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Epoch Times CFO charged in $67M crypto money laundering plot

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Re: Epoch Times CFO charged in $67M crypto money laundering plot

#91

Post by FabHK »

dist1ll wrote: post #87
FabHK wrote: post #81

Earlier quoted context omitted.

> I still can't send money to an US account without paying absurd fees. You think that is a technological problem? Using crypto appears cheap (despite being inferior technology) because it simply skips 99% of what banks are doing.

Well, clearly I don't need 99% of whatever the bank is doing to send a transaction between two accounts I own. Add to that all the things that many banks continuously fail to provide, like proper OpsSec, transparent fees, full programmability via APIs. > despite being inferior technology Could you clarify? Are you talking about a particular protocol, or an implementation component, or mean crypto in general?

Happy to clarify.

a) Theory: In any engineering or optimisation problem, adding a constraint makes the solution not better, and, if the constraint is binding, worse. So, we would not expect distributed state machine replication (which was solved in the late 90s, with BFT-style consensus such as Paxos and Raft etc.) to get better by requiring permissionlessness. (And the latter is, in my view, the actual defining characteristic of what's now known as blockchain; though of course you have a couple of permissioned blockchains that are basically rebranding of existing technology to ride the hype-train.)

b) Practice: You could trivially run a BTC (ie, Longest Chain Rule) or ETH (ie, BFT-type) style network with extremely high reliability with some, say, 10 nodes that are permissioned and (at least 51%) trusted. That would use around 10-100 W (and you could probably achieve far higher throughput). Instead, BTC uses 20 GW, ETH around 1 MW. So, the requirement of permissionlessness increases energy usage by a factor of several thousand to billions.

Furthermore, you lose many many other features of centralised systems (such as that you can correct mistakes cheaply, replace lost keys, undo fraud, etc.)

So, basically, you employ a vastly inferior technology, just so you can circumvent the law. Really don't see why anyone should support that.

Re: Epoch Times CFO charged in $67M crypto money laundering plot

#92

Post by MichaelMarie »

koolba wrote: post #6

> The plot, prosecutors said, was simple: members of the Make Money Online (MMO) team would purchase crime proceeds via cryptocurrency at a discount and transfer those proceeds into bank accounts held by entities affiliated with newspaper. > The illegal proceeds would ultimately be moved back into the Epoch Times accounts through "tens of thousands of layered transactions", including through prepaid debit cards and f…

[flagged]

Re: Epoch Times CFO charged in $67M crypto money laundering plot

#93

Post by lern_too_spel »

dist1ll wrote: post #70
eterm wrote: post #66

Earlier quoted context omitted.

None of those things require crypto. They are essentially solved problems. The UK banking system has had chip&pin for 20+ years, has had (Europe-wide?) instant payments for at least a decade. Banking numbers in the UK are push not pull, you cannot take someone else's money just because you have their bank number. * Payments require CVV (and have done for almost 30 years) and often additional 2fa verification through…

Many of the things I mentioned are absolutely not solved problems. > Payments require CVV Many companies regularly violate regulations and store CVVs against your will. How do you think millions of CC CVVs get leaked in many of these major hacks? > Solving the problem for international transfers simply requires greater international cooperation Sounds great in theory. How long has traditional finance had to work out…

> Now compare that to what several crypto projects have achieved a handful of years after their inception.

By ignoring regulations entirely. Guess what, if you're the bank, now you're liable.

Re: Epoch Times CFO charged in $67M crypto money laundering plot

#94

Post by beaeglebeachedd »

FabHK wrote: post #91
dist1ll wrote: post #87

Earlier quoted context omitted.

Well, clearly I don't need 99% of whatever the bank is doing to send a transaction between two accounts I own. Add to that all the things that many banks continuously fail to provide, like proper OpsSec, transparent fees, full programmability via APIs. > despite being inferior technology Could you clarify? Are you talking about a particular protocol, or an implementation component, or mean crypto in general?

Happy to clarify. a) Theory: In any engineering or optimisation problem, adding a constraint makes the solution not better , and, if the constraint is binding, worse. So, we would not expect distributed state machine replication (which was solved in the late 90s, with BFT-style consensus such as Paxos and Raft etc.) to get better by requiring permissionlessness. (And the latter is, in my view, the actual defining cha…

Better isn't objective. Not supporting it is fine but outlawing it ultimately means sending men with guns to stop people from interacting with a block chain. If you put bullet holes in people for their cryptographic fetishes, which is what the state will do ( or maybe if lucky they just flashbang a baby), you might be the baddie.

Re: Epoch Times CFO charged in $67M crypto money laundering plot

#95

Post by dist1ll »

FabHK wrote: post #91
dist1ll wrote: post #87

Earlier quoted context omitted.

Well, clearly I don't need 99% of whatever the bank is doing to send a transaction between two accounts I own. Add to that all the things that many banks continuously fail to provide, like proper OpsSec, transparent fees, full programmability via APIs. > despite being inferior technology Could you clarify? Are you talking about a particular protocol, or an implementation component, or mean crypto in general?

Happy to clarify. a) Theory: In any engineering or optimisation problem, adding a constraint makes the solution not better , and, if the constraint is binding, worse. So, we would not expect distributed state machine replication (which was solved in the late 90s, with BFT-style consensus such as Paxos and Raft etc.) to get better by requiring permissionlessness. (And the latter is, in my view, the actual defining cha…

> BFT-style consensus such as Paxos and Raft

Raft cannot deal with byzantine failures, so it's not a BFT protocol. Neither is the original Paxos, unless extended to Byzantine Paxos. Both are CFT by default.

> So, we would not expect distributed state machine replication to get better by requiring permissionlessness.

Right, but the banking system isn't a 600LoC Raft implementation. By your own admission, the bulk of inefficiencies come from the other 99% of stuff banks do.

So the question is: how much regulatory burden can be reduced if we were to switch to a crypto-based infrastructure.

> just so you can circumvent the law.

I can pay taxes in crypto to my local government. We also have crypto ATMs in several places here. Blockchain companies are working very closely with financial regulators. Not sure what kind of laws I'm supposedly circumventing here.

Re: Epoch Times CFO charged in $67M crypto money laundering plot

#96

Post by caeril »

infotainment wrote: post #30

I continue to be convinced that the only valid use cases for crypto are scams and money laundering -- chalk up this one to the latter. Can anyone name an application besides those two things that traditional finance doesn't handle better?

Any type of transaction that "traditional finance" or the governments behind them don't approve of. Controlled substances, firearms, sex work, gambling, funding politically unpopular movements, etc.

The mindset that can't understand the valid use cases of cryptocurrencies is approximately the same mindset that believes the status quo is acceptable, and that smashing the boot of the State into the necks of private citizens' ability to transact is a moral good.

If world governments and traditional finance were far less oppressive and moralistic about the freedom to transact, then you'd have a solid point. (Although depending on the jurisdiction in question, I'd say money laundering may be a valid use case, as well).

Re: Epoch Times CFO charged in $67M crypto money laundering plot

#97

Post by ajross »

0110101001 wrote: post #59
eli wrote: post #38

Earlier quoted context omitted.

That seems clear to me. They used stolen identity information to make false unemployment insurance claims in other people’s names. The CFO bought the prepaid cards at a discount and then transferred the whole amount to the company account. Maybe there’s more to it but it doesn’t sound like it was very sophisticated and seems inevitable they would be caught eventually.

> They used stolen identity information to make false unemployment insurance claims in other people’s names. I don't think "they," meaning Epoch Times, did the actual identity theft / unemployment insurance fraud. The indictment says they "purchased" the debit cards, and there are no charges related to those crimes. It sounds like Epoch Times found a platform where such fraudsters were offloading their phony unemploy…

> It sounds like Epoch Times found a platform where such fraudsters were offloading their phony unemployment debit cards at a discount [...] and tried to flip them around as legitimate donations and subscription revenue for an easy profit.

Just to be clear, since the framing here doesn't make it clear if you understand: that is textbook money laundering. "I didn't know where the money on these cards came from I was just buying them as a product" is not remotely a defense. AML/KYC laws apply to all financial transactions, not just to banks, and yes, "buying millions of dollars of pre-paid debit cards for real money" is quite clealy a "financial" transaction.

Re: Epoch Times CFO charged in $67M crypto money laundering plot

#98

Post by JumpinJack_Cash »

infotainment wrote: post #30

I continue to be convinced that the only valid use cases for crypto are scams and money laundering -- chalk up this one to the latter. Can anyone name an application besides those two things that traditional finance doesn't handle better?

> > Can anyone name an application besides those two things that traditional finance doesn't handle better?

People who want to subtract themselves to what Central Bankers (who are de-facto unelected Sovreigns) are doing have no other option if not for crypto and gold.

In general what you say about scams and money laundering could also be concomitant...how do you think Goldman Sachs and JPMorgan arrived to be the companies they are today? They were pulling so many scams and laundring especially during the 1880-2011 period. And quite frankly also after the touted post GFC regulations they keep laundering and breaking laws (Credit Suisse, Wells Fargo, JPMorgan etc, they all had a major multi billion dollar scandal or more in the aftermath of the GFC)

People aren't stupid, they can see how nowadays Central Banks, Governments, big Commercial Banks, big tech are all about stability AKA the winners realize that they won and want to prevent other spins at the roulette, actually ideally they want to close all the tables in the Casino so they'd be the perpetual winners from now on.

If you zoom out and see the picture from 30.000ft you might guess how some scams and laundering option for the common person isn't the worst thing that can happen when the powers that be want to freeze everything in place and sit on their winnings (while also continuing to break the law , scamming and laundering money)

Re: Epoch Times CFO charged in $67M crypto money laundering plot

#99

Post by FabHK »

dist1ll wrote: post #95
FabHK wrote: post #91

Earlier quoted context omitted.

Happy to clarify. a) Theory: In any engineering or optimisation problem, adding a constraint makes the solution not better , and, if the constraint is binding, worse. So, we would not expect distributed state machine replication (which was solved in the late 90s, with BFT-style consensus such as Paxos and Raft etc.) to get better by requiring permissionlessness. (And the latter is, in my view, the actual defining cha…

> BFT-style consensus such as Paxos and Raft Raft cannot deal with byzantine failures, so it's not a BFT protocol. Neither is the original Paxos, unless extended to Byzantine Paxos. Both are CFT by default. > So, we would not expect distributed state machine replication to get better by requiring permissionlessness. Right, but the banking system isn't a 600LoC Raft implementation. By your own admission, the bulk of i…

By BFT-style I meant employing rounds of voting rather than longest chain, thus being always consistent and eventually available (unlike LCR, which is always available and eventually consistent), but fair enough. Anyways, in the permissioned setting this was all solved in the 90s iirc.

Then, so, just moving stuff around in a robust and even distributed ledger is, we can all agree, while not trivial, a solved problem.

So then one can impose further constraints. Either, 1), comply with the law and rules and regulation, and sure, that will make it less efficient. But that is the 99% of the work banks do that crypto doesn’t do, and they are not being done for fun, but for good reasons. Or 2), permissionlessness, but what for? So you can avoid 1), because otherwise you wouldn’t need to incur the tremendous costs of 2).

I don’t think we should adapt the AirBnB/Uber approach (how much of the regulatory cost of fire regulations/working time restrictions/insurance cost can we avoid) to money transmission.

It is obviously trivially possible to do legitimate transactions with crypto, just as you can cut an onion with a machine gun. But that’s not the raison d’être of a machine gun. And the raison d’être of crypto is to escape regulation, as Satoshi basically said in the original emails, and as is abundantly clear not only from looking at the last 15 years of history, but also from the willingness to incur the massive overheads of permissionlessness.

ETA: appreciate the discussion, btw.

Re: Epoch Times CFO charged in $67M crypto money laundering plot

#100

Post by FabHK »

beaeglebeachedd wrote: post #94
FabHK wrote: post #91

Earlier quoted context omitted.

Happy to clarify. a) Theory: In any engineering or optimisation problem, adding a constraint makes the solution not better , and, if the constraint is binding, worse. So, we would not expect distributed state machine replication (which was solved in the late 90s, with BFT-style consensus such as Paxos and Raft etc.) to get better by requiring permissionlessness. (And the latter is, in my view, the actual defining cha…

Better isn't objective. Not supporting it is fine but outlawing it ultimately means sending men with guns to stop people from interacting with a block chain. If you put bullet holes in people for their cryptographic fetishes, which is what the state will do ( or maybe if lucky they just flashbang a baby), you might be the baddie.

Sure, just as the bad bad SEC sends men with guns after people trying to do an unregistered IPO. Terrible, the last 90 years of regulated IPOs. The oppression.
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