[HN Gopher] The Bond villain compliance strategy
___________________________________________________________________
The Bond villain compliance strategy
Author : takinola
Score : 462 points
Date : 2023-11-25 03:44 UTC (19 hours ago)
(HTM) web link (www.bitsaboutmoney.com)
(TXT) w3m dump (www.bitsaboutmoney.com)
| monero-xmr wrote:
| Man the anti-crypto news piles on like clockwork as the bull
| begins anew.
|
| Crypto is finance without borders. It is literally the cypherpunk
| dream come alive - money issued on computers, censorable by no
| one, existing only as numbers. You could ban crypto with every
| government on earth and it would be severely reduced in price,
| but it would not die - it would just delay its inevitability.
| This is because cryptocurrency is an ideology - one of anti-state
| money, pro freedom, decentralized, empowering individuals. A
| circular economy of crypto does exist - it's small vs. the
| speculation, but people do receive crypto and spend crypto
| without ever cashing out to fiat. As that economy grows, there is
| no longer anything the state can do to stop it.
|
| But the state won't stop crypto. That time has passed. Some in
| power saw the threat, but mostly the elites called it "rat poison
| squared" and laughed at it. Now crypto is so big you have major
| Republican presidential candidates issuing pro-crypto policy
| platforms and senators and powerful representatives defending it
| in committee hearings. It's all over.
|
| The real solution is to out compete crypto. Why do people like
| it? How can state currency do better? If you can't solve that
| puzzle, then you aren't going to defeat it.
| cyberax wrote:
| Replace "crypto" with "drugs" and your message will remain
| basically the same.
| 243423443 wrote:
| > A circular economy of crypto does exist - it's small vs. the
| speculation, but people do receive crypto and spend crypto
| without ever cashing out to fiat.
|
| Can you provide examples that do not involve extortion or
| drugs?
| monero-xmr wrote:
| Servers, VPNs, software engineers that work in the crypto
| space. You can get a flavor at https://kycnot.me/
| heyitsguay wrote:
| So... Not just crime, but also the digital infrastructure
| that facilitates it.
| dmichulke wrote:
| Criminals also eat, drink and drive cars.
|
| Why would paying for food in crypto be OK but digital
| infrastructure not?
|
| Do you think privacy is undeserved for one but not the
| other?
|
| Should all transactions be public / visible by the state?
| astrange wrote:
| Transactions in most crypto are even more visible to the
| state than in normal banking, because they're in an
| uneditable public database that never loses history.
| Kwpolska wrote:
| Crypto tumblers are a thing, and they make the public
| history unreadable. Bank transactions aren't public, but
| the government can get access, and stuff like money
| laundering is easier to detect than with crypto.
| CaptainFever wrote:
| Monero is also a thing.
| astrange wrote:
| > Crypto tumblers are a thing, and they make the public
| history unreadable.
|
| That simply means they're illegal, not that we have to
| put up with them. cf Tornado Cash.
| wombatpm wrote:
| Yes
|
| I'll go further. All transactions should be public,
| especially those by government, all politicians, and
| anyone in a position of authority over others.
| astrange wrote:
| If any of those people or businesses are located in the US
| or similar countries, they're either selling some of that
| crypto for taxes or just not reporting it.
| injeolmi_love wrote:
| Once people start receiving the scary and confusing 1099s
| next year from using Venmo et al. from Bidens new policy,
| crypto may seem preferable to some people. Pro taxists
| often underestimate the fear common people have of tax
| authorities.
| astrange wrote:
| There's no difference in taxation between the two and not
| much difference in how easily the government can see how
| you used them.
| afroboy wrote:
| Well i live in shitty country where trying to transfer USD or
| EUR is very dangereous and could get you a prison time and
| not that amount you think of, it just we want to buy things
| from Amazon. thanks to binance and other ways we could
| transfer money and buy things from out of borders.
| viknesh wrote:
| Are there any factual assertions that you disagree with in the
| piece? Otherwise this seems to be more anti-Binance than crypto
| itself (although the author's viewpoint on crypto is clear).
| monero-xmr wrote:
| I am extremely deep in this space since nearly the beginning.
| My take on Binance is it started like many YOLO exchanges
| back in the 2017 boom but pioneered the exchange token model.
| They had very good customer service and onboarded nearly
| everyone. The model was FAFO with the understanding they
| would pay a fine later.
|
| If the US government had the nuts they would have shut it
| down. They didn't, and CZ probably won't get any jail just
| like Bitmex's Arthur Hayes. If they do put him in jail it's a
| pittance vs. his massive equity stake and wealth.
|
| As an addendum, the Tether Truthers assumed that when the US
| government was done sifting through their subpoenas, the
| Truth about Tether would be revealed and it would collapse.
| Just like with the NY AG, didn't happen won't happen - Tether
| is backed at this point after 8 quarters of high interest
| rates.
|
| I was way, way more worried about crypto 2 years ago than I
| am now. The bad actors are being shaken out, the SEC mostly
| lost vs. Ripple, and the US and the world itself is yo-yoing
| back to conservative government after a period of progressive
| governments. All of this bodes well for crypto and its anti-
| state ethos.
| rocqua wrote:
| "Crypto is finance without borders" is not a positive
| statement. Borders are important for security. Especially
| because states have varying degrees of ill-intent towards each
| other's citizens.
|
| But more important than borders is jurisdiction of regulators.
| At least a significant portion of crimes are also evil. Lack of
| regulation really helps those evil things happen. Generally
| financial regulation is one of the more effective forms of
| crime prevention.
|
| There's certainly regulation so stupid it almost reaches
| malice. There's probably regulation that is intentionally
| malicious. That needs to be solved, but solving it by saying
| 'only regulation as the cryptocurrencies currently allow'
| throws out way too much regulation. It lets too many evil
| things all of a sudden happen.
| dmichulke wrote:
| > Especially because states have varying degrees of ill-
| intent towards each other's citizens.
|
| I think the major risk crypto people see is not other states,
| but their own state.
|
| > At least a significant portion of crimes are also evil.
|
| Likewise, a portion of non-crimes is evil. For example money
| printing. And it's huge, we're talking trillions.
|
| The same trillions that can't be traced once they enter the
| Pentagon.
|
| Generally, there seems to no longer be a moral authority the
| state wields, crimes and evil decoupled a long time ago, and
| people now see that they can choose who fleeces them and how.
| slackfan wrote:
| Borders are important for the security of governments, and
| very little else. A reminder that passports and mandatory
| travel restrictions outside of a few countries didn't come
| into existence till WWI.
|
| Border enforcement by governments as a whole has caused more
| death and human suffering than literally any other action by
| any nation state in the world.
| Aerbil313 wrote:
| The single issue is that real world has borders in the form
| of nation-state borders and barriers (regulations) to the
| money transfer between entities. Crypto does not, and this
| leads to a conflict.
|
| I am personally all in for a no-borders real world as long as
| there are no states which don't believe in my ideology. But
| such a thing is utopia and doesn't exist yet.
| RandomLensman wrote:
| State currencies are outcompeting crypto, including by
| considering it an asset denominated in said state currencies.
| IIAOPSW wrote:
| I'm deeply disappointed that this isn't the strict bylaws,
| policy, and procedure documents for SPECTRE and its affiliates
| and controlled entities. I wanted to read the Henchman Code of
| Conduct, Infiltration Response and Prevention Procedure, and
| Workplace Health and Safety Guidelines for a shadowy, criminal
| org.
| smnrchrds wrote:
| > _I wanted to read the Henchman Code of Conduct_
|
| Rule 1. Die fast, die often.
| BiteCode_dev wrote:
| And break things
| EdwardDiego wrote:
| The International Brotherhood of Henchsters union will
| negotiate better henching health and safety policies on behalf
| of all goons, thugs, hired thugs, minions, and of course
| henchpeople.
|
| We all know that henching is an inherently risky job. Fighting
| some of the world's most tuxedo clad Scottish sociopaths is
| often dangerous, but that doesn't mean we can't reduce
| unnecessary risks.
|
| Risks that cause lost productivity on your Doomstar project
| through avoidable injuries, recruitment delays, and the
| difficulty of removing tangled bodies from the drill you're
| using to get to the Earth's core.
|
| We demand:
|
| 1. Adequate hand-rails on ledges, bridges, and _especially_
| around piranha tanks, snake pits, etc.
|
| 2. Murder as a punishment for failing your boss "for the last
| time" now requires two written warnings beforehand.
|
| 3. Volcano bases must have adequate fire and lava escapes.
| hlandau wrote:
| Old but obligatory link, the Evil Overlord List:
|
| http://www.eviloverlord.com/lists/overlord.html
| peteradio wrote:
| 38) If I absolutely must ride into battle, I will certainly
| not ride at the forefront of my Legions of Terror, nor will I
| seek out my opposite number among his army.
|
| This one makes no sense, surely evil overlords are
| invulnerable during the battle charge.
|
| 45) I will make sure I have a clear understanding of who is
| responsible for what in my organization. For example, if my
| general screws up I will not draw my weapon, point it at him,
| say "And here is the price for failure," then suddenly turn
| and kill some random underling.
|
| This one is hilarious I didn't understand the direction until
| the last word.
| jstarfish wrote:
| Check out Marvel's MODOK show. It explores the banalities like
| this that arise when a corporation buys out your evil lab, and
| how poorly a Narcissistic supervillain handles being subjugated
| by a power greater than himself.
| roenxi wrote:
| Alexandra Elbakyan powers a big chunk of the worlds knowledge
| archiving almost singlehandedly. A tiny group of ringleaders
| powers who knows how much torrenting. The evidence I've seen so
| far is that coordinating a global blockade on anything tech is
| too expensive to manage. And getting more so as this more
| reliable alternative to the traditional banking system grows.
|
| The economics here are not on the side of governments. The
| enforcement costs are high. The costs to individuals in acquiring
| and using crypto are low. The benefits of running a monetary
| system that bypasses the high costs of the global regulatory
| state are extremely high (in some sense, the outrageous costs of
| running the bitcoin network represents the implied drag of
| regulation). Even if being imprisoned is an inevitable result,
| there are a lot of people where the intervening high life of
| running a huge crypto exchange must be attractive.
|
| The times are exciting. Unless we see capital controls the likes
| of which have never been tried (a possibility, the authoritarians
| must be stewing over crypto) might find these apparent victories
| by the regulator as Pyrrhic. Unlike most financial assets, once
| I've bought a cryptocurrency the only option they have is to come
| to my house and seize it. That isn't a feasible option at scale.
| RandomLensman wrote:
| Crypto doesn't need to be enforced out of existence, it already
| cannot compete with other money, so it remains a niche thing.
| Enforcing things on niches is easy to some extent (or rather
| not even needed).
| pas wrote:
| regulators don't have problem with crypto, they have problem
| with Crypto.
|
| more seriously, there's zero problem with the technology. you
| can send money to anyone you want using a complicated game of
| crypto whisper phone, but everyone in the chain has to file tax
| returns or whatever is required in the jurisdictions along the
| path.
|
| patio's piece opens with the insight that Crypto companies want
| to be eveywhere while being nowhere.
|
| if Crypto wants to really be everywhere, then they can do what
| all big tech (and non-tech) inter-multi-continental
| conglomerate does, open branch offices, do the frustrating work
| of finding local regulation experts, navigating the immense
| labyrinth of global vs local realpolitik, etc.
|
| they should/could have started with registering the fucking
| tokens.
|
| it makes zero sense that they contested this, because they
| already do KYC for their own fucking anti-fraud purposes.
|
| https://en.wikipedia.org/wiki/Regulation_A#Testing_The_Water...
| kdkirsch wrote:
| I really appreciated the deep insightful analysis wrapped in an
| excellent metaphor.
| 1B05H1N wrote:
| In case anyone wants to read the US Treasury announcement:
|
| https://home.treasury.gov/news/press-releases/jy1925
|
| """ ...Binance willfully failed to report well over 100,000
| suspicious transactions that it processed as a result of its
| deficient controls, including transactions involving terrorist
| organizations, ransomware, child sexual exploitation material,
| frauds, and scams.
|
| Terrorist Financing. Binance failed to report to FinCEN
| transactions associated with terrorist groups including Al Qaeda,
| the Islamic State of Iraq and Syria (ISIS), Hamas' Al-Qassam
| Brigades, and Palestinian Islamic Jihad (PIJ).
|
| Ransomware. Despite being one of the largest receivers of
| ransomware proceeds, and transacting in millions of dollars of
| ransomware proceeds from attacks involving at least 24 different
| strains of ransomware, Binance failed to report these
| transactions.
|
| Child Sexual Abuse Materials. Binance never reported transactions
| with websites devoted to selling child sexual abuse materials,
| including Dark Scandals.
|
| Darknet Markets, Scams, and Other Illicit Activity. Despite
| sending and receiving virtual assets proceeds from large-scale
| hacks, account takeovers, and darknet markets dealing in illegal
| narcotics, counterfeit and fraud-related goods and services, as
| well as other illegal contraband, Binance never reported any such
| transactions. """
| verisimi wrote:
| > transactions involving terrorist organizations, ransomware,
| child sexual exploitation material, frauds, and scams
|
| These justifications.
| robocat wrote:
| They left out copyright infractions. I bought a car service
| manual and the seller wanted to be paid using Binance.
| concordDance wrote:
| The ability of people to freely exchange a store of value is
| something governments don't like. They want the power to veto
| transactions and declare people or entire countries impossible
| to trade with.
| RandomLensman wrote:
| Welcome to society.
| concordDance wrote:
| I will note governments also want to do the same to any
| communication between two individuals (not just
| communication about an economic transaction). Do you have
| the same attitude to that?
| RandomLensman wrote:
| Yes, indeed, societies fight over this, too, because it
| isn't just governments acting in a vacuum.
| lelanthran wrote:
| I don't think it's that nefarious. They just want to tax
| every transaction, which is what they were doing before
| crypto.
|
| Vetoing and shutting down people and countries is a side
| effect, not the intended effect, of knowing all transactions.
| throwawayqqq11 wrote:
| Whereas on the classical side of wealth, gorillions are held
| by anonymous layers of legal bodies that allow quick shifting
| of assets out of taxation and circumvent eg. weapon embargos.
|
| Its the messiness the article speaks about and it mostly
| works for the few and not the many.
|
| It would be helpful for _us_ to realize that _it is that_
| what goverments do like, aka sustain, because the existing
| power structures rely on it. I am not sure whether "tinking
| about the many" was ever a serious part of bro cultulture.
| demondemidi wrote:
| I don't think anyone has squared the circle on absolute
| freedom versus nation destabilizing terrorism and child
| abuse. You seem to have just said, eh, oopsie doopsie.
| Footnote7341 wrote:
| Why is it always child abuse.... I'm so glad the fertility
| rate is dropping so maybe ill finally get a breath of fresh
| air and we can do away with some of these scare tactics
| once there's none left to abuse.
| kristjansson wrote:
| That is the best part about extinction, we don't have to
| hear disingenuous political justifications anymore.
| campbel wrote:
| for good reason
| afroboy wrote:
| Well for the USA perspective i guess but for others like me
| who believes in Alqasam brigades and Palestine moujahedeen
| i don't like how USA try to tell me what i should think of
| them or not to try to finance them.
| loeg wrote:
| Yikes!
| skullone wrote:
| Found the terrorist
| nerdponx wrote:
| Case in point? The US has every incentive to shut down
| businesses that want to facilitate the continued
| existence of these organizations.
| mv1234 wrote:
| Fully agreed. No one should be able to stop me from
| sending money to ISIS.
| skullone wrote:
| You are so ignorant of the world that I feel sad for you
| ponector wrote:
| Is it a bad thing? Would the world be better if no sanctions,
| no anti money laundering rules, no financial regulations
| could be applied by governments?
| galaxyLogic wrote:
| The word crypto comes from the Ancient Greek word kruptos, which
| means "hidden" or "secret". (a quote from AI)
|
| Thus it is not a big surprise that some shady things might be
| going on as relates to it. Crime wants to be secret.
| seabass-labrax wrote:
| _Cryptocurrency_ (abbreviated 'crypto') is made possible by
| _cryptography_ (also abbreviated 'crypto', but few call it
| that nowadays). _Cryptography_ is from the Greek for secret
| because it involves doing various things with 'secret keys'.
| What you use it for may or may not involve secrecy - here are
| just a few of the most prominent examples:
|
| - Authentication to prove your identity (no secrecy)
|
| - Encryption to keep information private except to certain
| keyholders (secrecy)
|
| - Signing to prove that information is as originally published
| (no secrecy)
| keiferski wrote:
| I'm no fan of Binance, but to label them as Bond villains while
| spending zero effort on trying to understand the ideology behind
| cryptocurrencies (at least, what was supposed to be the ideology)
| and why being a distributed business without a physical address
| is desirable from that point of view - and not just because
| they're evil greedy people (of which Binance may still be) -
| makes this essay not very interesting. It would have been a much
| better piece had the author attempted to understand the
| decentralization ideology and then squared that with the
| apparently very real crimes so widespread in crypto.
|
| Edit: found the essay that this link reminded me of: a comparison
| of Jason Bourne to James Bond, from a societal perspective. A
| good piece to read after this original link.
|
| https://exple.tive.org/blarg/2015/09/20/bourne-aesthetic/
| fake-name wrote:
| Have you considered that the author _did_ try to understand the
| underlying ideology? It seems pretty accurate to me.
| keiferski wrote:
| Well, I can't read his mind, but considering that he didn't
| mention anything about it, I think we can assume that he
| hasn't.
|
| Even if he did, my criticism was about the essay, not the guy
| himself.
| olalonde wrote:
| > He has long been adjacent to money and power, but craves
| more.
|
| > They have no passport and fly no flags; these concepts are
| thoroughly beneath them.
|
| Yeah, this is not an intellectually honest characterization
| of libertarian and anti-authoritarian ideology. I'd be very,
| very surprised if Patrick didn't actually understand that.
| tovej wrote:
| I'd say that is incredibly accurate. Libertarian ancap bros
| have previously wanted to found their own objectivist
| states either by building oil rig type structures on
| international waters or taking over an underdeveloped
| African state.
|
| And the common denominator is always wanting to keep all
| money (but still benefiting from democratic institutions in
| the markets they do business in). There may be other stated
| goals, but those are not serious.
| olalonde wrote:
| > Libertarian ancap bros
|
| Resorting to insults is not very conductive to
| intellectual honesty. Your comment equates libertarianism
| to "wanting to keep all money" which is an extremely
| cartoonish understanding.
| tovej wrote:
| Libertarians, especially crypto people, are cartoonish in
| my experience. Cartoonish is not equivalent to false.
| Some things in life are ridiculous, and then we should be
| able to call a spade a spade --- or call a bond villain a
| bond villain.
| Qwertious wrote:
| >Your comment equates libertarianism to "wanting to keep
| all money" which is an extremely cartoonish
| understanding.
|
| Sure, but it's true.
| nerdponx wrote:
| This squares pretty nicely with more conventional
| libertarianism that I usually encounter. Lots of blather
| about non-aggression, intellectual honesty, and personal
| freedom, but practically they tend to align in favor of
| things that result in keeping more money, and against
| things that result in keeping less money.
| bigstrat2003 wrote:
| It's not remotely true.
| patio11 wrote:
| I am describing actual literal appears-in-the-movies James
| Bond villains with these sentences, not anyone you know or
| any real-world political ideology. The way you would know
| this is to have read the previous two sentences: "James
| Bond films have a certain formula to them. It is more
| interesting when seen from the perspective of the villain."
| pavlov wrote:
| _> "being a distributed business without a physical address is
| desirable from that point of view"_
|
| Everybody agrees that CZ owns a majority of Binance (around 70%
| I believe). How does that square with the idea that it's a
| "distributed business"? Its ownership is more centralized than
| Meta's.
|
| There's no legal system on this planet that recognizes the
| notion of a company that's 70% owned by someone but doesn't
| have a physical address. It's just nonsense that was meant to
| keep regulators from catching up. But it's over. The DOJ now
| has full oversight of Binance, CZ has pleaded guilty, and he
| may still end up doing jail time.
| keiferski wrote:
| Geographical distribution and ownership distribution are not
| the same thing.
|
| _There's no legal system on this planet that recognizes the
| notion of a company that's 70% owned by someone but doesn't
| have a physical address._
|
| Yes, and so consider the possibility that some people see
| this as a problem to be solved and not an unchanging fact of
| reality.
|
| Again, there is a huge rich new field of discussion about
| this stuff [1] and so I find the lack of curiosity by the
| author to be very uninteresting. You don't have to agree with
| these ideas but to ignore them entirely is intellectually
| flawed, especially when it's the supposed reason for these
| actions in the first place.
|
| 1. See the Network State stuff.
| https://www.youtube.com/live/x-GfuIFkB_Y?si=t1r96klba69rwTtx
| pavlov wrote:
| A corporation that's able to do business globally but is
| not domiciled anywhere is analogous to a person who can
| travel anywhere but doesn't have any citizenship or a
| passport.
|
| The latter sounds obviously like a fantasy -- it's simply
| not how any of this works. What makes anyone think the
| former is feasible?
| anonymous_sorry wrote:
| So do those people want an individual to be able to
| incorporate, declare their corporation distributed and then
| not have to obey any country's laws?
| NovemberWhiskey wrote:
| _Yes, and so consider the possibility that some people see
| this as a problem to be solved and not an unchanging fact
| of reality._
|
| Sure but there are a significant number of people who feel
| the same way about government generally, or the ban on
| perpetual motion machines.
| camgunz wrote:
| You don't need to dig into the ideology of crypto to make the
| argument that Binance's business was essentially money
| laundering and sanctions avoidance. But if you do, you'll have
| no trouble finding people arguing that ducking state financial
| regulations is a huge and core utility of crypto (let sex
| workers get paid, buy drugs, etc). You can disagree with the
| regime, Patrick does and so do I, but it doesn't change the
| fact that the whole thing was just crime, crime everywhere.
| keiferski wrote:
| Yes well that's why I think it is a nuanced topic.
| Decentralization is appealing to a lot of people, including
| myself, but it also obviously has a ton of negative outcomes
| as well.
|
| Acknowledging this and exploring the complexity is
| interesting; calling everyone evil Bond villains is childish
| and at the ethical level of a Marvel movie.
| anonymous_sorry wrote:
| I think he called CZ an evil bond villain, not everyone.
| camgunz wrote:
| Proponents of decentralization should be heralding
| Binance's demise, as it represents the strongest force for
| centralization in the crypto world.
|
| Also yeah OP is basically about CZ and Binance, not all
| crypto people everywhere.
| kybernetikos wrote:
| I'm keen on decentralised cryptocurrencies, particularly
| ethereum, and I _am_ fairly pleased about Binance 's
| problems. What I'd like to see succeed is easy to use
| wallet apps running on an ethereum zk L2 with low
| transaction costs, social recovery, account abstraction,
| stable coins, and most transactions happening peer to
| peer on decentralised exchanges.
|
| Centralised exchanges are not about cryptocurrency or
| decentralisation or democratising access, or innovating
| money to be programmable, they're just about finding yet
| another source of risk for people to play with in
| _exactly_ the same ways we 've been playing with risk in
| tradfi for millenia. Pretty boring.
|
| Still, I assume that Binance's woes are at least partly
| because of an antipathy towards all forms of finance not
| controlled by the current system, and so the fact that
| they are taking down Binance probably doesn't augur well
| for the chances of my preferred outcome succeeding
| either.
| mkl wrote:
| The bit about Jason Bourne and James Bond is quoted from
| https://www.metafilter.com/93504/You-carry-a-00-number-it-
| me..., and the rest of that exple.tive.org link is irrelevant
| other stuff (don't bother).
| asdfman123 wrote:
| We all understand it, we've read about it since 2012.
|
| We just rightfully understand that at least the exchange level,
| it's not about that. It's about money laundering and making
| billions.
| mytailorisrich wrote:
| In most jurisdictions businesses must have a physical address,
| in fact it is a requirement to incorporate.
|
| This is no government conspiracy against "my freedom", this is
| to offer a level of protection and allow service of legal
| documents.
|
| Binance has always looked very shaddy and not to be touched
| with a bargepole.
| dumbfounder wrote:
| The author is a pragmatist and simply thinks it ain't gonna
| happen.
| resolutebat wrote:
| The author, patio11, has been writing about crypto since at
| least 2018 and is thoroughly familiar with "the ideology behind
| cryptocurrencies".
|
| https://www.kalzumeus.com/tweetstorms/1032033115408031744
| zxt_tzx wrote:
| I agree that the author could've done more to make the case for
| the other side. Where I have some firsthand knowledge, I find
| eg his suggestion that Binance and FTX divided up markets based
| on US geopolitical affiliation implausible and unconvincing.
|
| Nonetheless, it's fair to wonder if crypto has meaningfully
| lived up to any of its promises and why it has been hard to
| point to examples of value creation in crypto in a way that
| would make sense to an average person
| Animats wrote:
| Here's the list of SEC crypto enforcement actions.[1] They start
| about two or three cases a month. 30 cases so far this year. At
| first, they focused on the out and out scams. Then, they shut
| down the ICO industry by sending out letters asking why each ICO
| wasn't registered as a security. Then they went after some of the
| NFT guys. They went after some paid influencers. Now they're
| going after the bigger exchanges. Plus, along the way, the usual
| out and out scams: "fraud for misappropriating at least $12
| million of offering proceeds to purchase luxury goods including
| sports cars, watches, and a 555-carat black diamond..."
|
| The SEC's position is simple: the same rules apply to crypto as
| to other financial products. After FTX, nobody is seriously
| opposing that any more. The "crypto is special" argument is dead.
| The scams are not even original - the scams are Ponzi schemes,
| pump and dump, front-running, insider trading, and just plain
| stealing customer assets. All of those were known before 1900.
| The crypto crowd isn't really that innovative.
|
| [1] https://www.sec.gov/spotlight/cybersecurity-enforcement-
| acti...
| injeolmi_love wrote:
| There are over 1.8 million crypto tokens. If the SEC is going
| to shut down the industry, they'll need to at least start
| shutting down more projects per month than are starting up.
| growse wrote:
| Where's the tax dollars to pay for this?
| PoignardAzur wrote:
| If the fines are high enough, seems like it could be self-
| financing.
| ajb wrote:
| Usually this kind of enforcement attempts to reimburse
| victims, or failing that, goes to general funds. Anything
| else is a moral hazard for enforcement (eg, USA local
| police confiscations)
| lazide wrote:
| Are you trying to say USA local police confiscations
| don't exist at large scale?
| ajb wrote:
| No, I'm saying that they are an example of moral hazard.
| lazide wrote:
| Sure, but one that continues to exist after decades of
| being used no? It's an example of folks not caring about
| that hazard and doing it anyway.
| ajb wrote:
| So? That doesn't mean the feds should do it too.
| lazide wrote:
| The local seizures are run under a Federal program.
| [https://www.justice.gov/afp/types-federal-forfeiture]
| [https://www.forfeiture.gov/]
|
| That is why it is so prevalent everywhere in the US.
|
| The feds use it too, extensively.
| ajb wrote:
| Okay - worse than I thought.
| hurtuvac78 wrote:
| According to the article:
|
| _To make this palatable to the American public, those
| whistleblower rewards are not courtesy of the taxpayer;
| they're courtesy of money seized from previous Bond
| villains. A portion of Binance's settlement(s) will go to
| pay the whistleblowers at the next Bond villain. It's a
| circle of life._
| TacticalCoder wrote:
| > Where's the tax dollars to pay for this?
|
| You're kidding right? The US government is one of the
| biggest holder of Bitcoin. They seized insane amount of
| Bitcoins. And the US is a country where capital gains are
| taxed. The US government is making a _shitload_ of money
| when cryptocurrencies go up.
|
| You cannot have it both ways: if you tax your citizens on
| their capital gains made on crypto, then you prosecute the
| scammers like SBF when they prey on US citizens.
| growse wrote:
| I don't disagree, but you're arguing that the government
| gives a greater share of its tax receipts to the SEC.
| This is a question for Congress, not the agency. The
| usual assertion of "let's spend more money on x" results
| in the obvious question "instead of what?".
|
| OP was suggesting that the SEC ramp up the rate of
| actions, which will need funding (at least, initially). I
| don't see Congress doing that?
| gbear605 wrote:
| The SEC is largely self-funded by fees on banks, no need
| for tax dollars.
| ensignavenger wrote:
| A government mandated fee is an excise tax, they are
| essentially the same thing.
| alistairSH wrote:
| The SEC is largely self-funded via fees charged to
| financial institutions. Funding increased enforcement of
| crypto entities doesn't have to require more tax revenue.
| raccoonDivider wrote:
| Do any of them reach even 1% of Binance's size? If crypto
| stays a bunch of niche projects that only enthusiasts invest
| in, isn't that the SEC's goal accomplished? I can't imagine
| they would care about a coin that doesn't attract either a
| lot of retail customers or big financial institutions.
| injeolmi_love wrote:
| Binance value comes from servicing those niche projects -
| it's an exchange. As long as those niche projects exist,
| new projects will emerge to service demand. What will
| change is design; future exchanges will be less
| regulatable. Already dexes are waiting in the wings; UNI
| has been in a price uptrend due to these decisions.
|
| A smarter strategy would be to do what the US Justice dept
| is doing; co-opt the biggest players, install plants, and
| cut down any upstarts. Government enforced monopolies have
| worked for hundreds of years as an effective way to control
| industries.
| codeflo wrote:
| All of that's assuming that demand will continue. What
| this will do is remove crypto from the mainstream. And
| without paid celebrity endorsements, where will the new
| dumb money inflow come from? And if that dries up, how
| will the mining rigs pay their electricity bills?
| injeolmi_love wrote:
| A lot of people use crypto for utility, which is why it
| doesn't go to zero in bear markets. Not everyone needs or
| wants crypto tokens, but those that do form the base of
| the ecosystem. You can call it dumb money if you want to
| be elitist, but it's the same so called dumb as any
| consumer activity.
| csomar wrote:
| If you start an ICO, you are harmless until you get someone
| to buy into your token. For the SEC, you are harmless until
| you collect "millions" of dollars. Otherwise, you are just
| another one of these small scams that are happening all the
| time regardless of it using crypto or not.
| injeolmi_love wrote:
| Unless they do a complete and total eradication program,
| that will just create a selective environment for tokens
| that are able to avoid SEC fines. What you're saying does
| seem to be the SEC strategy, and it is probably the profit
| maximizing strategy in the short term. It also requires the
| least effort; rule making that allowed for regular fee
| collection instead of sporadic ones might be profitable in
| the long term, but it would be a complex activity the SEC
| might not be capable of.
| eastbound wrote:
| Remains the question: Why was it allowed to even live a little,
| when for the first dimes, it was clear it was a scheme that
| necessitated illegal actions at every step?
| graphe wrote:
| What's illegal step is mining crypto on your gpu?
| matheusmoreira wrote:
| Nothing illegal about proof of work.
| pjc50 wrote:
| No, but there should be a ban on proof of waste.
| matheusmoreira wrote:
| Waste? Better forget about crypto then. Even at its peak
| it didn't even amount to 1% of global energy consumption.
| Maybe you should suggest putting a ban on trading with
| China instead.
| doctor_eval wrote:
| 1% of global energy consumption is outrageous.
| matheusmoreira wrote:
| More like 0.5%. A literal drop of water into the ocean of
| western wastefulness.
|
| My only objection to it is the fact all that energy is
| being poured into obsolete technology like bitcoin. I
| wouldn't even mind if Monero used even more energy. That
| energy is buying us something: a true cryptocurrency.
| Mordisquitos wrote:
| > More like 0.5%. A literal drop of water into the ocean
| of western wastefulness.
|
| If we accept the analogy, 0.5% of the oceans is 5 100 000
| km3, which is quite a bit more than "a literal drop": htt
| ps://www.wolframalpha.com/input?i=0.5%25+of+the+volume+of
| ...
| doctor_eval wrote:
| A tiny fraction of the world's total population use or
| benefit from cryptocurrencies, but it consumes "just"
| 0.5% of world energy consumption.
|
| This is self-evidently insane.
| Qwertious wrote:
| China does useful stuff; their energy consumption is
| going up because they have over a billion people who e.g.
| want AC units in a tropical heatwave. They're building
| literally more renewables than any other country in the
| world and still aren't keeping up with demand. If we
| permanently switched off all those power plants then
| tens/hundreds of millions would die.
|
| In contrast, switching off all crypto farms would be a
| free reduction in emissions, and indirectly _save_ lives.
| Yoric wrote:
| Amen to that.
|
| Of course, just as most of yesterday's crypto experts are
| today's AI experts, the main wastage seems to be moving
| towards LLMs these days.
| mcpackieh wrote:
| Yeah, let's get a ban on video games (waste) and video
| game achievements (proof of waste.)
| eastbound wrote:
| This part takes the least to claim the worst isn't here.
| Akin to saying Al Capone was "just doing dishes" when he
| was arrested, why would you.
|
| There are various illegal parts: Creating a currency for
| example. But even if one can walk around the definition of
| a currency, exchanging it for dollars is most probably
| questionable: You give banknotes to someone in exchange for
| a token which you don't know how it was obtained. In most
| cases, it is facilitating drug exchange and hitmen, so,
| unless one can prove where a Bitcoin comes from, I'm
| surprised it is even legal to exchange it for tender money.
|
| The whole thing should have been sued from the start.
| matheusmoreira wrote:
| > Creating a currency
|
| Shouldn't be illegal.
|
| > exchanging it for dollars
|
| Shouldn't be illegal.
|
| > You give banknotes to someone in exchange for a token
| which you don't know how it was obtained.
|
| It doesn't matter how it was obtained.
|
| > In most cases, it is facilitating drug exchange and
| hitmen
|
| Oh... Just like USD then.
|
| Why don't you go after them for _those_ crimes? Without
| coopting us into your warrantless global surveillance
| network?
|
| > unless one can prove where a Bitcoin comes from
|
| That it is even _possible_ to prove that is actually a
| failure of bitcoin 's design. Thankfully Monero fixed it.
| Money should be _fungible_. There should be no dirty
| /clean bit attached to coins.
| MattPalmer1086 wrote:
| There's a huge difference between physically transporting
| a large amount of cash and disposing of it usefully
| without being detected versus electronically moving it
| around the world and exchanging it for fiat currency
| entirely anonymously.
|
| Here's a clue: one of those is hard to do and massively
| increases your risk of being caught, and the other
| actually enables further criminal activity which would
| not otherwise be easily possible.
|
| So no, not just like USD.
| matheusmoreira wrote:
| And yet every criminal out there seems to be using USD.
| Funny how that works. Maybe we should ban USD too.
| MattPalmer1086 wrote:
| Well, if you want to actually spend your ill gotten
| gains, you pretty much need it in fiat currency. I don't
| see the point you are making.
| matheusmoreira wrote:
| The original purpose of cryptocurrency was to replace
| fiat by getting everyone to use it for their
| transactions. People would be pricing things in bitcoin
| or monero instead of USD.
| MattPalmer1086 wrote:
| Well, yeah, that was the original idea. Didn't work out
| like that though.
| matheusmoreira wrote:
| Yes. That's the point. The fact it didn't work out like
| that, and turned into stonks line go up instead, is the
| tragedy of cryptocurrency.
| mcpackieh wrote:
| > > _Creating a currency_
|
| > _Shouldn 't be illegal._
|
| This is exactly where the bullshit should stop. Creating
| currencies should be the sole privilege of sovereign
| governments.
| fullspectrumdev wrote:
| > In most cases, it is facilitating drug exchange and
| hitmen
|
| Except this isn't even remotely true? Less than 1% or so
| of transactions are even remotely linked to crime?
| jowea wrote:
| Unless you're stealing electricity or computing of course.
| ThePhysicist wrote:
| I think this quote of the prosecutor in Bankman-Frieds' case
| summarizes it well: "The crypto industry might be new, the
| players like Sam Bankman-Fried may be new, but this kind of
| fraud is as old as time and we have no patience for it".
| jgilias wrote:
| Note though that the fraud that the prosecutor addresses here
| doesn't have anything to do with crypto per se. As in, it's
| not about securities laws, or even AML stuff.
|
| The fraud that scam bank man fraud got sentenced for was
| plain old theft. Taking customers assets (mainly crypto
| assets) and using it as his personal piggy bank.
| BobaFloutist wrote:
| That's literally what the prosecutor said.
| kemitchell wrote:
| > Note though that the fraud that the prosecutor addresses
| here doesn't have anything to do with crypto per se. As in,
| it's not about securities laws, or even AML stuff.
|
| That's playing pretty tight with definitions to push
| "crypto" out of the picture.
|
| SEC's press releases was "SEC Charges Samuel Bankman-Fried
| with Defrauding Investors in Crypto Asset Trading Platform
| FTX". https://www.sec.gov/news/press-release/2022-219
|
| The release said "crypto" ten times.
| matheusmoreira wrote:
| Truth be told, the FTX case isn't even a cryptocurrency case.
| The Bankman essentially ran an unregulated bank. People
| deposited money into it and he just took it. He pretty much
| robbed his depositors.
|
| It's ironic. Cryptocurrency was supposed to put an end to
| guys like that by ending the need for banks.
| smodo wrote:
| Well put. Following that line of thought I'd say that by
| now crypto has shown that you can never trust a system, in
| the end you have to trust the people behind it. I find
| people to be more trustworthy when they go to jail if they
| do wrong.
| matheusmoreira wrote:
| Cryptocurrency was meant to reduce the number of people
| you need to trust to an absolute minimum. Ideally, the
| only people you'd have to trust would be world class
| cryptographers.
|
| The whole problem here is people reinvented the entire
| financial system on top of it. Exchanges are really just
| banks in disguise. They do fractional reserve banking,
| they offer cryptocurrency loans, they even have savings
| accounts.
| hanniabu wrote:
| There are permissionless and trustless exchanges like
| uniswap
| matheusmoreira wrote:
| I apologize, in my post I meant to say centralized
| exchanges.
| pjc50 wrote:
| How do I get real money out of uniswap?
|
| Ultimately there has to be an off-ramp, or it's no
| different from an ingame currency.
| matheusmoreira wrote:
| > Ultimately there has to be an off-ramp
|
| Not if people start using the cryptocurrency to actually
| pay for stuff. That's the point of money, after all.
| pavlov wrote:
| It's been 15 years and nobody still uses cryptocurrency
| to pay for stuff. And as you say, that's the point of
| money.
|
| So maybe, just maybe crypto is actually not very good as
| money, which is why people have been increasingly
| desperate to invent new stories to keep someone paying
| real money for crypto (digital gold, NFTs, etc.)
| vidarh wrote:
| I paid for something with crypto just two days ago. I
| don't do _many_ transactions with crypto, because most of
| the time it 's easier to just use my cards, but on
| occasion it's handy.
|
| Frankly, it works well, but it's not user-friendly for
| non-technical users still.
| lazide wrote:
| So basically unless the existing financial system gets
| really broken, it's not worth using?
| vidarh wrote:
| It's been worth using for me when I've used it, just not
| very often.
| simonh wrote:
| I would contend that being friendly for non-technical
| users is a necessary condition to consider it working
| well. It clearly works, nobody is saying it doesn't.
| cherryteastain wrote:
| I'm writing this post over a VPN subscription I bought
| using BTC, paid from my wallet. It was as painless as
| putting in credit card details.
| simonh wrote:
| You are not addressing the point. There's a wold of
| difference between usable for something, and it being a
| good use case. You can go shopping in a monster truck,
| but that doesn't mean it's a good general use case for
| monster trucks in society.
| cherryteastain wrote:
| Why is it a bad use case? It was literally as convenient
| as any credit/debit card transaction.
| matheusmoreira wrote:
| I've gotten paid for services via Monero. It works
| surprisingly well. Just start using it.
| callalex wrote:
| And what did you do with that Monero after you received
| it?
| matheusmoreira wrote:
| Tried to find stuff to buy with it. Didn't find anything,
| sadly. I want people to start using it because then I can
| pay them with crypto too.
| RcouF1uZ4gsC wrote:
| Once you start buying goods and services in the real
| world, then the whole "trustless" part of crypto becomes
| useless.
|
| How is crypto going to ensure the landscaper actually
| cuts my grass. I have to have some measure of trust and
| there has to be infrastructure to resolve disputes and
| try to make people whole. Once you have that, you are in
| many ways back at fiat currency.
| lordfrito wrote:
| Which is why central back digital currencies will be /
| are a thing.
|
| I've also argued that we already have workable digital
| currency for regular consumer transactions. I pay my
| landscaper with Zelle. Who cares that it's denominated in
| dollars? Point is I can already move money practically
| wherever I want with the click of a button. And that
| money is already accepted by everyone I transact with.
|
| Crypto is a solution looking for a problem. And money
| laundering/crime ended up being the problem they ended up
| solving. I'm enjoying watching this space slowly grind
| down / burn to the ground. Good riddance to a level of
| evil where the perps joke about the fact they're making
| money helping criminals "they're here for the crime" etc.
| 18 months is too little time in prison.
| skullone wrote:
| Zelle is among the worst, yuck
| matheusmoreira wrote:
| > How is crypto going to ensure the landscaper actually
| cuts my grass.
|
| Same way cash ensured that. People generally don't pay
| until the service is done.
| demondemidi wrote:
| You can have cryptocurrency or you can have wildly
| manipulated assets in an attempt to become rich at the
| expense of everyone else who didn't get in first. It's a
| stampede toward number two by literally everyone I've
| encounter over the past decade who plays crypto markets.
| injeolmi_love wrote:
| P2P exchanges like Bisq use escrow and verification
| methods with dispute resolution for on/off ramp. There
| are other options as well for secure decentralize
| offramps, but bisq is much larger than any other
| protocol.
| lazide wrote:
| And why can't bisq play games and be bribed to release
| things out of escrow or just steal escrowed funds and
| run?
| NovemberWhiskey wrote:
| You just moved the cheese to the escrow agent.
| DennisP wrote:
| Sure, but that doesn't mean you have to _hold_ your money
| at the off-ramp. Just pass through briefly and you
| minimize your exposure to centralized actors.
| Qwertious wrote:
| >The whole problem here is people reinvented the entire
| financial system on top of it
|
| The whole problem is that some of what they do _adds
| value_ , because it turns out the banking industry as a
| whole has some valuable functions that people need.
| derefr wrote:
| Yeah, but ideally all of those features should be
| "native" features of the cryptosystem, such that they're
| all just as zero-trust as the core stuff the cryptosystem
| does with its gas currency.
|
| The problem is that developers see "this cryptosystem
| supports smart contracts" and interpret it as "this is a
| Turing-machine substrate which I can use to deploy
| effectively centralized / trust-us infrastructure, but
| then turn around and market it as being decentralized and
| zero-trust."
|
| If a cryptosystem supports "smart contracts", ideally
| they should be restricted to _only_ to serve as an
| interface for extending the deployed cryptosystem with
| additional decentralized / zero-trust features. Sadly,
| it's impossible to have a compiler determine whether your
| code is decentralized / zero-trust.
| jowea wrote:
| Well, the financial system exists because it provides
| services that are desired. From what I understand there's
| really no way to offer those same services purely in the
| blockchain, except for some imitations that have their
| own equally big problems.
| treprinum wrote:
| In essence, all a financial system functionally provides
| is a set of buffers/caches so that individual or company
| lives can overcome some bumps quickly at the expense of
| promise to refill the buffer + some extra later.
| NovemberWhiskey wrote:
| Not really. The complexity can't simply be reduced to a
| computer science metaphor.
| tnel77 wrote:
| Other the to exchange fiat for crypto, I'm not quite sure
| why people keep their cryptocurrencies on these
| exchanges. They proven time and time again that they're
| usually a scam.
| moomin wrote:
| I mean, this article suggests that Binance isn't a scam,
| rather it has a perfectly sound business model that is
| illegal and immoral.
| to11mtm wrote:
| Often it's a desire to be able to quickly run a trade or
| arb play.
| WalterSear wrote:
| Because you can't gamble if your money isn't in the
| casino.
| tadfisher wrote:
| Because, as it turns out, using cryptocurrency as
| currency is too expensive. The exchanges let you "trade"
| and then settle themselves in way fewer transactions, so
| you don't have to pay nearly as much in fees.
|
| It's the same reason we keep our money in banks instead
| of everyone owning a Fed terminal and requesting ACH
| pulls.
| roland35 wrote:
| The thing is... I honestly am not smart enough to trust
| the cryptography! I guess at a high level I could make
| some sense of it but there is no way I could fully
| evaluate any crypto as safe or not.
| newyankee wrote:
| Also because some of the code was supposed to be open
| source I guess ? Trust the code ?
| kemitchell wrote:
| People put money into FTX to buy and sell cryptocurrencies.
|
| FTX appropriated assets for a hedge fund that bought and
| sold cryptocurrencies.
|
| Why did they think they could run an exchange without
| complying with the laws for those? It was for
| cryptocurrencies.
|
| There are few if any "crypto cases" in the sense of cases
| about breaking laws specific to cryptocurrencies. There are
| very few of those laws.
|
| There are an awful lot of "crypto cases" in the sense of
| companies focused on cryptocurrencies breaking laws that
| long predate cryptocurrency. That is and should be
| affecting general perception of "cryptocurrency".
| matheusmoreira wrote:
| Crypto _could_ have been special. Sadly it turned into stocks
| instead and people reinvented the entire financial system on
| top of it. I don 't even mind their attempts to regulate this
| stuff anymore. Exchanges are literally banks.
|
| They should stop just short of regulating the underlying
| cryptocurrencies themselves. Just treat these institutions like
| they're banks.
| pjc50 wrote:
| > Crypto could have been special. Sadly it turned into stocks
|
| This is the libertarian version of "true communism has never
| been tried". Of course people wanted to reinvent the
| financial system, it was profitable to do so.
| matheusmoreira wrote:
| Not really. True cryptocurrencies _were_ tried. They even
| work. Monero is the truest cryptocurrency, it 's what
| bitcoin should have been since the beginning _and_ it
| already works.
|
| The tragedy is nobody's actually using it because
| everyone's too busy feeding their money into literal banks
| and speculating with it.
| vasco wrote:
| It's as much of a tragedy that people don't use Monero as
| people who go walking down the street and don't stop to
| look under every rock. They could do it, but not sure the
| point.
| Qwertious wrote:
| >The tragedy is nobody's actually using it because
| everyone's too busy feeding their money into literal
| banks and speculating with it.
|
| To borrow a phrase: Nice idea, wrong species.
| heresie-dabord wrote:
| Once very large financial interests (those capable of
| destabilising international trade, funding transnational
| smuggling operations, or --gulp!-- financing _war_ ) are
| attracted to an opportunity, the game is way beyond the
| scope of inconsequential small-scale adopters. The latter
| will be wistful about their dashed hopes.
|
| The libertarian ideology, like many others, is at best an
| extraordinarily _naive_ interpretation of the individual
| and the world.
| rollcat wrote:
| > They should stop just short of regulating the underlying
| cryptocurrencies themselves.
|
| The problem with not regulating a currency at all, is that it
| implies a permission for someone to print it at will.
| Cryptocurrency is no exception to this scenario; you are
| asked to trust the developers (technocracy) and node
| operators (50%+1 attack and all the usual power dynamics of
| the rich having more say than the majority) to not do it. The
| most important question you must ask yourself is, how long
| will the interests of that elite continue to align with yours
| (if they ever did).
|
| The dream of a decentralized, community-run, grassroots
| infrastructure died sometime around the first GPU PoC -
| Satoshi themselves expressed discontent, saying GPUs would
| trivially out-mine the common man.
|
| Communities can self-regulate because they run on trust; it's
| extremely difficult to build trust in a system designed
| around distrusting every single one of your peers.
| matheusmoreira wrote:
| > The problem with not regulating a currency at all, is
| that it implies a permission for someone to print it at
| will.
|
| Not a problem. This is determined by code in ways everyone
| can see and understand. It's actually better than
| governments printing money whenever they feel like it.
|
| The economic impact of money printing is actually minimal.
| Most inflation is actually generated by fractional reserve
| banking and their loans which is already something
| exchanges do. BTC maxis don't seem to grasp this fact.
|
| > you are asked to trust the developers (technocracy)
|
| You are asked to trust _code_. Either way I 'm actually OK
| with this. I actually trust them a whole lot more than the
| communists in charge of my country's economy right now.
|
| > node operators (50%+1 attack and all the usual power
| dynamics of the rich having more say than the majority)
|
| The only problem with this is it turned out cryptocurrency
| mining is not actually as decentralized as it was supposed
| to be. It should have been one CPU one vote but it turned
| into massive operations involving custom hardware.
|
| New cryptocurrencies need technology to fix that problem.
| Monero uses ASIC resistant proof of work algorithms to
| mitigate it.
|
| > The dream of a decentralized, community-run, grassroots
| infrastructure died sometime around the first GPU PoC -
| Satoshi themselves expressed discontent, saying GPUs would
| trivially out-mine the common man.
|
| Exactly. That's the true tragedy of cryptocurrencies.
| rollcat wrote:
| > This is determined by code in ways everyone can see and
| understand.
|
| That's just a slightly more wordy way of saying
| "technocracy". An overwhelming majority of people in the
| world (including cryptocurrency enthusiasts) are
| incapable of following through a fizzbuzz program, let
| alone an SHA256 implementation, and the hash algorithm is
| barely the tiniest building block.
|
| > Monero uses ASIC resistant proof of work algorithms to
| mitigate it.
|
| Proof of waste stopped being sexy the moment we realized
| the environmental impact, and continuing to defend it on
| any "practical" merits is shortsighted at best.
|
| > Exactly. That's the true tragedy of cryptocurrencies.
|
| With all of your doubling down on technocracy, I find it
| odd that you defend a concept that, by design, began
| falling apart as soon as it started gaining traction. The
| original idea was noble, but it was almost meant to be
| perverted. What we should have done was to get back to
| the drawing board: how can we build
| distributed/decentralized infrastructure that _actually
| helps people_.
| matheusmoreira wrote:
| > An overwhelming majority of people in the world
| (including cryptocurrency enthusiasts) are incapable of
| following through a fizzbuzz program, let alone an SHA256
| implementation, and the hash algorithm is barely the
| tiniest building block.
|
| So? It's still more open than traditional finance. You
| _can_ actually see how it works if you try. Unlike some
| central bank 's political machinations at some abstract
| far away place. We need exactly one guarantee: that
| _nobody_ can change how the system works to benefit
| themselves.
|
| Besides... The overwhelming majority of people do not
| even understand the nature of money itself. They do not
| understand fractional reserve banking. Most people think
| inflation is caused by the government printing money.
| Somehow that's not an argument against having money.
|
| > Proof of waste stopped being sexy the moment we
| realized the environmental impact
|
| Not this nonsense again. Even at the peak of the last
| bullrun, it didn't even amount to 1% of global energy
| consumption.
|
| > The original idea was noble, but it was almost meant to
| be perverted.
|
| I agree it was a noble idea and that it failed. I
| disagree that it was "meant" to be perverted.
|
| > What we should have done was to get back to the drawing
| board: how can we build distributed/decentralized
| infrastructure that actually helps people.
|
| Agree. At this moment in time, I think Monero is closest
| to that ideal. I am not opposed to even better and more
| decentralized technology. Ethereum's zero knowledge
| proofs are very interesting.
| rollcat wrote:
| > [...] it didn't even amount to 1% of global energy
| consumption.
|
| When you put it in these terms, we should also just de-
| regulate fuel, plumbing, and electronics, because the
| combined lead poisoning won't kill as much as 1% of the
| population.
| matheusmoreira wrote:
| No. When I put it in these terms, it means I expect you
| to prioritize far more impactful targets for regulation
| than cryptocurrencies. Trading with China should be
| number one in your list. As should be every other modern
| western comfort and privilege.
|
| To me you all seen plenty happy to buy made in China
| computers to post your environmentalist takes with and it
| makes it really hard to take any of it seriously. Maybe
| after the world is done taking care of the _truly_
| impactful stuff we can revisit this proof of work debate.
| rollcat wrote:
| > As should be every other modern western comfort and
| privilege.
|
| Seems to me like gambling, speculation, and proof of
| waste all perfectly fit the definition of "comfort and
| privilege".
|
| > Maybe after the world is done taking care of the truly
| impactful stuff we can revisit this proof of work debate.
|
| It's crazy how much we can agree on!
|
| The only problem is, PoW is considered harmful even by
| the larger crypto community, to the point where
| alternatives were not only considered, but also
| implemented (e.g. PoS). I'm more than willing to
| reconsider PoW's merits at a later time (as you suggest),
| under the condition that all ongoing PoW schemes are
| paused until we're done dealing with these more important
| things. I think it's a perfectly reasonable compromise.
| FireBeyond wrote:
| Relativity. Trade with China generates a lot of wasteful
| byproducts, at a lot of benefit to society.
|
| Proof of work generates not as much wasteful byproducts,
| but _far more relative to its current utility_. Not its
| potential or idealized utility, but for what it gives
| now.
|
| The cost-benefit on those two examples are at vastly
| different sides of the spectrum.
|
| And your argument that because of that, we can't take
| claims about proof of work seriously doesn't hold muster.
| We can still do things about it. Just like we can still
| do something about the fountains at the Kardashian homes
| just being fresh running water (they were annoyed about
| the cleaning process, so had the bright idea to just
| install a drain and have the fountains be an open tap, so
| one of their homes was using 1/2 million gallons a month
| of water).
|
| Ironically, to you, that's a drop in the ocean and we
| should let them do it because it doesn't move the needle.
| bear141 wrote:
| I am trying to find a source for your claims about the
| fountain but nothing comes up in the first few pages of a
| search. The results that do come up mention their extreme
| overuse of water during the droughts of 2022, but nothing
| as extreme as your anecdote.
| pjc50 wrote:
| > You can actually see how it works if you try. Unlike
| some central bank's political machinations
|
| You can also see how those work, it's just that they're
| boring.
|
| https://www.ecb.europa.eu/press/govcdec/mopo/html/index.e
| n.h...
|
| > They do not understand fractional reserve banking
|
| Entertainingly the crypto people managed to immediately
| re-invent it, in several different forms, because it
| turns out to be inextricable from the concept of credit.
| mlyle wrote:
| > Even at the peak of the last bullrun, it didn't even
| amount to 1% of global energy consumption.
|
| Getting close to 1% of global electricity consumption to
| do a piddling quantity of transactions is a _massive_
| amount of waste. This is, like, 5 orders of magnitude or
| worse less efficient than normal banking networks, or
| about the same usage as all televisions.
| to11mtm wrote:
| TBH Helium was the only crypto I saw and actually
| _started_ trying to get into.[0]
|
| Proof of Coverage was an interesting form of POW, and had
| the advantage of doing something -potentially- useful
| with relatively low power consumption. [1]
|
| [0] - Life things happened alongside delays on getting
| the actual 'miner' so... IDK where it is now. oops.
|
| [1] - The odd question I never quite got far enough in
| the setup to ask myself was whether this was, in and of
| itself, a bizarre side-step around reselling internet
| services.
| mgaunard wrote:
| Most of crypto trading is on centralized exchanges.
|
| What made crypto big was making trading approachable to the
| common man, mostly through sophisticated loan systems.
| everfree wrote:
| It's a classic blockchain fallacy that a 51% attack allows
| you to print the underlying crypto at will.
|
| As for the developers, they could write code to print a
| billion bitcoins if they wanted to, but for it to take
| effect everyone's gotta agree to run it.
| _rm wrote:
| No, it straight up doesn't work as a money, outside of very
| niche use cases like crime and evading the state.
|
| Most people have no use for that, or speculation upon that,
| and just want a money that's simple, easy, fast, and
| reliable.
|
| A decade after bitcoin, no-one but crooks and when-moon
| fanboys use it. Contrast that with AI: the moment it hit the
| retail market every man and his dog is using it for
| everything.
| matheusmoreira wrote:
| > it straight up doesn't work as a money
|
| I've gotten paid for services via Monero.
|
| > money that's simple, easy, fast, and reliable
|
| That was my exact experience with Monero.
|
| Ever tried to set up a Stripe account for GitHub Sponsors?
| I literally had to open a new bank account for that. With
| cryptocurrency, you just generate a private key in your
| wallet app.
|
| > A decade after bitcoin, no-one but crooks and when-moon
| fanboys use it.
|
| Yeah, that's kind of my point. It's tragic. I don't
| understand it.
| _rm wrote:
| You're a techie - everyone else views the complexity and
| unreliability of computers as "computers are a necessary
| evil" rather than "oh this is an interesting challenge!".
|
| To the layman, a single unfamiliar word or concept equals
| "my money will disappear".
| AlchemistCamp wrote:
| Shopify takes payments in USDC (Coinbase's stable coin
| that's pegged to USD). They use Solana Pay to do it, and
| the fees are considerably lower than traditional banking
| alternatives.
|
| https://solanapay.com/
| hanniabu wrote:
| > people reinvented the entire financial system on top of it
|
| That's the goal, to remove intermediaries and trust.
|
| There are permissionless and trustless application, but HN
| likes to use centralized scams like FTX to dunk on crypto and
| feel smug.
|
| It'd be like me pointing to bernie madoff and saying "see, I
| told you all of the stock market was a scam!"
| rovek wrote:
| Nothing soured my (already negative) opinion of Crypto as much
| as regular conversations with a Crypto VC. Every time we spoke
| they were either sceptical or very excited about something
| that, to me, was obviously a trivial example of 1 or more
| classic scams. Whether or not they were excited about it didn't
| seem to track with the scamminess.
| fsloth wrote:
| That's sort of general problem with people regardless of
| industry who've drunk the startup coolaid ... wrong way
| around, let's say. The point of innovation is _not_ to
| reinvent the wheel. Saying you are startuppy does not excuse
| you from actually learning about the field. One could even
| radically propose knowledge of field helps to find
| innovations. What one should avoid is saying 'no' just
| because such a thing does not exist yet. If the thing exists,
| has a name like 'Big Bad Mistake', you should at least
| acknowledge it. (Yeah yeah, rockets were impossible and Musk
| beat them but that happened via _respect_ of existing art and
| extending it, not completely ignoring it).
| vidarh wrote:
| When I did my second startup and first to get proper VC
| funding, we were young and stupid and got talked into
| changing strategy because the VC, while not going for an
| actual scam, was very clearly thinking we could win a game of
| musical chairs that necessarily would end badly - this was a
| the height of the dot-com boom, and they wanted us to chase
| signups over revenue because per-user valuations were way out
| of whack with what there was any reasonable hope of earning
| from users who had signed up for a free service.
|
| Their hope was we could exit before the music stopped (we
| didn't; we survived, barely, thanks to mostly sheer luck of
| having closed our B-round weeks before the bubble burst, and
| managed to pivot and survive with massive cuts). We still
| hoped we could make it profitable without that, but there was
| no way we could generate enough revenue to justify the exit
| we were hoping for, but the proportion of our budget that
| went to marketing certainly made achieving profitability much
| harder.
|
| Which is to say that VC's often chase very high-risk ways of
| getting growth even in cases where they _know_ it 's just a
| question of time before valuations will collapse, because
| most of them are in the business of producing returns, not
| sustainable companies, and many of them are "dumb money".
| It's a tough business. I spend a few years in one, analysing
| the track records of other funds among other things, and I
| saw so much stupidity in that dataset.
| huehehue wrote:
| What soured my opinion was everyone and their dog trying to
| explain to me how they were going to get rich with bitcoin
| and NFTs.
|
| And this was when I was actively employed developing crypto
| finance instruments! Like, I have warned people not to buy
| the thing I have built because they did not understand it.
|
| It is/was a great playground for modeling different
| instruments imo, but people don't want to treat it like the
| back alley casino it is.
| legutierr wrote:
| > The SEC's position is simple: the same rules apply to crypto
| as to other financial products.
|
| If you only reference the SEC's own press releases, you are
| going to miss the nuance here.
|
| The SEC on its own doesn't get to decide when and how existing
| securities law applies to cryptocurrencies. Absent a
| settlement, any action undertaken by the SEC must be decided by
| a federal court.
|
| Importantly, the SEC has been losing in court. For instance,
| the SEC, which had been blocking a spot Bitcoin ETF, was told
| in unequivocal terms by the DC Court of Appeals that its
| reasons for not allowing the ETF to issue were completely
| unsound. More pertinent to the question of enforcement: another
| federal court recently found that exchange-traded Ripple XRP
| tokens are not securities, with the implication that the SEC
| does not have jurisdiction to regulate the trading of Ripple
| XRP tokens on exchanges. If you extrapolate this finding to
| other cryptocurrencies, the SEC cases against Kraken and
| Coinbase are on shaky ground.
|
| The fact that the SEC can list so many victories on its website
| is more a function of how costly it is to fight the SEC in
| court, rather than being a function of whether the SEC is right
| in all of its assertions.
|
| There have been too many cases of fraud in the crypto industry,
| and it's good that the SEC has pursued enforcement against
| them. There are cases, however, where SEC has gone too far, and
| continues to go too far--especially in light of the fact that
| the SEC refuses to set forth clear criteria as to which crypto
| tokens it considers securities, and which crypto tokens it does
| not consider securities.
|
| Now that the SEC is going after larger players, we are starting
| so see more cases actually go to court. If the trend continues,
| one or more of these cases will end up before the Supreme
| Court, and we will find out what the actual law is in the
| United States with regards to which crypto tokens are
| securities and which ones are not, and whether the SEC does in
| fact have any jurisdiction at all over the crypto exchanges.
|
| You should not be surprised if after everything is said and
| done--after we have a Supreme Court opinion--crypto _is_ in
| fact a special case under US securities law, at least with
| regards to some tokens.
|
| You should also not be surprised if some of the cases in the
| list that you reference lose their legal support once the law
| is clarified by the Supreme Court. In hindsight, some of these
| SEC enforcement actions may be seen as unfair and unjust.
| davedx wrote:
| > the SEC refuses to set forth clear criteria as to which
| crypto tokens it considers securities, and which crypto
| tokens it does not consider securities.
|
| Here you go: "A security is a fungible, negotiable financial
| instrument that represents some type of financial value"
|
| It's not the responsible of enforcement agencies to educate
| people as to what crimes are. This is like pleading
| ignorance.
| legutierr wrote:
| > Here you go: "A security is a fungible, negotiable
| financial instrument that represents some type of financial
| value"
|
| Is that your own definition? Luckily, the SEC is
| constrained by laws passed by Congress and by Supreme Court
| precedent--both of which run counter to your definition--
| and doesn't have the same flexibility that ordinary
| citizens do when articulating policy.
| NovemberWhiskey wrote:
| OK:
|
| (1) The term "security" means any note, stock, treasury
| stock, security future, security-based swap, bond,
| debenture, evidence of indebtedness, certificate of
| interest or participation in any profit-sharing
| agreement, collateral-trust certificate, preorganization
| certificate or subscription, transferable share,
| investment contract, voting-trust certificate,
| certificate of deposit for a security, fractional
| undivided interest in oil, gas, or other mineral rights,
| any put, call, straddle, option, or privilege on any
| security, certificate of deposit, or group or index of
| securities (including any interest therein or based on
| the value thereof), or any put, call, straddle, option,
| or privilege entered into on a national securities
| exchange relating to foreign currency, or, in general,
| any interest or instrument commonly known as a
| "security", or any certificate of interest or
| participation in, temporary or interim certificate for,
| receipt for, guarantee of, or warrant or right to
| subscribe to or purchase, any of the foregoing.
| legutierr wrote:
| OK, so how, under this definition, does Ethereum qualify
| as a security? XRP?
| NovemberWhiskey wrote:
| Based on the definition of an investment contract by the
| Howey test in cases of secondary sale?
| legutierr wrote:
| By answering in the form of a question you seem to be
| implying that the answer is obvious.
|
| But the judge in the SEC v. Ripple case found that
| exchange-traded XRP tokens are _not_ securities; even if
| you think she is wrong, the fact that she disagrees with
| the SEC (and with you) is evidence that the answer is in
| fact _not_ obvious.
|
| With regards to whether Ethereum is a security, even the
| SEC is unsure. When asked under oath before Congress, the
| SEC Chair has repeatedly refused to give a direct answer.
| The commission has also avoided naming Ethereum as a
| security in any of its crypto exchange lawsuits, while it
| does name direct Ethereum competitors. If it were
| obviously a security, why would they name other tokens
| but not Ethereum?
|
| And what about Bitcoin? The SEC has said unequivocally
| that it is _not_ a security, but they refuse to say what
| specifically distinguishes Bitcoin from other tokens.
| Bitcoin cannot be one-of-a-kind in this regard--what
| would it take for another token to fall in the same
| category as Bitcoin?
|
| Clearly, some tokens are _not_ securities! If you cannot
| specify clear criteria to distinguish between security
| tokens and non-security tokens, you don 't have a valid
| definition.
| NovemberWhiskey wrote:
| That's actually not exactly what the decision in the
| Ripple case says: it says that certain types of
| transactions are not securities transactions, but some
| are. On the balance, the decision is probably reasonably
| regarded as a loss for the SEC I agree.
|
| The uncertainty about how legislation should be
| interpreted in the case of novel facts is a fundamental
| aspect of the business of law and the courts and is not
| special to cryptocurrency; nor does it indicate special
| victimization of cryptocurrency practitioners.
| legutierr wrote:
| When do facts stop being novel? There are hundreds of
| millions of crypto users worldwide, and more than a
| trillion dollars in value at stake. Cryptocurrencies have
| been around for more than a decade, and only in the past
| few years has the SEC begun to assert broad authority
| across the whole category.
|
| Whether or not the crypto industry is victimized or not
| has nothing to do with my point, which is simply that the
| SEC has avoided clarifying the difference between
| security tokens and non-security tokens, while at the
| same time undertaking aggressive enforcement actions that
| depend entirely on where that line is drawn. I imagine
| that you and I agree on this?
|
| > That's actually not exactly what the decision in the
| Ripple case says: it says that certain types of
| transactions are not securities transactions, but some
| are.
|
| Thank you for pointing that out. I added the qualifier
| _exchange traded_ when referring to XRP in an attempt to
| highlight that distinction, but my terminology was
| imprecise.
|
| As you note, the court identified the _transaction_ as
| the proper level of analysis, and found that whether or
| not participants entered into an investment contract
| depended on the nature of the transaction, not the token.
|
| Implicit in this mode of analysis is that the XRP token
| is _never_ itself a security; rather, securities laws are
| implicated when the XRP token is part of an investment
| contract, where the investment contract is itself a
| security, but the underlying asset is not.
| fallingknife wrote:
| A court has already ruled that XRP does not pass the
| howey test. If it is an investment contract, who are the
| parties to the contract?
| cherryteastain wrote:
| Way, way too broad. Even arcade machine coins or gambling
| chips fall under that definition. Do you expect everyone
| who operates an arcade or casino to seek SEC approval?
| everfree wrote:
| Where did you get that definition? It seems to be trivially
| false because it includes all sorts of classic non-security
| commodity contracts like corn, oil, etc. And stocks are not
| negotiable yet they are securities, so the definition seems
| to fail on that front too.
| carstenhag wrote:
| Imo completely valid for the SEC to file lawsuits for a broad
| spectrum. All of this crypto stuff is a point where both
| "knowns" and "unknowns" regarding law interpretations/rules
| meet.
|
| So essentially them losing sometimes makes it clearer what is
| allowed, whether the SEC is actually responsible or not.
| FireBeyond wrote:
| > the SEC refuses to set forth clear criteria as to which
| crypto tokens it considers securities, and which crypto
| tokens it does not consider securities
|
| This is a PR soundbite. Coinbase has milked this one quite
| extensively. "Woe is us, we're trying to do the right thing
| but the SEC won't tell us what to do!"
|
| It's not actually accurate.
|
| And when the people responsible for writing become Coinbase's
| lawyers, not their marketing team, and the rubber hits the
| road in court, Coinbase says _no such thing_. This is the
| actual crux of their complaint, in their own words:
|
| > for many tokens, registering is not possible due to effort
| involved, or not economically viable.
|
| Coinbase doesn't like the cost of having to register
| securities for the shitcoin du jour - there's no money to be
| made.
|
| But the SEC isn't obligated to make a profitable business
| model for Coinbase.
|
| But it sounds far better to get the crypto club and
| libertarians up in arms about unhelpful government
| organizations.
| everfree wrote:
| Where has the SEC stated whether they consider the second
| largest cryptocurrency, Ethereum, to be a security or not
| (and thus under their jurisdiction or not)?
|
| If "missing criteria" is nothing but a PR soundbite,
| perhaps I missed where the SEC shared that criteria.
| FireBeyond wrote:
| The last I recall is that the SEC considered all crypto
| to be a security. And Coinbase is absolutely aware of it.
| In fact, in the previous sentences to my quote, in their
| court filing, they are aware, but disagree:
|
| > We disagree that the majority of digital assets are
| securities.
|
| And you seem to miss my point.
|
| _Not once_ in Coinbase 's lawsuit did they actually say
| "We'd love to comply, we just don't know how to".
|
| In fact what they _did_ say was that they knew how to
| comply, "but the cost and effort makes it not profitable
| for us".
|
| But because of their PR everyone is latching on to this
| spin of "we'd love to follow regulation, but we don't
| know how and no-one will tell us!"
|
| So why didn't they say that in court?
| everfree wrote:
| > The last I recall is that the SEC considered all crypto
| to be a security.
|
| That's not true. "US regulators including the SEC agree
| that Bitcoin, which is by far the largest digital asset,
| isn't a security."
|
| https://www.washingtonpost.com/business/2023/06/09/why-
| crypt...
|
| The big unanswered question is whether they consider
| Ethereum to be one.
|
| > Not once in Coinbase's lawsuit did they actually say
| "We'd love to comply, we just don't know how to".
|
| They seem to say that pretty explicitly on Page 14 of
| their Wells submission.
|
| https://assets.ctfassets.net/c5bd0wqjc7v0/2pW56ln6rPJ7koL
| Hlu...
|
| > In fact what they did say was that they knew how to
| comply, "but the cost and effort makes it not profitable
| for us".
|
| I don't see anywhere where they said that.
|
| > So why didn't they say that in court?
|
| They did say that in court.
|
| "For years, Coinbase has voluntarily submitted to
| regulation by multiple overlapping regulatory bodies, has
| adhered to the public and limited formal guidance from
| the SEC, senior SEC Staff, and the courts about the
| application of securities law to its industry, and has
| begged the SEC for guidance about how it thinks the
| federal securities laws map onto the digital asset
| industry as the SEC's actions reflected an escalating but
| undisclosed change in its own view of its authority."
|
| https://storage.courtlistener.com/recap/gov.uscourts.nysd
| .59...
| throw3823423 wrote:
| Let's be realistic here: The US supreme court always tells us
| what the law is, every time, regardless of how clear the
| law's writing is, and how the court had rules in the past.
| The same can happen in lower courts, as federal circuits come
| back with head-scratching rulings whenever it suits the
| judge's aesthetic preferences. Judge shopping is quite
| popular in expensive cases for good reasons.
|
| So we shouldn't be surprised when anything changes, ever,
| given how much activism we are seeing in courts today. So the
| question is, how much do the people that actually decide what
| a law means really like cryptocurrencies? I suspect the only
| good chance most of those companies have is rely on the
| court's dislike for government agencies, regardless of what
| laws say. But as far as I am aware, the good friends of the
| court tend to be very involved in old banking, and thus they
| aren't fond of crypto companies either.
|
| So maybe those companies should start lobbying Harlan Crow
| and his circle of friends.
| kemitchell wrote:
| The SEC doesn't set the legal standard for what is or is not
| a security. The courts do, based on the statutes passed by
| Congress.
|
| Here's a guide they published:
| https://www.sec.gov/corpfin/framework-investment-contract-
| an... It summarizes the law.
|
| The SEC obviously will not be publishing a release saying it
| won't enforce the law according to criteria written to suit
| cryptocurrency promoters. Its key public mission is investor
| protection.
| legutierr wrote:
| The SEC's public mission also includes maintaining fair,
| orderly, and efficient markets, and facilitating capital
| formation. Both would be well served by an explanation as
| to how the SEC distinguishes between security tokens and
| non-security tokens.
| kemitchell wrote:
| Did you read the guide I linked to above? From its first
| paragraph:
|
| > In this guidance, we provide a framework for analyzing
| whether a digital asset has the characteristics of one
| particular type of security - an "investment
| contract."[4] Both the Commission and the federal courts
| frequently use the "investment contract" analysis to
| determine whether unique or novel instruments or
| arrangements, such as digital assets, are securities
| subject to the federal securities laws.
| legutierr wrote:
| I am quite aware of what the document says. It's just
| that it hasn't been updated since April 2019, and today
| more clarity is needed.
|
| https://news.ycombinator.com/item?id=38414770
| Animats wrote:
| > another federal court recently found that exchange-traded
| Ripple XRP tokens are not securities
|
| You mean this case?[1]
|
| No, that's not what the court decided. The setup with Ripple
| was that institutional investors bought tokens directly from
| Ripple, and then resold them on an open market. The court
| ruled that resale of the tokens on the open market did not
| violate the Howey test because Ripple was not a party to that
| transaction. But the initial sale to institutional investors
| is still being litigated. Whether the resale by the
| institutional investors is a regulated event hasn't been
| litigated yet.
|
| So this is a token-laundering scheme that may have worked. Or
| not; the remaining parts of the case go to trial on April 23,
| 2024.
|
| [1] https://www.nysd.uscourts.gov/sites/default/files/2023-07
| /SE...
| legutierr wrote:
| Did you read the document you linked to?
|
| "...the Court concludes that Ripple's Programmatic Sales of
| XRP did not constitute the offer and sale of investment
| contracts"
|
| It is not only third party sales that were deemed not to be
| investment contracts--it was all programmatic sales. As I
| said, the federal court found that exchange-traded Ripple
| XRP tokens are not securities.
|
| Also, you should know that the SEC has dropped the
| remaining charges that were to be tried in April. The next
| step in the trial is an appeal of the summary judgement.
| cs702 wrote:
| "Fools, as it has long been said, are indeed separated, soon or
| eventually, from their money. So, alas, are those who,
| responding to a general mood of optimism, are captured by a
| sense of their own financial acumen. Thus it has been for
| centuries; thus in the long future it will also be." - John
| Kenneth Galbraith
|
| Source: https://www.goodreads.com/quotes/10115990-fools-as-it-
| has-lo...
| infogulch wrote:
| As always, new technology is neutral, but the latency between a
| new technology appearing and the attention of the law breeds
| scams that are completely mundane.
| anon_trader wrote:
| While crypto might not be the ideal solution, it's hard to not
| notice that modern AML/KYC banking laws are rapidly degrading
| into complete bullshit, and it is nice to have a workaround.
|
| I've just read an article how Russian emigrants around the world
| (that's up to several million people, more than some European
| countries) are struggling with opening and maintaining bank
| accounts, and have to resort to all kinds of workarounds, crypto
| and Binance included. You might not have any sympathy for them,
| especially in current circumstances, but they did nothing wrong,
| and won't cease to exist just because of your lack of sympathy.
|
| Where I live now, there is a growing number of street currency
| exchange shops which will gladly and openly accept your USDT and
| hand over cash in either local currency or USD $100 bills; no
| documents ever asked, of course. That kind of infrastructure did
| not exist a mere couple years ago.
|
| You might think, why don't just ban it all, but, I'll say it
| again, the problem with this line of thinking is that if you, as
| the government, declare large enough numbers of mostly innocent
| people criminal or "undesirable", they won't magically vanish
| into thin air overnight; to the contrary, you've just made life
| harder for your own law enforcement, as real criminals will now
| have a much larger crowd to blend in.
|
| For many countries where it is difficult to legally buy or
| transfer USD at international market rates (either because of
| sanctions or capital controls), there is a thriving USD/USDT/BTC
| black market, involving, in extreme cases, the majority of
| population; see Argentina or Venezuela for example. Labeling all
| of them as "criminals" achieves you nothing.
| null0pointer wrote:
| This comment was marked [dead] when I read it. I vouched it
| back into visibility. I wish people would respond with a
| comment if they disagree, rather than reporting it.
|
| Meta-comment aside, there's another population segment who
| suffer from overbearing AML/KYC regulations - homeless people.
| Many homeless people do not have any form of ID and hence
| cannot open a bank account. What option do they have? I would
| argue for low value accounts, say <$5000 annual transaction
| volume, AML/KYC enforcement should not be required. $5000 is
| such a small amount in the grand scheme of money laundering
| that the government should really focus on the bigger fish.
| Splitting your laundered money into many bank accounts would,
| or could, fall under existing structuring laws and would be
| easily detectable by any bank.
|
| I haven't even mentioned that in many countries, such as the
| US, you have absolutely no guaranteed right to banking access.
| Your access to banking can be shut off overnight by any one of
| the various middle men involved. Until these things are solved,
| and legal persons can be guaranteed access to banking then
| crypto is necessary.
| ben_w wrote:
| Here's a trilemma:
|
| 1. Everyone should have access to banking, and a $5k
| nominal/year in most of the G7 economies[0] is small enough
| it shouldn't attract attention.
|
| 2. If you don't require proof of ID, you can't stop people
| signing up for as many small accounts as they want to.
|
| 3. Homeless people may not have any formal proof of ID
| (either because it's too expensive, or as a direct
| consequence of why they're homeless in the first place[1]).
|
| You can try to get around #3 with biometrics. But even with
| AI assistance, the goal here is to prove a person isn't
| already on the system -- which is much harder than merely
| showing they're the same person as on the ID card they have
| with them, for reasons which are basically a generalisation
| of the Birthday problem[2].
|
| [0] one of the G7 is the EU, the worst of the EU is Bulgaria
| at EUR12400 GDP (nominal) per capita, Wikipedia reports that
| "More than a fifth of the labour force work for a minimum
| wage of $1.16 per hour.[203]" but that citation (which
| follows) is from 2012 and this is where I stopped going down
| the rabbit hole: https://web.archive.org/web/20121224023912/h
| ttp://epp.eurost...
|
| [1] off the top of my head: because they ran away from home
| as a minor and didn't take sufficient documentation with
| them; or because they had an untreated mental health problem;
| or because they're an unregistered migrant; or because they
| were born in the country but out of the system.
|
| [2] https://en.wikipedia.org/wiki/Birthday_problem
| null0pointer wrote:
| You've struck on an interesting problem in decentralized
| systems, Sybil attacks [0]. How do you prevent someone from
| registering multiple accounts and pretending to be multiple
| people? In Bitcoin, and other cryptos, the problem is
| ignored because it doesn't matter at the address level
| since you have the same amount of bitcoin no matter how
| many addresses it's split between. However, in other
| systems within the crypto-ecosystem it may be desirable to
| establish a 1:1 human:account ratio. This is exactly what
| Sam Altman was/is trying to solve with his WorldCoin thing
| which also uses biometrics (I'd personally not sign up for
| WorldCoin and advise against it for others). Largely it
| remains an unsolved problem AFAIK.
|
| Jumping back to banking the homeless, I mentioned in the
| previous comment that if criminals tried to use these small
| accounts to launder money it should be relatively easily
| detectable by the banks. I would add that I don't think
| it's a problem if a given homeless person opens N of these
| accounts for small values of N since that would still be a
| small total cashflow volume. The main things I'm interested
| in with such a scheme would be allowing homeless people to
| have somewhere to store what little money they have without
| risk of having it robbed from them [1], allowing them to
| have a normal way to get paid from any job they might work,
| and allowing them to purchase things online (perhaps
| delivered to an Amazon locker or other pickup location).
| I'm not saying this idea is perfect, it certainly isn't,
| but my point in the previous comment was that there are
| people who are underserved by the existing banking
| infrastructure.
|
| 0: https://en.wikipedia.org/wiki/Sybil_attack
|
| 1: They could authenticate with an account number or card
| and a PIN at an ATM. Here opening multiple accounts would
| be an advantage for the security conscious because they
| could open a duress account and put a fraction of their
| money in it to withdraw if they were ever forced to by a
| robber.
| zxt_tzx wrote:
| I'm new to HN, could I check how does this report/vouching
| thing work?
|
| If someone is new and their comments get reported (because
| people disagree? or must there be a violation of the site
| guidelines), then the comment would be marked as dead and
| thus hidden?
|
| Who can vouch for these users then? Is there an
| upvote/downvote mechanism too that's not visible to me
| because I'm a new user?
| CrazyStat wrote:
| There's an account setting to show dead comments.
|
| You may also need some minimum amount of karma to vouch,
| not sure.
| CrazyStat wrote:
| > This comment was marked [dead] when I read it. I vouched it
| back into visibility. I wish people would respond with a
| comment if they disagree, rather than reporting it.
|
| Comments from brand new accounts (as in this case) are marked
| dead by default as a spam prevention measure, I believe.
| anon_trader wrote:
| Thank you.
|
| I preferred to register a throwaway for obvious privacy
| reasons, immediately got shadowbanned, and while I refrained
| from posting the actual article link [1] that I mentioned,
| that did not really help.
|
| [1] (Russian) https://vc.ru/relife/928248-50-bankov-kotorye-
| chashche-vsego...
| matheusmoreira wrote:
| > it's hard to not notice that modern AML/KYC banking laws are
| rapidly degrading into complete bullshit
|
| They were always bullshit from day one. AML/KYC is literally
| the financial arm of warrantless global mass surveillance. To
| me it's comical when I see HN defending unlimited strong
| cryptography and yet drawing the line at untraceable financial
| transactions. They are one and the same.
| anon_trader wrote:
| There is a difference between "evil" and "ineffective", and
| while I agree with the more controversial "evil" part, my
| point was to emphasize the "ineffective" part of it.
|
| I won't go into further details even under anonymous account,
| but I have some first-hand experience dealing with compliance
| from various financial institutions, I have a general idea of
| what they ask, what they do NOT ask, and all of this feels
| much like IP address logging or so-called "chain analysis":
| it may work against unprepared people (mostly those who "have
| nothing to hide"), but is almost trivially bypassable by any
| semi-motivated attacker.
|
| Mostly it's because incentives are completely off. These
| people are not the police; their top priority is to cover
| their asses with enough paperwork, not actively engage in yet
| another anti-whatever crusade.
| pjc50 wrote:
| While I'm definitely a "crypto skeptic", I think it's probably
| going to persist in this niche of "US-equivalent hawala banking
| for people who aren't allowed the stability of the US dollar".
|
| People worried about US hyperinflation are nuts. People worried
| about Argentine hyperinflation have a reasonable point.
|
| A big problem with everything is that digital money has no
| scale. It's reasonable to want to stop people transacting
| billions of dollars for Russian weapons and it's not reasonable
| to pursue every last Russian national. But in an electronic
| system "one" and "one billion" fit in the same field.
| miohtama wrote:
| I have a Lithuanian friend (not even Russian, or Russian
| heritage) who has a same name as a sanctioned person in Russia.
| He has never been able to make an international wire transfer.
| Banks bounce his transaction back based on a name check.
| csomar wrote:
| > AML/KYC banking laws are rapidly degrading into complete
| bullshit
|
| It did not. That was their purpose all along but it's nicer to
| say we are implementing AML instead of we are sanctioning these
| guys or we are restricting outflows.
|
| Crypto did not boom because it is mathematically revolutionary
| (it is, but most people don't really understand it). It boomed
| because there is a market for it.
| crotchfire wrote:
| The only reason it got big enough to be boom-eligible was
| that geeks, nerds, and cypherpunks (in particular) understood
| how mathematically revolutionary it was.
| skrebbel wrote:
| I recognize that this is partly taste and some will hate the
| style here, but _wow_ how did patio11 get even better at writing?
| Every sentence is a delight.
| JaDogg wrote:
| We should strive to eliminate finance, not to go back to the past
| when each lord had their own currency. Cryptocurrency is
| hindering human progress.
| matheusmoreira wrote:
| A fully automated post scarcity society would be nice.
| JaDogg wrote:
| Indeed.
| hanniabu wrote:
| You're contradicting your original post by agreeing
| matheusmoreira wrote:
| How so? Economies only exist because of scarcity. A post
| scarcity society would naturally have no need for an
| economy.
| JaDogg wrote:
| How, post scarcity (star-trek like) world does not need
| currency or finance at all.
| miohtama wrote:
| If compared to the national currencies Bitcoin is 16th largest,
| larger than 100+ national currencies
|
| https://coinmarketcap.com/fiat-currencies/
|
| So the development is towards other direction - less currencies
| of lords.
| JaDogg wrote:
| Disagree, I am talking about whole set of cryptocurrencies.
| see here: https://coinmarketcap.com/all/views/all/.
| smallnix wrote:
| > And also Binance gleefully and knowingly banked [...] child
| pornographers. That's not an allegation; that has been confessed
| to.
|
| I would like to learn more about that. Does anyone have a source?
| resolutebat wrote:
| > _More than 1,000 transactions took place involving three
| marketplaces that dealt in child pornography and related
| material, FinCEN said. An administrator of one of those sites,
| Dark Scandals, was indicted in 2020. The site featured violent
| rape videos._
|
| https://news.bloomberglaw.com/crypto/binance-lapses-boosted-...
| olalonde wrote:
| The article's viewpoint relies on accepting AML regulations and
| financial surveillance as beneficial. In my view, CZ is not a
| villain; he ran a popular business without defrauding customers.
| There were no victims. His wrongdoing lies in not taking his
| "police" role seriously enough. As per AML regulations, he had a
| duty to investigate customers and de-platform those that he
| considered criminal, all without due process of course. However,
| he chose not to strictly adhere to this role. Yes he broke laws,
| unethical laws that do more harm than good. I don't know to what
| degree CZ was motivated by personal gain vs principle but I don't
| believe he deserves the "Bond villain" label.
| jgilias wrote:
| I think the "Bond villain" label is more to point towards the
| way of doing the operation. Which is pretty fitting imo, from
| the point of view of being everywhere and nowhere at the same
| time.
| rtpg wrote:
| I think people dismiss how much AML regulations are directly
| linked to preventing crime from being efficient. There's a
| reason that scammers ask for gift cards, and it's not "just"
| because of traceability reasons (mules have always been a
| thing)
|
| Countries have varying levels of fraud and organized scams, and
| I think stuff like AML compliance flows play a bigger part than
| people appreciate
| jgilias wrote:
| Yes, and one could argue that banning end to end encryption
| and doing preventive monitoring of all communications would
| render crime even less efficient.
|
| I think it's just natural that in a democratic society people
| fall on different parts of the spectrum when it comes to
| thinking of what the correct trade-off should be.
|
| Recently Lyn Alden posted how her wire transfer to her family
| in Egypt to cover some mortgage payments got blocked. I mean,
| if a celebrity (in some circles) with known family ties to
| Egypt experiences this, what chances do we mere mortals have?
|
| Making a 10k payment to an African country basically lands
| you in AML red "don't do business with" lists. And sure
| enough, maybe most people doing this are financing
| terrorists, what do I know. But I think there's a meaningful
| debate to be had here.
| Obscurity4340 wrote:
| This argument did it for me.
|
| > banning e2ee would render crime evem less efficient
|
| Yeah, don't care if criminals use something that helps us
| all protect ourselves and reveal or be vulnerable only to
| disclose that which we CHOOSE. Like, the real choose, not
| Apple's "choose" what we want or you can't use everything
| hanniabu wrote:
| Can't have it both ways
| Obscurity4340 wrote:
| So you...agree...right?
| hanniabu wrote:
| No, you can't say you want encryption even if bad guys
| use it but then say crypto is bad because bad guys use it
| Obscurity4340 wrote:
| That is nowhere near what I was saying, I'm saying that
| this is the quote that resonated most with me because it
| tries to take away yet another thing that protects us
| all, not just criminals, businesses, and
| criminal_businesses
| Obscurity4340 wrote:
| In case you're referring to the Apple thing--umm, ya they
| can. They have the NoDataCollected checkmark designation
| in the AppStore's Privacy Nutrition Labels. Anything they
| make is offefed/made 3rd party also and is therefore
| evidence they could have collected no data but
| consciously choose to design things in such a was that
| they are being disingenuous when they say they only
| collect the absolute minimum amount of data required for
| functionality
| matheusmoreira wrote:
| We don't dismiss it. _We know_ it makes life hard for
| criminals. We just don 't care. It's still the financial arm
| of warrantless global surveillance. It's the government
| working around its due process restrictions by getting
| private corporations to do the dirty work. As such, it should
| absolutely be opposed and resisted _on principle_.
|
| The USA was literally founded upon principles like these.
| Look how far from the ideal it's fallen. If you're gonna
| sacrifice freedom for security, might as well go all the way
| and become a fascist state.
| kstenerud wrote:
| I'd call the alternative (unlimited wealth and power for
| the criminal organizations because the government can't
| touch it) a far worse outcome. It's always about moves and
| countermoves.
|
| There's no such thing as the perfect system. So we have to
| settle for something that at least works most of the time.
| matheusmoreira wrote:
| It's a politico-technological arms race. Government makes
| laws, people make technology that gets around the laws.
| With every iteration, they need to increase their tyranny
| to maintain the same amount of control over the people.
| The result is either an uncontrollable population or a
| totalitarian state.
|
| The only question is: how much tyranny are you willing to
| tolerate before the government becomes worse than the
| criminals you want to stop?
| NovemberWhiskey wrote:
| That's not really the case. The government mostly just
| makes one law that says "hey, bank, it's your
| responsibility to know your customer and their source of
| wealth and God forbid you can't when we come asking".
|
| I wonder what proportion of all Americans have actually
| had any kind of material interaction with KYC/AML. My
| guess is it's approximately none of them.
| matheusmoreira wrote:
| > I wonder what proportion of all Americans have actually
| had any kind of material interaction with KYC/AML.
|
| Impossible to know since it's illegal to tell someone
| they're the subject of such extrajudicial investigations.
| Even knowing about the existence of such laws makes them
| assume you're a money launderer because of your
| "technical knowledge".
|
| https://news.ycombinator.com/item?id=38180477
| peyton wrote:
| The alternative is to require a warrant, which has so far
| been a pretty good system.
| miohtama wrote:
| Also AML is very ineffective despite massive surveillance.
| It harms consumers more than terrorists
|
| https://www.tandfonline.com/doi/full/10.1080/25741292.2020.
| 1...
|
| This is because a lot of compliance is not optimised for
| maximum benefit (capture terrorists) but is just a tick
| boxing exercise.
|
| There is also abuse. India is also using AML laws (forced
| by American led FATF) to crack down political opponents and
| human rights activists, as per Amnesty
|
| https://www.amnesty.org/en/latest/news/2023/11/india-stop-
| ab...
| matheusmoreira wrote:
| > There is also abuse. India is also using AML laws
| (forced by American led FATF) to crack down political
| opponents and human rights activists, as per Amnesty
|
| Similar situation here in Brazil. Former president got
| fined, people started donating money to him to nullify
| the fine and government started "auditing" those donors.
| They literally weaponized this AML/KYC bullshit into
| political persecution.
| jgilias wrote:
| Of course. That's an expected outcome if everyone just
| works within the system according to their incentives.
|
| When it comes to the US, the country literally would not
| exist if the British had anything close to the modern
| governments' abilities to control the money flows.
|
| As in, the revolutionary period Patriot movement would've
| just been AML-ed to death.
| olalonde wrote:
| Sure, AML might be beneficial if it had no cost. It does make
| crime slightly more inefficient. However, AML has a massive
| cost. It makes legal transactions inefficient as well.
| Billions of people are unbanked and underbanked, in large
| part thanks to AML. It forces money transmitters to carry out
| what amounts to extrajudicial punishment on people and
| industries deemed "at risk". The estimated global cost of
| compliance amounts to hundreds of billions of dollars
| annually. Imagine if all those wasted resources instead went
| to chasing terrorists & human traffickers for those actual
| crimes.
| miohtama wrote:
| Here is on the cost of AML
|
| https://www.tandfonline.com/doi/full/10.1080/25741292.2020.
| 1...
|
| We could also make traffic accidents go zero by putting a
| police at every crossroads.
| Aerbil313 wrote:
| People are not dumb, at least when it costs this much.
| AML exists for a reason, which I believe is collecting
| intel for three letter agencies to ensure USA's continued
| dominance over the rest of the world.
| pr337h4m wrote:
| The Bank Secrecy Act, under which he was charged, is of
| extremely dubious constitutionality
| (https://www.coincenter.org/broad-ambiguous-or-delegated-
| cons...), and it certainly violates the spirit of the Bill of
| Rights.
| raincole wrote:
| > it certainly violates the spirit of the Bill of Rights.
|
| Sadly the list of acts that violate the spirit of the BIll of
| Rights is really, really long.
| kemitchell wrote:
| More than 200 years of Supreme Court decisions show there's
| no one "the spirit" of the constitution we can consult via
| Ouija Board on Capitol Hill. There are many, and they often
| disagree.
|
| Fortunately, we have institutions where they can duke it
| out. And where we can fight about what the decisions mean.
| miohtama wrote:
| Also Binance and Mr Zhao were not found guilty helping or
| funding terrorists, only breaking anti-money laundering laws.
| Despite years of investigation DoJ did not find definitive
| evidence that Binance would have helped criminals or
| terrorists, only evade sanctions.
|
| In the case of HSBC, when there was more direct evidence of
| serving Mexican drug cartels, no one did jail time
| https://www.democracynow.org/2012/12/13/matt_taibbi_after_la...
| pavlov wrote:
| _> "... a popular business without defrauding customers. There
| were no victims"_
|
| I believe it's been proven that Binance traded against its
| customers and manipulated token prices on its platform. That
| kind of thing is completely forbidden in the world of
| traditional stock exchanges and brokers.
|
| That makes Binance customers victims of their manipulations.
| When Binance made profits from trading on its own platform, it
| came from the pockets of its customers.
|
| Crypto exchanges are less like stock exchanges and more like
| casinos where the house is guaranteed to win in the long run in
| bets made by customers. Maybe that's the deal that Binance's
| happy customers signed up for, but I don't think regular retail
| investors could be expected to understand that's how it works.
| matheusmoreira wrote:
| > I believe it's been proven that Binance traded against its
| customers and manipulated token prices on its platform.
|
| Can you cite this? I'd like to read more about it.
|
| > Crypto exchanges are less like stock exchanges and more
| like casinos where the house is guaranteed to win in the long
| run in bets made by customers.
|
| I agree. Binance skims so much money from every transaction
| it's not even funny. Truth is a company in their position
| doesn't even _need_ to run a dishonest operation in order
| amass vast amounts of money. They just need to let it happen.
|
| > Maybe that's the deal that Binance's happy customers signed
| up for, but I don't think regular retail investors could be
| expected to understand that's how it works.
|
| Well it sure as hell wasn't for lack of warning. I've _told_
| people not to get into the shitcoin casino. To their faces.
| They still got into it. I simply don 't have a lot of
| sympathy for these people when they get liquidated.
| ric2b wrote:
| How are stock exchanges not also guaranteed to win in the
| long run due to the bets of their customers?
|
| That's the entire business of both types of exchanges,
| collect fees on every trade that the users make (besides some
| newer stuff like the robinhood model).
| smrtinsert wrote:
| > His wrongdoing lies in not taking his "police" role seriously
| enough.
|
| I'm absolutely incredulous at this statement.
| davedx wrote:
| > There were no victims.
|
| "Terrorist Financing. Binance failed to report to FinCEN
| transactions associated with terrorist groups including Al
| Qaeda, the Islamic State of Iraq and Syria (ISIS), Hamas' Al-
| Qassam Brigades, and Palestinian Islamic Jihad (PIJ).
|
| Ransomware. Despite being one of the largest receivers of
| ransomware proceeds, and transacting in millions of dollars of
| ransomware proceeds from attacks involving at least 24
| different strains of ransomware, Binance failed to report these
| transactions.
|
| Child Sexual Abuse Materials. Binance never reported
| transactions with websites devoted to selling child sexual
| abuse materials, including Dark Scandals."
| oconnor663 wrote:
| The problem with this line of reasoning by itself, is that it
| justifies some policies we like but also other policies we
| don't like. (For example, almost no one wants background
| checks or KYC laws for buying a computer.) Assuming we're not
| cartoonish totalitarians, we counterbalance the concept of
| indirect victimhood with some other concept of privacy or
| liberty or something. But that's where all the hardest
| questions come up.
| wongarsu wrote:
| Finance is in a somewhat unique place in that we hold them
| responsible for their customers. If a bank doesn't ask any
| questions and as a consequence provides service to known
| terrorists that's against their perceived (and codified)
| obligations. Yet the we allow anyone to ride the subway, to
| get a telephone connection, or to have their home hooked up
| to electricity. If your internet provider terminated your
| contract because you download files from Syria or regularly
| upload large files and trigger their risk analysis that would
| be seen as outrageous. Yet that is exactly what we expect of
| finance companies.
| kemitchell wrote:
| The US government also issues cash.
| paulryanrogers wrote:
| Cash does facilitate crimes. Yet we consider that a cost
| or a bug, one we're willing to accept in exchange for its
| benefits. Cash itself is clearly a neutral tool, yet even
| it is regulated if transactions exceed certain
| thresholds.
| ketzo wrote:
| You say it's a unique place, but here's the thing: it
| actually undergirds _all of those other services_.
|
| Telephones/internet/elecricity are quite hard to regularly
| get without access to the traditional banking system.
| _Possible_ , yes, but very annoying. Which is the point.
|
| Some would argue it is only because of the security of the
| banking system that these other utilities are allowed to be
| """free""".
| kevinmchugh wrote:
| I think if you want to sell chemicals, explosives, or guns,
| you're going to have to keep records on your customers, and
| may have to do some level of vetting before the sale,
| depending on the product and jurisdiction within the US.
| BobaFloutist wrote:
| I'm pretty sure "Bond Villain" is primarily intended as a pun.
| DylanSp wrote:
| > The article's viewpoint relies on accepting AML regulations
| and financial surveillance as beneficial.
|
| You might want to check the last section of the article:
|
| > We are a nation of laws. I'd support reforming some of them;
| a lot of the AML/KYC regulatory apparatus harms individuals who
| have done no wrong. Much is not well-calibrated in terms of
| societal costs versus occasionally facilitating a Bond
| villain's self-immolation.
|
| > However, in the interim, one cannot simply gleefully ignore
| the laws because the opportunity to do so allows you to become
| wealthy beyond the dreams of avarice. [...] I do not know if
| we'll ever have a world with this scale of crypto businesses
| without the crime. The crime was the product.
| ric2b wrote:
| The crime is the product because that's what's left after the
| media makes it sound like everyone using crypto is either an
| idiot or a criminal, so most businesses avoid it because they
| don't want to be labeled as either.
| elwell wrote:
| There's "morally OK", and then there's "love your neighbor". If
| a road is used to traffic an ambulance saving a life and also a
| kidnapper, the hands-off road builder is "morally OK". But, in
| the world we really want to live in, if the road builder has
| some reasonable means to disallow road usage for kidnappers
| (excuse the hypothetical), they, in love of the victim, should.
| jgilias wrote:
| It's interesting how the market's reaction to this was basically
| - nothingburger, tick tock, next block.
| quijoteuniv wrote:
| Difficult to not think about other Tech CEOs when reading this,
| and most very rich people that did not inherit the money to start
| with. If you look IMO they all have in common that they have at
| least once done something morally questionable/ illegal, usually
| at their beginnings. The ability then is that they have manage to
| mantain themselves out of the reprimands, or had made enough
| money that they could buy themselves out of it. Name one and i
| promised i find something.
| HPsquared wrote:
| Doesn't the same apply to everyone though? "Show me the man and
| I'll show you the crime"
|
| https://en.m.wikipedia.org/wiki/Give_me_the_man_and_I_will_g...
| quijoteuniv wrote:
| It does sound pretty totalitarian but i guess there must be a
| difference (at least karmically) between stealing food to
| give to your family and profiting in the millions with
| election manipulation. And anyway what is the point in
| defending billionaire narcissist CEOs?
| bambax wrote:
| This is about crypto and Binance. It's a little too long IMHO --
| the last paragraph says it all, and plainly enough:
|
| > _I do not know if we'll ever have a world with this scale of
| crypto businesses without the crime. The crime was the product.
| An opportunity to transform global financial infrastructure was
| greatly overstated and has not come to pass. I do not expect this
| to change._
| Shatnerz wrote:
| Can any financial system exist without financial crimes? Just
| look at HSBC. Nearly all of Binance's failures also happened at
| HSBC which continues to operate within the law simply by paying
| fines as the cost of business every so often.
| bambax wrote:
| The big difference between crypto and regular finance isn't
| the crimes; it's that finance has other uses than crime, and
| crypto doesn't.
| Shatnerz wrote:
| The transfer of value is pretty nice. International
| transfers via crypto are often cheaper than wire fees.
| Domestic transfers can be faster via cryptocurrency
| depending on where you are at. ACH is painfully slow. SEPA
| is a a bit better. That being said there is a tradeoff. You
| lose clawback mechanisms in favor of independence and
| control.
| htrp wrote:
| The financial sevices industry considers fraud as a feature.
|
| Just in moderation
| pas wrote:
| But the product was gambling and funvestment (buy funky
| pictures, silly named coins/tokens), the crime was doing it
| unregistered. (And it's not like the constant whack-a-mole
| evasion did not cost them anything.)
|
| Right now these serious claims (that the main product was money
| laundering for ISIS et al.) are unsubstantiated.
| nickdothutton wrote:
| Google Riggs Bank and BCCI.
| TacticalCoder wrote:
| > Your users and counterparties understand it to be a lie the
| entire time, of course.
|
| I'm not sure users feel that way. Maybe users just _believe_ they
| live in a free world and do nothing wrong by buying $100 USD of
| Solana or Shiba coins.
|
| The evil, evil, evil person, outside of government's reach, who
| sneakily installed the crypto.com app (oh, the horror!): surely
| he needs to be send to some re-education camp to be taught the
| merits of the state and why we need less options and more state?
|
| > We are a nation of laws. I'd support reforming some of them; a
| lot of the AML/KYC regulatory apparatus harms individuals who
| have done no wrong
|
| Yup. It is _insane_. It is the bane of my existence. I 'm not a
| drug dealer, I'm not selling firearms, I'm not kidnapping kids to
| sell their organs, I'm not funding terrorism. Leave me the FUCK
| alone.
|
| > However, in the interim, one cannot simply gleefully ignore the
| laws because the opportunity to do so allows you to become
| wealthy beyond the dreams of avarice.
|
| But is it unthinkable, for state lovers, to imagine a world where
| people would be free to decide if they buy or not
| cryptocurrencies?
|
| I know it's a very ugly word: freedom. But shouldn't people have
| more of it and not less?
| davedx wrote:
| Freedom isn't the only goal of society. It's in tension with
| other things like security, privacy, and so on.
|
| Libertarians are dumbasses because they wilfully ignore this.
| Andrex wrote:
| Libertarians are just anarchists with extra steps.
| IsaacL wrote:
| I agree with you politically and spiritually.
|
| However, Patrick Mackenzie is a person of the highest calibre
| (see, e.g., this: https://worksinprogress.co/issue/the-story-
| of-vaccinateca/).
|
| There is a need for laws, and there is a need for laws that
| respect freedom. As of 2023, the details of how a freedom-
| respecting social system would work have only been scantily
| developed.
|
| If men like patio11 aren't convinced by the pro-freedom case,
| why would anyone else be?
|
| The libertarian movement has supported many bad actors.
| Cryptography has supported many evil acts. Libertarianism is
| not bad and cryptography is not evil; but no-one serious will
| follow us until we clean up our act.
|
| (It's not enough to say that the current system is bad or
| worse. The current system is terrible. But we should be aiming
| to set things right, not simply tweak things on the margin.)
| pas wrote:
| I don't have problem with KYC/AML, I have problem with the lack
| of consumer protection, with their shitty websites, security
| theater app and processes, their inability to do proper risk
| and compliance checking/monitoring/reporting respectfully.
|
| Strange opaque "post hoc" enforcement (when you are allowed to
| transfer money in, but not out) should be illegal without
| probable cause and "habeas corpus", etc.
| samirillian wrote:
| I almost liked the tone this was written in until I got to
| "totes". It's a fine line between clever and cloying. Depressing
| how much of that article I understood.
| ano-ther wrote:
| I like "slow database enthusiasts".
|
| > We had all the technology required to CC regulators on every
| banking transaction years before slow database enthusiasts
| decided all transactions would eventually be publicly readable
| and persisted forever. We simply chose not to implement it. It
| would have been quite expensive and infringed on the privacy of
| many ordinary people and firms.
| eastern wrote:
| I don't care about Binance or CZ or even crypto but it was
| worthwhile wading through the article just to learn this:
|
| "The U.S.'s point of view on the matter, elucidated at length in
| any indictment for financial crimes, is that if you have ever
| touched an electronic dollar, that dollar passed through New
| York, and therefore you've consented to the jurisdiction of the
| United States. Dollarization is very intentionally wielded like a
| club to accomplish the U.S.'s goals."
| justaj wrote:
| So wait, does this mean that if an exchange is far outside of
| the US jurisdiction, it can be subject to the US laws simply by
| trading in dollars?
|
| How is that even remotely legal?
| wolf550e wrote:
| The US military and the US as a large market you want to
| trade with make it legal.
| appplication wrote:
| Why wouldn't it be? The exclusive purpose of crypto is to
| circumvent existing regulation for financial transfers. The
| US government would obviously not be so rosy about that idea,
| nor would it recognize the "sovereignty" of crypto such that
| its laws would not apply.
| justaj wrote:
| Because I was under the impression that once you buy
| certain currency, you're allowed to do with it whatever you
| want. Certainly if you're outside of the jurisdiction of
| the entity that issues said currency.
| lmz wrote:
| Cash yes (it's just another physical token), but bank
| account / "electronic" dollars are ultimately backed by
| US bank accounts under US jurisdiction.
| eastern wrote:
| It's completely legal under the law called 'might is right'.
|
| Forget about exchanges. If a random business anywhere in the
| world buys a product from a factory in a neighbouring country
| and settles in dollars, this applies.
| csomar wrote:
| You can't have real dollars without a US bank account.
| pas wrote:
| sure you can. if you and your friends start to issue dollar
| IOUs to each other, it's as real as the ones you get from a
| US bank when you get a mortgage.
|
| the problem is you can't access global liquidity pools
| easily with the former. and if you're a B2C company and
| want to sell to US customers, then the US claims
| jurisdiction.
| ric2b wrote:
| Your friends IOU's are just IOU's, the bank's IOU's are
| legal tender.
|
| That's the difference.
| xkcd1963 wrote:
| I think the writer overstates the power of the global finance
| institution, whatever it is. If someone would decide to make all
| banking transactions publicly readable and persistent forever,
| other people would just create an alternative global finance
| institution. There is no omnipotence "allowing" shenanigans to
| happen.
| spacecadet wrote:
| Its very interesting to me that we went from "dont be evil" to
| full on Bond Villain leading every sudo-tech company in 20 years.
|
| I guess the initial lies that pushed the dont be evil line set
| the tone that you say one thing and do another...
| lordfrito wrote:
| It's been heartbreaking to watch this unfold slowly over my
| lifetime.
|
| The techno optimism I had in the 90s has been crushed by
| profound despair for the human species, as I watch the
| salivating sociopaths among us getting accolades as they invent
| brand new ways to use this technology to subjugate the rest of
| us. These are our new role models?
| nerdponx wrote:
| People have always been like this. I don't know why anybody
| believed it would be different this time around.
| spacecadet wrote:
| So true. I didn't- Just felt like pointing out the irony.
| pavlov wrote:
| In just 25 years, we went from the early Internet's
| "information wants to be free" to the crypto mindset of "we
| must insert expensive scarcity into digital realms".
|
| And often it's even the same people. I'm baffled by the Marc
| Andreessens of this world.
| WaitWaitWha wrote:
| I know this will read like I am a luddite, but hear me out.
|
| I would love to consider crypto as a type of medium of exchange.
| Unfortunately, as soon as crypto came out, I saw governments of
| many nations moving into it in some way, shape, or form. They
| gave it two options, either government has full control over time
| or eradication, with a few outliers. The US SEC was vacillating
| on how to deal with crypto for quite some time, and they are not
| alone. Is it property or legal tender, both, or neither? Now they
| have planted their stake.
|
| Cash is a tangible and disconnected way for payment for goods and
| services. Disconnected, as in the government (mostly) does not
| have instantaneous method to cripple the existence of cash. It
| requires significantly more interaction than just disable, for
| our example a government run, centralized crypto exchange (lest
| we forget, however you feel about politics, when governments
| froze or seized banked assets).
|
| 1. fear of the government wiping out all crypto assets in an
| instance because one disagrees with them, or more likely by an
| accident or hackers.
|
| 2. no transactions can be conducted if there is no electricity or
| device to conduct the exchange of crypto. There are many nations
| where power outages are scheduled as a matter of fact, or worse,
| power on times are scheduled. The dependence on a device is a bit
| more acceptable but the cost between a paper clip that holds the
| paper cash versus a cellular phone is still enormous.
| cherryteastain wrote:
| > no transactions can be conducted if there is no electricity
| or device to conduct the exchange of crypto
|
| Same is true for fiat. Vast majority of transaction volume
| happens in computers these days.
| rossdavidh wrote:
| More than once, I have mentioned to someone that the vast
| majority of the $$ they have in the bank, do not actually
| physically exist anywhere, and seen otherwise intelligent
| people look surprised and horrified.
| Sebb767 wrote:
| On the other hand, if that cash suddenly fails to appear,
| your physical dollars most likely won't work anymore,
| either (it might fail to appear _for you_ for various
| reasons, but in that case, whether there was physical
| backing at any point is quite irrelevant).
| Horffupolde wrote:
| 2) you can issue some kind of physical money then periodically
| settle crypto. It's not all or nothing.
| Footnote7341 wrote:
| People should have the human right to use their money anonymously
| in ways that they want, as an abstraction of cash, as an
| abstraction of human value.
| skullone wrote:
| And when crimes totalling hundreds of billions happen, who will
| you call?
| ponector wrote:
| Better call Saul!
| martinky24 wrote:
| This is some delusional, misinformed, crypto bro kool aid type
| propaganda lol
| Footnote7341 wrote:
| Justify to me where my rights should end on the spectrum of
| trading someone a piece of fruit for another piece of fruit,
| or giving him precious metals for it, or giving him fiat, or
| giving him electronic dollars, or giving him monero.
|
| please pick the point on that line where my rights should end
| and I should be submitted to bureaucracy, KYC, etc.
| takinola wrote:
| No one interferes with your ability to exchange money for
| fruit. However, exchanging money for a hitman's services,
| financing terrorists, selling illegal substances, etc are
| very much curtailed and for good reason. Society has
| determined you don't have the right to exchange money for
| those purposes. If you want that right, you have to change
| the society (by ballot or revolution, as may be applicable
| to your situation).
| Footnote7341 wrote:
| You fail to see what the problem is here. The problem is
| freedom eroding banking laws that do peer into my fruit
| transactions. They should be first challenged in the
| courts. Calling for violence isn't legal either, doesn't
| mean we support the state peering into all my emails.
| takinola wrote:
| You have a valid point but when there are conflicting
| interests, regulations are typically designed to act on
| the pivot point where they are likely to be effective,
| have a concentrated set of targets and create minimal
| harm.
|
| In the case of finance, it is easier and more effective
| to delegate the bankers to keep tabs on who is moving
| (large sums of) money around and refuse service to anyone
| that seems suspicious. With regards to email providers,
| no similar nexus exists.
|
| You can best believe that if email providers were
| registered and licensed and the issue of people using
| email to commit crimes were sufficiently pronounced,
| having them scan all emails for suspicious activity would
| be seriously considered (and there would be a good
| argument for it).
| Footnote7341 wrote:
| And I'm not going to support the inevitable law that has
| a LLM scan all of my digital communication either. no
| matter how they wrap it up in a bow of public safety. The
| world is safer every year, yet somehow there's more and
| more scary reasons why the state should have its boot on
| my face.
| ponector wrote:
| You rights should end where you try to not pay taxes of
| your trade.
| shkkmo wrote:
| There are many point where that right ends.
|
| One is when you knowingly become a broker that sits between
| the two parties.
| ketzo wrote:
| Serious question: why?
|
| Why should we have the inalienable right to exchange goods and
| services, no matter what the goods and services are?
|
| Why is that an important tenet of a prosperous and free
| society? It hasn't ever been one, and we've done well so far.
| ric2b wrote:
| Because privacy is important for freedom.
| J_Shelby_J wrote:
| Privacy is different than anonymity.
| njharman wrote:
| Your absolute rights end when they encounter another person.
|
| As society, we've decided peoples individual rights can/should
| be curtailed when they harm others. We will never agree on
| definition of "harm". But, certainly money can be used for
| harm. From I pay someone to kill you, to I donate money to
| group government has labeled "terrorist", to we made profit
| polluting environment, etc.
| Footnote7341 wrote:
| Yes words can be used for harm too, and there's very strict
| rules for how the government can regulate and investigate
| speech. I'm saying the same should be true for money.
| Georgelemental wrote:
| What if the money was stolen? Or obtained in some other illegal
| way?
| akudha wrote:
| The thing that amazes me about these people/companies - why do
| they think they can escape the reach of U.S government? It is the
| most powerful and vicious entity there is, if they want to get
| you, they will. What makes these people think that they are
| smarter or luckier than their fellow law breakers that came
| before them.
|
| Unlike SBF (who seems dumber than a rock), CZ doesn't seem that
| dumb. I don't understand this at all
| rossdavidh wrote:
| There were lots of examples of "better to ask for forgiveness
| as a rich person than permission as a poor person", that they
| saw. Tech companies entered finance, taxi-driving, health-
| advice-dispensing, etc. and didn't fall into line with existing
| laws and regulations for years, until after they got rich.
|
| They were, no question, incorrect, but if you're wanting to
| believe it could work (because you really wanted to get rich),
| you could convince yourself of it.
| bear141 wrote:
| You, like everyone else, have never read about the
| smartest/luckiest criminals in the world because they don't get
| caught.
| akudha wrote:
| Ok, fair enough. But the question still remains - what are
| the odds of not getting caught? Just because a handful of
| people win the lottery every year doesn't mean you and I
| will, correct? In the case of lottery, all I am gonna lose is
| a few dollars that I paid for the ticket, but doing illegal
| activities can cost me my freedom and life.
| jncfhnb wrote:
| And they don't get caught because they don't take too much.
| So less interesting
| takinola wrote:
| Well, it did kinda work. At least for a while. CZ, SBF, etc
| gained fabulous wealth and would have gotten away with if not
| for those darned kids! The reality is lots of people are
| willing to take extreme risk for extreme reward. Sometimes
| those risks involve the potential of serious jail time.
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