[HN Gopher] The Offshore Networks of Oligarchs
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The Offshore Networks of Oligarchs
Author : rntn
Score : 155 points
Date : 2023-02-28 17:02 UTC (5 hours ago)
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(TXT) w3m dump (academic.oup.com)
| rektide wrote:
| Younger me was so excited by bootstrapping new connectivities &
| systems, resented government survelliance of personal lives. The
| Manifesto of Cyberspace was scrawled across my brain.
|
| But wow, my dislike for how many vast powers in the world are so
| very un-observable was also high then, & the implications of
| bitcoin & cryptocurrency to let these systems grow & be harder to
| deal with has only gone up & up & up ever-more.
|
| Ultimately we're far more tracked by corporations anyhow now, and
| that only barely has to do with the currency we use.
| DennisP wrote:
| A potential solution is to make small transactions anonymous,
| but break the anonymity for large transactions. Of course a
| large transaction could be broken into many small transactions,
| but it'd be much more cumbersome and expensive.
|
| For specific sanctioned entities, a possibility would be to let
| users specify a list of addresses they're not willing to share
| an anonymity pool with.
|
| Here's Vitalik talking about these ideas in a recent interview:
|
| https://podclips.com/c/K3RLE1?ss=r&ss2=ethereum&d=2023-02-28
| rt4mn wrote:
| > the implications of bitcoin & cryptocurrency to let these
| systems grow & be harder to deal with has only gone up & up &
| up ever-more.
|
| While I agree the implications are concerning, I think its
| difficult to overstate just how much of a stranglehold the US
| regulatory and surveillance machine has over the global
| financial system.
|
| Trying to buy and sell things online without sharing your real
| name or address is functionally impossible for 99% of people
| (unless you are willing to break the law or learn how to use
| cryptocurrency). This is because the gatekeepers to the
| Internets finances (banks, credit cards, etc) are required by
| law to identify who they are working with.
|
| This makes a sort of sense until you zoom out and see the scope
| of the problem. Because it is impossible in 99% of cases to
| move money around online without using those gatekeepers, there
| functionally is no financial privacy online.
|
| I should not have to share my bloody name or address with
| _anyone_ to order a god damn box of chocolate.
|
| > Ultimately we're far more tracked by corporations anyhow now,
|
| True, and thats very concerning and should be pushed back
| against. But when corporations collect data on you, the worst
| thing they do with that data (generally speaking) is not treat
| it with care and the data gets stollen / made public.
|
| When the government collects data on you, the worst thing they
| do with it (generally speaking) is throw you in jail or kill
| you. The scope of the concern is astronomically higher.
| zehaeva wrote:
| What's entertaining about this line of thought, that
| corporations will only treat your data without care and you
| really need to worry about the government because they'll
| kill you is that there is a long history in the US of
| corporations straight up murdering people.
|
| And I'm not even talking "accidentally", or though neglect.
| I'm thinking of the union busting efforts of the railroad and
| mining companies in the late 1800s and early 1900s where the
| corporations straight up murdered folks.
| chordalkeyboard wrote:
| > I'm thinking of the union busting efforts of the railroad
| and mining companies in the late 1800s and early 1900s
| where the corporations straight up murdered folks.
|
| my favorite examples of corporate union busting from that
| era all involve the US Army being deployed against workers.
| Invictus0 wrote:
| Corporations can deny you credit, change your interest rate,
| increase your bail, close your account, refuse to do business
| with you, and generally make your life harder.
| forgetfreeman wrote:
| "I should not have to share my bloody name or address with
| anyone to order a god damn box of chocolate."
|
| You don't. Get off your ass and go buy a box with cash. On
| the drive over meditate on who generally benefits when given
| the ability to move large sums of cash anonymously (hint:
| terrorist organizations, drug cartels, and tax dodging
| oligarchs).
| CyanBird wrote:
| Please, reminder that the cia literally funded their own
| international bank (bcci) in order to do their clandestine
| operations
| csydas wrote:
| I think you're missing the point here. I'm not a crypto
| advocate, but Visa and Mastercard definitely have too much
| power as do most online transaction processors, and the
| amount of information that online processors collect (at
| the request and joy of governments) is quite scary.
|
| A select few organizations can control whether you can buy
| necessities or not and cut you off even from legally earned
| money on a whim. Banks have finite cash on hand which
| limits your mobility and liquidity at any given moment in
| the event of an emergency. Online commerce at this stage
| may as well be a secondary benefit given how your
| information is scooped up and resold to advertisers.
|
| Financial systems are quite convenient, there's no denying
| that, but they're extremely fragile and the system exists
| at the whim of a few select people. Visa and Mastercard
| have demonstrated they can effectively remove persons from
| modern civilization at their discretion, not even with
| official government requirements, and that this has not
| been challenges is really unsettling.
|
| To reiterate, cryptocurrencies are not the answer here in
| their current state, as they're too unstable and basically
| inherit not only all the issues that normal banks bring,
| but also introduce a ton of new issues. I don't know how to
| ensure sovereignty for individuals who are legally earning
| compensation when a support representative for banks can
| click on a checkbox and make them penniless. Nevermind if
| the company the representative works for is influenced by
| an unhappy government.
|
| Finance is terrifying, and we're really in a strange place
| where we don't have a good answer for ensuring individual
| sovereignty with any currency, crypto included. I stress
| over this because I'm less and less confident every year
| that there is a good solution for this besides eschewing
| Finance entirely (and that's quite the magic trick...)
| comfypotato wrote:
| Pointless yelling ensuing: why do you care if people track
| your chocolate spending? You're not important enough for
| anyone to ever put your face to your name to your purchase of
| the chocolate. Forgive me if I'm talking to someone famous,
| but I'm not. Nobody gives a damn about you on the internet.
| They want to know you bought chocolate because they want to
| sell you more chocolate. That's it! Just be grateful you
| don't have to get off your ass to order the chocolate.
|
| I've never understood the hubbub over privacy. Outside of
| obviously malicious attacks (that we should be well-protected
| from) it all just seems that you're being observed so that
| other people can make money. That doesn't bother me if I'm
| getting something out of it (chocolate). There are extreme
| examples of employees with access viewing the data, but they
| should be considered statistically insignificant in the
| discussion because they're so rare.
| rektide wrote:
| It's easy to say when times are good. Government basically
| sort of tries & does good. But as others have pointed out,
| America has some ghastly data-collection-against-the-people
| situations in the past 100 years alone.
|
| For example, Ralph Van Deman[1]. After being instrumental
| in the Philippine-American war (1899-1902)'s military
| intelligence division, creating some of the first (and
| incredibly far reaching) catalogs of potential enemies &
| associates & basically anyone anywhere near-by & using
| torture regularly to extract confessions/information, he
| came home to America... to start enormous files on anti-
| War, labor, human rights & basically anyone standing up or
| making noise. Or who happened to be a couple degrees of
| separation away. Sending under-cover agents out to report
| back with unsigned reports, calling them "enemy agents" for
| not being happy-dumb American's & advocating voices. Among
| many things this lead to
|
| [1] https://en.wikipedia.org/wiki/Ralph_Van_Deman
| pa7ch wrote:
| I think you underestimate the worse things corporations do
| with data and how many people that affects. Cambridge
| analytica and the scandal with FB and Brexit would be one
| example.
| diordiderot wrote:
| Crypto has been pretty unsuccessful at moving large volumes
| anonymously over a multi year timespan
|
| https://www.goodreads.com/en/book/show/60462182
| yieldcrv wrote:
| I think there are a lot of things that aren't tracked very
| well.
|
| Randomly pumped tokens/NFTs - even newly issued and pumped
| ones - are moving large volumes anonymously.
|
| You act like a random trader that caught the wave, but really
| you are also the addresses pumping the asset with the dark
| money that isn't intended to be cashed out. The pumped
| addresses just wind up with the asset and will never cash
| out. Your KYC'd address just looks like a good crypto trader.
|
| A clean 8,000% gain doesn't look different than a dirty
| 8,000% gain.
| photon12 wrote:
| Got this message in my Discord message requests, from 13
| hours ago: Yo!*Welcome to [redacted]!*
| What can we offer you We providing quality crypto
| pumps. *We share the name of target coin in advance.*
| *We are professional cryptotraders* And finally, we
| show you how to beat the market and be ahead of everyone.
| **This is your chance to multiply your investment together
| with the cryptocurrency market whales**! ** The
| amount of invites is limited! Hurry up to take your place
| there:** : [redacted]
| yieldcrv wrote:
| maybe, but that's most likely a scam where you will be
| exit liquidity for the leader too.
|
| but people with the "dark money" can also pay similar
| kinds of groups. this happens in the stock market all the
| time too.
|
| if you have the dark money that you won't cash out, you
| can do it yourself pretty easily as well, you don't
| actually need to notify a crowd because there are so many
| bots that will join a pump of any token, and that will
| cause it to trend too.
| photon12 wrote:
| I recently had to leave working for a cryptocurrency adjacent
| startup because my stomach kept getting into knots about how
| oligarchs are doing a lot of VC funding in the space, and the
| reason they are funding it is to cement their authority.
| wonderwonder wrote:
| Interesting, can you provide more details without doxxing
| yourself?
| photon12 wrote:
| This person isn't necessarily an oligarch, but they are a
| major vendor of market research and VC dollars in the
| space. This is how important they think the stakes are
| around fake internet money [1]:
|
| > The Biden Administration is trying to strangle crypto.
|
| > A lot of folks have been trying to stifle that criticism,
| but the effort to destroy the industry is quiet but
| pervasive across the exec branch.
|
| > The time to make crypto an issue that wins or loses the
| Presidency is now.
|
| Investors in my company support that view. It's an example
| of doing things indistinguishable from what oligarchs want:
| no questions on their authority, even in the wake of
| massive consumer harms relating to token speculation and
| fundamentally unsolvable UX issues for retail consumers.
|
| I had to leave mostly because I couldn't deal with the
| constant cognitive dissonance. The only reliable source of
| income in crypto is arbing yields on customer deposits to
| US treasuries, and the whole space is reliant on the
| government for macroeconomic stability already and they are
| creating big deposit flow risks and banks are rightfully
| worried about it. [2]
|
| [1]
| https://twitter.com/twobitidiot/status/1624563275760279554
|
| [2] https://twitter.com/ecommerceshares/status/163028716933
| 07494...
| berjin wrote:
| Every time I have to fill in some AML (anti-money laundering)
| form I think how much of a waste of time and money it is for
| every party involved since the real big fish are getting around
| it with professional help. It's all very kafkaesque and invasive
| so I come to the conclusion it's more about powerful governments
| existing to gain more power than it is about solving any
| injustice.
| kornhole wrote:
| Like many laws, they apply to you and me, not to the oligarchs.
| The international lawyers and accountants are the gatekeepers
| that navigate them through the loopholes.
| berjin wrote:
| Yes and they do it under the pretence of solving sexual
| slavery or child sexual abuse...yet at the same time how many
| global leaders have visited J.Epstein's island?
| notch898a wrote:
| That reminds me of FATCA. They made the burden just high
| enough for banks taking sub six-figure accounts that it's
| worthless to bank an American customer overseas unless they
| are rich.
| HashThis wrote:
| 100%. Elites are allowed to do "money laundering" while
| commoners are put in jail for it.
|
| FinCen exists to put commoners in jail, for the same things the
| Elites can do without going to jail. The Elites use Shell
| Companies to do the same tactics.
|
| The following have FinCen put commoners in jail, but elites
| move money the same way via Shell companies and stay out of
| jail: 1) Breaking up transactions, to hide total amount.
| Commoners=Jail vs Elites=Shell Companies.
|
| 2) Fee assets when law enforcement comes = "Obstruction of
| Justice". Commoners=Jail w/FinCen. Elites=no jail via Shell
| companies articles of incorporation
|
| 3) Keeping identity secret. Commoners=Jail w/FinCen. Shell
| Companies= No Jail
|
| 4) ...list every way commoners go to jail via FinCan and cross
| boarder. Elites do full list via Shell companies and don't go
| to jail.
| matheusmoreira wrote:
| AML is just the financial arm of global mass surveillance.
| majormajor wrote:
| Nothing will be 100% proof around evasion or exploitation.
|
| The answer isn't to do nothing and let it be a free-for-all.
| ted_bunny wrote:
| It's darkly funny how nearly every control mechanism in
| capitalist society equates to merely making a particular
| action more or less expensive.
| tobyjsullivan wrote:
| I think both sentiments have merit and are not necessarily
| mutually exclusive.
|
| Money stuff tends to follow power laws. The basic,
| beaurocratic checks probably dissuade 80% of offenders while
| only stopping maybe 20% of the volume.
|
| Doing nothing would leave those 80% of offenders free to
| launder which seems bad. Meanwhile, it seems fair to call the
| measures mostly ineffective.
|
| There's also a cost to these measures. They frequently block
| or add friction for people just trying to do legitimate
| business. Is it worth it?
| harha wrote:
| Just makes the rest that can avoid it more powerful.
|
| KYC doesn't protect you from much, all sorts of scams still
| send money to bank accounts and you wont get your money
| back from the bank it was sent to even though they should
| have systems in place to know what is happening and where
| money is going.
|
| And as you mention it doesn't dissuade the powerful. So
| what's the purpose other than control and bullying the ones
| who didn't commit a crime?
| notch898a wrote:
| Just as likely IMO is that the 20% are using regulatory
| capture to stomp out the 80% and consolidate their business
| and create even more effective crime.
| JumpCrisscross wrote:
| > _basic, beaurocratic checks probably dissuade 80% of
| offenders while only stopping maybe 20% of the volume_
|
| Concentrating illicit behavior into fewer nodes also makes
| whacking them when necessary simpler. I doubt the
| concentration this paper notes would occur were Russian and
| Chinese oligarchs able to hold dollars without KYC.
| anigbrowl wrote:
| That's not what was proposed. The problem is that things like
| KYC laws are now probing down to thresholds like $600, so the
| cumulative cost (both directly, of compliance, and
| indirectly, of overbearing surveillance, chilling effects
| etc.) is hugely increased for little benefit. In the name of
| limiting untoward concentrations of money capital, it creates
| untoward concentrations of political capital.
| spiritplumber wrote:
| Just make it legal to eat oligarchs.
| passwordoops wrote:
| Here's a link explaining the original Panama papers, on which
| this work and detailed analysis is based:
|
| https://www.icij.org/investigations/panama-papers/
| mihaic wrote:
| After being in the crypto space for a while, and thinking a lot
| about the problem of tracing money, I've come to the conclusion
| that the system I'd prefer would be a hybrid.
|
| Everyone needs a quota of anonymous spending, say $50/day, $1000/
| month and anything after that is public on government ledger.
|
| I've mentioned this to a few friends, who've always called it
| dystopian, yet all alternate systems seems to be worse in terms
| of illegal abuse.
| JumpCrisscross wrote:
| > _a quota of anonymous spending, say $50 /day, $1000/ month
| and anything after that is public on government ledger_
|
| You're describing cash + digital money.
| paxys wrote:
| 1. This system is too complicated and messy, we need to throw
| it away and rebuild it from scratch.
|
| 2. This new system is so simple and works perfectly.
|
| 3. Hmm, it doesn't account for this one problem. Doesn't
| matter, we can just iterate and add in a special case.
|
| Repeat 3 a few hundred/thousand times.
|
| 4. This system is too complicated and messy, we need to throw
| it away and rebuild it from scratch.
| mihaic wrote:
| Completely agree, cash is great, am not aiming to reinvent
| the bus! There is though a push to remove it, and it's a bit
| clearer when we aknowledge the goal.
| hesdeadjim wrote:
| Yea, but cash isn't very web3 now is it.
| Scoundreller wrote:
| Shhhh, no talk about our web4 plans
| luckylion wrote:
| > yet all alternate systems seems to be worse in terms of
| illegal abuse
|
| worse than that system, sure. Worse compared to a fascist state
| that has near total control over everyone? I don't think it's
| clear that tax evasion and black market deals are worse than
| that, the scale is just different.
|
| China is much deeper in technology than the Soviet Union ever
| was. Imagine what Stalin had done with China's abilities in
| 2023, I think accepting Oligarchs, tax evasion and Drug Cartels
| is a fine trade off to avoid that.
| JumpCrisscross wrote:
| > _don 't think it's clear that tax evasion and black market
| deals are worse than that_
|
| The paper's original context is the War in Ukraine. That
| doesn't mean we shred up our Bill of Rights. But the
| counterfactual is starker than tax evasion and cocaine
| naughties.
| comfypotato wrote:
| It's not either or in an all or nothing sense, and it's not
| either or necessarily either. There's a very appropriate
| comment on another sub-thread pointing out that privacy and
| corruption aren't necessarily linked. We need to balance as
| we progress towards a more private and less corrupt world.
| [deleted]
| iszomer wrote:
| 403'd.
| ypeterholmes wrote:
| The premise here is very solid- shut down the small number of
| people that the Oligarchs depend on, and their ability to operate
| is curtailed much more effectively than trying to attack the
| oligarchs directly.
| motohagiography wrote:
| The challenge with it is that this doesn't generalize to any
| shared principle and it's cynical realpolitik dressed up as
| network science.
|
| I'd argue this paper is less a work of scholarship than an
| example of collusive, astroturfed, agitprop, where even though
| russia's oligarchs are an easy target because they are still
| new money and retain the taint of trade from the corruption
| that produced their fortunes, the authors are casting
| aspersions on highly regulated businesses that provide the
| financial rails for investing and preserving pensions and
| sovereign wealth.
|
| The only reason you can insure anything or have long term
| financial instruments at all is because of special purpose
| vehicles that persist longer than the whims of a given regional
| governing party. These vehicles are infrastructure that
| provides financial stability for capital flows that facilitate
| social stability and growth. I remember the eurozone sovereign
| debt crisis', and to me the paper just looks like another
| (tawdry) setup for blaming "speculators and international
| financiers" for the failed technocratic policies of their peers
| own makings.
|
| The approach of "going upstream," is guilt by association, and
| it's unprincipled overreach. The paper is entertaining, and I'm
| glad that the networkX python library has become so accessible
| that social activists can use it, but I think we should hold
| the authors to a higher standard.
| CyanBird wrote:
| From my naive perspective it almost reads that you won't be
| able to receive your money on the proper hongkong HSBC select
| account and are upset about it
|
| Reality is that tax dodging is a wildly out of control
| problem, and worse it is considered to be de defacto standard
| to even run a business at all. From south Dakota to the city
| of London and beyond. It is really a problem
| leashless wrote:
| We're looking for the "Goldilocks Zone" of privacy. We want:
|
| * Enough privacy that activists don't wind up facing death squads
| * Not so much privacy that drug cartels wind up running the
| country.
|
| The problem is that cryptography is all or nothing: for a given
| observer, the transaction is either private or it isn't.
|
| I'm fascinated by models like differential privacy. Maybe there
| are ways of making systems which snare large scale abuses but
| _provably_ leave the minnows free.
| gabcoh wrote:
| Small nitpick: it isn't entirely true that cryptography is "all
| or nothing". With things like time lock crypto and proof of
| work you can effectively have a scheme where large scale
| snooping is impossible (would take too much compute), but any
| individual transaction can be decrypted with a bit of work.
| whatshisface wrote:
| The problem is the institutions writing the laws see it as,
| "enough privacy to allow us to deal with the Contras, but
| enough surveillance to stop activists from running the
| country." ;)
| paxys wrote:
| There is nothing about the nature of privacy itself that leads
| to drug cartels running the country. There could be a world
| with perfect privacy and a perfect justice system where this
| wouldn't be a problem at all. Of course that isn't realistic,
| but the tendency should be to always trend towards more privacy
| and less corruption. Thinking that a private yet safe world
| isn't possible is a fallacy, because privacy itself isn't the
| source of these issues.
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