purchases of illegal substances seem to be the biggest "benefits". Those are benefits that aren't beneficial to the government or the people that are governed.

Re: Why the feds took down one of Bitcoin’s largest exchanges

#110

Post by eropple »

MichaelGG wrote: post #105
eropple wrote: post #83

Earlier quoted context omitted.

It doesn't matter why they exist: they are different transactions and taxes are assessed separately.

Sure, so if you want to use circular logic to say the real crime of money laundering is tax evasion, when money laundering actually results in more taxes being paid, that's fine. But don't expect that to be a persuasive moral argument for making money laundering a crime.

I didn't say the real crime of money laundering is tax evasion. The real crime of money laundering is obstruction of justice. But taxes are certainly being evaded, too.
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