Is "money laundering" really that big of a deal?

[dave111223]

you can also tell its government property because of counterfeiting laws.

unlike music. if you make a song, you can produce as many copies as you like and you get to say and be incontrol of who else can make copies or if you even allow them to make copies.. because its your property..

money is not your property.. you are just an entitled bearer(holder) of it. do something illegal, and you will lose your entitlements.

fail


You don't make (print) the money, so how is it comparable to song that you made?  You are not entitled to copy a song that someone else created, in the same way that you are not entitled to copy money someone else created.

[manfred]

Why stop there? Why not have ID checks at every corner of every city of every country so that if a crime happens on one street they can trace the crime by knowing who was on that street at that time? Oh, but those of us who would be against that would be "supporting terrorists" or drug dealers and criminals.

It's already happening faster than u think. No need to physically stop you and check the ID (even so that did happen to me too) the street cameras installed through the city streets will recognise your face and know exactly where you have been. The last time i flew I had to but the ticket on a scanner and at the same time stand on a premarket spot on the floor to have a "picture" taken. The system does nothing else as measure the facial features which can then be used for recognition.
Bitcoin will never be outlawed so much is clear by now, but exchanges will be forced to be run like banks so that the digital trail can be followed.  Cash will be outlawed as soon as practical possible. 

[franky1]

you can also tell its government property because of counterfeiting laws.

unlike music. if you make a song, you can produce as many copies as you like and you get to say and be incontrol of who else can make copies or if you even allow them to make copies.. because its your property..

money is not your property.. you are just an entitled bearer(holder) of it. do something illegal, and you will lose your entitlements.

fail


You don't make (print) the money, so how is it comparable to song that you made?  You are not entitled to copy a song that someone else created, in the same way that you are not entitled to copy money someone else created.

clever boy.. now you see my point of my first post.. the money in your pocket is not yours. it belongs to the government. your just "entitled" to hold it. and using if for a crime loses you that entitlement.

now go back to my second post and read UNLIKE music.. and now you will see its not a comparison of 2 things owned by you, but a clarification on the differences.

[Seal]

So essentially, these are monetary crimes. And since the law enforcement cannot solve the crime or catch the "bad guys" they have to lock down the whole monetary system just in case "bad" money makes it through.

So because some people may use money for bad things and they are too incompetent to catch them, the government must know every transaction that anyone ever makes with money?

I couldn't agree more. When editorials and the press condemns bitcoin for drugs, they do not acknowledge that the drug trade would still exist regardless of the means of payment.... The drug business existed before bitcoin, and if bitcoin failed (i hope it doesn't), the drug trade would still exist.

[Carlton Banks]

you can also tell its government property because of counterfeiting laws.

the money in your pocket is not yours. it belongs to the government.

No, currency is the property of the Central Bank that issued it. This is not a trivial distinction, either.

[cbeast]

Trillions of dollars are "money laundered" every year. This argument is a red herring. It's far easier to form shell corporations and move millions through phoney business deals than to make untraceable Bitcoin transactions. Bitcoiners just need to ignore this nonsense, comply with whatever rules are imposed and move on. If someone really wants to launder money, they will use banks and fiat money anyway, not Bitcoin.

[Chaoskampf]

"money laundering" statutes are just another way for the power elites to restrict others from engaging in the types of activities they do on a day to day basis. When I buy a priceless work of art for $120,000,000 cash, I just "laundered" my money into an item that will hold that value in a "legitimate" medium. This is just a simple example of this. The level of sophistication in legitimized money laundering is mind boggling.

[TippingPoint]

Money Laundering is a false crime, like loitering, disturbing the peace, and resisting arrest.  It exists so they can arrest you if they have nothing else.

[johnyj]

Can someone give an example of illicit money?

When a person comes to a bank and deposite 1 million dollar, how could bank tell this 1 million dollar is robbed from a bank (thus become money laundering)or collected by a ASIC mining rig company from pre-orders?

I just have only one reasonable assumption: Through AML rule, banks can trace all the money flow up to the root (bank's loan) so that they know exactly who has how much money. I have seen some analysts from banks analyzed bitcoin transactions and it seems they are very professional in analyzing the trace of money flow in a transaction network

[Trongersoll]

Can someone give an example of illicit money?

When a person comes to a bank and deposite 1 million dollar, how could bank tell this 1 million dollar is robbed from a bank (thus become money laundering)or collected by a ASIC mining rig company from pre-orders?

I just have only one reasonable assumption: Through AML rule, banks can trace all the money flow up to the root (bank's loan) so that they know exactly who has how much money. I have seen some analysts from banks analyzed bitcoin transactions and it seems they are very professional in analyzing the trace of money flow in a transaction network

assuming that you meant 1 million cash.
The bank doesn't care where the money came from. The bank is required to report the deposit to the proper authorities and then the IRS will come knocking. they will require you to show detailed records as to where, why, and how you acquired that much cash. If they believe you, you pay your taxes and the money is clean.

[ashaw596]

The reason that money laundering is illegal is ... Drumroll plz ... because of money (and politics, but that goes hand I'm hand). It's just easier for them to them to keep make laws that the "big organizations" have to follow to keep track of currency movement than to try to get them on the actual crime. Al Capone got taken down on tax evasion. It's just easier for them to pass these type of laws and it costs them less money. Also, these serve as good whipping boys for failing police and justice systems.

[CompNsci]

Firstly, I have to agree completely with the OP. This AML business is just lazy policing because they can't actually enforce the original laws. Many of these likely wouldn't even be laws in a free society, such as drug trafficking.

The other part I love about the reasons given for AML is that they are needed to prevent use of the money by "terrorists, drug dealers, and child pornographers". Some of these are really the modern boogeymen, aren't they? These frequently seem to be the three groups that are mentioned.

How large is the market for child pornorgraphy? Or how much money do terrorists really need to move around the world in a year? Obviously I am not endorsing these activities in any way, but I can't imagine the market for them is anything compared to the total amount of money being move around for drug markets.

It is absurd, we clog up whole financial markets on the slight chance that such laws will make the original activities slightly more inconvenient to the criminals.

[johnyj]

Can someone give an example of illicit money?

When a person comes to a bank and deposite 1 million dollar, how could bank tell this 1 million dollar is robbed from a bank (thus become money laundering)or collected by a ASIC mining rig company from pre-orders?

I just have only one reasonable assumption: Through AML rule, banks can trace all the money flow up to the root (bank's loan) so that they know exactly who has how much money. I have seen some analysts from banks analyzed bitcoin transactions and it seems they are very professional in analyzing the trace of money flow in a transaction network

assuming that you meant 1 million cash.
The bank doesn't care where the money came from. The bank is required to report the deposit to the proper authorities and then the IRS will come knocking. they will require you to show detailed records as to where, why, and how you acquired that much cash. If they believe you, you pay your taxes and the money is clean.

Is this true? I periodically receive large sum of transfer from my customer and IRS (or its swedish equavalent) has never knocked my door (I suppose they know already from the banking system where those money are coming from?)

The more I look into this the more I believe those old mans words: The world is in the hand of a couple of bankers

[Trongersoll]

Can someone give an example of illicit money?

When a person comes to a bank and deposite 1 million dollar, how could bank tell this 1 million dollar is robbed from a bank (thus become money laundering)or collected by a ASIC mining rig company from pre-orders?

I just have only one reasonable assumption: Through AML rule, banks can trace all the money flow up to the root (bank's loan) so that they know exactly who has how much money. I have seen some analysts from banks analyzed bitcoin transactions and it seems they are very professional in analyzing the trace of money flow in a transaction network

assuming that you meant 1 million cash.
The bank doesn't care where the money came from. The bank is required to report the deposit to the proper authorities and then the IRS will come knocking. they will require you to show detailed records as to where, why, and how you acquired that much cash. If they believe you, you pay your taxes and the money is clean.

Is this true? I periodically receive large sum of transfer from my customer and IRS (or its swedish equavalent) has never knocked my door (I suppose they know already from the banking system where those money are coming from?)

The more I look into this the more I believe those old mans words: The world is in the hand of a couple of bankers

In the US banks were required to report every transaction of $10,000 or more. or, suspiscous numbers of transactions below that number. It is my understanding that it is now deposits of $5,000 or more.

[marcus_of_augustus]

money is not your property.. you are just an entitled bearer(holder) of it. do something illegal, and you will lose your entitlements.

... good thing then bitcoin is not lawful money.

[No 1]

the answer changes periodically depending on the agent that visits you..

[escrow.ms]

actually it's a big fucking joke, if you send someone 5000+/10000+ it comes into money laundering but when those rich assholes send millions into their swiss bank accounts no one says a shit.

[Razick]

There are all of these rules and laws about "money laundering" to make it sound so scary and evil like Scarface moving his dirty money.

But what is money laundering anyway? Someone commits a crime involving money and does not want that money traced back to them for that crime, so they launder the money.

So essentially, these are monetary crimes. And since the law enforcement cannot solve the crime or catch the "bad guys" they have to lock down the whole monetary system just in case "bad" money makes it through.

So because some people may use money for bad things and they are too incompetent to catch them, the government must know every transaction that anyone ever makes with money?

Why stop there? Why not have ID checks at every corner of every city of every country so that if a crime happens on one street they can trace the crime by knowing who was on that street at that time? Oh, but those of us who would be against that would be "supporting terrorists" or drug dealers and criminals.

Sure, if someone steals money from someone else it would be nice to track that money down. But is it worth locking down a whole currency because of it?

My thoughts exactly.

[tvbcof]

...this just made me think of a new alt coin CleanCoin™.

I'm anticipating a pretty good chance that we'll not need an alt coin for that since that may be the trajectory of Bitcoin proper.

One of the more interesting observations from the 2013 conference came from the security discussion.  With the exception of Ranier, there seemed to most like a no-brainer to employ tarnish/taint.  I anticipate it happening shortly after mining and SPV servers can be centralized enough to apply pressure at the network level.

The (likely correct) idea seemed to be that a relatively few entities honoring a taint framework would be sufficient to implement it because even those who dis-agreed and would otherwise take BTC at face value would have to worry about getting shafted going forward.  It would be interesting to know if any modeling has been attempted on this.

It was also interesting that ~vess gave a pretty clear warning about using mixing services.  The implication seemed to be that if/when taint is introduced, there will be no grandfathering.  A lot of people might be in for a rude awakening.  All my coins came from Tradehill-I, but I heard rumors that some ~allinvain coins had been deposited with them prior to some of my purchases.  So I might be looking at taking it up the ass for something I had no control over or knowledge about. (For those who are interested, several people took Tradehill coins straight to Mt. Gox and Mark immediately locked them based on his own taint analysis system I guess.)

It also strikes me that a taint system would be an outstanding method of encouraging users to pay fees where appropriate.  The tainting body itself is going to be needing some funding to do their job (e.g., gumshoe work in identifying legitimate thefts and what-not.)  And, of course, the Bitcoin Foundation probably deserves some cut of the economic activity for their services in shaping the solution's trajectory.

[cypherdoc]

...this just made me think of a new alt coin CleanCoin™.

I'm anticipating a pretty good chance that we'll not need an alt coin for that since that may be the trajectory of Bitcoin proper.

One of the more interesting observations from the 2013 conference came from the security discussion.  With the exception of Ranier, there seemed to most like a no-brainer to employ tarnish/taint.  I anticipate it happening shortly after mining and SPV servers can be centralized enough to apply pressure at the network level.

The (likely correct) idea seemed to be that a relatively few entities honoring a taint framework would be sufficient to implement it because even those who dis-agreed and would otherwise take BTC at face value would have to worry about getting shafted going forward.  It would be interesting to know if any modeling has been attempted on this.

It was also interesting that ~vess gave a pretty clear warning about using mixing services.  The implication seemed to be that if/when taint is introduced, there will be no grandfathering.  A lot of people might be in for a rude awakening.  All my coins came from Tradehill-I, but I heard rumors that some ~allinvain coins had been deposited with them prior to some of my purchases.  So I might be looking at taking it up the ass for something I had no control over or knowledge about. (For those who are interested, several people took Tradehill coins straight to Mt. Gox and Mark immediately locked them based on his own taint analysis system I guess.)

It also strikes me that a taint system would be an outstanding method of encouraging users to pay fees where appropriate.  The tainting body itself is going to be needing some funding to do their job (e.g., gumshoe work in identifying legitimate thefts and what-not.)  And, of course, the Bitcoin Foundation probably deserves some cut of the economic activity for their services in shaping the solution's trajectory.

i agree with Alan Reiner's trepidation at tainting coins.

all sorts of problems can arise from trying to implement a tainting system namely b/c of temporal factors.

by the time any governing tainting body gets around to tainting criminal coins, they will most likely have passed through several pure addresses and whoever gets stuck unwittingly holding the tainted coins would be screwed.

not to mention if i wanted to sabotage a competitor or someone i didn't like by sending him/her tainted coins to  their donation address.