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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

#61

Post by avianlyric »

KLexpat wrote: post #39
ajkdhcb2 wrote: post #8

Earlier quoted context omitted.

Throughout all of human history people used private forms of money like cash. Why is it that suddenly only now it is a disaster to have financial privacy because of "crime"?

The idea of fiat currency only works when people are forced to participate in it. The petro-dollar was fairly obvious in the late 20th century, but now things are more subtle. The key thing is ensuring that all exchanges of wealth only occur within a currency controlled by the authorities. They are not really concerned about minor instances of tax avoidance; the primary concern is that large scale economic activity c…

> The key thing is ensuring that all exchanges of wealth only occur within a currency controlled by the authorities.

I don’t think even this is a requirement. Really all you need is all large transfers of wealth to be reported to central governments so they can collect tax, and enforce money laundering prevention rules.

Don’t think a government really cares what currency you use, fiat or crypto, as long as they get their cut in a currency of their choice.

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

#62

Post by avianlyric »

vmception wrote: post #12
ajkdhcb2 wrote: post #8

Earlier quoted context omitted.

Throughout all of human history people used private forms of money like cash. Why is it that suddenly only now it is a disaster to have financial privacy because of "crime"?

they have to clamp down on financial privacy because they invented financial crimes the federal crime of "money laundering" requires the state to use public resources in whitelisting every transaction, and having the entire population stigmatize the concept of ever having money themselves let alone actually moving it and that 50 year old absurdity is pretty much what they are doubling down on

If you’ve seen the real harm that caused in the world by money laundering, you would be less inclined to condemn its prevention.

I’ve personally seen cases of money laundering where the money comes from sexual exploitation, human trafficking, modern day slavery, organ trafficking, high value thefts (petrol, or digits bank robberies), standard social engineering scams etc

These aren’t special one of events, this happens in small bank on every day ending in y. Most fincrime teams don’t have the energy to deal with normal people moving their cash, or even high net wealth people moving their cash. They’re too busy tracking down and cleaning up after some really nasty people.

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

#63

Post by CryptoPunk »

ve55 wrote: post #2

The way I usually phrase this situation is something like "The goals of a strong government are in direct opposition to the goals of most modern cryptocurrencies", and this is yet another subset of those goals where we can see the forces fighting against each other. I find it hard to convince myself cryptocurrency can win out in the long-term, as the more rules they find ways to skirt around via technology and decent…

The Soviet economy had a substantial black market, especially if you include the Blat system of favor-trading [1]. New York today is seeing growth of ostensibly illegal, unlicensed street vendors, in reaction to lockdown restrictions [2].

Government is not efficient, and cannot effectively enforce rules, so cryptocurrency will undoubtedly survive.

[1] https://blogs.commons.georgetown.edu/rees-577-fall2016/2016/...

[2] https://nypost.com/2020/12/26/mayhem-in-the-streets-illegal-...

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

#64

Post by avianlyric »

brmgb wrote: post #15
ajkdhcb2 wrote: post #8

Earlier quoted context omitted.

Throughout all of human history people used private forms of money like cash. Why is it that suddenly only now it is a disaster to have financial privacy because of "crime"?

Hard limits to cash transactions exist in most countries around the world. For example, in France, as a business, you can't accept payment in cash above 1000€. Between consumers, you need to produce an invoice. I personally deeply disagree with the EFF regarding FinCEN. From my point of view, the obligation imposed by the regulation strikes a good balance between protecting private life and fighting tax dodging and m…

As someone that works in financial crime prevention, I think these rules are a very blunt instrument that will almost certainly do more harm than good.

There have been banks in the past that have operated similar policies, and regulators have raked their senior leaders over the coals for implementing such naive rules.

Transaction size alone tends to be an extremely weak signal for money laundering, but does tend to be a very strong single of high net wealth. Any criminal worth their salt will split up illicit transactions into smaller ones to avoid these types of rules, it’s money laundering 101.

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

#65

Post by icelancer »

erk__ wrote: post #37
Nextgrid wrote: post #36

Earlier quoted context omitted.

> taxes are generally spent by government officials By politicians I meant to include government officials; I've edited my comment to reflect that. > Very few low-tax countries are pleasant to live in for the average human being I agree, but I don't see the current situation being great either; I think the countries where high taxes are demonstrably increasing quality of life are outliers, and similarly you can incre…

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.

>> If you pull up a list of countries by tax rates and some quality of life index they seem to be pretty corrolated

Try correlating restrictive immigration policies and quality of life index. Should we tax people a lot and make it very hard for immigrants to become citizens? Scandinavian countries do precisely both.

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

#66

Post by gabereiser »

CryptoPunk wrote: post #63
ve55 wrote: post #2

The way I usually phrase this situation is something like "The goals of a strong government are in direct opposition to the goals of most modern cryptocurrencies", and this is yet another subset of those goals where we can see the forces fighting against each other. I find it hard to convince myself cryptocurrency can win out in the long-term, as the more rules they find ways to skirt around via technology and decent…

The Soviet economy had a substantial black market, especially if you include the Blat system of favor-trading [1]. New York today is seeing growth of ostensibly illegal, unlicensed street vendors, in reaction to lockdown restrictions [2]. Government is not efficient, and cannot effectively enforce rules, so cryptocurrency will undoubtedly survive. [1] https://blogs.commons.georgetown.edu/rees-577-fall2016/2016/... [2…

I agree with this at the macro level. It’s easy for a government to strong arm an individual into regulation, a small company even. When the markets themselves shift, that’s when government is going to have a hard time regulating. Crypto, good and bad, is here to stay because government is slow to respond to shifts.

What’s going to be interesting to see is how this government regulations vs the people’s needs play out. The street vendors are suppling a demand, there’s a need, illegal vending or not.

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

#67

Post by nmlnn »

avianlyric wrote: post #62
vmception wrote: post #12

Earlier quoted context omitted.

they have to clamp down on financial privacy because they invented financial crimes the federal crime of "money laundering" requires the state to use public resources in whitelisting every transaction, and having the entire population stigmatize the concept of ever having money themselves let alone actually moving it and that 50 year old absurdity is pretty much what they are doubling down on

If you’ve seen the real harm that caused in the world by money laundering, you would be less inclined to condemn its prevention. I’ve personally seen cases of money laundering where the money comes from sexual exploitation, human trafficking, modern day slavery, organ trafficking, high value thefts (petrol, or digits bank robberies), standard social engineering scams etc These aren’t special one of events, this happe…

> sexual exploitation, human trafficking, modern day slavery, organ trafficking, high value thefts (petrol, or digits bank robberies), standard social engineering scams etc

That kind of logic can be used to justify putting government cameras and microphones inside everyone's homes too.

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

#68

Post by 3np »

AnthonyMouse wrote: post #5
TheChaplain wrote: post #3

I believe privacy advocates needs to be more involved in the financial sector for there to be any meaningful change and provide counter proposals to balance. The problem now is that a lot of cryptocurrencies are prime targets for money laundering, financing organized crime and terrorism networks. I often get shat on when mentioning that, especially by loud proponents of cryptocurrencies, but it is a real issue that m…

> 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 is game over. 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.

What's happening here is effectively a battle over the fungibility of cryptocurrency. If the transactional history of each UTXO comes under scrutiny for a business to touch a BTC transaction, the practical value of each satoshi differs. This was actually brought up many years ago as an argument for why bitcoin in its current form (sans untraceable transaction) may lose the "fungibility" property and thus will lose its utility as money.

This was early on a main selling point for Monero; "truly fungible cryptocurrency".

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

#69

Post by throwaway0a5e »

erk__ wrote: post #37
Nextgrid wrote: post #36

Earlier quoted context omitted.

> taxes are generally spent by government officials By politicians I meant to include government officials; I've edited my comment to reflect that. > Very few low-tax countries are pleasant to live in for the average human being I agree, but I don't see the current situation being great either; I think the countries where high taxes are demonstrably increasing quality of life are outliers, and similarly you can incre…

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.

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

#70

Post by logifail »

CryptoPunk wrote: post #63
ve55 wrote: post #2

The way I usually phrase this situation is something like "The goals of a strong government are in direct opposition to the goals of most modern cryptocurrencies", and this is yet another subset of those goals where we can see the forces fighting against each other. I find it hard to convince myself cryptocurrency can win out in the long-term, as the more rules they find ways to skirt around via technology and decent…

The Soviet economy had a substantial black market, especially if you include the Blat system of favor-trading [1]. New York today is seeing growth of ostensibly illegal, unlicensed street vendors, in reaction to lockdown restrictions [2]. Government is not efficient, and cannot effectively enforce rules, so cryptocurrency will undoubtedly survive. [1] https://blogs.commons.georgetown.edu/rees-577-fall2016/2016/... [2…

> 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?'"

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