DASH Masternode legality

[geotom]

Community,

 

I’ve recently been sent a link by a guy who was considering setting up a tumbler service for BTC but wanted my opinion on the validity of the information that he saw in the link, which could impact his business model.  I didn’t do much to help the guys confidence as I’ve already heard similar information coming down the pipe elsewhere – Norway and Sweden are already pushing legislation to consider services and nodes that facilitate coin-mixing to be treated as a form of money laundering.  This seems to be potentially influenced from the Quatar conference on money laundering (listed relevant key points below).

 

My question is this.  If this legislation is coming down the pipe, potentially in many nations, could this mean that a Dash Masternode which facilitates coin mixing also becomes illegal (in any nation using the Quatar conference recommendations as a template for AML legislation)?

 

If the majority of nations determine Dash Masternodes to be illegal (“should not continue to be tolerated”) then Dash would either have to:

a)  Follow extensive KYL/AML proceedures at each point in the process of transaction, giving the appearance (if not the substance) of privacy or,
b)  Dispose of the ability to conduct coinjoin mixing operations altogether and drop the “privacy focussed” moniker,
c)  Move Masternodes to those nations that do not consider Masternodes as facilitating laundering, leading to centralisation (and a greater point of weakness
 

I’ve seen that Amanda B has been asked on YouTube what the answer might be regarding the legality of Masternodes and private transactions, but so far they are only at the stage of liaising with legal representation to investigate the issue under current US law.

 

My concern is genuine because I have a modest investment in Dash and I feel that given potential new AML laws coming over the horizon, the Masternode structure could be a point of potential weakness (to legal attack).  If DASH drops privacy from their transactions and follows AML/KYC more strongly in the future then I feel that a large advantage of DASH over other forms of electronic payment will have been removed.

 

Investigate for yourselves, any genuine, knowledgeable or well though-out responses would be appreciated.

Thanks.

 

---

 

Global conference on countering money laundering and digital currencies in Doha, Qatar. The event was organised by the Working Group on Virtual Currencies, a joint initiative of the Basel Institute on Governance, Europol and Interpol, and funded by the authorities of Qatar.

 

At the end of the Conference, the following recommendations were agreed:

 

“All countries are advised to regulate Digital Currencies Exchangers and Wallet Providers under their current Anti Money Laundering and Counter Terrorism Financing Legislation in line with the obligations already pending on the Financial Sector”

 

“All countries are advised to take action against Digital Currencies Mixers/Tumblers. Such services are designed exclusively to anonymize transactions and to make it impossible for Law Enforcement Agencies to detect and trace suspicious transactions. The existence of such companies should not continue to be tolerated”

 

https://www.baselgovernance.org/news/global-conference-countering-money-laundering-and-digital-currencies

[aleix]

Hi,

This is an interesting issue indeed. I suggest you to post in the DASH main forum, because bitcointalk (and even more the announcement section) can be messy sometimes and your post can remain unnoticed.

https://www.dash.org/forum/topic/general-discussion.2

best,

edit.- a mod moved the thread from "Announcements (Altcoins)" to "Discussion".

[dwgscale11]

stay away from Dash

https://www.youtube.com/watch?v=VrKU0Ymta-U

[Minotaur26]

Community,

 

I’ve recently been sent a link by a guy who was considering setting up a tumbler service for BTC but wanted my opinion on the validity of the information that he saw in the link, which could impact his business model.  I didn’t do much to help the guys confidence as I’ve already heard similar information coming down the pipe elsewhere – Norway and Sweden are already pushing legislation to consider services and nodes that facilitate coin-mixing to be treated as a form of money laundering.  This seems to be potentially influenced from the Quatar conference on money laundering (listed relevant key points below).

 

My question is this.  If this legislation is coming down the pipe, potentially in many nations, could this mean that a Dash Masternode which facilitates coin mixing also becomes illegal (in any nation using the Quatar conference recommendations as a template for AML legislation)?

 

If the majority of nations determine Dash Masternodes to be illegal (“should not continue to be tolerated”) then Dash would either have to:

a)  Follow extensive KYL/AML proceedures at each point in the process of transaction, giving the appearance (if not the substance) of privacy or,
b)  Dispose of the ability to conduct coinjoin mixing operations altogether and drop the “privacy focussed” moniker,
c)  Move Masternodes to those nations that do not consider Masternodes as facilitating laundering, leading to centralisation (and a greater point of weakness
 

I’ve seen that Amanda B has been asked on YouTube what the answer might be regarding the legality of Masternodes and private transactions, but so far they are only at the stage of liaising with legal representation to investigate the issue under current US law.

 

My concern is genuine because I have a modest investment in Dash and I feel that given potential new AML laws coming over the horizon, the Masternode structure could be a point of potential weakness (to legal attack).  If DASH drops privacy from their transactions and follows AML/KYC more strongly in the future then I feel that a large advantage of DASH over other forms of electronic payment will have been removed.

 

Investigate for yourselves, any genuine, knowledgeable or well though-out responses would be appreciated.

Thanks.

 

---

 

Global conference on countering money laundering and digital currencies in Doha, Qatar. The event was organised by the Working Group on Virtual Currencies, a joint initiative of the Basel Institute on Governance, Europol and Interpol, and funded by the authorities of Qatar.

 

At the end of the Conference, the following recommendations were agreed:

 

“All countries are advised to regulate Digital Currencies Exchangers and Wallet Providers under their current Anti Money Laundering and Counter Terrorism Financing Legislation in line with the obligations already pending on the Financial Sector”

 

“All countries are advised to take action against Digital Currencies Mixers/Tumblers. Such services are designed exclusively to anonymize transactions and to make it impossible for Law Enforcement Agencies to detect and trace suspicious transactions. The existence of such companies should not continue to be tolerated”

 

https://www.baselgovernance.org/news/global-conference-countering-money-laundering-and-digital-currencies

Moving ahead of issues like this Dash requested a full legal analysis by Marco Santori from Cooley LLP, one of the leading attorneys on the space.

This research has been completed and a new legal section will be added to our website soon with information. What i can advance is masternode operators are not liable for the transactions they relay or the PrivateSend feature under US law.

Edit: You can follow updates to this here https://www.dash.org/forum/threads/legal-research-marco-santori-cooley-llp.12691/

[qwizzie]

with regards to The Netherlands law / Possibly EU law :

https://bitcoinmagazine.com/articles/dutch-tax-authority-clarifies-bitcoin-mixing-will-not-be-banned-will-raise-suspicion/

Bitcoin Magazine recently reported that the investigative arm of the Dutch tax authority — the FIOD — wants to lower the bar for prosecution of unlicensed bitcoin traders. As part of that effort, the FIOD aims to have mixing services recognized as money-laundering indicators. Users of mixing services would be assumed guilty, Dutch financial newspaper Financieele Dagblad (FD) wrote, unless they could prove otherwise.

The FIOD has now nuanced these reports. Speaking to Bitcoin Magazine, the press officer for the tax authority explained that recognizing something as a money laundering indicator does not mean it will be illegal in and of itself.
“But it does mean it indicates money laundering,” he added.

When asked by Bitcoin Magazine, the FIOD spokesperson did acknowledge that bitcoin mixing can also be done for perfectly valid, privacy-related reasons.

And that is just about Bitcoin mixing / centralized Bitcoin mixers, nothing about Dash and its masternode network which provide full nodes, forms an integral decentralized system
and also provide other services then just mixing (for example it provides InstantSend, it validate blockchain blocks, it validate blockchain transactions and it enables a functioning peer-to-peer system).

[Monerobuyer]

Dash is a ponzi paying guaranteed 8% returns. I encourage all idiots to invest and lose their money. Evan deserves the money of idiots.

[Macrochip]

...paying guaranteed 8% returns....

....lose their money....

Do I still have to tell you you're fucking retarded or did you notice yourself after you read your own quote?

[dwgscale11]

...paying guaranteed 8% returns....

....lose their money....

Do I still have to tell you you're fucking retarded or did you notice yourself after you read your own quote?

Ponzi schemes "guarantee" profit all the time... until it doesnt happen and the scheme falls apart like Dash will.  It is purely paid pumpers selling to greater fools. It's a scheme you fools.

[Macrochip]

Prove it's a Ponzi.

While you're at it: Prove Bitcoin is not a Ponzi.

[Minotaur26]

...paying guaranteed 8% returns....

....lose their money....

Do I still have to tell you you're fucking retarded or did you notice yourself after you read your own quote?

Ponzi schemes "guarantee" profit all the time... until it doesnt happen and the scheme falls apart like Dash will.  It is purely paid pumpers selling to greater fools. It's a scheme you fools.

I am going to answer this once in case you are just confused about how Dash works and not actually trolling. The Masternode rewards are not fix, all masternodes share 45% of the block rewards, just like all miners share 45% of the block rewards. Thus  as more masternodes  join the network the rewards go down.

Some masternode operators sell their nodes and some new buy. So basically the free market determines the balance and the risk/ return node operators want to take.

[qwizzie]

...paying guaranteed 8% returns....

....lose their money....

Do I still have to tell you you're fucking retarded or did you notice yourself after you read your own quote?

Ponzi schemes "guarantee" profit all the time... until it doesnt happen and the scheme falls apart like Dash will.  It is purely paid pumpers selling to greater fools. It's a scheme you fools.

I am going to answer this once in case you are just confused about how Dash works and not actually trolling. The Masternode rewards are not fix, all masternodes share 45% of the block rewards, just like all miners share 45% of the block rewards. Thus  as more masternodes  join the network the rewards go down.

Some masternode operators sell their nodes and some new buy. So basically the free market determines the balance and the risk/ return node operators want to take.

yep, and due to Dash yearly 7% cut on block rewards, the masternodes (45% of blockreward), miners (45% of blockreward) and its decentralized budget system (10% of blockreward) will receive less and less Dash over time.  
Those good old times when we got like a yearly 14% interest from running a masternode are long gone.. sighh  

[qwizzie]

[vincentvincent]

https://bitcointalk.org/index.php?topic=999886.0

[PovertyByte]

...paying guaranteed 8% returns....

....lose their money....

Do I still have to tell you you're fucking retarded or did you notice yourself after you read your own quote?

Ponzi schemes "guarantee" profit all the time... until it doesnt happen and the scheme falls apart like Dash will.  It is purely paid pumpers selling to greater fools. It's a scheme you fools.

I am going to answer this once in case you are just confused about how Dash works and not actually trolling. The Masternode rewards are not fix, all masternodes share 45% of the block rewards, just like all miners share 45% of the block rewards. Thus  as more masternodes  join the network the rewards go down.

Some masternode operators sell their nodes and some new buy. So basically the free market determines the balance and the risk/ return node operators want to take.

What about the legality of instamining? Dash is nothing but instamined bullshit anyway.

The instamine was an error and most of those coins were sold off by the miners early on since the original XCoin project was an experiment that not many took very seriously to hold and invest. Also the duration of the instamine was not that severe. A real example of a crooked instamine is Bytecoin

[arielbit]

...paying guaranteed 8% returns....

....lose their money....

Do I still have to tell you you're fucking retarded or did you notice yourself after you read your own quote?

Ponzi schemes "guarantee" profit all the time... until it doesnt happen and the scheme falls apart like Dash will.  It is purely paid pumpers selling to greater fools. It's a scheme you fools.

I am going to answer this once in case you are just confused about how Dash works and not actually trolling. The Masternode rewards are not fix, all masternodes share 45% of the block rewards, just like all miners share 45% of the block rewards. Thus  as more masternodes  join the network the rewards go down.

Some masternode operators sell their nodes and some new buy. So basically the free market determines the balance and the risk/ return node operators want to take.

What about the legality of instamining? Dash is nothing but instamined bullshit anyway.

The instamine was an error and most of those coins were sold off by the miners early on since the original XCoin project was an experiment that not many took very seriously to hold and invest. Also the duration of the instamine was not that severe. A real example of a crooked instamine is Bytecoin

sold by miners who don't know what Evan and co. plans... Evan plans to make masternodes out of Xcoins even before launching Xcoin, and he kept it secretly and deceptively hidden from the public for 1 month after the release of Xcoin.

Also the duration of the instamine was not that severe

it's not about the duration, it's about the quantity of coins that were instamined that matters..and then changing the block reward from 84M to 21M and make the loot more valuable.

[qwizzie]

Anyone that is using the old (and increasingly boring) instamine/fastmine history of Dash in a thread like this
is clearly trying to steer this thread into an off topic course.

To OP : i'm sorry to see that such an interesting topic like this one can appearently not be properly discussed by everyone. 

[johhnyUA]

If DASH drops privacy from their transactions and follows AML/KYC more strongly in the future then I feel that a large advantage of DASH over other forms of electronic payment will have been removed.

What if i will say to you that DASH for now not good for anonimity for now? Their new anonime system which says that anonimity is nor mandatory for all (you are able don't mix your coins in your wallet) sucks against Monero and Zcash.

[qwizzie]

If DASH drops privacy from their transactions and follows AML/KYC more strongly in the future then I feel that a large advantage of DASH over other forms of electronic payment will have been removed.

What if i will say to you that DASH for now not good for anonimity for now? Their new anonime system which says that anonimity is nor mandatory for all (you are able don't mix your coins in your wallet) sucks against Monero and Zcash.

* Dash will never stop offering optional privacy .. period. Dash is and always will be a privacy-focussed cryptocurrency.
* Dash privacy has never been broken and is as good as Monero and Zcash, Dash just does it differently.
* Dash Evolution will bring different type of accounts for different kind of users. There will be a private account that will automatically and almost instantly mix your funds.
* AML/KYC rules are intended for the FIAT gateways (USD->Dash & EUR>Dash), not for cryptocurrencies itself.
* Dash Masternodes do not hold any funds (no FIAT & no Dash), they are servers that just function as full nodes and perform services for the network.


 

[PovertyByte]

...paying guaranteed 8% returns....

....lose their money....

Do I still have to tell you you're fucking retarded or did you notice yourself after you read your own quote?

Ponzi schemes "guarantee" profit all the time... until it doesnt happen and the scheme falls apart like Dash will.  It is purely paid pumpers selling to greater fools. It's a scheme you fools.

I am going to answer this once in case you are just confused about how Dash works and not actually trolling. The Masternode rewards are not fix, all masternodes share 45% of the block rewards, just like all miners share 45% of the block rewards. Thus  as more masternodes  join the network the rewards go down.

Some masternode operators sell their nodes and some new buy. So basically the free market determines the balance and the risk/ return node operators want to take.

What about the legality of instamining? Dash is nothing but instamined bullshit anyway.

The instamine was an error and most of those coins were sold off by the miners early on since the original XCoin project was an experiment that not many took very seriously to hold and invest. Also the duration of the instamine was not that severe. A real example of a crooked instamine is Bytecoin

sold by miners who don't know what Evan and co. plans... Evan plans to make masternodes out of Xcoins even before launching Xcoin, and he kept it secretly and deceptively hidden from the public for 1 month after the release of Xcoin.

Also the duration of the instamine was not that severe

it's not about the duration, it's about the quantity of coins that were instamined that matters..and then changing the block reward from 84M to 21M and make the loot more valuable.

Not even half of the total Dash that can ever be mined has been mined yet. 1.9 million coins were instamined out of just under 7 million now, and 16 or 18 million is the final circulation amount in the end. That instamine was very fast but it was not a death blow in quantity of the total circulation.

The fact that an instamine happened sucks, but it has been mitigated and right now the coin has taken many steps to improve and stand out which is why it has value and once Evolution comes you will wish you was holding some to trade at least

[arielbit]

...paying guaranteed 8% returns....

....lose their money....

Do I still have to tell you you're fucking retarded or did you notice yourself after you read your own quote?

Ponzi schemes "guarantee" profit all the time... until it doesnt happen and the scheme falls apart like Dash will.  It is purely paid pumpers selling to greater fools. It's a scheme you fools.

I am going to answer this once in case you are just confused about how Dash works and not actually trolling. The Masternode rewards are not fix, all masternodes share 45% of the block rewards, just like all miners share 45% of the block rewards. Thus  as more masternodes  join the network the rewards go down.

Some masternode operators sell their nodes and some new buy. So basically the free market determines the balance and the risk/ return node operators want to take.

What about the legality of instamining? Dash is nothing but instamined bullshit anyway.

The instamine was an error and most of those coins were sold off by the miners early on since the original XCoin project was an experiment that not many took very seriously to hold and invest. Also the duration of the instamine was not that severe. A real example of a crooked instamine is Bytecoin

sold by miners who don't know what Evan and co. plans... Evan plans to make masternodes out of Xcoins even before launching Xcoin, and he kept it secretly and deceptively hidden from the public for 1 month after the release of Xcoin.

Also the duration of the instamine was not that severe

it's not about the duration, it's about the quantity of coins that were instamined that matters..and then changing the block reward from 84M to 21M and make the loot more valuable.

Not even half of the total Dash that can ever be mined has been mined yet. 1.9 million coins were instamined out of just under 7 million now, and 16 or 18 million is the final circulation amount in the end. That instamine was very fast but it was not a death blow in quantity of the total circulation.

The fact that an instamine happened sucks, but it has been mitigated and right now the coin has taken many steps to improve and stand out which is why it has value and once Evolution comes you will wish you was holding some to trade at least

wow, you speak as if DASH is purely a POW coin..Masternodes get coins too, if 1.9 million coins were instamined, how many coins will that 1.9 million generate as masternodes?

DASH is a fork of bitcoin no matter how much it evolve and re-evolve it won't be that good. there is a saying "The fruit doesn't fall very far away from the tree"