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Lebanon’s underground cryptocurrency market

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Re: Lebanon’s underground cryptocurrency market

#81

Post by csomar »

celticninja wrote: post #55
csomar wrote: post #39

Earlier quoted context omitted.

Most of these countries finances are based on direct unavoidable taxes as they are already struggle to collect taxes the western way due to low compliance.

What's the western way? Don't you mean the US way? In western Europe most places tax at source, which means your wages are taxed before they are sent to your bank. This sort of direct taxation ensures more compliance. I think rather the issue is that many places will deal in cash, where it is easier to avoid tax.

Not if you are employing your workers illegally and paying them with cash. Of course, each country is different and has different levels of control. Some which lack any control will just tax unavoidable items (like cars for example) to compensate. These are harder to smuggle and easier to catch.

Re: Lebanon’s underground cryptocurrency market

#82

Post by csomar »

mathgenius wrote: post #61
csomar wrote: post #34

Earlier quoted context omitted.

> Someone must be left holding the bag, there must be some FX liquidity that they tap into? You must have missed that 1. Lebanon is very corrupt and 2. there is an official exchange rate. Someone is making a killing selling on the black market and buying with the official rate.

Yes, this is the interesting part of the story. I was just wondering how it works exactly. Is there a black market lebanese pound / USD? There is no mention of this in the article. Or do they use some kind of offical lebanese pound / USD exchange? If so how does that work, can you just show up at some office somewhere with local currency and get USD?

You are confused (though your username is mathgenius haha). The guy in the article is exactly doing that. He is the black market for Lebanese pound / USD (in this case USDT).

Obviously, he'll need to run a full circle (back from Lebanese pound to USD) to refuel his reserves. In some countries where I have seen this, this is usually done through companies which have some license to buy USD at the government exchange rate to import stuff. Stuff is imported from offshore companies run by these same guys who will sell this product at some crazy markup (usually 100%) and then this profit is dumped through guys like in the article. Rinse and repeat.

Re: Lebanon’s underground cryptocurrency market

#83

Post by nybble41 »

celticninja wrote: post #55
csomar wrote: post #39

Earlier quoted context omitted.

Most of these countries finances are based on direct unavoidable taxes as they are already struggle to collect taxes the western way due to low compliance.

What's the western way? Don't you mean the US way? In western Europe most places tax at source, which means your wages are taxed before they are sent to your bank. This sort of direct taxation ensures more compliance. I think rather the issue is that many places will deal in cash, where it is easier to avoid tax.

> In western Europe most places tax at source, which means your wages are taxed before they are sent to your bank.

The US does this too; it's known as "withholding". There are also "estimated taxes" paid quarterly if you have significant income outside of regular employment and thus not subject to withholding. You still have to settle up at the end of the tax year, but by that point the vast majority of the tax (and perhaps a bit more) has already been paid.

Re: Lebanon’s underground cryptocurrency market

#85

Post by around_here »

echopurity wrote: post #79
aazaa wrote: post #52

> That’s when Lebanon’s cryptocurrency market took off, along with the OTC system run by traders like Awad. The OTC ecosystem here largely operates using Tether, a cryptocurrency pegged to the U.S. dollar and therefore subject to fewer price fluctuations. The process works like this: A client who wants to buy cryptocurrency will usually open a wallet on an exchange (the most popular in Lebanon being Binance) and then…

People say this stuff as if the fiat system isn't a corrupt bomb that's constantly blowing up.

Capitalism is the corrupt bomb that keeps blowing up. Fiat money is just on of its many mediums with which is props itself up after it explodes.

Re: Lebanon’s underground cryptocurrency market

#86

Post by krapp »

around_here wrote: post #85
echopurity wrote: post #79

Earlier quoted context omitted.

People say this stuff as if the fiat system isn't a corrupt bomb that's constantly blowing up.

Capitalism is the corrupt bomb that keeps blowing up. Fiat money is just on of its many mediums with which is props itself up after it explodes.

But crypto is also capitalist, and it explodes a lot more often than regulated, fiat commerce.

Re: Lebanon’s underground cryptocurrency market

#87

Post by nl »

danield9tqh wrote: post #76
IG_Semmelweiss wrote: post #72

Earlier quoted context omitted.

its not illegal or impossible to open a USD bank account for the lebanese. In fact, its extremely common. The problem is that now it just extremely risky Most of the upper class has the USD denominated savings effectively kidnapped by their bank institution. Those funds are frozen or very highly capped (only say $200 $USD draw per week). No one can take them out in large chunks. It is extremely difficult to make payr…

Thanks for providing some nuance on the banking accounts. It's helpful to be able to compare crypto's impact (which I still think is substantial) against a realistic situation instead of the "centralized strawmen" that seem so common in crypto arguments.

It's worth noting that this - and other non-crypto remittance schemes - rely on the end exchange agent having access to large amounts of physical US cash.

This article doesn't go into where that comes from, but it's not unusual for criminal gangs to launder money this way. The agent themselves might not be a criminal, but they take often use the cash supplies from one and transfer back the value somewhere else (via a legitimate business) less a commission.

Re: Lebanon’s underground cryptocurrency market

#88

Post by csomar »

EliRivers wrote: post #50
csomar wrote: post #37

Earlier quoted context omitted.

> How is it different? You don't get 50% dilution of your savings within a year. > How many goods and services can you pay for with cryptocurrency where you live? In a liquid market, you can convert your weekly needs and pay using cash. > What if your government's goons (or private goons for that matter) hit you with a rubber hose and steal your coins? If they are going to do that (and some countries do that), they'l…

You don't get 50% dilution of your savings within a year. Although if you're measuring bitcoin against the USD, you could have done that in May :)

Currencies inflate only. Bitcoin fluctuates. It's not the same kind of exposure. (though a consumer might have a hard time catching the upside and avoiding the downside).

Re: Lebanon’s underground cryptocurrency market

#90

Post by Hyolobrika »

danield9tqh wrote: post #69
graeme wrote: post #51

Earlier quoted context omitted.

Is crypto involved in any way, or is it just USDT, a centralized USD token, on centralized exchanges? I guess the agent probably has to buy bitcoin and exit if on some dollar offramp to get actual USD to give the family.

USDT is hosted on Ethereum. The value of the USDT coin does not come from cryptocurrency as you've correctly pointed out, it comes from centralized authority backing USDT. But what part does come from cryptocurrency is the decentralized tracking of account balances. If it were't for the Ethereum blockchain, the only alternative would be to get physical USD into the country or for a Lebanese individual to open up a ba…

Tether is on record as censoring transactions (remember the Poly Network fiasco?). They are clearly centrally controlled despite being a token on the Ethereum network.

Whether they should have censored transactions in that instance is irrelevant. The fact remains that the coin does not belong to it's holders.

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