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Author Topic: I questioned the "Bitcoin dev team" (Andresen & Co.) on complying with AML laws.  (Read 6509 times)
Korbman
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October 14, 2012, 05:22:28 PM
 #41

Who is to say the devs aren't providing a financial service? Does not being incorporated exempt somebody from AML regulations when they provide financial services? The answer is likely no.

Software developers at investment banks aren't providing "financial services" even though the bank does.

Are you suggesting the Devs are running an organization that manages money?

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kwoody
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October 14, 2012, 06:52:32 PM
 #42

in the original irc conversation it's weird how BlueMatt doesn't appear to have ops but then does all of a sudden as he threatens to kick people.
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October 14, 2012, 06:55:05 PM
 #43

in the original irc conversation it's weird how BlueMatt doesn't appear to have ops but then does all of a sudden as he threatens to kick people.
Freenode recommends ops "hide" without the +o flag until they need to use it.

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October 17, 2012, 03:06:14 AM
 #44

If you take the time to look at actual AML requirements, you will find it is non-trivial to implement them in the Bitcoin protocol. Bitcoin is essentially a sophisticted public transaction record. To include the required sender information would violate any privacy legislation in place. Governments are likely reluctant to crack down of Bitcoin for two reasons:
  • they don't want to give it legitimacy in the eyes of the general public.
  • They can't really criminalize it without criminalizing accounting software that does essentially the same thing.

If we assume the Bitcoin is a currency, and all nodes must (or even want to) register as Money Service Businesses: the Bitcoin protocol still can't comply with the Guidelines as written. Nodes would somehow need the capacity to do the following:
  • Report transactions comming from outside of Canada totalling over $10,000 CAD from the same entity within a 24 hour period.
  • The above should be simple since all nodes would be required to include originator information in all outgoing transactions. This incudes: "name, address and principal business or occupation, (and) date of birth (or) the incorporation number and place of incorporation."
  • Even if the block-chain can handle the bloat, the nodes in each jurisdiction will have different reporting rules. If the originator, winning miner, and recipient are all in the same country, no reporting may be necessary. In Canada, Government departments are exempt from reporting rules.
  • If the originator is on the list of terrorists or terrorist organizations, many nodes may be forced to not relay the transaction to other nodes.
  • If the transaction is over $100,000, you have to check if the transaction involves a Politically Exposed Foreign Person. This will also vary by jurisdiction. Manual intervention is also required within 14 days. AML-complaint nodes may refuse to relay such large transactions to avoid the extra work that can not be automated.
The above list involves bloating the block-chain, removing pseudonymity, subscribing to at least two databases, and balkanizing the network. In short, it would be impossible for the developers to slip this one by the vast majority of bitcoin users. In no small part because these changes would require careful user configuration to work correctly for their jusridiction.


James' OpenPGP public key fingerprint: EB14 9E5B F80C 1F2D 3EBE  0A2F B3DE 81FF 7B9D 5160
twolifeinexile
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January 16, 2013, 09:16:18 PM
 #45

I think you still didn't understand bitcoin, bitcoin in essence is just a protocol backed by the full faith and credit of Mathematics, which is the only thing can have eternal faith and credit.

(only the protocol part, the real effect of being a valuable assets are social phenomenon)

(While the difficulty of certain mathematical questions is not proved yet, or may eventually to be proved NOT hard enough. Even if they are proved to be hard enough, it doesn't mean physical computing power could not reach that difficulty level, but that is out for another discussion. We are talking about current reality vs. mathematical questions behind bitcoin).

And you choose which protocol you yourself believe in (let's say if the developers forced by gov to change the client software, that essentially means from that moment on, some users/miners changed their protocol, you do not have to participate, not only that, even you discover it a little late, you can still roll back to the old block chain to the point where the old protocol is used by all , from there, only verify and accept newer block chains using the old protocol.

Essentially, gov forced world to generate two block-chains, and each chain grows on its own.

There will still be the "Good old bit coin network still alive" from that moment, then which one will be THE bitcoin are subject to social behaviors.



[/quote]

Who says you have to control everybody? All you need is a good enough majority under control and the face of the currency is yours.
[/quote]
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January 17, 2013, 03:44:18 PM
 #46

If you take the time to look at actual AML requirements, you will find it is non-trivial to implement them in the Bitcoin protocol. Bitcoin is essentially a sophisticted public transaction record. To include the required sender information would violate any privacy legislation in place. Governments are likely reluctant to crack down of Bitcoin for two reasons:
  • they don't want to give it legitimacy in the eyes of the general public.
  • They can't really criminalize it without criminalizing accounting software that does essentially the same thing.

If we assume the Bitcoin is a currency, and all nodes must (or even want to) register as Money Service Businesses: the Bitcoin protocol still can't comply with the Guidelines as written. Nodes would somehow need the capacity to do the following:
  • Report transactions comming from outside of Canada totalling over $10,000 CAD from the same entity within a 24 hour period.
  • The above should be simple since all nodes would be required to include originator information in all outgoing transactions. This incudes: "name, address and principal business or occupation, (and) date of birth (or) the incorporation number and place of incorporation."
  • Even if the block-chain can handle the bloat, the nodes in each jurisdiction will have different reporting rules. If the originator, winning miner, and recipient are all in the same country, no reporting may be necessary. In Canada, Government departments are exempt from reporting rules.
  • If the originator is on the list of terrorists or terrorist organizations, many nodes may be forced to not relay the transaction to other nodes.
  • If the transaction is over $100,000, you have to check if the transaction involves a Politically Exposed Foreign Person. This will also vary by jurisdiction. Manual intervention is also required within 14 days. AML-complaint nodes may refuse to relay such large transactions to avoid the extra work that can not be automated.
The above list involves bloating the block-chain, removing pseudonymity, subscribing to at least two databases, and balkanizing the network. In short, it would be impossible for the developers to slip this one by the vast majority of bitcoin users. In no small part because these changes would require careful user configuration to work correctly for their jusridiction.



It is a lot simpler. Treat Bitcoin as if it were cash and impose the requirements on the sender and recipient of the transaction in their respective jurisdictions.

Concerned that blockchain bloat will lead to centralization? Storing less than 4 GB of data once required the budget of a superpower and a warehouse full of punched cards. https://upload.wikimedia.org/wikipedia/commons/8/87/IBM_card_storage.NARA.jpg https://en.wikipedia.org/wiki/Punched_card
bitfarmer
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January 18, 2013, 03:10:36 PM
 #47

It looks as if you're getting the same response here as in the IRC channel, albeit much more drawn out.

Aren't the AML laws in place already? And they effect everyone? You can't accept cash for gold in any significant amount and not be required to report your business to the MAN. You know, for taxes and all that jazz.

If a government feels threatened by bitcoin, the DEV team(s) would simply be an easy starting point if they comply. If big brother starts leaning on them, I expect they'll step down. The math does not need to change, there would need to be more information contained about sender and receiver. Let's drop this, they can do their own damn figuring on how. Implementation would be a nightmare, and a fork would likely result, govcoin.

That being said, there are other attack vectors than code changes. Why bother with that fuss and bad PR of attacking open source software development when they can pass a law in relative secrecy banning the transacting of fiat with bitcoin related business, to stop the funding of terrorism.
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January 18, 2013, 03:22:29 PM
 #48

Edit: Double-posted response, sorry.
TraderTimm
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January 18, 2013, 03:40:53 PM
 #49

Atlas, you're a complete idiot.

By your reckoning, every open source project on the internet could be full of "back doors" and "hidden agendas". Guess what, they haven't been. Where are the sob stories from users who installed the latest distribution, and through some elaborate "secret" method, had their banking credentials stolen and misused? Oh that's right, there AREN'T ANY.

Here's another one for you - reality in your mind is simply your perception when your senses deliver the electrical impulses to your brain. They are perpetually "late", due to physics of our universe. Therefore, someone with an agenda could be shaping your reality every second to present you with a "fake" one. (If you even begin to believe that, or try to use it in a rebuttal to me - consider getting some professional help.)

While your noodle is baking on that one, perhaps let the adults focus on their tasks while you beat your pots in the kitchen?

fortitudinem multis - catenum regit omnia
Jane Rand
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January 18, 2013, 08:12:30 PM
 #50

Okay, I am new here, and I'm just a girl who once saw a guy code once, that's the limit of my expertise, but the idea that you could have government secretly take the project over and secretly push a bunch of outrageous changes seems preposterous.

Especially since some of the devs are likely not even in US.
Explodicle
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January 18, 2013, 09:08:43 PM
 #51

Hidden fees, tracking capabilities, confiscation capabilities, inflation capabilities, backdoors, etc.

Of course these would eventually be discovered; however, by then it would be too late. It would tear the currency to oblivion and small sects.

Inflation and confiscation would both be protocol changes, so it would takes months to implement. Don't you remember the shitstorm over P2SH, a feature that everyone agreed was important but only disagreed on technical details? No way are 51% of miners updating to a new patch overnight.

Client-based tricks might work on people who auto-update the Satoshi client straight from the dev team and always leave it running, but they're a minority of the total network. Personally I only use the Satoshi client for my long-term storage and rarely start it up. Even with my Satoshi client I don't update directly from github, but instead use the Ubuntu PPA.

I hate to admit it, but I'd probably inadvertantly read your condemnation of the new patch on this forum before I even ran it. So, ummm... thanks for being so loud?
Brunic
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January 18, 2013, 09:20:50 PM
 #52

Guys, look at the date. This thread is 3 months old. Don't feed the troll and don't necro shitty threads please.
Photon939
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January 18, 2013, 09:21:10 PM
 #53

This thread was dead for 3 months guys.

Edit: derp, got beaten to the punch
twolifeinexile
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January 19, 2013, 06:28:00 PM
 #54


Here's another one for you - reality in your mind is simply your perception when your senses deliver the electrical impulses to your brain. They are perpetually "late", due to physics of our universe. Therefore, someone with an agenda could be shaping your reality every second to present you with a "fake" one. (If you even begin to believe that, or try to use it in a rebuttal to me - consider getting some professional help.)


That is a such a philosophical oriented comments, what do you mean here, could you elaborate a little bit?
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