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How to Launder Billions of Digital Dollars

theatlantic.com

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Re: How to Launder Billions of Digital Dollars

#31

Post by Glyptodon »

Smirnoff wrote: post #8
driverdan wrote: post #3

> LR's most basic criminal offense is simple: It didn't know or want to know the identities of its clients. They allowed people to transfer big sums of money without checking their identification. That this is a crime disgusts me. I should be able to do whatever I want with my money without anyone knowing who I am. That's how it worked up to the past century.

Umm, no, you shouldn't be able to do everything you want with your money. A payment processor has a fiduciary duty for its customers. So if you are sending $100,000 to Nigeria to pay for puppies, the Payment processor better stop this transaction to protect you form being scammed. Now maybe you are smart and savvy enough to be not scammed but an average joe isn't. There are many rules in the payment industry but KYC…

Fiduciary duty should be to prevent customers from being scammed themselves, not to prevent them from purchasing things they want. IE Nigerian puppies is probably a scam, but of, "Hi, we're Paypal and we've decided to just keep your money because you ordered a reproduction Civil War cavalry saber and it's against our TOS" is just bull.

It's one thing to have some sort of fiduciary duty to protect customers from scams. It's another to impose government or public morality on the commerce a service is gatekeeping.

Especially when said laws prevent access to the marketplace without going through said gatekeepers.

Re: How to Launder Billions of Digital Dollars

#32

Post by mindslight »

"Money Laundering" is an oxymoron. The whole concept of money requires that one unit is an equal store of value no matter who possesses it or how it was obtained. Adding conditions on exchanging destroys independent/classless power by making the value of one's liquid assets dependent on their political connections.

FWIW this is something Bitcoin didn't bother to get right, and will be its downfall, starting as soon as brick and mortar businesses are required to register their wallet identities.

Liberty Reserve isn't the first competitor to USD that USG has shut down, and it won't be the last. It's unfortunate that when economics finally prevails against these goons, the market correction will probably cause the collapse of the USA.

Re: How to Launder Billions of Digital Dollars

#33

Post by dublinben »

keyme wrote: post #23
ck2 wrote: post #2

Ah they now have an angle to go after bitcoin.

Difference is, there is no one behind bitcoin. No one to arrest. The only "real people" "behind" it are the Exchanges. However, they(usually) hold proper documentation for transactions and comply with the law fully.

That's a pretty new situation, and not nearly as certain as you make it sound.

Re: How to Launder Billions of Digital Dollars

#35

Post by criley2 »

cynicalkane wrote: post #22
strick wrote: post #4

Many of the largest banks in the world launder much greater sums and get away with the lightest slap on the wrist. Wherever money changes hands you will find ethically challenged people making a profit. Gangster Bankers: Too Big to Jail http://www.rollingstone.com/politics/news/gangster-bankers-t...

I think https://en.wikipedia.org/wiki/HSBC#Money_laundering might be more interesting to a hacker. As I've discussed previously[1], Taibbi is not noted for being a reliable systems expert on the international banking system. The simple facts are damning enough without layers of editorializing cruft from an unreliable source. For example, consider the assertion that people need to go to jail for fraud in the HSBC case…

For the life of me, I don't understand why the biggest investors and executives, who are rich because "with great risk of captial comes great opportunity for success". So they get the 99% of the profit, they get the big paychecks, because they took the big risk in the beginning.

But on the flip side, they don't accept the risk for the behavior of their company.

I don't understand how the system operates whereby they accept all the profit from their risk, but successfully mitigate almost all of the negatives of their risk, reducing jail time and criminal penalties to fines and loss of investment.

If a man earns profit from an investment in his control, to me, he also is responsible for the legality and behavior of that investment.

This seems obvious: Take down the executives. And keep on doing it, keep throwing them in jail until banks hire executives who don't let this bullshit happens. How many millionaires in jail would it take to change the culture? I'm betting not many.

Re: How to Launder Billions of Digital Dollars

#36

Post by JSZZHlmumeUE »

bencoder wrote: post #26
loopdoend wrote: post #15

Earlier quoted context omitted.

Crimes against facilitating human trafficking and terrorism disgust you?

We should ban trucks too, because people can be carried in trucks. And you're against human trafficking, right?

Nobody is banning money transfer, just regulating it.

And coming back to trucks, we do require trucks to be registered, drivers to have identification that can be checked by police officers and the ability for border police to examine your cargo when you cross an international border.

Re: How to Launder Billions of Digital Dollars

#37

Post by nostromo »

criley2 wrote: post #35
cynicalkane wrote: post #22

Earlier quoted context omitted.

I think https://en.wikipedia.org/wiki/HSBC#Money_laundering might be more interesting to a hacker. As I've discussed previously[1], Taibbi is not noted for being a reliable systems expert on the international banking system. The simple facts are damning enough without layers of editorializing cruft from an unreliable source. For example, consider the assertion that people need to go to jail for fraud in the HSBC case…

For the life of me, I don't understand why the biggest investors and executives, who are rich because "with great risk of captial comes great opportunity for success". So they get the 99% of the profit, they get the big paychecks, because they took the big risk in the beginning. But on the flip side, they don't accept the risk for the behavior of their company. I don't understand how the system operates whereby they…

That sounds nice, but it's impossible for an executive of a multinational bank to know what every employee is doing at all times.

It's not like their quarterly business review slides include, "committed fraud to increase revenue 20%."

Re: How to Launder Billions of Digital Dollars

#38

Post by nostromo »

gizmo wrote: post #13
driverdan wrote: post #3

> LR's most basic criminal offense is simple: It didn't know or want to know the identities of its clients. They allowed people to transfer big sums of money without checking their identification. That this is a crime disgusts me. I should be able to do whatever I want with my money without anyone knowing who I am. That's how it worked up to the past century.

The trade-of here is individual liberty vs what we know the consequences will be from allowing truly anonymous exchange. For all things in life: cui bono. Illegal operations (the vast majority of which are doing tremendous damage to society) stand to gain the most from anonymous money exchanges. So that's who end up using the service. So even die hard libertarians who value personal freedom such as anonymity a great…

Isn't cash more popular than Liberty Reserve and just as anonymous? (Albeit more cumbersome to transmit around the world.)

So isn't your argument also that cash encourages crime? And if so shouldn't it be abolished so that we can prevent activities that damage society?

Re: How to Launder Billions of Digital Dollars

#39

Post by bradleyjg »

cynicalkane wrote: post #22
strick wrote: post #4

Many of the largest banks in the world launder much greater sums and get away with the lightest slap on the wrist. Wherever money changes hands you will find ethically challenged people making a profit. Gangster Bankers: Too Big to Jail http://www.rollingstone.com/politics/news/gangster-bankers-t...

I think https://en.wikipedia.org/wiki/HSBC#Money_laundering might be more interesting to a hacker. As I've discussed previously[1], Taibbi is not noted for being a reliable systems expert on the international banking system. The simple facts are damning enough without layers of editorializing cruft from an unreliable source. For example, consider the assertion that people need to go to jail for fraud in the HSBC case…

> Truth be told, if you start doing this in an equitable fashion with the goal of "punishing" bad banking behavior, you'll target a lot of lower-middle-class mortgage brokers from the 2008 mortgage crisis who knowingly committed fraud, which seems like an undesirable result.

I think it a very desirable result. When it came time to break up the mafia, the prosecutors didn't say "we can't get the dons right off the bet, oh well let's not bother". Getting the triggermen is both a good in itself and a strategy to both starve the organization of foot soldiers and to work up the hierarchy.

No one seems to have any compunctions about putting outright lower class street drug dealers in prison.

Specicially with respect to HSBC, there were several avenues available for criminal prosecution of individuals both low level (i.e. the actual tellers and bank branch officials who recieved the ilicit funds) and high level. Irene Dorner, President HSBC Bank USA, for example signed the 2010 consent decree with the Office of the Comptroller of the Currency[1] and could have been held in contempt of court for refusing to carry out the agreed changes. Also conspiracy and RICO don't require every member of the corrupt organization to be aware of all the details of the criminal acts imputed to the entire conspiracy.

The Justice Department had no problem securing a prison sentence for money laundering against Vladimir Kats[2] as well as lower level employees of Liberty Reserve, but I bet he didn't go to Oxford. Can't a women that looks and sounds like Dame Judi Dench in prison, that would be uncivilized!

[1]http://www.occ.gov/news-issuances/news-releases/2010/nr-occ-... [2]http://www.informationweek.com/security/government/liberty-r...

Re: How to Launder Billions of Digital Dollars

#40

Post by alasdair_ »

gizmo wrote: post #13
driverdan wrote: post #3

> LR's most basic criminal offense is simple: It didn't know or want to know the identities of its clients. They allowed people to transfer big sums of money without checking their identification. That this is a crime disgusts me. I should be able to do whatever I want with my money without anyone knowing who I am. That's how it worked up to the past century.

The trade-of here is individual liberty vs what we know the consequences will be from allowing truly anonymous exchange. For all things in life: cui bono. Illegal operations (the vast majority of which are doing tremendous damage to society) stand to gain the most from anonymous money exchanges. So that's who end up using the service. So even die hard libertarians who value personal freedom such as anonymity a great…

>So even die hard libertarians who value personal freedom such as anonymity a great deal have to acknowledge that the real life consequences of exchanges like Liberty Reserve are a net negative to society.

I'm not sure I agree at all with this statement. Replace "liberty reserve" with Bitcoin and I certainly don't agree that it's a net negative to society.

Unless by "society" you mean the current status quo, in which case I'd agree but this changes the tone of your message significantly.

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