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Money Laundering and AML Compliance

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Re: Money Laundering and AML Compliance

#191

Post by dsfyu404ed »

wpietri wrote: post #188
dsfyu404ed wrote: post #182

Earlier quoted context omitted.

>That will seem swell to you until better-funded criminals want a piece of your assets, money, or labor. And the status quo where the banks take a bigger cut to pay for their big compliance departments and the government takes a bigger cut to pay for auditing those compliance departments is somehow better? X-percent not in your pocket is X-percent not in your pocket no matter how you cut it. At least in the proposed…

Yes, the status quo is definitely better. The numbers on total AML cost vary widely, and I think the high-end numbers are suspicious because there are incentives to inflate them. But taking them at face value, AML costs the US financial industry about 1% of revenue. That is nothing compared to the costs of crime in high-crime/high-corruption societies. And looking at dollars alone doesn't paint a true picture. Crimin…

>That is nothing compared to the costs of crime in high-crime/high-corruption societies.

Is it really though? How much was the US (or any other equally developed country) losing to crime and corruption prior to all this KYC/AML BS? Not that much. Letting a mobster have a bank account doesn't magically turn your country into Nigeria. If anything it makes your country better because the mobster doesn't have to store that value another way and then protect it (with violence). >Criminal enterprises work through violence and add risk throughout the economy

So like government but with less abstraction?

> But unlike criminal gangs, they don't settle them with shooting wars in the streets.

Only because they don't have to. Being an above the table enterprise they can just go to the government court system and get their (credible threat of) violence that way.

All this violence you're complaining about w.r.t. organized crime is just their (low buck, because due process and diffusion of responsibility sufficient to dissuade revenge are expensive) way of settling business disputes.

Re: Money Laundering and AML Compliance

#192

Post by matheusmoreira »

pjkundert wrote: post #17
matheusmoreira wrote: post #12

Earlier quoted context omitted.

> And then, they wonder why people are being driven to use Cryptocurrency... If only. Normal people are only buying crypto to speculate. They drive the price up to absurd levels and then write it all off as a scam when it corrects. Meanwhile good technology like Monero remains marginalized instead of replacing the USD as it should.

You seem to be speaking for ... a lot of people you can't possibly know -- such as me, and every person I work with and deal with on a day to day basis in the Crypto R&D field. As for Monero -- don't complain, let's bring it mainstream by building something . Specifically: something that state-level interference can't stop, even if they're quivering in rage that it exists! That's what us "speculators" who code every…

> such as me, and every person I work with and deal with on a day to day basis in the Crypto R&D field.

You ended up proving my point. Normal people don't research or develop cryptocurrency technology, they buy and sell it on Binance. It's hard enough for people to understand BTC, the altcoin situation is next to hopeless.

> As for Monero -- don't complain, let's bring it mainstream by building something.

I've gotten paid anonymously in XMR for a small programming task. It was a wonderful experience, I wish everybody would pay me that way. The technology already already works. If anything still needs to be built, it's even stronger privacy guarantees against the perpetual government encroachment.

This is a social problem. How do we get people to drop USD and start using XMR instead? It's a form of the ages old circular logic problem of bootstrapping: nobody uses it to buy things because nobody accepts it, and nobody accepts it because nobody uses it to buy things.

Re: Money Laundering and AML Compliance

#193

Post by matheusmoreira »

novok wrote: post #151
pjkundert wrote: post #17

Earlier quoted context omitted.

You seem to be speaking for ... a lot of people you can't possibly know -- such as me, and every person I work with and deal with on a day to day basis in the Crypto R&D field. As for Monero -- don't complain, let's bring it mainstream by building something . Specifically: something that state-level interference can't stop, even if they're quivering in rage that it exists! That's what us "speculators" who code every…

Always kind of wondered why monero onlyfans or state weed hasn't happened much. Work that is legal, but the financial system makes an absolute bitch to actually financially transact for.

I'm wondering to this day. Prudish financial institutions refusing business to "questionable" businesses are one of the problems cryptocurrencies were intended to solve.

But when I suggested that here I got called out for it. No idea why there was so much hostility.

Re: Money Laundering and AML Compliance

#194

Post by novok »

wpietri wrote: post #180
novok wrote: post #147

Earlier quoted context omitted.

AML regulations prevent about %0.05 of criminal proceeds from being 'harvested' and the cost of these compliance regimes costs vastly more than the value they bring. And it enables a vast financial surveillance system and a huge industry of AML analysts doing pointless busy work writing SARs nobody cares about. The US mafia declined because of the rico act and the fact that there was less racism and better integratio…

> AML regulations prevent about %0.05 of criminal proceeds from being 'harvested' and the cost of these compliance regimes costs vastly more than the value they bring. I look forward to your proving these two very numerical claims. But you can't just count existing criminal proceeds. That'd be saying, "The current level of speeding is so low that we can get rid of traffic cops." You have to measure the crime prevente…

Read the studies the original article links to?

AML is a boil the ocean way to prevent crime, except the ocean isn't being boiled because there isn't enough energy to actually boil the financial system. Instead it just annoys everyone with the financial equivalent of the ineffective TSA, where the TSA's own auditors bring everything and anything through with ease.

With all the money and human time used to prevent crime via AML, that could've been redirected to far more productive things. Especially in a country like the USA, where crime prevention issues are fairly obvious but not acted upon, such as robbery, murder, assault, rape, car break ins, property theft, damage, etc in California which aren't things effected much by AML either way.

Re: Money Laundering and AML Compliance

#195

Post by matheusmoreira »

ClumsyPilot wrote: post #42
matheusmoreira wrote: post #12

Earlier quoted context omitted.

> And then, they wonder why people are being driven to use Cryptocurrency... If only. Normal people are only buying crypto to speculate. They drive the price up to absurd levels and then write it all off as a scam when it corrects. Meanwhile good technology like Monero remains marginalized instead of replacing the USD as it should.

> good technology like Monero remains marginalized instead of replacing the USD as it should. Imagine you achieve your Crypto-dream, known mass murderers like the head of Wagner or Kadyrov will move money with impunity. Current system is problematic, but I don't fancy the idea of money being conpletely untouchable by the system of justice

I wonder what else you don't fancy. I mean, your argument is essentially the financial version of the "terrorists and child molesters" argument. Do you also support mandated cryptography backdoors because cryptography also protects criminals?

All this mandatory financial reporting for "anti-money laundering" purposes or whatever is just the financial arm of the global panopticon. You're defending total global surveillance and control. You're advocating giving up freedom for security.

Re: Money Laundering and AML Compliance

#196

Post by from »

exbanker wrote: post #30
timerol wrote: post #20

Earlier quoted context omitted.

> burdening 8 billion law-abiding Citizens with impossibly complex and arduous KYC/AML requirements TFA notes that "This will affect the typical user of the financial system precisely zero times during their lives." It is very much not a complex and arduous situation in most instances, only in very few edge cases. (Which patio11 wants us to pay closer attention to.) I had occasion to unexpectedly transfer $10k over A…

This is just factually untrue. AML policies unjustly affect millions of Americans. At US Bank, you can’t deposit cash without an ID which is standard post 2018 or so. Yet go to a US Bank in a low income area, deposit $100 in a family member’s account and they will ask for ID, social security number and your job. US Bank has been involved in multiple money laundering scandals leading to deferred criminal prosecution.…

I agree with your broader point but I’m pretty sure the Supreme Court case is about a technicality involving foreign bank account reporting, basically whether a failure to file that you had 5 foreign bank accounts is 5 counts or 1 count of FBAR violations. Unless there’s another pending case I haven’t heard of?

Re: Money Laundering and AML Compliance

#197

Post by from »

IG_Semmelweiss wrote: post #80
wolongong942 wrote: post #33

Earlier quoted context omitted.

Sites like Paypal and Skrill did this because they know most people would otherwise just cancel on sign up , and when you've got money locked in you have no choice but to complete verification. Thankfully i haven't had to deal with their crap in the past 4 years due to better options existing.

You cannot end such a compelling sentence.. and not finish your thoughts in writing!! What are the better options?

Hint: Starts with “adv” and ends with “cash”

Re: Money Laundering and AML Compliance

#198

Post by from »

NovemberWhiskey wrote: post #29
yieldcrv wrote: post #10

Al Capone would have passed KYC

Al Capone would fail KYC just on reputational risk and negative media exposure before we even get into unclear source of wealth.

Yes but most likely his wife or son wouldn’t show up in World-Check or whatever compliance system they use nowadays. Instead of engaging in this hypothetical we can just look at the million examples where modern day multi millionaire criminals passed KYC, to which the usual suspects will say “well that wasn’t real KYC” or “we have since closed those loopholes” which they have been saying for the past 30 years. This weird experiment of outsourcing crime enforcement to banks does not work and I’m not sure why this massive consensus exists that it does.

Re: Money Laundering and AML Compliance

#199

Post by super256 »

quelltext wrote: post #136
super256 wrote: post #84

Earlier quoted context omitted.

The USA is the only economically significant country that opts out of participating in the Common Reporting Standard (CRS) data exchange. The USA claim that FACTA is enough. This puts the USA in the unique position where it only receives information from other countries through FACTA and its IGAs, without providing any information in return. Why doesn't it provide information in return? Well, only specific bank accou…

Well, only specific bank accounts are subject to FACTA: ... Investment accounts and custodial accounts (of individuals and entities), even when they are a resident in the FACTA partner country. This is true, as long as the custody account doesn't have income flows into this accounts (eg dividends or interests). You say that investment accounts are subject to FACTA, but not anymore if dividends or interest earnings fl…

Sorry, I missed “US” in this sentence. It should say:

  Investment accounts and custodial accounts (of individuals and entities), even when they are a resident in the FACTA partner country. This is true, as long as the custody account doesn't have \*US\* income flows (eg dividends or interests).
To be clear: US custody accounts of individuals and entities, which are not US taxpayers, but receive US income, are subject to FACTA data exchange.

But, if you don't have the before mentioned US income to your account, you are exempted from data sharing.

Re: Money Laundering and AML Compliance

#200

Post by from »

wpietri wrote: post #126
etherael wrote: post #121

Earlier quoted context omitted.

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 di…

“Money laundering” became a crime in 1986. The bank secrecy act originally just introduced the $10000 threshold ($80000 now) and record keeping requirements. It was later amended in the 90s to add suspicious activity reporting. Nearly all of the major mafia cases predate this. There are many reasons for this decline (https://www.journals.uchicago.edu/doi/10.1086/706895) but mostly it has to do with RICO, wiretap evidence becoming admissible, the witness protection program, changing demographics, and more federal prosecutions where the people involved were smarter, less corruptible and where the sentences were greater. I am incredibly skeptical that it had anything to do with the decline of organized crime in this country.
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