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Why banks are suddenly closing down customer accounts

nytimes.com

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Re: Why banks are suddenly closing down customer accounts

#831

Post by pa7x1 »

Quindecillion wrote: post #591
vvpan wrote: post #294

Earlier quoted context omitted.

Yeah, to say that "Bitcoin" is the epitome of blockchain technology, an ever-innovating field, is either ignorant or disingenuous.

Can you describe to me what the main point of "blockchain technology" is? What is there to innovate in terms of its core function?

Without a general purpose (i.e. Turing complete) and sufficiently expressive programming language (i.e. providing an idiomatic and expressive manner to build general-purpose logic) associated to the ledger you cannot build scaling technology that inherits the self-custodial, permissionless, and censorship resistance qualities of the underlying ledger. Nor a financial system that inherits those same properties.

If you think about it you are very limited in what you can do. You have an asset that you can self-custody, exchange permissionlessly and without censorship which is good to fight what the original article is about. But you cannot build any financial product on top of it that would have those same properties. Nor be able to scale the transactions per second that the base layer does while keeping those same properties. And I find it very unlikely you can serve the entire world with 7 transactions per second. So yes, there is plenty to innovate on its core function.

Re: Why banks are suddenly closing down customer accounts

#832

Post by rbanffy »

trompetenaccoun wrote: post #523
ArabicBaklava wrote: post #494

Earlier quoted context omitted.

Well, this happened in 2017.. fast forward to this account closure effect on my life: I had to go back to my country, without a degree, was not able to land any job. Unfortunately, good places require degrees. Stayed unemployed, hit with chronic depression as anyone would. Lost 4+ years of professional progress. When covid came, i was able to complete my degree online and graduated in 2021, but because all fresh grad…

Horrible. I've heard similar stories but this one's the worst by far. This shouldn't be allowed to ever happen again, such sudden closures without warning need to be illegal. The issue is banking is highly regulated but a lot of the regulation is about AML, terrorism screening and such. Not actually protecting customers from abuse but rather the other way around - banks are taking precautions to protect themselves fr…

> There is a solution - not sure if everyone's ready to hear it yet: Decentralized finance.

Another good option is to have checking accounts in more than one bank. Whatever triggers bank A to close your account is unlikely to also trigger the same action by bank B. It requires more funds, but you decentralise your finances within the classic financial system.

If something triggers a close of your accounts on multiple banks at the same time, odds are you have much worse problems than access to liquidity.

Re: Why banks are suddenly closing down customer accounts

#833

Post by Quindecillion »

FatalLogic wrote: post #772
Quindecillion wrote: post #596

Earlier quoted context omitted.

> But neither currency has ever done a roll back of this nature again. Maybe not a rollback, but Ethereum has proven it is malleable time and time again. As one example, compare the issuance of ether to Bitcoin. Eth's issuance is a dog's breakfast, indicative of changing opinions by those who call the shots... just like a central bank. Bitcoin's issuance? Predictable and steady as a rock for 15 years. Another example…

I don't know why you're replying to my comment, because I wasn't talking about any of those other issues you've said here. I did not confirm or deny them. I quoted the single issue that I was disputing. I wrote as clearly as possible to only refute one point, about the implication that Bitcoin had never done a roll back. If you want to talk about all those other things, then make a separate thread or post,. Please do…

No.

Re: Why banks are suddenly closing down customer accounts

#834

Post by pas »

Ridj48dhsnsh wrote: post #550
pas wrote: post #536

Earlier quoted context omitted.

look, US politics is a shitshow, regulators are beholden to politics, lobbying is a very big influence in the US. from the crazy anti-porn, anti-abortion, anti-gay/trans, anti-welfare xenophobic fundamentalist anti-anything lobby to the anti-gun, super-duper-pro-trans, militantly-feminist, pro-eat-the-rich lobby. and during all this banking in the US suffers from all the usual problems, it's 50+ regulatory regimes al…

Are things like Operation Chokepoint [1] still a conspiracy theory? It appears to me like a sophisticated and coordinated operation, not the accidental result of bureaucracy. [1] https://en.m.wikipedia.org/wiki/Operation_Choke_Point

... it was announced in a public speech on March 20 that year (2013), it was all kinds of bad (very ineffective and probably extralegal, etc)... but it wasn't a secretive conspiracy. (despite what Wikipedia writes.)

https://www.justice.gov/opa/speech/financial-fraud-enforceme...

Re: Why banks are suddenly closing down customer accounts

#835

Post by Quindecillion »

pa7x1 wrote: post #831
Quindecillion wrote: post #591

Earlier quoted context omitted.

Can you describe to me what the main point of "blockchain technology" is? What is there to innovate in terms of its core function?

Without a general purpose (i.e. Turing complete) and sufficiently expressive programming language (i.e. providing an idiomatic and expressive manner to build general-purpose logic) associated to the ledger you cannot build scaling technology that inherits the self-custodial, permissionless, and censorship resistance qualities of the underlying ledger. Nor a financial system that inherits those same properties. If you…

> you cannot build scaling technology that inherits the self-custodial, permissionless, and censorship resistance qualities of the underlying ledger

Correct, and yet you seem to still miss the point. There are tradeoffs. You can't scale AND maintain those properties. This is why Bitcoin scales with layer 2 solutions like Lightning (and more ideas like Enigma, Ark, Cashu etc.), or things like RGB or Taro for expressiveness. Separation of concerns.

The best attempts to have their cake and eat it too have failed in crypto.

There is very little innovation to be had in the core function of what a blockchain was designed to achieve. There's plenty of innovation ahead of us for the layers that are built on top of it.

Re: Why banks are suddenly closing down customer accounts

#836

Post by pas »

appalp wrote: post #787
pas wrote: post #536

Earlier quoted context omitted.

look, US politics is a shitshow, regulators are beholden to politics, lobbying is a very big influence in the US. from the crazy anti-porn, anti-abortion, anti-gay/trans, anti-welfare xenophobic fundamentalist anti-anything lobby to the anti-gun, super-duper-pro-trans, militantly-feminist, pro-eat-the-rich lobby. and during all this banking in the US suffers from all the usual problems, it's 50+ regulatory regimes al…

> crazy anti-porn Nothing crazy about that. It's very harmful to women, and doesn't do the consumers of it much good either.

citation needed

this has the same energy as "video games are making us killers", "tabletop RPGs directly lead to Satan (no chance of ever getting back)", "reefer madness, not even once", and so on.

are there negative consequences with regards to women? sure, as with many things.

is it "harmful to women"? oh, yes, maybe we need to put blinders on women and assign a guardian to them to help them avoid this harm!

Re: Why banks are suddenly closing down customer accounts

#837

Post by planede »

marcodave wrote: post #745
planede wrote: post #565

Earlier quoted context omitted.

The main issue isn't firing a customer (although it's bad), but locking up their money. It's not like they say "hey, we want to stop doing business with you, please transfer all your money to some other bank within a week or take out your money at the nearest branch", or do they? Locking up the money is basically theft, but I'm sure the law and regulations say otherwise.

If that would be the case, won't there then be the risk of creating a short-circuit which would benefit the actual money launderers/criminals? Say, I have 3 millions somehow deposited in the $bank_where_i_put_my_shady_money, I want to take/move the money, but doing so will raise some eyebrows, so I deliberately try to debank myself so that I can get all my money cash OR move it to $partner_bank

Possibly. All I'm saying that what banks do isn't simply "firing customers".

Re: Why banks are suddenly closing down customer accounts

#839

Post by egorfine »

dclowd9901 wrote: post #202
krupan wrote: post #70

The crazy thing to me in all this is that the types and amounts of transactions you make with your money and the bank is not criminal and never could be. It could however be a technique used to hide things that are criminal like fraud or theft. Somehow somewhere along the way we as a society decided we were ok with criminalizing the types of transactions that can be used to hide crime. That to me should have been a c…

Is there a legitimate, non-criminal reason to launder money?

Various.

For example, I was living and working in Ukraine and without some sort of.. let's call it instruments... I would not have been able to get my money in the clear and legal into the western bank. Because obviously all money earned in Ukraine could only be made criminally, no way a ukrainian programmer could earn some. Must be a criminal.

One western bank even told me in private: "we do understand stealing a train of coal and laundering bribes from Ukraine, this is common and the risk is clear for us; but we have no idea about your IT stuff and things, it scares us".

Of course, it's getting easier today in some ways but good luck exporting any substantial amount of money from Ukraine into the world and in the clear. Practically impossible without some help of money laundering services.

Now I expect to be downvoted to hell because the everyday reality of being from a third-world country is incomprehensible to American people so it must be me in the wrong.

Re: Why banks are suddenly closing down customer accounts

#840

Post by elzbardico »

raincom wrote: post #796
elzbardico wrote: post #779

Banks should close accounts for administrative reasons only, with ample notice period, and give full disclosure of the reason. Balance should be made available as soon as possible once the customer present an alternative account, or he should be able to get a check. For regulatory reasons, only the government should be able to mandate closure and for that it should be backed by a judicial order. I don't fucking care…

Two things: (a) Banks can be vague in their SAR filings with “transaction with no apparent economic, business or lawful purpose” (b) What BSA manul says: "No bank, and no director, officer, employee, or agent of a bank that reports a suspicious transaction may notify any person involved in the transaction that the transaction has been reported." [1] This deadly combination is enough for banks to NOT disclose. That's…

The manual says that customer should not be informed for the reasons of reporting. But it doesn't say the banks should close the accounts.
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