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The rise of crypto laundries: how criminals cash out of Bitcoin

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Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#181

Post by jackfoxy »

CryptoPunk wrote: post #113
jackfoxy wrote: post #106

Earlier quoted context omitted.

> how have we always just accepted the lack of personal privacy when it comes to finance? It was very easy. The American public was hoodwinked into accepting the 16th Amendment (levying an income tax) as a tax the rich scheme. And like all tax the rich schemes it was a cover to tax everyone, especially the middle class. You can't have an income tax without the government prying into everyone's finances. Before this f…

The income tax was first introduced in the UK, in 1799, to fund a war against France, and the rate was only 10%, and only levied on the rich. The first American income tax was also introduced in a war - the Civil War.

IIRC the US Supreme Court declared the Civil War era income tax unconstitutional, which is why it required a constitutional amendment.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#182

Post by orbitingpluto »

user-the-name wrote: post #34
gvv wrote: post #5

yeah, this would NEVER happen with cash! /s

You can't demand people send you cash from around the world as ransom for the computers you took over.

The media is the message. Criminals don't launder bitcoin at non-profitable nail salons either.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#183

Post by takeda »

vmception wrote: post #131
vyrotek wrote: post #126

After learning about how expensive stolen art is exchanged as a proxy for cash from "This is a robbery" on Netflix I started to wonder if laundering is really needed with crypto. There are probably clever ways to just exchange wallet ownership instead.

Yep. Anybody that is watching funds move across addresses has no idea what they are doing. They rely on assuming that the funds still have the same ultimate beneficial owner (UBO) who is trying to hide, when that couldn’t be further from the truth. Anybody that claims they know is just trying to scam a government for a lucrative blockchain analysis contract. Just another crypto entrepreneur aiming to leak fiat out of…

The thing is that wallet is digital. If I hand you an USB stick with the wallet, that doesn't mean I no longer have it. The USB could be a copy of it and I could still withdraw the money. To be sure that doesn't happen the new owner would need to transfer money to another wallet. Unless there's a high trust that this won't be done.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#184

Post by mdavis6890 »

loceng wrote: post #173
mdavis6890 wrote: post #165

Earlier quoted context omitted.

It's important to realize that attribution - knowing which human got which money when - is actually very important in many contexts, particularly when a lot of money is involved. This allows for an un-do button in the case of mistakes, fraud, etc. If I'm wiring my down payment for a house for $200k, it's nice to know that if I fat-finger the receiving account I can get the money back. How would you feel paying your d…

I believe the $900M was merely paid earlier than it needed to be, but was still owed, so why the transaction wasn't reversed.

Yes, but still normally this mistake would be unwound. The recipients would just send the money back, or a court would tell them to send it back, even though the money was owed. But there were a number of confounding factors - for example that the money wasn't owed by Citi - it was owed by someone else and Citi was just paying on their behalf.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#185

Post by bluGill »

jackfoxy wrote: post #181
CryptoPunk wrote: post #113

Earlier quoted context omitted.

The income tax was first introduced in the UK, in 1799, to fund a war against France, and the rate was only 10%, and only levied on the rich. The first American income tax was also introduced in a war - the Civil War.

IIRC the US Supreme Court declared the Civil War era income tax unconstitutional, which is why it required a constitutional amendment.

No, they said the tax on capital gains was unconstitutional. An income tax itself was allowed, they only tossed out the whole law because it was obvious that the tax code they ruled unconstitutional wouldn't make sense without the capital gains tax parts.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#186

Post by vmception »

takeda wrote: post #183
vmception wrote: post #131

Earlier quoted context omitted.

Yep. Anybody that is watching funds move across addresses has no idea what they are doing. They rely on assuming that the funds still have the same ultimate beneficial owner (UBO) who is trying to hide, when that couldn’t be further from the truth. Anybody that claims they know is just trying to scam a government for a lucrative blockchain analysis contract. Just another crypto entrepreneur aiming to leak fiat out of…

The thing is that wallet is digital. If I hand you an USB stick with the wallet, that doesn't mean I no longer have it. The USB could be a copy of it and I could still withdraw the money. To be sure that doesn't happen the new owner would need to transfer money to another wallet. Unless there's a high trust that this won't be done.

Yes, crypto can operate in a temporarily trusted environment.

What I was describing here wasn't that, I am referring to onchain transfers in trade for goods and services. (Part C could also be hand to hand trusted transfer of a wallet/private key)

Chain analysis still assumes that its the same owner or related guilty beneficiary all the way to a centralized exchange.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#187

Post by ska »

exo762 wrote: post #46
MikeDelta wrote: post #39

Earlier quoted context omitted.

I understand your point. However, privacy cannot shield one from tax and legal obligations. It is not just the proceeds from criminal activities, but also tax evasion (from the rich or companies) and terrorism financing.

You can use cryptocurrency which hides all of your transactions (like zcash) and pay your taxes as a law abiding citizen. There is no conflict here. Tax systems rely on citizens reporting anyway.

> Tax systems rely on citizens reporting anyway.

It relies on reporting and the right to audit, so they may end up with all of the information anyway; it's more that you are making them ask for it rather than providing it proactively.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#188

Post by URSpider94 »

camgunz wrote: post #104
ccity88 wrote: post #14

I get that money laundering is always linked to criminal activity, but how have we always just accepted the lack of personal privacy when it comes to finance? Privacy is a feature, not a bug; and whilst crypto may not be the way forward, I hope one day we can reach a solution that has both privacy and also safety. The language used by law enforcement is quite alarming, it suggests that they should be privy to ALL tra…

I think in the US, it's a war on drugs thing--though it could also be a Cold War thing. Just musing though, but yeah it's wild that we don't think this is a right.

It goes back further than that, at least to the prosecution of organized crime syndicates in the early part of the 20th century. Al Capone went to jail for tax evasion, after all.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#189

Post by vmception »

bsedlm wrote: post #72

I'm always left wondering about the invention (the encoding into laws) of "money laundering". I believe that this happened at some point during the 70s right around the time congress declared "war on drugs"? edit: aha, I refer to 91st USA congress: https://en.wikipedia.org/wiki/Bank_Secrecy_Act https://en.wikipedia.org/wiki/Comprehensive_Drug_Abuse_Preve...

Yes this is accurate in the sense that these are the basis for the modern enforcement tools in use

The state has never had a right to understanding the financial flows or private property, it found a convenience with the electronic financial system and deputized all financial intermediaries to data mine and snitch for it.

This has subsequently become conflated with a right of the state to have all of this information, as the people running it now are unfamiliar with not having these conveniences.

The market, on the other hand, is simply reverting to a mean. It has developed and chosen an electronic financial system that doesnt require financial intermediaries.

So the state is going to lose its power to criminalize transactions. If there are any actual criminal behaviors with distinctive victims, then it has to do an actual investigation and find the individual and prosecute them. It really isnt that absurd of a concept.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#190

Post by camgunz »

URSpider94 wrote: post #188
camgunz wrote: post #104

Earlier quoted context omitted.

I think in the US, it's a war on drugs thing--though it could also be a Cold War thing. Just musing though, but yeah it's wild that we don't think this is a right.

It goes back further than that, at least to the prosecution of organized crime syndicates in the early part of the 20th century. Al Capone went to jail for tax evasion, after all.

Yeah for sure, famously. I think the evolution of like, KYC and the global financial surveillance system probably came about for Cold War or War on Drugs reasons though.
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