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EFF to FinCEN: Stop Pushing for More Financial Surveillance

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Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#101

Post by AshWolfy »

throwaway0a5e wrote: post #69
erk__ wrote: post #37

Earlier quoted context omitted.

If you pull up a list of countries by tax rates and some quality of life index they seem to be pretty corrolated so I would not say it is an outlier, where as the outliers are those with low tax and high QOL for example UAE, Oman and Qtar, but all those have a pretty significant income in another way compared to most countries.

I think you have the causation backward. The poorer the country the less of a cut the government can take without bringing everything crashing down. These places are low tax because they cannot afford to be high tax. If you look at local taxes and fees between US cities the same pattern emerges.

The US is wealthy, has lower taxes, and lower happiness than similar countries

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#102

Post by freeone3000 »

Xixi wrote: post #91
Red_Leaves_Flyy wrote: post #86

Earlier quoted context omitted.

https://www.nationalpriorities.org/budget-basics/federal-bud...

That's the federal budget. Aren't things like road or education typically part of the state/city budgets? I'm not American, but I used to live in NYC, and thus paid my taxes there. I was always under the impression that: federal budget is for the armies/FBI/CIA/NSA/FDA and other three letters agencies. On the other hand state taxes, city taxes, and sales taxes are for roads, schools, hospitals, firefighters, police a…

Federal funds support state efforts in eduction, and HUD's section 8 housing vouchers are direct aid to people.

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#103

Post by freeone3000 »

Karunamon wrote: post #94
intotheabyss wrote: post #81

Earlier quoted context omitted.

Just wrap your Bitcoin into renBTC on Ethereum, and exchange it for DAI stablecoin. Then, deposit it into a zero knowledge mixer contract called tornado.cash and withdraw to a fresh address. Now you've broken the link. An entirely decentralized process of converting BTC into a stablecoin without an intermediary while maintaining some privacy.

How many bites of the pie did you lose during those 4 transactions? Besides, you still need to convert DAI to fiat to use it IRL in most ways, DAI is just another form of space money despite being pegged to the dollar. I could also see criminalization of mixing tools being a thing.

It's already a thing - it's money laundering to conceal the source of funds that may have been used in an illegal activity.

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#104

Post by logifail »

sildur wrote: post #74
logifail wrote: post #70

Earlier quoted context omitted.

> Government [..] cannot effectively enforce rules Counter-example: pick any one of the (new) rules that are currently being enforced due to C19? Government may not be efficient, but from time to time may just be efficient enough to catch you and/or punish you. Shameless movie quote: "You've got to ask yourself a question: 'do I feel lucky?'"

Paraphrasing another movie quote: "with everyone criminal, no one will be".

> with everyone [..]

Hmm, "everyone"?

Q: What proportion of Bitcoin holders are actually using as an approximate alternative to fiat currency (regularly purchasing real life stuff using Bitcoin) vs holding and hoping to get rich?

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#105

Post by tuxxy »

Karunamon wrote: post #94
intotheabyss wrote: post #81

Earlier quoted context omitted.

Just wrap your Bitcoin into renBTC on Ethereum, and exchange it for DAI stablecoin. Then, deposit it into a zero knowledge mixer contract called tornado.cash and withdraw to a fresh address. Now you've broken the link. An entirely decentralized process of converting BTC into a stablecoin without an intermediary while maintaining some privacy.

How many bites of the pie did you lose during those 4 transactions? Besides, you still need to convert DAI to fiat to use it IRL in most ways, DAI is just another form of space money despite being pegged to the dollar. I could also see criminalization of mixing tools being a thing.

> How many bites of the pie did you lose during those 4 transactions?

Probably between ~1-2%, if that.

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#106

Post by CogitoCogito »

refurb wrote: post #72
thefounder wrote: post #25

Earlier quoted context omitted.

The issue is converting that crypto into cash.

This is what I don’t get. Great, you can transfer Bitcoin to anyone for cheap, anywhere in the world. But that Bitcoin is useless to you or whoever you give it to unless it’s converted to currency. That’s where the gov’t puts it’s grip. Move as much Bitcoin wherever you want. Who cares. Want to convert to dollars or Euros or Yen? That’s where the gov’t steps in and say fine - prove who you are for this transaction. W…

It doesn't need to be convertible to cash to have economic value. As long as people are willing to trade bitcoins for other goods, they have value. So even if it could never be converted to another currency, that wouldn't necessarily mean it's useless.

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#107

Post by Karunamon »

freeone3000 wrote: post #103
Karunamon wrote: post #94

Earlier quoted context omitted.

How many bites of the pie did you lose during those 4 transactions? Besides, you still need to convert DAI to fiat to use it IRL in most ways, DAI is just another form of space money despite being pegged to the dollar. I could also see criminalization of mixing tools being a thing.

It's already a thing - it's money laundering to conceal the source of funds that may have been used in an illegal activity.

No, I mean criminalization of mixing services in specific, regardless of their use. In the same vein as KYC laws.

It's currently not illegal to obscure your financial trail as long as it's not in service of anything that is itself illegal, but I could see the legislators saying that any funds from a mixer are to be considered tainted, and made de facto illegal all on their own.

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#108

Post by Karunamon »

tuxxy wrote: post #105
Karunamon wrote: post #94

Earlier quoted context omitted.

How many bites of the pie did you lose during those 4 transactions? Besides, you still need to convert DAI to fiat to use it IRL in most ways, DAI is just another form of space money despite being pegged to the dollar. I could also see criminalization of mixing tools being a thing.

> How many bites of the pie did you lose during those 4 transactions? Probably between ~1-2%, if that.

That would depend on the transaction size and market, no? As early as yesterday, any single transaction involving ETH would have cost no less than $3 due to gas prices even at the slowest acceptable pace, and that's before the bid/ask spread on the exchanges eat some more

I'm quickly coming to the conclusion that while crypto cuts out a lot of the obvious middlemen, there are a lot more hidden ones. It is currently non-economical to do small transactons.

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#109

Post by AnthonyMouse »

3np wrote: post #68
AnthonyMouse wrote: post #5

Earlier quoted context omitted.

> The problem now is that a lot of cryptocurrencies are prime targets for money laundering The issue is that you can't actually solve this. It's already over. The premise of money laundering rules is that you have two conspiring parties transferring illicit gains between one another and the regulations have the bank as an intermediary informing on them to the government. The existence of cryptocurrency makes it possi…

Well, not quite. You seem to be conflating "money laundering" with all "undesired"/illegal transactions. Laundering implies transition from "dirty" to "clean". This is the kind of scenario that these kinds of regulatory requirements impede: "Dirty BTC" transferred to Binance, traded for ETH, sent to Coinbase, traded for USD, and sent outward to a fiat bank account. Like you say, strictly peer-to-peer value transfer i…

> Laundering implies transition from "dirty" to "clean".

But this doesn't really work directly with fiat anyway. If a million dollars suddenly appears in your bank account and the IRS wants to know where it came from, and your answer is "I sold some Bitcoin" their next question is where you got the Bitcoin.

Money laundering works with front companies. Your front company is e.g. an electronics retailer. Your foreign supplier is in on it. You transfer money to them for a truck full of televisions and game consoles, but when the truck comes, it has twice as many as you could ordinarily get for that amount of money because you paid for the rest under the table.

Then you sell the products and get clean money. It used to require a truck full of cash or diamonds going the other way, now it's cryptocurrency. That's what they're complaining about. They used to be able to catch that truck crossing the border with a hundred thousand dollars in cash, now they can't. But you can't stop that by regulating exchanges or anything else that law abiding people are doing.

> If every point of contact between cryptocurrency and a regulated entity requires full KYC, those illicit funds can be prevented from entering the regulated economy.

You can't get there when cryptocurrency is used internationally. The foreign entity selling the criminal organization the televisions isn't subject to KYC regulations in its own country. Or it is on paper but that country's government is corrupt and looks the other way.

It also doesn't actually solve the problem even if you managed to do that. Suppose the cryptocurrency of unspecified origin is prohibited from being used above board in the US. So then it isn't worth as much. Great, then it can be acquired for a lower price; doesn't impact its utility as a medium of exchange. And then the criminals still use it for that and the electronics wholesaler in Russia doesn't really care that the cryptocurrency it receives can only be used in Russia because that's where it is anyway.

All the regulations do is make things harder for people who follow the law.

Re: EFF to FinCEN: Stop Pushing for More Financial Surveillance

#110

Post by jeofken »

vkou wrote: post #44
jeofken wrote: post #11

Earlier quoted context omitted.

With cryptocurrency you can travel across a border with a million $ worth, by just keeping a 12-word recovery phrase on you. Cryptocurrencies can never be stopped, and will more likely outlive governments than vice versa. Long live tax evasion! Vive la liberté!

Sorry to burst the tax evasion bubble, but it is pretty easy to stop cryptocurrencies. Just require KYC at points of entry and exit into the ecosystem.

There are ways around it - worst case find a bank in some foreign jurisdiction who is willing to play ball.
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