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Author Topic: Are AML and KYC legitimate laws?  (Read 1617 times)
Dawnbreaker
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September 14, 2014, 04:03:49 PM
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A lot of people and companies are throwing around "anti money laundering" like it is some kind of legitimate concept to begin with, and by extension, a legitimate law.

First, the Constitution of the United States says that citizens are INNOCENT until proven GUILTY.
When was this reversed?

AML laws basically say that everyone is guilty until they can prove WAY beyond a shadow of doubt, that they are innocent. Everyone must be monitored at all times in order to catch a minute percentage of the people who MAY be criminals.

Why do so many people and most companies accept these laws? All Bitcoin exchanges now have been converted into espionage outlets. If they do not perform, they are shut down. Doesn't anyone wonder why only ONE exchange is doing most of the business in such a huge country as the United States? There is more Bitcoin activity in the US than any other country yet ONE exchange. Coincidence?

Obviously, Satoshi understood the erosion of privacy as a problem and Bitcoin begins to address this. We must not, however, continue speaking and interacting like AML is ok and acceptable. It is a major violation of our rights as citizens and dignity as human beings.
What do you guys think?
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Bad Uncle
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September 14, 2014, 04:05:59 PM
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You could argue are any laws legitimate. Yes, AML and KYC laws are legit and betraying them will likely end you up in prison.
RappingSniper
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September 14, 2014, 06:52:03 PM
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What do you think "legitimate" means?
Onanula
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September 14, 2014, 07:33:45 PM
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What do you think "legitimate" means?

This. All of these things are part of the body of law, in particular the Bank Secrecy Act of 1970 and the various extensions and acts (like the patriot act) that build on it, to take the US as an example.

Whether that is constitutional or not is a good question. You say that citizens are innocent until proven guilty. In fact, it's not citizens, I think it's very important to note that most constitutional rights (except very few, like voting rights) apply to 'any person', not 'any citizen', and the supreme court has in the past always used this interpretation.

But as for the substance of a person people innocent until proven guilty, so what? Just because a person hasn't been proven guilty yet, does not say anything about the legal or constitutional right to prevent monitoring. i.e. it's completely okay for the police to set up a speed sensor on a highway and monitor if someone is breaking the speed limit, right? Just because that person isn't proven guilty, and is thereby innocent, does not say anything about the right to not be monitored.
There are civil liberties like the right to be safe from unreasonable search and seizure. But that generally applies to things like ones house being entered and searched, or a person being frisked. That is sometimes called upon. I don't really think it holds up, too well, because it doesn't make any mention of things like financial records originally.
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September 14, 2014, 07:40:23 PM
 #5

What do you think "legitimate" means?


There have been some supreme court rulings and some amendments on this. I'm not terribly up to date. A pretty good reading of some insights can be found here:
https://www.aclu.org/technology-and-liberty/testimony-legislative-counsel-gregory-nojeim-know-your-customer-banking-regul

I quote:
The Supreme Court ruled in United States v. Miller, 425 U.S. 435 (1976) that individuals do not have a "reasonable expectation of privacy" under the Fourth Amendment in financial records pertaining to them but maintained by a bank in the normal course of business.
As a consequence the right to financial privacy act was created: http://en.wikipedia.org/wiki/Right_to_Financial_Privacy_Act
But that was amended later, including by the patriot act. It's a pretty complex legal issue with lots of back n forth. As it stands though, there simply isn't a big debate about the constitutional backing of monitoring people or even citizens. There is huge political consensus between republicans and democrats of the value of things like the patriot act, KYC/AML, the patriot act and generally any anti-terrorist act, many of the things the democrats chided republicans for during the Bush years have essentially been copied and extended to the extent that Cheney was praising him for it, and KYC/AML is probably the least controversial part of that package. Most people simply don't care because they don't think they'll ever be affected. (e.g. I'll never launder money in my life, what do I care?). But philosophically and politically this is a very dangerous way of thinking even though it makes a lot of sense intuitively.

It's one of the most disappointing things of the past decade in my opinion, because Obama ran for a big part on his ability to showcase constitutional infringements by his predecessor. After all, he taught constitutional law at an ivy league plus university, after having been educated to do so at an ivy league university. If you look at past interviews he has a very strong constitutional understanding, but has sadly completely waved it away. The most ironic one being: http://floppingaces.net/wp-content/uploads/2011/04/verbatim_obama-copy.jpg which is something he said while running for president in response to Bush's policies, obviously repeating the exact same mistake shortly after.

Glenn Greenwald did a nice presentation on this at Brown some time ago you can see here: https://www.youtube.com/watch?v=ikCUHh3Ge_k
You could contact the EFF to see if they have any info on this. Again I'm not terribly up to date.
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September 14, 2014, 07:41:16 PM
 #6

No victim, no legitimate crime.

Saying that you don't trust someone because of their behavior is completely valid.
EternalWingsofGod
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September 16, 2014, 01:09:21 AM
 #7

AML and KYC Laws are giant pains in the Arse

To be honest a lot of good businesses could be built around bitcoin if the regulatory framework was more admissable towards these type of developments
As it stands now if you want to provide a Bitcoin service that ships something to a consumer be it a product good or service you need a very expensive license else you will be a possible target for money laundering.

(even if you have all these documents the cost to register on their list is large)
So going fully compliant just means a great pita on something that might not even make ROI and months to years for it to process through till your officially licensed and going under a compliant but not registered plan puts risks on you since there are no real low cost alternatives to run a legitimate operation.

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September 16, 2014, 09:26:42 AM
 #8

In the US there are plenty of laws passed that appear to be unconstitutional. Unfortunately it is these laws that are enforced and not the constitution. For example, the Washington D.C. handgun ban that was in place from 1976 clearly violated the 2nd Amendment, but it wasn't until 2008 that the Supreme Court declared it unconstitutional after some DC gun owners / potential gun owners challenged the law.
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