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Facebook’s Cryptocurrency: Stop It Before It Starts

lawfareblog.com

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Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#21

Post by ThrustVectoring »

darawk wrote: post #13
ThrustVectoring wrote: post #5

Cryptocurrency has a pretty big problem: "dollars, but without US Government oversight" is exactly what money launderers and other financial criminals want to have. The closer any cryptocurrency gets to being this, the more illegal activity it will facilitate and the more risk the project takes on of getting the entire operation seized and the principals arrested and extradited to the US (see also: Liberty Reserve).

You could equally say "Speech, but without US government oversight, is exactly what the pedophiles and terrorists want to have".

True. I'm not making a moral judgement here - merely stating that flouting anti-money-laundering laws and facilitating financial crimes has severe legal risks.

I'm honestly not even worried that Facebook is going to flout AML laws. I'm more worried that they'll use the fact that they're using newfangled technology and the political and economic weight of their crypto consortium to get favorable legislation passed. And then, because of said crypto features, we'll end up undermining laws that fight money laundering and other financial crimes.

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#22

Post by wilg »

jlmorton wrote: post #14
camjohnson26 wrote: post #10

People who think the government should have the technological power to decide who pays who in the world need to ask themselves this. Do you think that there should be a hardware filter on all internet fiber cables that allows the government to filter that traffic? Banning cryptocurrencies because they physically allow money laundering is as logically indefensible as banning internet fibers because they physically all…

> After all cash physically allows money laundering, should we ban cash? Yes, we probably should, now that better alternatives exist. We should have public postal banking, so no one is unbanked. And then we should stop issuing cash.

What better alternatives exist?

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#23

Post by a-nikolaev »

55555 wrote: post #15

You all need to read the following excerpt from Matt Levine's thoughts on Libra: > So, first, Libra will be a “stablecoin,” in the sense that its value will be pinned to conventional financial assets. Unlike most stablecoins, though, it will be pinned to a basket “of low-volatility assets, including bank deposits and government securities” in different currencies, so it won’t consistently be worth one dollar or one e…

Exactly.

.. It is also pretty obvious that the guy wants to become a king of the world or something like that. He couldn't do that with his network. He will do that with money. It's also a diversification strategy, shifting business from problematic facebook (for how long it will last?) to a new potentially long-term venture.

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#25

Post by ThrustVectoring »

Solvitieg wrote: post #18
ThrustVectoring wrote: post #5

Cryptocurrency has a pretty big problem: "dollars, but without US Government oversight" is exactly what money launderers and other financial criminals want to have. The closer any cryptocurrency gets to being this, the more illegal activity it will facilitate and the more risk the project takes on of getting the entire operation seized and the principals arrested and extradited to the US (see also: Liberty Reserve).

It's a problem only for the government and existing financial institutions. Looks no further than China.

Not really. Money laundering, extortion, and other financial crimes have negative externalities. It's absolutely a problem if we invent the technology that allows me to pay a crypto-ransom, since that pretty directly creates a bunch of ransomers.

Also, the principals involved in "disrupting" governments and existing financial institutions also face the problem of government reprisal. Liberty Reserve got seized and their principals arrested and charged with various financial crimes.

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#26

Post by buboard »

mevile wrote: post #24

Facebook doesn't have anyone but themselves to blame for poor reactions to Libra. I think it's a cool idea with interesting tech and I'm interested to see what happens with it. I want to be optimistic, but I am not surprised at the backlash.

facebook couldn't possibly do anything that wouldn't be painted in a bad light in the current year. They could literally shut down their site and the world would be up in arms that they cut their access to their audiences. It's a moral panic, it will pass.

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#27

Post by buboard »

ThrustVectoring wrote: post #5

Cryptocurrency has a pretty big problem: "dollars, but without US Government oversight" is exactly what money launderers and other financial criminals want to have. The closer any cryptocurrency gets to being this, the more illegal activity it will facilitate and the more risk the project takes on of getting the entire operation seized and the principals arrested and extradited to the US (see also: Liberty Reserve).

It's not a bug it's a feature. Cryptocurrencies were invented by and promoted by libertarians from the beginning.

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#28

Post by solveit »

ThrustVectoring wrote: post #25
Solvitieg wrote: post #18

Earlier quoted context omitted.

It's a problem only for the government and existing financial institutions. Looks no further than China.

Not really. Money laundering, extortion, and other financial crimes have negative externalities. It's absolutely a problem if we invent the technology that allows me to pay a crypto-ransom, since that pretty directly creates a bunch of ransomers. Also, the principals involved in "disrupting" governments and existing financial institutions also face the problem of government reprisal. Liberty Reserve got seized and th…

> Also, the principals involved in "disrupting" governments and existing financial institutions also face the problem of government reprisal.

Say what you will about Bitcoin, it's been remarkably successful on this front and I'm not exactly sure how.

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#29

Post by malandrew »

Government should have no involvement in stopping a technological product because it might be used for something illegal. The creators are just producing a tool. The government should have no business stopping creators or interfering in any way because they aren't committing any illegal acts.

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#30

Post by SomeOldThrow »

ThrustVectoring wrote: post #5

Cryptocurrency has a pretty big problem: "dollars, but without US Government oversight" is exactly what money launderers and other financial criminals want to have. The closer any cryptocurrency gets to being this, the more illegal activity it will facilitate and the more risk the project takes on of getting the entire operation seized and the principals arrested and extradited to the US (see also: Liberty Reserve).

That’s not a problem with cryptocurrency, that’s a regime problem.
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