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Money Laundering and AML Compliance

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Re: Money Laundering and AML Compliance

#121

Post by etherael »

wpietri wrote: post #96
StanislavPetrov wrote: post #83

Earlier quoted context omitted.

I know I'm expressing a minority opinion on this, but I'd much rather have an unregulated system where I was able to send and receive money without any sort of hassle or oversight, even if criminals and people frowned upon by the people who run SWIFT are able to do the same.

That will seem swell to you until better-funded criminals want a piece of your assets, money, or labor. There are very good societal reasons to keep crime to a manageable level.

So crime was not at a manageable level prior to say 1970, when none of these AMLKYC laws existed? And crime has not been at a manageable level after say 2008 when crypto came into existence and made it impossible to actually enforce?

Man, for that brief shining window we really had perfection.

Re: Money Laundering and AML Compliance

#122

Post by yieldcrv »

AlbertCory wrote: post #66
yieldcrv wrote: post #10

Al Capone would have passed KYC

Do you mean KYC now, or what passed for KYC in the 20s? Before he got busted by the Feds, he went to baseball games and posed for pictures, and "respectable" people might be seen with him. I don't think he'd ever have been invited to the White House, though. As someone else here said: no, the "reputational risk" would doom him now.

this is so cute I dont even want to bother explaining it

How are we on a KYC thread, with people that actually do KYC, believing their koolaid

They see the accounts

They know the gaps in the regulatory framework, or should

They should know the pointlessness of this exercise but apparently the idealism (or a couple internal examples I’m unaware of) is convincing still and masquerades as reality

KYC is as strong as the weakest link in all financial institutions and all pooled accounts

I’m out

Re: Money Laundering and AML Compliance

#123

Post by pyuser583 »

wpietri wrote: post #95
lotsofpulp wrote: post #62

Earlier quoted context omitted.

> The best example: if you want to get a mortgage to buy a house you have submit to a financial strip search. But if you want to buy a house with bags of cash, you don’t even need to give your name. What is this an example of? You are submitting a financial strip search because the lender wants to ensure the borrower can pay the debt, not to ensure they are a criminal or not. And that is because prior to 2008, lender…

If you want to deposit that same cash in a bank, it's going to raise questions. Real estate is a bit of an exception here. For reasons explained in the article.

An innocent buyer would just say “I sold my home of 20 years to some company - Perwinkle LLC of Bermuda. Pretty strange, but not my problem.”

The bank would report it, and in theory the feds could track down Periwinkle LLC.

But tracking down holding companies consumes precious resources, and would be strategic, not just legal, decision.

The US is obsessed with having a clean financial sector, but doesn’t care one jot or tittle about corporate transparency.

Re: Money Laundering and AML Compliance

#124

Post by kjetijor »

lancewiggs wrote: post #120
roenxi wrote: post #118

Earlier quoted context omitted.

Hi. I'm Australian. When Australian companies offer shareholder deals (like capital raises, offering shareholders a chance to get in first on favourable terms) there is usually a neatly printed prospectus that has a couple of pages in very explicit language saying "this is NOT FOR AMERICANS. Please do not show this to a US citizen. If you are a US citizen, you must disregard this booklet!". It always strikes me as un…

That’s due to US securities laws, not AML. The real reach through for Australia EY al. is FACTA, where any person with US citizenship invokes extra and onerous reporting requirements.

Or just changing tax residency. Moving from Norway to the US, brokerages will tell you to liquidate your assets or they'll do it for you, because they do not want to touch the reporting requirements to the US.

Re: Money Laundering and AML Compliance

#125

Post by wpietri »

pjkundert wrote: post #117
wpietri wrote: post #102

Earlier quoted context omitted.

I think it's appropriate you open with Star Wars, as this is mainly fantasy. > burdening 8 billion law-abiding Citizens with impossibly complex and arduous KYC/AML requirements Not sure if you read the article, but they just aren't a significant burden for most people. They could be better, sure. And I think the "driven to use Cryptocurrency" example does not pair at all well with FTX. The massive wave of cryptocurre…

No, you aren’t burdened. The bulk of humanity is, though. The compliance costs in terms of effort/time/money expended per dollar of revenue affected is probably 10x to 100x for them, as it is for you. This has been my experience, and my observation across many life stories. I taught basic finance to hundreds of mid- to low-income families in the 2000’s. So again - a “let them eat cake” admonishion. And FTX was just a…

> No, you aren’t burdened. The bulk of humanity is, though.

I look forward to somebody demonstrating that. The author of the article, a domain expert, thinks otherwise.

> And FTX was just a massive, traditional fraud. Literally nothing to do with Cryptocurrency, other than as the medium of the fraud.

Other than the medium, the culture, the community, the domain, and the regulatory vacuum of cryptocurrency. So a great deal to do with it. And it's not as if it's an outlier for the space.

If it's really the burden you are concerned about, you might look again at cryptocurrency. The burden just to use it is relatively high. Then there are the higher caveat emptor burdens. And then we get to the vast, vast sums lost through volatility, exchange costs, user error, incompetence, fraud, and theft. Being upset about KYC/AML and not about that is a situation of motes and beams.

Re: Money Laundering and AML Compliance

#126

Post by wpietri »

etherael wrote: post #121
wpietri wrote: post #96

Earlier quoted context omitted.

That will seem swell to you until better-funded criminals want a piece of your assets, money, or labor. There are very good societal reasons to keep crime to a manageable level.

So crime was not at a manageable level prior to say 1970, when none of these AMLKYC laws existed? And crime has not been at a manageable level after say 2008 when crypto came into existence and made it impossible to actually enforce? Man, for that brief shining window we really had perfection.

Yes, actually, the American mafia has declined severely since its heyday. There are surely many reasons, as it's part of a broader decline in crime in recent decades, but the increased difficulty of cleaning dirty money is part of it.

And crime has definitely gone up because of cryptocurrency. I'm not sure how much it has affected the more traditional sorts of crime, as I don't think it's much of a help in turning dirty cash into clean assets thanks difficulty of exchange and the ledger acting as "prosecution futures". But ransomware has grown massively thanks to cryptocurrency. And ransomware gangs have grown correspondingly in size and sophistication thanks to having all that money to spend.

Re: Money Laundering and AML Compliance

#127

Post by habinero »

icelancer wrote: post #90
anonymoushn wrote: post #87

Earlier quoted context omitted.

The latter is a correct summary of what TFA says actually happens. Also hi, yes, it's me, I'm debanked at most US banks without wrongdoing.

I'm also debanked, but sporadically, and weirdly at only some investment institutions. Fidelity outright banned me and demanded I call in to withdraw my money between absurd hours. I sent them an intent to file a lawsuit and I got my money wired within 48 hours. Vanguard and TD Ameritrade have no problem taking my money. I'm also banned at Zelle, but Venmo and CashApp and Paypal are all fine. What a weird world. Of c…

I'm sure you know exactly what shady thing you did to get yourself banned.

Re: Money Laundering and AML Compliance

#128

Post by ethbr0 »

pyuser583 wrote: post #123
wpietri wrote: post #95

Earlier quoted context omitted.

If you want to deposit that same cash in a bank, it's going to raise questions. Real estate is a bit of an exception here. For reasons explained in the article.

An innocent buyer would just say “I sold my home of 20 years to some company - Perwinkle LLC of Bermuda. Pretty strange, but not my problem.” The bank would report it, and in theory the feds could track down Periwinkle LLC. But tracking down holding companies consumes precious resources, and would be strategic, not just legal, decision. The US is obsessed with having a clean financial sector, but doesn’t care one jot…

As separation of concerns, this sounds reasonable and efficient: why should it be the financial sector's job to weigh whether someone is good or bad?

Better to make finance focus on ensuring there are quality, documented links where legally required... and then perform the judging elsewhere (e.g. legal system, FBI, journalism).

That the US (and especially certain states) permits opaque corporate structures is a different problem.

Re: Money Laundering and AML Compliance

#129

Post by habinero »

yttribium wrote: post #64
josephcsible wrote: post #16

> At many institutions, one SAR is a non-event. Two, for a retail client, means one gets a letter saying the bank wishes you the best in your future endeavors and will not bank you anymore. That letter will often mention that this is a commercial decision of the bank and will not be reversed. Some clients receiving that letter will, on attempting to open account at a different bank, get refused because the first bank…

The former affects blacks, which are a recognized political constituency. The latter allows you to debank your political opponents (cf Operation Chokehold), which is useful.

Don't be gross.

Re: Money Laundering and AML Compliance

#130

Post by ethbr0 »

datavirtue wrote: post #100
lotsofpulp wrote: post #62

Earlier quoted context omitted.

> The best example: if you want to get a mortgage to buy a house you have submit to a financial strip search. But if you want to buy a house with bags of cash, you don’t even need to give your name. What is this an example of? You are submitting a financial strip search because the lender wants to ensure the borrower can pay the debt, not to ensure they are a criminal or not. And that is because prior to 2008, lender…

Zero underwriting? You obviously do not know what you are talking about. I got a "no-doc" non-conforming FHA loan back then. They fucking strip searched me. It was not easy--I still have PTSD from it. That same loan is still available on the market. You also need a citation on your reason for the financial crisis of 2008. I had to walk away from my home BECAUSE of the financial crisis (after having paid down 90% of t…

The 2008 crisis was directly caused by human greed, at all levels, and failing to be reigned in by regulatory bodies.

It's unreasonable to blame one source for something that metastisized over years, involving most parties in the financial sector, until exploding.

Banks could have chosen not to do this business or to hedge their risk in a better way. Credit ratings agencies could have shown some independence and objectivity. Derivatives buyers could have done more due diligence on what they were buying. Home buyers could have looked at the market and said "This is way too hot, and the party can't go on forever."

Deregulation handed everyone rope, including us, and we all hung ourselves.

It stings when you get personally @+$#ed, and it feels good to blame massive, systemic failures on one source, but they're systemic failures for a reason -- because the entire system was culpable.

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