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EFF to FinCEN: Stop Pushing for More Financial Surveillance

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Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#111

Post by 3np »

AnthonyMouse wrote: post #109
3np wrote: post #68

Earlier quoted context omitted.

Well, not quite. You seem to be conflating "money laundering" with all "undesired"/illegal transactions. Laundering implies transition from "dirty" to "clean". This is the kind of scenario that these kinds of regulatory requirements impede: "Dirty BTC" transferred to Binance, traded for ETH, sent to Coinbase, traded for USD, and sent outward to a fiat bank account. Like you say, strictly peer-to-peer value transfer i…

> Laundering implies transition from "dirty" to "clean". But this doesn't really work directly with fiat anyway. If a million dollars suddenly appears in your bank account and the IRS wants to know where it came from, and your answer is "I sold some Bitcoin" their next question is where you got the Bitcoin. Money laundering works with front companies. Your front company is e.g. an electronics retailer. Your foreign s…

Oh, I agree that these measures are futile, counterproductive and won’t stop organized crime. That being said, you seem to underestimate the global reach and compliance of banking regulation. Check out FATCAs travel rule.

Also, the difference with a truck and a UTXO/address is that the latter can be reliably and deterministically tracked. Assign identifiers once and bob’s your uncle, if you want to surveil economic activity.

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#112

Post by vkou »

Nextgrid wrote: post #71
vkou wrote: post #55

Earlier quoted context omitted.

If criminals are the only people using cryptocurrencies, it becomes socially trivial to criminalize the possession of software that interacts with cryptocurrencies.

A law is only good if it can be enforced. Technically piracy is illegal and yet pirated content exists and keeps being consumed because there's no way (for now) to control what people run on their computers and even more so when there's a direct financial incentive which could even fund building dedicated hardware if general-purpose computers can no longer do the job.

It's as easy to enforce this law as it is to enforce laws that criminalize possession of bits - for example, child pornography. Which, by the way, get enforced all the time.

The only reason piracy isn't enforced is because it's largely a civil, as opposed to a criminal matter, which constrains the tools available to copyright holders to go after pirates. Criminal investigations, in comparison, are not hamstrung the way that Warner Brothers going after someone downloading The Matrix is.

You significantly overestimate the financial incentives for building special purpose hardware solely for the purpose of participating in a criminal economy. That would be trivial for the police to shut down, because hardware manufacturers have a very conspicuous physical presence.

There's a reason nobody sells 'piracy-solutions-in-a-box'. It's because you need factories to build those, and you can't exactly own a factory in secret.

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#113

Post by Supermancho »

markkat wrote: post #85

We should not sacrifice privacy to make law enforcement easier. It's ok to make law enforcement work harder and less efficiently rather than the people they serve.

I don't see how this is about "privacy". How are you defining that?

I'm not even sure why anyone would cant to consider money exchanges "private". You want currency exchanges to be recorded for auditing, at the very least. The idea of invisible transaction causes and allows more harm than good.

Fiat barter is always an option if you want to avoid a ledger.

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#114

Post by AnthonyMouse »

3np wrote: post #111
AnthonyMouse wrote: post #109

Earlier quoted context omitted.

> Laundering implies transition from "dirty" to "clean". But this doesn't really work directly with fiat anyway. If a million dollars suddenly appears in your bank account and the IRS wants to know where it came from, and your answer is "I sold some Bitcoin" their next question is where you got the Bitcoin. Money laundering works with front companies. Your front company is e.g. an electronics retailer. Your foreign s…

Oh, I agree that these measures are futile, counterproductive and won’t stop organized crime. That being said, you seem to underestimate the global reach and compliance of banking regulation. Check out FATCAs travel rule. Also, the difference with a truck and a UTXO/address is that the latter can be reliably and deterministically tracked. Assign identifiers once and bob’s your uncle, if you want to surveil economic a…

> Also, the difference with a truck and a UTXO/address is that the latter can be reliably and deterministically tracked. Assign identifiers once and bob’s your uncle, if you want to surveil economic activity.

That seems a lot more useful if people were using it like a bank account. Once you figure out that a given address belongs to Alice, if that address starts paying for hotels and cloud services, now you know what Alice is up to.

But anybody who would be interesting to surveil would know not to do that. So you get an address that keeps receiving transfers and then sending it to an unregulated foreign exchange because they're using the cryptocurrency to buy their local currency. From there the cryptocurrency goes into the hands of various uninteresting randos with no connection to the original party.

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#115

Post by brmgb »

avianlyric wrote: post #64
brmgb wrote: post #15

Earlier quoted context omitted.

Hard limits to cash transactions exist in most countries around the world. For example, in France, as a business, you can't accept payment in cash above 1000€. Between consumers, you need to produce an invoice. I personally deeply disagree with the EFF regarding FinCEN. From my point of view, the obligation imposed by the regulation strikes a good balance between protecting private life and fighting tax dodging and m…

As someone that works in financial crime prevention, I think these rules are a very blunt instrument that will almost certainly do more harm than good. There have been banks in the past that have operated similar policies, and regulators have raked their senior leaders over the coals for implementing such naive rules. Transaction size alone tends to be an extremely weak signal for money laundering, but does tend to b…

> Any criminal worth their salt will split up illicit transactions into smaller ones to avoid these types of rules, it’s money laundering 101.

FinCEN mandates that all transactions conducted by or or on behalf of the same person during the same business day have to be aggregated and the $10000 dollars limit is per individual not per account.

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#116

Post by markkat »

Supermancho wrote: post #113
markkat wrote: post #85

We should not sacrifice privacy to make law enforcement easier. It's ok to make law enforcement work harder and less efficiently rather than the people they serve.

I don't see how this is about "privacy". How are you defining that? I'm not even sure why anyone would cant to consider money exchanges "private". You want currency exchanges to be recorded for auditing, at the very least. The idea of invisible transaction causes and allows more harm than good. Fiat barter is always an option if you want to avoid a ledger.

n. The quality or condition of being secluded from the presence or view of others. n. The state of being free from public attention or unsanctioned intrusion.

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#118

Post by icelancer »

alkonaut wrote: post #97
icelancer wrote: post #65

Earlier quoted context omitted.

>> If you pull up a list of countries by tax rates and some quality of life index they seem to be pretty corrolated Try correlating restrictive immigration policies and quality of life index. Should we tax people a lot and make it very hard for immigrants to become citizens? Scandinavian countries do precisely both.

> make it very hard for immigrants to become citizens? Scandinavian countries do precisely both. As a Swede, all I can say is..."excuse me, Wat"?

Compare the racial makeup of Sweden and immigration policies (citizenship, not permanent resident) with the United States.

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#119

Post by Nextgrid »

vkou wrote: post #112
Nextgrid wrote: post #71

Earlier quoted context omitted.

A law is only good if it can be enforced. Technically piracy is illegal and yet pirated content exists and keeps being consumed because there's no way (for now) to control what people run on their computers and even more so when there's a direct financial incentive which could even fund building dedicated hardware if general-purpose computers can no longer do the job.

It's as easy to enforce this law as it is to enforce laws that criminalize possession of bits - for example, child pornography. Which, by the way, get enforced all the time. The only reason piracy isn't enforced is because it's largely a civil, as opposed to a criminal matter, which constrains the tools available to copyright holders to go after pirates. Criminal investigations, in comparison, are not hamstrung the w…

> There's a reason nobody sells 'piracy-solutions-in-a-box'. It's because you need factories to build those, and you can't exactly own a factory in secret.

Piracy boxes are a thing. There are Android TV set top boxes loaded with all kinds of piracy software being sold at a premium, and they manage to do so without factories.

Similarly, you don’t need a factory to build a Bitcoin wallet if (hypothetically) you can no longer use a general purpose computer for that - a microcontroller and hobbyist-level tooling is enough to build one.

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#120

Post by CryptoPunk »

drtillberg wrote: post #90
CryptoPunk wrote: post #52

Earlier quoted context omitted.

>>Bitcoin isn't worth fighting for here, sorry EFF, but it is a useful canary warning about the current state of low financial freedom and privacy (by historical standards) and surprising degrees of unofficial suppression of viable alt-moneys. I would be happily surprised if the FinCEN reg forced unlawful use cases out of the bitcoin ecosystem leaving a vibrant, healthy marketplace.... This is a completely incoherent…

Let me simplify it. The bitcoin ecosystem is a cesspool of ransomware payoffs, international money laundering and speculation. Eliminate 2 of those use cases via financial surveillance and I will be happily surprised if the 3d survives, or if any similarly robust marketplace springs up from the ashes. Because the bitcoin ecosystem is such a mess, it's not worth saving, in my opinion. It's a feature, not a bug, and it…

Any dragnet surveillance applied to Bitcoin will apply to other alternative digital currencies as well. If you want a future where people have financial privacy/freedom, you should not welcome dragnet surveillance of any digital currency, let alone the current flagbearer of digital currencies.
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