[HN Gopher] Debanking (and Debunking?)
___________________________________________________________________
Debanking (and Debunking?)
Author : wmf
Score : 236 points
Date : 2024-12-09 22:56 UTC (1 days ago)
(HTM) web link (www.bitsaboutmoney.com)
(TXT) w3m dump (www.bitsaboutmoney.com)
| rosmax_1337 wrote:
| >This is not the world you live in. [A world where people get
| debanked for political reasons.]
|
| I know quite a few people, and entities affected by it in Europe.
| Some of them even personally, individual accounts, not just their
| companies and organizations. I would elaborate, except I suspect
| that will be counter productive. Please read site guidelines.
| Let's agree to disagree.
|
| The idea that the debanking of individuals on political basis has
| only happened in Canada is wrong. Furthermore, this also only
| happens to, let's say one side of the political dialogue.
| do_not_redeem wrote:
| That blog has a lot of choice quotes along the same lines.
| Another favorite:
|
| https://www.bitsaboutmoney.com/archive/money-laundering-and-...
|
| > This [KYC/AML] will affect the typical user of the financial
| system precisely zero times during their lives.
|
| I've been affected by this nonsense, and so have friends and
| family. Quite inconvenient when you're trying to buy a house
| and trying to keep things moving on time. I may not be
| "typical" but my mother certainly is. I can tell that patio11
| is highly invested in the finance industry, not wanting to burn
| bridges, and I think he is incentivized to try to make people
| believe that KYC is beneficial and highly effective, but it's
| just not the case. It reminds me of the people inside Google
| working on their auto-banning systems who won't admit that it
| doesn't always work perfectly.
| otterley wrote:
| Per the article:
|
| "Debanking will also not infrequently swiftly cascade to
| accounts in the same household, regardless of title (non-
| specialists can round this to "name on the account"; industry
| can't). Banks institutionally consider those accounts in the
| same household to be highly likely to be under common
| control, regardless of what paperwork, account holders, or
| politically influential subcultures believe."
| do_not_redeem wrote:
| My parents live 1000 miles away and we haven't been in the
| same household for 20 years. Either our troubles were
| independent and uncorrelated events, or banks are crawling
| through people's family trees like they're 23andMe. Maybe
| my cousin who I haven't seen since we were kids did
| something shady and tainted our whole family tree in the
| eyes of the banks, who knows anymore.
| JumpCrisscross wrote:
| > _or banks are crawling through people 's family trees_
|
| I work in securities. Our KYC screens aren't as
| sophisticated as the banks'. We absolutely see family
| relations. (They're typically gleaned from public records
| and social media. It's unfortunately not uncommon for
| kids to open accounts in parents' names and vice versa,
| even after a long time.)
| bdangubic wrote:
| this 100%
| aitchnyu wrote:
| Umm, what does social media reveal?
| JumpCrisscross wrote:
| > _what does social media reveal?_
|
| "Family relations."
| watwut wrote:
| Of course they are crawling through people's family
| trees. They have no idea who talks to who, but see formal
| relationships.
| broken-kebab wrote:
| Same here. I think one must be occupying very nice couch in a
| nice house in a 1-tier country to say that AML/KYC doesn't
| affect 'typical' users
| pjc50 wrote:
| If people have actually read the article, they will have
| spotted the bits where patio11 himself has been adversely
| affected by this at least twice!
|
| > I think he is incentivized to try to make people believe
| that KYC is beneficial and highly effective
|
| I don't think the article is arguing that at all. It's
| describing the "system", not endorsing it (and explicitly
| complaining about it in several places).
| graemep wrote:
| If nothing else having to do more paperwork is very common.
|
| British banks tend to not open accounts for people abroad
| because of the cost of KYC, and they even close accounts if
| you move abroad. Difficult if you have assets or a pension in
| the UK but live abroad. As you say, it makes it very hard for
| people who move around.
|
| There are definitely political biases in closing bank
| accounts in the UK, and many cases of accounts being closed
| because banks did not like someone's politics. Not even
| fringe political views, associations with the previous
| government's part has caused problems in some cases, and
| definitely association with smaller but significant parties.
|
| People also avoid taking on jobs that might make them
| "politically exposed persons" because the rules are too
| broad, and that (although it affects only a few people) does
| a great deal of damage because it reduces the number of
| people from outside in organisations, which worsens
| governance and corruption.
| Dracophoenix wrote:
| > If nothing else having to do more paperwork is very
| common. British banks tend to not open accounts for people
| abroad because of the cost of KYC, and they even close
| accounts if you move abroad.
|
| How are their so many non-dom retirees if that's the case?
| They have to have some sort of income.
| jdietrich wrote:
| As patio11 made abundantly clear in his article, banks
| are not homogeneous in their preferred customers, their
| ability to serve specific needs or their tolerance for
| risk. It may well be true that some banks don't like non-
| resident customers, but many banks offer products
| specifically tailored for these customers.
|
| https://www.expat.hsbc.com/international-
| banking/products/ba...
|
| https://www.santanderinternational.co.uk/international/pr
| odu...
| graemep wrote:
| Not any non-resident customers. You need to deposit PS75k
| or more with them or have an income or over PS100k.
|
| i.e. you need to be far better than a British resident
| customer to cover the extra KYC costs (its less automated
| if you are abroad).
|
| People have had accounts closed:
| https://www.telegraph.co.uk/money/banking/barclays-to-
| debank...
| graemep wrote:
| The term "non-dom" usually means foreigners in the UK
| making use of the tax dodge. In that case, British banks
| are happy to open accounts for them, especially as they
| are rich.
|
| Some accounts will be opened for other foreigners in the
| UK - sometimes the "basic" accounts .
|
| Lots of British people who have retired abroad on more
| modest incomes have had their accounts closed:
| https://www.telegraph.co.uk/money/banking/barclays-to-
| debank...
| Dalewyn wrote:
| Also happening in Japan. Quite a number of big-name vendors
| like DMM, DLsite, and others are getting heavy pressure from
| Visa and Mastercard to censor certain merchandise for no
| justifiable reason (as in no legal basis) and in some cases
| have been blacklisted outright.
|
| The Japanese response, and this is _after_ placating the first
| round of censor demands, has been to reverse-blacklist Visa and
| Mastercard because Japan realized that giving an inch only
| means they will then demand a mile, then a league, and so on.
| diptera911 wrote:
| I feel like you are omitting the content that visa and
| mastercard find particularly objectionable that is
| commonplace in japan but not elsewhere.
| xethos wrote:
| This reads like an American, once again, deciding to
| enforce American cultural norms on other nations
|
| I'm not defending or condemning any of the artwork in
| question, just pointing out that American corporations have
| been forcing through their own cultural norms for decades,
| even in countries where that may not always be welcome
|
| In turn, this makes American corporations the arbiters of
| what is de facto legal, despite not being the ones elected
| to write the laws
| Dalewyn wrote:
| Your feelings as a non-Japanese have absolutely no bearing
| on what flies in Japan.
|
| Whether the content concerned is tentacle hentai, or goth
| lolis, or genderbent King Arthur and Leonardo Da Vinci, or
| whatever else, that stuff is legal under Japanese law and
| Visa/MC are violating Japanese rights ordering Japanese
| creators and merchants to censor them. Visa/MC are quite
| literally engaging in foreign interference and subversion
| of democracy and Japan's very culture.
| habinero wrote:
| That's a, uh, rather overheated statement and ironically,
| a very Western point of view. Japan is one of the richest
| nations in the world, they can (and do) run their own
| payments systems.
|
| Also, it's risible to call that stuff Japan's "very
| culture". It's not. Otaku culture is fringe there, too.
| Japan is not anime.
|
| Also, there are plenty of legal things that are (rightly)
| publicly shamed and ostracized.
|
| For example, I don't want white supremacists to go to
| jail for what they say, but I want their lives to be as
| annoying and lonely as possible.
| lmm wrote:
| > For example, I don't want white supremacists to go to
| jail for what they say, but I want their lives to be as
| annoying and lonely as possible.
|
| Do you want e.g. electricity companies to refuse to do
| business with them? Do you think that's a private
| business decision that doesn't need any particular right
| of appeal or evidentiary standard?
|
| (The author deliberately presents the notion that a bank
| account is something different from a utility as though
| this were an objective, immutable fact of nature, rather
| than the product of choices that the financial industry
| makes because it finds it very convenient to think of
| itself that way)
| habinero wrote:
| The idea of making people with 19th century views
| actually live in 19th century conditions _is_ extremely
| amusing. We could try it, sure.
|
| On a more serious note, I don't think it's accurate or
| fair to say it's merely because of industry choices.
|
| The US stretched the idea of the common carrier (ie
| everyone has equal access to send freight on the
| railroads) to things like oil pipelines and
| telecommunications lines. Utilities offer services under
| license from the government and have special rights and
| subsidies.
|
| I don't think a bank account is that similar. It's
| essentially floating you a loan - you can cash a
| fraudulent check and skip out with the money, for
| example, and the bank eats the cost.
| Dalewyn wrote:
| >Japan is one of the richest nations in the world, they
| can (and do) run their own payments systems.
|
| Indeed. JCB and certain western credit cards contracted
| with them for access into Japan (namely AMEX and
| Discover) have no problems (and why should they) with
| what Visa/MC want to censor.
|
| >Also, it's risible to call that stuff Japan's "very
| culture". It's not. Otaku culture is fringe there, too.
| Japan is not anime.
|
| Tentacle hentai goes back at least as far as Katsushika
| Hokusai[1], so you are mistaken. Otaku culture is very
| much a part of Japanese culture and inseparable.
|
| >Also, there are plenty of legal things that are
| (rightly) publicly shamed and ostracized.
|
| When legal tender cannot be used for legal transactions,
| there is a problem.
|
| [1]: https://en.wikipedia.org/wiki/The_Dream_of_the_Fishe
| rman%27s...
| habinero wrote:
| > When legal tender cannot be used for legal
| transactions, there is a problem
|
| Why? Something being legal for you doesn't make it
| compulsory for others. With limited exceptions, nobody is
| required to do business with you.
|
| Also, I must stress again that Japan is a real country
| with real people. It is not anime, and it's even more
| risible to point to famous historical porn and say it's
| analogous to modern porn.
|
| That's like gay slurs are deeply central to American
| culture because the Roman poet Catallus lost his cool
| once at some critics.[0]
|
| [0] https://en.wikipedia.org/wiki/Catullus_16
| Dalewyn wrote:
| >Why? Something being legal for you doesn't make it
| compulsory for others.
|
| Money is legal tender for all debts public and private,
| money has value precisely because everyone can and should
| use and accept it.
|
| If banks or payment processors inhibit or prohibit my
| ability to conduct business by refusing to transact my
| money with no justifiable basis, then that is violating
| my and the other party's rights to free association as
| well as destroying the very essence of money.
|
| If you truly do not see the very serious problem here,
| I'm not sure what it will take to enlighten you.
|
| >Also, I must stress again that Japan is a real country
| with real people.
|
| You are literally talking to a Japanese man, I probably
| know about Japan more intimately than you will ever do.
|
| >It is not anime
|
| Otaku culture is an inseparable part of Japanese culture
| and attacking it like Visa/MC are doing is attacking
| Japanese culture, what part of that do you not
| understand?
|
| >it's even more risible to point to famous historical
| porn and say it's analogous to modern porn.
|
| Kinoe no Komatsu[1] is quite literally a doujinshi-
| equivalent[2] from its time. Classic Japanese eroges are
| sometimes featured[3] as a symbol of Japanese culture of
| its time.
|
| >That's like gay slurs are deeply central to American
| culture because the Roman poet Catallus lost his cool
| once at some critics.
|
| Whitewashing histories and cultures is nothing short of
| reprehensible. Whatever happened to diversity and
| heritage?
|
| [1]: https://en.wikipedia.org/wiki/Kinoe_no_Komatsu
|
| [2]: https://en.wikipedia.org/wiki/Shunga
|
| [3]: https://x.com/Ian_Fisch/status/1820897232746594354 -
| The lower screenshot (it is SFW) is from Words Worth[4].
| The dialogue translates to English like so: _[Astral]:
| Hey Katra... Are you always peeping at Sharon when she 's
| naked?_
|
| [4]: https://en.wikipedia.org/wiki/Words_Worth (Link is
| SFW.)
| numpad0 wrote:
| >> When legal tender cannot be used for legal
| transactions, there is a problem > Why? Something
| being legal for you doesn't make it compulsory for
| others.
|
| Because this undermines soverignity. Nation monopolizes
| violence. There can't be a private police with its own
| laws, that's a mafia. Once an entity has powers
| comparable to that of the nation it resides in, within
| few orders of magnitudes, that power must to be destroyed
| and transferred to the government of the nation.
|
| Credit card brands has it.
| Dracophoenix wrote:
| In this case, the US government, as well as the
| governments of other nations, will tacitly impose its
| monopoly on violence against banks, processors, and
| merchants to ban content it doesn't like. So it was with
| Wikileaks, and so it goes with ero-manga. The only mafia
| are the ones prodding the credit card companies into a
| financial dilemma between legal liability and cutting off
| a market.
| numpad0 wrote:
| VISA isn't doing it in compliance right now. It's doing
| its things using "global standards" as an excuse. That
| behavior is not democratic, and such functions need to be
| regulated out.
|
| I remember seeing people debating who's the kingpin and
| where the orders are coming from, as it'll change which
| of anti-monopoly laws, financial transaction laws,
| trademark laws, outsourcing laws, etc. would apply or has
| to be amended.
|
| Whoever it is, it's kind of obvious that the mafia isn't
| a US or European official government entity or employee.
| Last I've heard, people doing this research-activism seem
| to have largely excluded direct involvement of VISA Inc.
| in US as well as its Singapore subsidiary, and was poking
| around few specific VPs in VJA or something.
| rosmax_1337 wrote:
| What is a white supremacist?
| epolanski wrote:
| That's overblown.
|
| In any case, you can't force a private entity to do
| business with you.
| efitz wrote:
| Sure you can. Power companies etc.
| lmm wrote:
| Omitting that tends to result in more productive
| discussions. Most people are much more principled when
| discussing in the abstract than when it comes to something
| that they have been two minutes' hating for their whole
| lives.
| Shank wrote:
| > I feel like you are omitting the content that visa and
| mastercard find particularly objectionable that is
| commonplace in japan but not elsewhere.
|
| At this point, I would argue that the reasoning isn't even
| cohesive or unified. Some sites lose all processors (e.g.,
| Amex bails too) whereas others lose only Visa and
| MasterCard, and the distinctions aren't made clear to end
| users.
|
| Sure, DMM and DLSite end up offering a large variety of
| pornography, but it's not just that -- Niconico Douga's
| premium subscription service was also blacklisted, despite
| the fact that it's basically just YouTube Premium for
| Japanese livestreamers (i.e., not pornography).
|
| A lot of people argue that the reason is specific genres of
| pornography, but the practical reality is that it can be
| basically any type of content of reason. Stripe considers
| pornography an industry that's too-hot-to-touch, for
| example, despite the fact that some processors _do_ work
| with pornography, and end up charging much higher processor
| fees for the hassle. A lot of user-generated content, which
| is wildly uncontrolled, combined with a relatively high
| risk of refunds, can lead to this type of action without
| necessarily transgressing a general rule like "this
| specific variety of pornography is bad".
| Dalewyn wrote:
| >DMM and DLSite end up offering a large variety of
| pornography
|
| What's really twisted is these same payment processors
| seemingly have no qualms about Steam's large variety of
| pornography[1], some of which are Japanese eroges[2]
| (with _less /no_ censoring![3]) that DMM, et al. are
| demanded to delist.
|
| Banks and payment processors really need to stick to just
| doing their business, which is securely storing money and
| facilitating the transfer of money between two parties
| regarding legal business transactions.
|
| [1]: https://store.steampowered.com/adultonly/ (Warning:
| NSFW!)
|
| [2]: https://store.steampowered.com/app/1073440/__Koikats
| u_Party/ (Warning: NSFW!)
|
| [3]: https://store.steampowered.com/app/955560/Evenicle/
| (Warning: NSFW!)
| numpad0 wrote:
| It's clearly Japanese amateur content publishing economy
| that they are after. They're leaving professional
| comic/porn sections of same websites as-is, while cutting
| off multiple amateur bookstore chains[1] altogether. This
| is not even double standards.
|
| Their intent is undoubtedly to throw wrenches into
| Japanese manga ecosystem that incubate and train authors
| rather effectively through out-of-economy feedback
| mechanisms in social media and self publishing, massively
| supercharged in the past decade through Twitter; it had
| proved immune to foreign replication attempts, financial
| incentives, leverages, even generative AI tools[2]. Those
| tools don't do much, other than raising barrier to entry
| by raising expectations and bolstering Japanese
| dominance.
|
| Some crazy person somewhere must be on a cultural crusade
| trying to "solve" that problem, not understanding that
| trying to deny financial incentives just widens the cost-
| performance gap between Japan and the rest of the West by
| suppressing market valuation of Japanese manga and anime,
| allowing it to be more heavily subsidized by authors'
| dayjobs. _They never made money in manga_. Introducing
| money to disinterested then refusing it achieves nothing.
| Otherwise it makes no sense.
|
| 1: as in small videogame-shop-like franchises that
| specialize in casual self-published books - yes, that's a
| thing in Japan.
|
| 2: AI is completely useless in manga, I mean, there's no
| way copyright flamewar and watermarking movement existed
| if it worked. Pornographic voice drama authors[3] are
| loving it for generating cover arts for free. But even
| they don't look interested in AI content generation, they
| just love free covers.
|
| 3: yes, it's a thing in Japanese language, seem to be
| steadily growing even among English speakers. They're
| picking up Japanese _fast_. The hardest language on
| Earth, not anymore.
| throwaway2037 wrote:
| Classic HN bullshit: > censor certain
| merchandise
|
| Zero evidence provided. Zero examples provided.
| Dalewyn wrote:
| https://x.com/fantia_jp/status/1792811477256343764
|
| The following links are all NSFW because they are from
| Sankaku Complex, you have been warned:
|
| https://news.sankakucomplex.com/2024/11/10/japanese-
| bookstor...
|
| https://news.sankakucomplex.com/2024/08/19/japanese-
| politici...
|
| https://news.sankakucomplex.com/2024/08/03/tora-no-ana-
| alleg...
|
| https://news.sankakucomplex.com/2024/08/11/tora-no-ana-
| cuts-...
|
| https://news.sankakucomplex.com/2024/05/11/japanese-video-
| si...
|
| https://news.sankakucomplex.com/2023/11/14/japanese-
| netizens...
|
| You may now crawl back to your throwaway den from whence
| you came.
| CyberDildonics wrote:
| _You may now crawl back to your throwaway den from whence
| you came._
|
| Their account is actually older than yours.
| Dalewyn wrote:
| Be that as it may, he chose to call himself
| "throwaway<#>" instead of something more distinctive.
| WinstonSmith84 wrote:
| The middle class and below live paycheck to paycheck so that's
| an issue they don't have. I suppose the author refers to this
| (ironically or not)
|
| But debanking happens, or has happened, to _almost_ everybody
| who has some assets and cash, probably from the higher middle
| class until the ~1% .. as for the super wealthy, this class
| enjoys offshore private banking, has assets split into dozens
| of accounts and is mostly unbothered by AML.
| epolanski wrote:
| You need to provide data behind your claim that debanking is
| so widespread as to use the word almost everybody.
|
| Never ever heard any person I know being denied banking
| services, except for some unlucky (were they?) entrepreneur
| with very shady is-he-laundering-money situations.
| throwaway2037 wrote:
| I feel exactly the same. I tire of people on HN talking
| about their accounts being closed but providing 10% of the
| relevant information to their case. I have said it before
| and I will say it again: If your accounts are wrongfully
| closed, immediately: (1) Visit your your bank in protest
| and meet with the branch manager and (2) send physical
| letter of complaint to (a) local branch (b) head office (c)
| national bank regulator and make it clear you have CC'd
| all. I bet 99% of legit cases will be reinstated within 30
| days.
| sroussey wrote:
| Small VCs have this de-banking problem. Their patterns for
| cash and not conducive to want banks want and large banks
| will regularly close them down.
| loeg wrote:
| > debanking happens, or has happened, to _almost_ everybody
| who has some assets and cash
|
| I don't think this is true. I know many people with assets
| and as far as I know, none of them has been debanked. Surely
| I would know someone who has been debanked if almost
| everybody with assets has been.
| astrange wrote:
| > The middle class and below live paycheck to paycheck so
| that's an issue they don't have.
|
| You mean they answer surveys saying they do, according to
| surveys published in press releases from payday lenders.
|
| They also answer surveys from the Fed saying they have median
| $8k in bank accounts and that they can pay 3 months of
| expenses in cash.
|
| These two things are contradictory.
| jvanderbot wrote:
| More likely different people are represented in the surveys
| and general trends are erroneously extrapolated from non-
| representative populations
| santoshalper wrote:
| Much more likely is that self-reporting is notoriously
| unreliable and "paycheck to paycheck" is a state of mind.
| astrange wrote:
| We're better at doing surveys than that.
|
| If you look in the details of the "paycheck to paycheck"
| surveys, people reporting they make 200k+ a year also say
| yes to that, so I think it's just unclear what they think
| it means.
| lancesells wrote:
| > But debanking happens, or has happened, to _almost_
| everybody who has some assets and cash, probably from the
| higher middle class until the ~1%
|
| Can you back up this claim? The wealthier you are the less
| chance you're going to be debanked. Marc Andressen and all
| the crypto bros will never have an issue with debanking.
| Banks are rolling out the red carpet for him and everyone
| else with his net worth.
|
| What they (1%) want is to own the bank and own (and create)
| the currency without ever having to be an actual bank. They
| invest in crypto to make a massive profit, and it's foolish
| to play along with these things as some sort of benefit to
| society. Together these guys could end world hunger and still
| have more money than they would ever need, but no, they've
| decided VBucks are a pressing issue.
| Yeul wrote:
| We live in a society. There were a bunch of pedos in the
| Netherlands who tried to start a political party to change age
| of consent. It did not go well for them.
| elric wrote:
| I too know of such people in Europe. Including people in
| perfectly legal industries, and refugees from war torm
| countries.
|
| Banks are a necessary evil, but evil all the same.
| porridgeraisin wrote:
| Jeez, had the article been any more drawn out we could have
| connected them to a publisher.
| SuperNinKenDo wrote:
| This is a very strange read. My initial feeling was that it was
| an awful lot of verbal gesticulation aimed at simple gaslighting.
| Having read most of it at this point it almost reads like it's
| trying to confirm the hypothesis while saying it's doing the
| opposite. I really dunno what to make of the piece, but it's kind
| of an exhausting read.
| ls612 wrote:
| I think you are exactly right. patio11 both wants to
| communicate a point and also understands that communicating
| certain points can lead to really bad outcomes for you and your
| family. Thus he often writes that way about topics where
| powerful individuals might wish to harm him for his opinions.
| Such is the way the world really works, regardless of whatever
| naive people were taught in school about freedom of expression.
| "If you give me six lines written by the hand of the most
| honest of men, I will find something in them which will hang
| him."
| walterbell wrote:
| We need a good name for this style of writing.
| ls612 wrote:
| samizdat
| walterbell wrote:
| perhaps, _patiotic_ :)
| do_not_redeem wrote:
| Sounds like this:
| https://en.wikipedia.org/wiki/Aesopian_language
| walterbell wrote:
| Indeed. Also linked from that article, https://en.wikiped
| ia.org/wiki/Persecution_and_the_Art_of_Wri...
|
| _> prior to the 19th century, Western scholars commonly
| understood that philosophical writing is not at home in
| any polity, no matter how liberal.. In questioning
| established opinions.. pre-modern philosophers found it
| necessary to convey their messages obliquely. Their "art
| of writing" was the art of esoteric communication. This
| is all the more apparent in medieval times, when
| heterodox political thinkers wrote under the threat of
| the Inquisition or comparably strict tribunals._
| makeitdouble wrote:
| I'm not sure I got the gist of it right, but not willing to go a
| second time.
|
| This was specifically about banks and their regulation, and I
| think it misses the more vague and less accurate sense that
| financial institutions can remove players and customers from the
| market basically at will, which would be the reason given by
| people going to crypto IMHO.
|
| To his point it doesn't fit "debanking", but if tomorrow VISA and
| Mastercard decide your online business is stinky, holding a bank
| account won't help you in any useful way.
|
| That's basically what happened with Porn, where even if you had a
| very tightly managed and stricly lawful business (let's say you
| produce clay stop motion porn movies), you'd still be kicked off
| payment platforms.
|
| Sure there can also be interesting discussions about actual bank
| account closures, but I think it's a lot more of a minority,
| there's better recourses, and most decent countries will be
| willing to guarantee citizens can get some form of banking
| whatever their situation.
| dalemhurley wrote:
| You missed the point, banks have costs, banks are companies,
| banks must be profitable otherwise they collapse, crypto is
| very expensive to bank, banks have difficulty making profits on
| funds sourced from crypto, a responsible business you must
| prioritise (queens English) profitable customers.
| makeitdouble wrote:
| My understanding is that crypto is expensive to banks because
| crypto is expensive to any legal entity in general.
|
| And crypto kings not being able to hold their coins in their
| bank account doesn't sound like "debanking" to me, because it
| never was banked in the first place (some banks sure did
| handle it, but not the ones they're crying about).
|
| I also can't get my bank to hold my beany babies either, and
| nobody calls that being debanked.
| lmz wrote:
| It's not about storing crypto - it's about storing fiat
| currency for crypto companies.
| makeitdouble wrote:
| Thanks, I wasn't getting it and it's a bit clearer.
| sroussey wrote:
| Same problem for marijuana companies.
| wmf wrote:
| The difference is that marijuana is illegal at the
| federal level while crypto is (nominally) legal.
| dalemhurley wrote:
| It is not about legality. It is about the costs exceed
| the ability to make a profit, it all has to do with
| liquidity and capital requirements to mitigate the risks.
| If you want to blame anyone, blame all the scam artists
| and criminals that targeted crypto. The banks cannot
| profitable mitigate the risks. If a bank cannot make
| profits they will collapse.
| dalemhurley wrote:
| Yes it is, crypto is wanting to use banks for the storage
| of funds, but the banks cannot afford the cost of doing
| so, because it costs money to manage the massive risk.
| zajio1am wrote:
| That pretty much depend on country. Here in Europe, it is
| common to pay online by bank transfers, not by payment cards.
| alibarber wrote:
| There's quite a lot of variance across the country of Europe.
|
| Bank transfers are indeed common but implying that payment
| cards are not is a bit of a misnomer - and the (buyer)
| protection offered by the card networks is much higher.
|
| I guess my point is, that even in Europe, accepting only Bank
| transfers is going to limit your client base fairly
| significantly and to a sizeable number of people will be
| considered a signal of how much they can trust the vendor.
| codetrotter wrote:
| Yeah that stuck out for me too. Europe consists of a huge
| number of different countries.
|
| And what the GP was saying is not at all my experience in
| my country, which is also in Europe.
|
| Broad statements about Europe as a whole are often going to
| be very inaccurate for many of the countries in Europe.
| carlosjobim wrote:
| You don't deserve to be down voted for your comment, because
| what you wrote is true. Depending on what kind of product
| you're selling online, you can expect about half of Europeans
| to pay by card and half by bank wire, if given both options.
|
| Removing the ability to pay by card, I'd estimate the
| business would lose a substantial share of clients, maybe in
| the range of 25%.
| KineticLensman wrote:
| > Here in Europe, it is common to pay online by bank
| transfers, not by payment cards.
|
| UK here. I pay my window cleaner and my tree surgeon by a
| bank transfer (from my bank's phone app app). If I buy a
| thing or service online or in a shop I pay using a credit
| card. It's almost unheard for medium to large companies to
| offer their bank details for a transfer.
| tredre3 wrote:
| > Sure there can also be interesting discussions about actual
| bank account closures, but I think it's a lot more of a
| minority, there's better recourses, and most decent countries
| will be willing to guarantee citizens can get some form of
| banking whatever their situation.
|
| I think you're just speaking form your personal point of view
| as an entrepreneur. Losing access to the payment system would
| be the end of your career, yes. But losing the ability to hold
| a basic checking account would be a death sentence for most
| normal citizens, including you.
|
| Think of everything that is primarily paid in checks or bank
| transfers. Think of all your income that you receive primarily
| in checks or bank transfers form.
|
| Now think of using cash for those use cases. You'll quickly
| find that it's untenable and sometimes plain impossible.
| Cashing a personal check your grandma sent you? Forget about
| it. Cashing a pay check? Go to one of those cash-for-check
| places that keep 20% of it!
| pjdesno wrote:
| "death sentence": about 5 million households in the US do not
| have checking accounts. Although it's a great inconvenience,
| and in many cases may be an injustice, it doesn't seem
| incompatible with life.
|
| Note that a "normal" checking account customer poses
| basically zero risk to a bank - money goes in via direct
| deposit, comes out via debit, ACH, and withdrawals, and the
| bank is never left holding the bag.
|
| From the article: Employees of crypto companies are not
| "normal" bank customers. Recent history shows that there is a
| significant risk that they may deposit commingled funds from
| their employer, which (a) puts the bank at risk for huge
| money-laundering fines, and (b) puts it at additional risk (I
| think?) if the crypto company fails.
|
| If you have a credit score of 300 and complain about not
| being able to get a mortgage, I won't have a lot of sympathy.
| If your employment history is spotty and you're not a full-
| time employee, I might have more sympathy but I'll still
| understand why it would be hard to get a loan.
|
| It turns out that if you work for a crypto company, you're a
| bigger risk to the bank than someone with bad credit is to a
| mortgage lender, as the possible losses are far higher than
| the amount of money they'd ever make off of you, and the
| fraction of crypto companies that have gone down that route
| is uncomfortably high. Oh well.
|
| BTW, Walmart charges $4 to cash checks less than $1000, and
| $8 for $1000-$5000. If Grandma's check is $200 or less, it
| will cost $6. Your local post office will sell you a money
| order (up to $1000) for about $3, and you can get prepaid
| credit cards to pay online bills at your local 7-11, again
| for prices in the single digits.
| olalonde wrote:
| I don't think anything was truly debunked here. Debanking is
| indeed a side-effect of AML laws and regulators, but as the
| article highlights, these laws are largely ineffective at
| stopping actual money launderers. Meanwhile, the vast majority of
| debanked customers are innocent. AML laws should be repealed
| entirely. Law enforcement should do their job and investigate
| crimes, rather than outsourcing this responsibility to financial
| institutions and effectively forcing them to be the "judge, jury,
| and executioner."
| nyclounge wrote:
| >Law enforcement should do their job and investigate crimes,
| rather than outsourcing this responsibility to financial
| institutions and effectively forcing them to be the "judge,
| jury, and executioner."
|
| Think there have being big pressure from banks and financial
| institutions to centralize power. AML laws seems just a way for
| the regulators to do it.
| walterbell wrote:
| _> pressure .. to centralize power_
|
| Social law and order rests upon consent of the governed.
|
| Social contracts are abrogated when legal power is hijacked.
|
| Indirection of motive via narrative, math or physics is not
| consent.
| tadfisher wrote:
| Banks and financial institutions see AML as a necessary cost
| center to continue operating as a business. They would gladly
| fire 90% of their compliance department if they didn't have
| to write hourly memos to FinCEN and join conference calls
| with the Fed. Power and money correlate, but money is
| ultimately what does the talking.
| vishnugupta wrote:
| I didn't read the article but I do agree with you completely.
| I've noticed this repeatedly where if I've to move a small sum
| of money in/out of my country I need to fill 20 letters and 50
| if it's a business. But if I have to move say $100MM? Banks
| will roll out a red carpet, no questions asked.
|
| If it's left to the banks they are all too happy to serve
| anyone with money, we have quite a few examples[1] of that.
| Regulators want banks make examples of _anyone_ which banks do
| by harassing small businesses which won 't have monetary impact
| to banks' bottomline. My gut feeling is even regulators don't
| care much, they just want to pretend to the voters that they
| are trying to do something, anything.
|
| [1] https://www.icij.org/investigations/fincen-files/hsbc-
| moved-...
|
| [1]
| https://en.wikipedia.org/wiki/World_Jewish_Congress_lawsuit_...
| JumpCrisscross wrote:
| > _if I have to move say $100MM? Banks will roll out a red
| carpet, no questions asked_
|
| What are you basing this on? Every nine-figure wire I've seen
| issued was _far_ more involved to get authorised than
| anything sub-million. (For obvious fucking reasons.)
| throwaway2037 wrote:
| > I've noticed this repeatedly where if I've to move a small
| sum of money in/out of my country I need to fill 20 letters
| and 50 if it's a business.
|
| More HN bullshit! Please explain the first 10-25 letters,
| then we will judge!
| makeitdouble wrote:
| > these laws are largely ineffective at stopping actual money
| launderers
|
| Money laundering could be the "think about the children"
| relying cry of the financial world. If international entities
| want better control over financial exchanges and a window into
| people's money, playing the money laundering card is a
| guarantee to get it passed without having to justify it that
| much.
|
| The degree to which it has affected regular/everyday banking is
| pretty astounding, and is probably exactly what the regulators
| wanted from the start.
| commandlinefan wrote:
| > Money laundering could be the "think about the children"
|
| My hyper-liberatrianism is showing, but I've always been
| slightly irritated with money "laundering" being a crime in
| the first place. It's pretty far removed from the actual
| harm: money laundering is illegal because drugs are illegal
| and drugs are illegal because when people do drugs they do
| things that actually cause harm (to others and themselves).
| Like... I get the cause-and-effect chain there, but there's
| no evidence that these laws help anyway and they definitely
| hurt.
| egorfine wrote:
| > these laws are largely ineffective at stopping actual money
| launderers
|
| This is a non-goal. Taking it at face value is extremely naive,
| and no one in the fintech world thinks this way.
|
| AML laws exist solely for the purpose of enforcing the American
| grip on the world's politics via financial means.
| throwaway2037 wrote:
| What about Europe/Japan/Australia/NZ? They don't care about
| AML? This is really a stretch.
| egorfine wrote:
| Every financial system in the world that remotely matters
| is a member of FinCEN and adheres to the same rules.
|
| Except the US of course.
| empath75 wrote:
| > these laws are largely ineffective at stopping actual money
| launderers.
|
| Let's think about what the purpose of money laundering laws is.
| Nobody really cares about people concealing the source of their
| income in the general case. There's no purpose for money
| laundering laws just for that purpose alone.
|
| The reason that money laundering laws exist is that one way to
| discover and prosecute crimes that people actually care about
| (human trafficking, drug dealing, various kinds of fraud,
| terrorism) is to "follow the money", and if criminals can
| successfully launder their money, it makes it easier to get
| away with their criminal activity.
|
| The second reason that it exists is that money laundering
| _itself_ is often a much easier crime to prosecute than the
| underlying offense is. What KYC and AML laws do, and are
| extremely successful at is _not_ preventing money laundering.
| That would actually be undesirable for prosecutors! What KYC
| and AML laws do is allow people to money launder while creating
| a wonderful paper trail for prosecutors to follow and build a
| case on when they take an interest in someone from crimes they
| actually do care about. Chances are if you are money
| laundering, you have at some point lied on a banking form,
| which is a prosecutable crime, and a lot easier to prosecute
| than drug dealing and other crimes are, sometimes.
| RetpolineDrama wrote:
| Yep. AML and KYC laws are unconstitutional.
| typeofhuman wrote:
| How do they not mention what happened to Kanye West?
| wmf wrote:
| I assume Kayne found another bank, just like patio11 did after
| he got debanked. Those stories aren't that interesting. The
| juicy cases are when _no_ bank will deal with someone.
| roenxi wrote:
| > ... [debanking] often gets conflated with declining to open an
| account for a person or a business ...
|
| A reasonable perspective. But the obvious follow up is what one
| pithy word should be used to describe this activity? The
| proffered terms (offboarding, derisking) are being suggested by
| the industry with an obvious political motive to minimise the
| significance of what they are doing.
|
| There is an ongoing war against the pornography industry that has
| been waged in part through payment processing. The entire thing
| is an intense mish-mash of poverty, wealth, politics, drama,
| technology and major social forces clashing with each other. It
| isn't appropriate to talk about that sort of action in bland
| terms. There is an attempt being made to sculpt society by
| leveraging the financial system. The implementation details of
| that isn't "offboarding" or "derisking" - it is much more in the
| spirit of a word like "debanking".
|
| I'm with the activists on this one. It makes more sense to
| redefine the word debanking to cover politically motivated (or
| even motivated by business-logic) denial of a bank account. These
| are not bland administrative decisions.
| blindriver wrote:
| Bleah this post was overly wordy by 10X and so meandering it was
| really hard to read. I gave up after 15 mins and realized I was
| only 1/3 of the way through. My suggestion to the author is to
| break this up into smaller essays and be more succinct with less
| meandering.
| declan_roberts wrote:
| What's the point of this windy article? An allusion to "debanking
| people is OK actually!"
|
| Allowing the bank remove your financial lifeline via some opaque
| and kafkaesque process where you have zero recourse is not OK and
| we should not tolerate it.
| wbl wrote:
| There are many banks out there that aggressively complete.
| palmfacehn wrote:
| This is a valid point. Banks should compete for customers by
| providing value. They should also be free to decline
| customers to ensure quality. However, debanking due to
| perceived or real regulatory risk is ultimately a political
| act. The banks may not be exclusively political actors, but
| they are incentivized to act outside of market concerns by
| state pressure.
|
| Similarly, one of the alleged intentions of the
| cryptocurrency movement was to decouple the state from
| monetary control.
| wbl wrote:
| No it isn't political it's a "you guys are expensive and
| flighty and killed two banks that served you" decision. VCs
| pull money out of banks having a hard time while JP Morgan
| put money in.
| stainablesteel wrote:
| there's really only a small number of banks in the US after
| the 2008 crash, they were all consolidated. what used to be
| thousands became like 3
| TeaBrain wrote:
| At the end of 2023, there were still over 4000 commercial
| banks in the US.
|
| https://banks.data.fdic.gov/explore/historical/?displayFiel
| d...
| tadfisher wrote:
| This is specifically a response to Andreessen conflating crypto
| offboarding with "debanking" on Rogan. The goal is to inform
| you about the regulatory and political environment around
| banking and crypto in general, and to warn you to be wary when
| a crypto investor uses terms like "debanking" to rally favor
| for their cause, which is to integrate crypto into the banking
| sector.
| empath75 wrote:
| > An allusion to "debanking people is OK actually!"
|
| Literally the opposite of what he says. He says it happens too
| often to too many people, and that mostly it happens to people
| who are immigrants or don't speak english well or are
| financially illiterate, or just generally people at the
| margins, and not to privileged crypto bros.
| timerol wrote:
| The point is that reality is more complicated than short
| statements (which often embed political assumptions) can
| express, and understanding the reality of the situation is
| useful, especially to people who want to change the system.
| Phil_Latio wrote:
| Another perspective from Europe:
|
| In Germany the political climate is so bad that the domestic
| intelligence publicly confirms on social media that they have
| person so and so on their radar. This had no consequences. Let
| that sink in. In such a climate it's sometimes enough to publicly
| scold a bank on social media to have blogger XY as their customer
| to trigger debanking. In one case, some blogger called a
| politician "fat", which caused the FBI equivalent to request the
| bank account history from the bloggers bank, which ultimately
| caused debanking.
|
| So in Germany it's used more Stasi like, meaning protection of
| the government. They changed the objective so that the scope of
| the domestic intelligence is no longer groups of people who want
| to overthrow the system, but also individuals that "deligitimize
| the government and it's representatives". That is, criticism
| about the Covid measures can put you on the radar of domestic
| intelligence. An independent left wing journalist did a FOIA
| request and found out she's on the radar because of just that.
|
| A perfect climate for debanking measures and some hint on what is
| going on with Germany in case you wonder...
| the_mitsuhiko wrote:
| > which caused the FBI equivalent to request the bank account
| history from the bloggers bank, which ultimately caused
| debanking.
|
| I don't know which person you have in mind but the situation in
| Europe can't be directly compared since you have a right to a
| bank account. You _cannot_ be debanked. You have a right to a
| "base account" (under some conditions).
| Phil_Latio wrote:
| Debanking to me doesn't just mean "no bank account". It
| starts with closing of accounts without being given a reason
| and the constant fear that any new account will be closed as
| well. For businesses this has even bigger implications.
|
| You a right: There is base account meant for refugees,
| homeless people, indebted people... This is nothing more than
| a safety net for when you are at the bottom of society. You
| can't do business with it etc... If someone where to be
| forced to register such an account because all banks closed
| the normal accounts without giving a reason, I'd still
| consider it debanked.
| bcye wrote:
| Why can you not do business with it?
| Phil_Latio wrote:
| Well I guess you can probably use such an account for
| sole proprietorship, meaning doing business in your own
| name with full liability etc...
| csomar wrote:
| I am sorry but the OP is writing a lengthy article to legitimize
| his claim?
|
| Here is the point, as I see it and it is very simple: If having a
| bank account is a requirement to operate legally, a bank can NOT
| refuse any customer unless they have been barred by a court. It
| doesn't matter whether you are selling crypto, weed, porn or
| socks.
|
| This is done in France, and many other countries by the way. The
| bank has an obligation to service, as your life's obligations
| requires such a bank account.
|
| Pat went on a dozens of pages of non-sense to avoid this
| particular point explaining how the banking system work, the bank
| obligations and other crap. It's just a bunch of filler non-sense
| that doesn't address the core point.
| tptacek wrote:
| That doesn't make any sense. As the article points out, it's
| akin to saying that a lender must loan to you unless they've
| been barred by a court. The accounts you are thinking about are
| all, under the hood, lines of credit, even though they don't
| look like that.
| csomar wrote:
| Since the Fed is the provider of the liquidity and also sets
| the rules on what is a collateral and what is not, I say yes,
| the bank must loan you the money as long as you satisfy the
| conditions of the loan.
|
| The bank is roughly a re-seller of the Fed liquidity. They
| shouldn't be an arbiter of who gets to access that liquidity
| but rather an administrative entity that follows the rules.
| tptacek wrote:
| That doesn't make sense. When your business account stiffs
| a bunch of customers who get their ACH transactions
| reversed, and you're insolvent, your bank has to pay off
| those transactions. It can't just go to the Fed and say
| "give me money to cover for this insolvent business".
|
| Your bank is not in fact literally just a front end for the
| Fed.
| alexey-salmin wrote:
| No, it's not akin to that. You can live without loans but you
| can't leave without a debit bank account.
|
| As the parent points out there's indeed such a law in France
| but from personal experience I can tell that it doesn't
| prevent the bank from closing your account without an
| explanation (the explanation I was given off-record was my
| citizenship). The law merely forces the bank to open you an
| account which can later be closed. So definitely the right
| direction but IMO not far enough.
| tptacek wrote:
| A debit bank account _is a line of credit_. It effectively
| is a loan.
| alexey-salmin wrote:
| You're not participating in a good faith discussion. Yes,
| it is technically a line of credit but it's not the
| reason why you're being refused service. Overdraft risks
| for a personal account are small and can easily be
| accounted-for in the service fee or via insurance (which
| is the same in the end).
|
| The reason for account closure is the fear of anti-AML
| laws and sanctions that have nothing to do with loans.
| Banks in fact love offering small loans and it's not
| uncommon to have your account closed while having a pre-
| approved loan at the same time -- these are different
| bank divisions in action.
|
| And in any case, turning personal debit accounts into
| credit accounts is not something that was asked for. I
| lived long enough to have used Visa Electron and Maestro
| cards that made most of overdraft scenarios impossible.
| It was the banking industry decision to get rid of them.
| tptacek wrote:
| The entire article is about why that isn't true in the
| cases he's talking about.
| alexey-salmin wrote:
| What exactly isn't true? That compliance is the reason
| why accounts get closed?
|
| As far as I understood the article this is the main
| reason he gives. Loans or other objective reasons that
| can make the interaction with the client unprofitable are
| only drawn as (bad) analogies and not as the actual
| explanation.
| mikaraento wrote:
| To be charitable, I think tptacek was referring to a
| variant of "accounts aren't closed because of credit
| risk" as not being true. The credit risk talked about in
| the article was ACH reversals with a bankrupt account
| owner falling on the bank, rather than overdrafts.
| the_mitsuhiko wrote:
| > the explanation I was given off-record was my citizenship
|
| That seems fishy and can't be right. The only way this
| would work is if you don't have residence but not because
| you have the wrong citizenship.
| alexey-salmin wrote:
| I have a multi-year titre de sejour, the problem is the
| Russian citizenship. I guess banks don't want to figure
| out who's sanctioned and who's not, refusing service is
| safer.
|
| The first wave of account closures in 2022 was absurdly
| wide and even affected some French citizens. It was a
| scandal that got some coverage in the news [1][2][3]. I
| suspect the filter was the birthplace which is known to
| the bank, even though some media speculated it was about
| names. IMO names would be insane even for a bank, however
| I can imagine a name being one of the inputs for an
| opaque ML risk-scoring model.
|
| French citizens that I know of got their accounts
| reinstantiated, but foreign nationals continue to
| struggle to this day. There's a collective lawsuit going
| on but it will take years to achieve anything withhin the
| french justice system.
|
| [1] https://www.lepoint.fr/societe/comptes-bancaires-
| bloques-en-...
|
| [2] https://www.nouvelobs.com/entreprises/20220726.OBS613
| 66/des-...
|
| [3] https://www.lesechos.fr/finance-marches/banque-
| assurances/en...
| the_mitsuhiko wrote:
| Sounds like a case of being in the right is not enough.
| The law in theory prevents this kind of stuff, but it
| might not have done enough of a job here.
|
| Since my wife is Russian and we have lots of Russian
| friends we're not blind to these checks, but in all cases
| they were resolved by submitting residence documents.
| Success rate was 100%.
|
| Of folks that were not residents however or that did not
| manage to prove their residence, very few got their
| accounts re-instantiated. We also had a case of someone
| who was not able to keep their account until they stopped
| receiving a Russian salary.
| alexey-salmin wrote:
| Out of curiosity, which country are you in?
|
| Based on my network of ex-colleagues who are now
| scattered all across Europe the best banking experience
| for foreigners is in Netherlands and the worst is in
| France, Spain and Poland. Germany is somewhere in the
| middle, for other countries I don't have datapoints.
|
| The best part about Europe is the common market that
| includes online banking. Revolut and Bunq seem to accept
| all legal residents and that's enough for 90% of basic
| services. Life would be much harder without them.
| the_mitsuhiko wrote:
| Austria, but we both made personal and indirect
| experiences through friends all over the place. For
| instance my wife has accounts also in the UK and Estonia
| (guess why) and it was all pretty much the same thing. I
| have no experience in the Netherlands but friends moved
| to Poland and Spain (among other countries) and it all
| was absolutely fine.
|
| The only people that ran into issues had monetary
| transfers in and out of Russia or folks who did not
| manage to actually immigrate properly. With regards to
| monetary transfers in and out of Russia, I even have that
| as an Austrian citizen, that to me is largely an
| unrelated problem to citizenship.
| csomar wrote:
| No citizenship is a major factor. For example, Syrians
| are a very red flag in many countries and many banks
| outright denies them service. If you are from North
| Korea, you'd be delusional to think that you can just
| show up at a "western" bank and walk out with a bank
| card.
| AnAfrican wrote:
| patio11 himself has mentioned in many podcasts that the
| sanctions following the Russian invasion of Ukraine may
| have affected Ukrainian persons or businesses as they
| include territory currently occupied by Russia (perhaps
| more so than Russian persons or businesses themselves).
|
| Many western financial institutions simply won't keep
| track of who holds Nikopol or Enerhodar and will close
| account held by Ukrainian people or business.
|
| (and when you think about the possibility of the account
| holder lying, it gets worse)
| the_mitsuhiko wrote:
| The person I replied to is in the EU where rather strict
| rules exist that prohibit this kind of nonsense.
| AnAfrican wrote:
| The basic account thing ?
|
| Does that apply to US citizens (legally residing in the
| EU) that routinely get denied bank accounts because the
| bank don't want to deal with the IRS ?
|
| May be he probably could bank with LaPoste.
|
| Beyond that, I wonder if you really believe that the EU
| has no Anti-Money Laudering / Counter Finance Terrorism
| laws.
| the_mitsuhiko wrote:
| > Does that apply to US citizens (legally residing in the
| EU) that routinely get denied bank accounts because the
| bank don't want to deal with the IRS ?
|
| Yes, it applies to every legal resident.
|
| > Beyond that, I wonder if you really believe that the EU
| has no Anti-Money Laudering / Counter Finance Terrorism
| laws.
|
| Why should I not believe this? I know it does.
| AnAfrican wrote:
| >Why should I not believe this?
|
| Because you don't believe an EU bank can terminate an
| account because they're worried it may trigger an AML/CTF
| regulation or similar without bothering to really check
| if it does.
|
| *edit : AML/CTF and similar rules have to be exceptions
| to basic banking rights.
| the_mitsuhiko wrote:
| > Because you don't believe an EU bank can terminate an
| account because they're worried it may trigger an AML/CTF
| regulation or similar without bothering to really check
| if it does.
|
| No, I questioned the particular situation given my
| personal experience with the Ukrainian war for account
| holders in Europe, the existing banking regulation around
| the basic account.
| alexey-salmin wrote:
| > May be he probably could bank with LaPoste.
|
| For the record, I have an official denial letter from
| LaPoste. Which, by the way, is very nice on their part:
| many banks refuse to put that in wringing and without a
| letter it's hard to exercise your droit au compte with
| the Bank of France.
| AnAfrican wrote:
| Ouch. If even LaPoste did it...
| aidenn0 wrote:
| Given that about 10% of the US has no debit bank account
| and they aren't dying, that seems like an exaggeration. You
| can walk into a paycheck cashing service and walk out with
| a card that can be used anywhere a credit card is accepted
| without ever opening a bank account. You have to pay to do
| so, which seems rather regressive considering it's mostly
| the less affluent who end up in that situation, but it's
| not life-ending.
| tptacek wrote:
| That previous comment is a "tell me you've never been
| declined for a financial service before without telling
| me" kind of thing; I had to shop for a week to find a
| bank that would give me a checking account.
| alexey-salmin wrote:
| Not sure what you mean, I got declined by a dozen of
| banks. And where I live (France) it's illegal for me to
| receive my salary in cash or to pay rent in cash: both
| are above the limit for cash transactions. Even if I
| personally was open to breaking the law, my employer and
| my landlord obviously aren't.
|
| To compensate for that there's a "right for an account"
| law but it doesn't work that well.
| tptacek wrote:
| This article is about the US banking system, and that's
| where my experience is. Nobody in the US with any
| experience of financial precarity believes a checking
| account is a human right, because checking accounts are
| routinely denied to people without established credit.
| Which makes a kind of sense: they are credit products.
| aidenn0 wrote:
| I think the US/EU distinction is the main disconnect.
| Anyone in the US can take a (paper) paycheck to a cashing
| service and, for about 2% of the value of the check,
| receive the cash for it. They can usually walk into the
| office of their landlord (or property manager) and pay in
| cash.
|
| I sold an RV for nearly $10k and the buyer paid in cash.
|
| Other than my mortgage payment, I have _never_ paid for
| something via a bank transfer. Merchants take credit
| cards and services provided by individuals (e.g. piano
| teacher) take check or cash.
| lmm wrote:
| > The accounts you are thinking about are all, under the
| hood, lines of credit, even though they don't look like that.
|
| You present this statement as though it's an immutable law of
| nature, rather than a design feature of the US banking system
| that allows them to offer an excuse for closing accounts
| that's convenient for those banks. (The fact that someone on
| HN can read about it and feel smart because they think they
| understood the deep reality that lesser people don't get is
| also a convenient design feature).
| tptacek wrote:
| As long as we agree that it's a basic feature of the US
| financial system I don't think there's much for us to argue
| about.
| alexey-salmin wrote:
| I haven't seen any proof that it's a basic feature of
| bank accounts.
|
| Some specific services (checkbooks, embossed and offline-
| chip cards, visa/mc acquiring) can require a credit-
| worthy account, but these services can be denied without
| denying the account itself.
| patio11 wrote:
| Does your envisioned product allow someone to direct
| deposit a paycheck? Then congratulations, it is a credit
| account, because a) we expect to spend paychecks
| including very soon after receiving them but b) payroll
| companies sometimes screw up payroll and can in some
| cases pull the money back.
| alexey-salmin wrote:
| Can you reference a law saying that the bank is obligated
| to force an overdraft on a non-overdraft account when the
| transaction is reversed? This was a screw up by neither
| the bank nor their client, I see all reasons to bounce it
| back and let the wrong party figure it out. Furthermore I
| saw that exact case IRL in another country and the
| payroll company had to settle it with the employee (not
| with the bank) in court.
|
| I understand that US banking can be very different here
| but neither googling nor chatgpt was able to provide any
| specific proofs.
|
| Some people claim online that a bank can never refuse an
| ACH transaction but it's obviously false, they do it
| easily when the account is closed, blocked or overdrawn
| beyond a certain limit.
| tptacek wrote:
| This is in the article.
|
| https://f16c0eccd54007287fb794f9a3d05f2a.cdn.bubble.io/f1
| 698...
| lmm wrote:
| I don't think it's a "basic" feature. I suspect it's one
| of those things that, like the ACH upgrade mentioned in
| the article, would be changed swiftly if the relevant
| parties were sufficiently motivated.
| tptacek wrote:
| I don't agree, but even that statement concedes Patrick's
| point.
| astrange wrote:
| You can't make a bank account where there is no possible
| chance a transaction can be reversed. That's what you're
| asking for.
|
| (Crypto doesn't do this. You can be taken to court and they
| don't care that it's decentralized and immutable and all
| that. That's much of the point of his writing.)
| alexey-salmin wrote:
| If account has insufficient funds to do a reversal the
| bank is not always obliged to step in, only in a few
| specific circumstances. Avoiding such circumstances is
| possible.
| astrange wrote:
| There's an example in the article. If the account is
| owned by a company and it goes bankrupt, the account no
| longer contains money even though your computer says it
| does. So if anyone reverses a deposit quickly enough your
| computer is going to let it through and you're paying for
| it.
| southernplaces7 wrote:
| It makes perfect sense because of the very bloody obvious
| point that your account isn't really a line of credit since
| you gave a full deposit equal to the funds you have
| available. If the bank wants to lend your money around as
| part of its fractional reserve process, that's their
| business, but opening an account with funds you expect to
| have access to at any time is not the same as asking for a
| loan. Please.
| tptacek wrote:
| No, that's not even a little bit how a checking account
| works. Assume nothing moves instantaneously, everything has
| a settlement period, everything is reversible, and, apart
| from the bank's willingness to decline you for an account,
| none of that mechanism is ever exposed to you. You'll be
| much closer to the true nature of the system than your
| belief that, having "fully deposited" money into an
| account, the bank can safely assume it has custody of that
| sum of money.
|
| This is the challenge Patrick is up against with a piece
| like this: most of his readers share the deeply broken
| assumption you've brought to it.
| southernplaces7 wrote:
| It doesn't matter how it works in the background. A
| checking account is marketed as a bank account in which
| your balance matches what you put into it and unlike a
| formal, named loan, it's necessary for many very basic
| transactions of daily living for even ordinary people who
| participate in no business banking. Thus, being frozen
| out by some bullshit regulatory "compliance" nonsense or
| some brainless, fearful risk assessment is at a whole
| different level than it would be if you ere denied a loan
| for similar reasons.
|
| Banks that fear risk so much should organize their
| checking account system better for the full range of
| their customers, but that requires more effort than
| simply unbanking people and then communicating with them
| through grudging hostility about the reasons why as their
| lives take a major hit, and then being defended for this
| conduct by someone who gets mealy mouthed about how
| checking accounts are actually loans, as if they involved
| a major financial favor by the bank to you as a customer.
| tptacek wrote:
| It does matter, because it is in fact how the system
| works, and that system constrains banks. You can be mad
| at the system and prefer a different system; that's fine.
| But once you recognize it as the system we do in fact
| have, you've conceded Patrick's point.
|
| As the article points out, when you scale this problem up
| to business bank accounts, losses from bad credit
| decisions to customers can erase all the gains from the
| entire commercial account line of business at a bank; in
| other words: to factor risk and credit out of business
| bank accounts, you're essentially demanding that banks be
| insolvent.
|
| Checking accounts are credit products.
| metaphor wrote:
| Estimated reading time: 134-170 minutes
|
| Definitely not a casual Monday evening digest.
| upfrog wrote:
| For the benefit of people who come to the comments first: If you
| want a comprehensive debunking or substantiation of the claims
| about crypto debanking, then this is not the place to go.
|
| If you want to read 23,000 words on banking regulation, its uses,
| abuses, the incentives faced by both the banks and their
| watchmen, and an explanation for how we ended up where we are,
| then go ahead and jump into it. Personally, I think the latter is
| far more useful than the former. I enjoyed it, at least.
|
| Bear with me; the free market seems to think that history isn't a
| very useful area of study, and lots of people agree. At least
| some of this probably comes from bad experiences with history
| classes. I like to think of history instruction as having three
| levels. The lowest level - the one you'll hear people complaining
| the most about - is presenting history as a dry series of facts.
| At it's worst, the entire course can be reduced to a hashmap;
| event -> date. Rinse, repeat.
|
| The second layer presents history as a narrative. Most people
| like stories, so this is much more compelling, and makes it a lot
| easier to enjoy history. But the highest level of teaching is
| about systems. It's not enough to colorfully explain that King
| so-and-so was furious at the offense given by King the-other-one.
| You have to try to make students understand the world that these
| two kings existed in; how things as small as calling 9th-century
| European polities "countries" can disastrously mis-callibrate our
| models. Once you understand the system that someone is working
| in, you can hope to understand them, and why they do the things
| they do. Once you have that, you can hope to pass reasonable
| judgement on their actions.
|
| This article is all about systems and tradeoffs. It is aspiring
| to that third level. The title is arguably a little bit
| misleading, but I think it accomplishes it's goal, and
| personally, I feel like I've come away with a reasonable overall
| understanding of his thesis, and I think it matches the title.
| tptacek wrote:
| I think it's one of his better pieces and in some way a
| culmination of a lot of things he's been writing about; I think
| he's counting on people to actually read his previous posts
| about why e.g. business bank accounts are functionally credit
| products, not the financial equivalent of water and electric
| service, and it really helps if you understand some of those
| details.
| influx wrote:
| I was debanked by a California bank for selling holsters, a
| product that is legal nationwide and protected under the
| Constitution. While the bank has the right to choose its business
| relationships, it's concerning to see decisions driven by
| political positions. This sets a troubling precedent for the
| direction we might be heading as a country.
| wbl wrote:
| I'm sure that the Bakersfield regional credit union would have
| a different idea about the bankability.
| stainablesteel wrote:
| it should have been a central point of the election, it's crazy
| that this only came out afterwards. we need a basic right to
| our own banking with due process
| ranger207 wrote:
| I don't feel like the article is particularly in favor of or
| against debanking in general. (I think in fact that his position
| as stated is that debanking in general is bad unless it's against
| people he doesn't like, which is a position held by literally
| everybody.) Rather, it's an examination of why debanking exists
| in general and why "bank everyone you're allowed to" isn't the
| dominant strategy, what factors go into influencing politically-
| driven debanking, and whether or not the current argument made by
| cryptocurrency advocates that "we are being debanked for
| political reasons" is true or not. It concludes that while crypto
| is being debanked (or equivalently but less provocatively, banks
| are declining to create new relations with them), it's primarily
| because crypto has historically been bad for banks. This in turn
| has created a(n arguably political) culture among those who
| decide who shall be banked or debanked to not service their
| industry. In other words, crypto isn't being debanked because
| people morally disagree with them per se, but because crypto is
| simply extremely risky
|
| tl;dr of the tl;dr: the article is primarily about systems around
| debanking and only secondarily about whether or not crypto is
| being debanked (conclusion: it is and it's not necessarily for
| political reasons)
| ranger207 wrote:
| The main problem with the article is that, while patio is a
| very knowledgeable and even insightful writer, he has an
| extremely indirect writing style. It almost feels like a math
| textbook that describes "here's the properties of this
| mathematical construct; you can immediately see it has these
| properties" without explaining the connection to the other
| mathematical constructs that give it these properties. In his
| defense though, his writing is a more gradual progression
| between "here's a thing" and "here's the implications of the
| thing" than a typical math textbook. But he still doesn't
| explicitly point out the connections, which means you have to
| expend a lot of brain power to hold enough things in your head
| at once to make those connections yourself, which is
| exhausting. Part of that is because the connections are social
| connections that are far less clear, defined, and observable
| than typical STEM systems, and he doesn't want to ever tell you
| or imply to you anything incorrect. Contrast this to Matt
| Levine who will gladly tell you how a social system works in a
| step-by-step list, followed by how the example he's about to
| write about completely breaks that system
| __mharrison__ wrote:
| Even his tweets are often indecipherable...
| astrange wrote:
| His tweets are always perfectly understandable if you've
| done the reading.
|
| For some reason many of his stories are long winded ways of
| saying "if you start a business, many of your customers
| will be literally mentally retarded or senile."
|
| He recently did one where he linked an Uber driver asking a
| question on Reddit I thought was totally sensible, and then
| proceeded to write a long extremely polite explanation of
| how they were an abject moron from the underclass for
| having to ask it. I didn't believe him on that one.
|
| (But I can't find it because it was written too indirectly
| so my first 5 tries at search keywords didn't pull it up.)
| robertlagrant wrote:
| > debanking in general is bad unless it's against people he
| doesn't like, which is a position held by literally everybody
|
| I don't hold this position. Should I?
| lmm wrote:
| As always, he moves the cup so flashily for so long that you
| forget that you never saw him put the ball under it in the first
| place. If you take it as read that Binance (the largest threat to
| his business interests) really are evil, then of course
| destroying any bank willing to serve them is perfectly justified.
|
| I also love the impersonal gloss over the actions of all the bank
| employees, as though all the Operation Choke Point crimes were
| carried out by machines directed by the politicians and
| regulators, and not humans making the choice to be Quislings.
| Look at the quote from Zuckerberg where he expresses regret for
| the poor choices he and his company made, and note the
| conspicuous absence of anyone doing the same from the
| banking/finance industry.
|
| Those of us who've been paying attention are not hearing about
| debanking for the first time now, we've been banging this drum
| for years. In a country with the US' asset forfeiture laws,
| denial of banking service is de facto denial of the human right
| to own property. The current situation in the US is shameful, and
| while part of that shame should fall on the politicians and
| regulators, much of it rightly falls on the banks themselves.
| (Nor is it that an alternative is impractical. The UK made it
| legally obligatory for banks to offer "basic bank accounts" to
| everyone in 2016, and the sky has not fallen).
|
| I have no love for the crypto people, but they're fighting for
| the right thing here (whether they're doing so out of good
| motives or bad) and I hope they succeed.
| dalemhurley wrote:
| So you are saying that a private company, i.e. the bank must
| service the crypto industry even though it is going to mean
| they will suffer massive losses in doing so?
|
| See my explanation of why it is an extremely costly venture for
| banks.
| lmm wrote:
| My position is that banks (which are not "private companies"
| as normally understood, but heavily regulated entities whose
| status already involves a complex bundle of special rights
| and special obligations) should be obliged to provide basic
| banking to any legally operating individual or business, just
| as they are already obliged to offer various services that
| they probably would not if they had a free choice.
|
| If they are unable to figure out a way to provide basic
| banking without extending credit in the way patio11 describes
| then this will of course be extremely costly for them, but I
| suspect they would figure out a way to not have to extend
| credit rather quickly (hint: look at what banks in virtually
| any other country do) if they actually tried. If not - i.e.
| if the current price of banking is only sustainable when
| banks are permitted to arbitrarily refuse service - then I
| guess prices will have to rise to something similar to what
| they are in countries where banks already have those kind of
| service obligations. Again, that doesn't sound like such a
| terrible fate.
| SpicyLemonZest wrote:
| I completely agree when it comes to personal accounts, but
| the restrictions required to avoid extending credit make
| such accounts impractical for any realistic business
| purpose. You can't, for example, allow the customer to
| write checks.
| dvdkon wrote:
| I know this debate is about the US banking system, but I
| feel the need to point out that in most of the EU,
| cheques basically aren't used, and business purchases are
| generally made by wire transfers.
|
| Without a chequebook or credit card, you could offer a
| bank account without any risk that the bank would ever
| have to pay out more than its nominal balance. Bank runs
| could still be a problem, but I feel an appropriate
| pricing structure could solve that.
| wmf wrote:
| Wire transfers can be reversed. It's rare, but when it
| rains it pours. Maybe this could be "solved" by holding
| all incoming funds for, say, 60 days but that would be
| extremely hard on most businesses.
| dalemhurley wrote:
| 60 day call accounts are a great solution for managing
| the risk not meeting the desires of the crypto community.
| dalemhurley wrote:
| SVB has entered the chat.
|
| Liquidity in crypto is extremely difficult due to the
| volatility.
| dalemhurley wrote:
| Okay, now I understand, you know very little about banking.
| I started a bank so I will try to help.
|
| Banks are mostly private companies (most are listed on
| stock exchanges) so public companies in that meaning, but
| in most cases they are not government owned. I was meaning
| private in the sense they are not public owned entities by
| the government.
|
| Banks are highly regulated.
|
| Regulations require banks to manage their risks mainly
| liquidity and capital risks plus operational risks.
|
| There is no laws mandating banks must bank everyone and
| every business.
|
| There are laws that mandate banks must not take on
| excessive risks.
|
| Banking is a principle based regulation. This means the
| governments set laws based on guidelines of how banks meet
| the obligations.
|
| Banks are managing their customers constantly and any
| customer that represents unmanageable risks mainly
| liquidity they must remove them from their balance sheets.
|
| It is the crypto industry fault that they refuse to take
| the actions and accountability to work with the banks.
|
| This doesn't only happen in crypto.
|
| Crypto is highly volatile and liquidity is unmanageable for
| banks. When I spoke to the regulators, we were told we had
| to hold 100% liquidity for deposits intended for crypto.
| There is zero ability to recover the losses of the
| liquidity obligations.
|
| Like all businesses, banks have the right to refuse to
| service customers they don't want to serve because the
| costs exceed the income.
|
| On the flip side the crypto industry is refusing to accept
| the additional costs and refusing to derisk their
| platforms.
| fabian2k wrote:
| Not familiar with the UK version, but these kinds of
| regulations usually apply to personal bank accounts and do
| not require extending any credit. So you'd only get a basic
| bank account that cannot be overdrawn, nothing more.
| throw_a_grenade wrote:
| Not familiar with UK either, but in PL, you're mostly
| right, with the addition that you can also use this account
| for simple business, aka "one person company" for which you
| don't need to have a separate account.
| zajio1am wrote:
| The cost is here due to AML regulation. If government wants
| to outsource its duties (crime intercepting) to banks, then
| perhaps it should be government to pay for it (in the similar
| manner it pays telecoms for wiretapping).
| dalemhurley wrote:
| I fully agree that the cost of the AML/CTF should be on the
| government.
|
| However a bank still needs to work out if they will risk
| accept customers.
|
| For example my CRO presented to me the cost of enhanced due
| diligence for Delaware companies. It was cost prohibitive
| so I argued that we should not bank customers who are too
| complex for the next 12 months.
| k__ wrote:
| Like everything related to politics it's about plausible
| deniability.
|
| The founding fathers sold their ideas as freedom from the
| tyranny of the crown. While this was true, they probably didn't
| care as much for the freedom of the average Joe, but their own
| freedom and that of their rich friends. They just needed the
| freedom of the average Joe to get the masses on board without
| blatantly lying about their actual goals.
|
| The rich people of crypto see themselves similarly, selling
| their ideas as freedom from the tyranny of traditional finance;
| and they have a point: There are millions of average people out
| there who suffer by the hand of financial institutions.
| However, the goal of the crypto "elite" is mainly the freedom
| of their own and their rich friends, they just need the freedom
| of the average Joe to get the masses on board.
|
| Now, the only thing left to argue is if the rich people from
| back in the days had a better case against the crown as the
| rich people from today have against traditional finance.
| Ylpertnodi wrote:
| >denial of banking service is de facto denial of the human
| right to own property.
|
| Is property ownership a 'human right', or a 'human privilege'
| (nod to George Carlin)?
| lmm wrote:
| It's literally in the UN declaration, and widely accepted as
| a basic right. If some philosopher thinks there is some sense
| in which it isn't a right, so much the worse for their
| philosophy.
| barry-cotter wrote:
| The UN is not a moral authority and utterances endorsed by
| it have no more moral weight than any other political
| organisation.
| anticorporate wrote:
| Imagine being a newcomer coming to this discussion and
| the two sides are "debanking is bad and hurts people" and
| "the Universal Declaration of Human Rights is garbage."
| barry-cotter wrote:
| That the UN General Assembly endorses a document is no
| more valuable a signal than BRICS, the OIC or the Arab
| League doing so. If you want to point to a document for
| its moral weight better not to point to one from an
| organisation that has Saudi Arabia chairing its women's
| rights committee.
| nkrisc wrote:
| All rights are unnatural. Therefore "we" get to collectively
| agree on what rights all people ought to be granted.
|
| I believe almost anywhere you go you'll find that most people
| agree to consider property ownership to be a basic right.
| PhasmaFelis wrote:
| > Look at the quote from Zuckerberg where he expresses regret
| for the poor choices he and his company made
|
| I'm sure Zuckerberg does have regrets, but I think it's a
| mistake to assume they align with actual human interest except
| by coincidence. The state of Facebook today, and for many years
| before, has nothing to do with any honest concern for human
| welfare, however misguided.
| pjc50 wrote:
| > The UK made it legally obligatory for banks to offer "basic
| bank accounts" to everyone in 2016, and the sky has not
| fallen).
|
| This did not avoid
| https://en.wikipedia.org/wiki/Nigel_Farage_Coutts_bank_scand...
|
| However there's a vital layer of ambiguity in that story which
| made it more confusing for everyone involved: Coutts is a long
| standing "private bank" which makes a point of _not_ serving
| everyone, only HNWIs, and Farage fell into both the "not rich
| enough" and "too politically exposed" categories.
|
| > The current situation in the US is shameful, and while part
| of that shame should fall on the politicians and regulators,
| much of it rightly falls on the banks themselves
|
| Like the lack of consumer protection and public safety in the
| US, at some point you have to accept that the public are also
| ultimately responsible through the ballot box. US financial
| control systems are driven firstly by the catch-all "war on
| terror", which since 9/11 has been used to justify any and all
| authoritarianism _with public support_ , war on drugs ditto
| (despite state level legalization!), and thirdly evangelical
| support for Operation Choke Point.
| MonkeyClub wrote:
| The Farage situation hardly applies as an example, if at all.
|
| From the linked Wikipedia page:
|
| > NatWest, the owner of Coutts, initially claimed that he
| failed to meet the Coutts eligibility criteria of holding
| PS1,000,000 or more in his account, following the expiry of
| his mortgage. NatWest instead offered him an account with the
| retail side of the bank.
|
| So it's hardly a case of debanking a random Joe. It was only
| a higher-end account that was closed for not keeping the
| requirements for keeping it, and Farage was offered a normal
| account.
| ahakki wrote:
| From the same Wikipedia article:
|
| > It was later revealed that Farage's account was closed in
| part as Coutts felt that his beliefs and values did not
| align with theirs. In an internal dossier, Coutts wrote
| that he "is at best seen as xenophobic and pandering to
| racists" and considered a "disingenuous grifter".
| pessimizer wrote:
| > initially claimed
| carlosjobim wrote:
| Oops, you "forgot" the rest of the quote:
|
| "After Farage went to the press about the closure, it was
| discovered that Coutts had closed Farage's account as they
| deemed him to be "at best seen as xenophobic and pandering
| to racists". Following media attention, the NatWest CEO,
| Dame Alison Rose, resigned."
|
| And of course, debanking is not used against any "random
| Joe", it is a weapon to make sure the random Joe stays
| nothing more than a random Joe and does not express his
| opinions or reaches for any political influence not
| sanctioned by the bankers.
| robertlagrant wrote:
| > and not humans making the choice to be Quislings
|
| What is with the obsession with calling people quislings? Have
| all the nationalists transferred their hyper-patriotism to more
| socially acceptable targets, instead of just learning not to be
| like that?
| pessimizer wrote:
| It's extending the basic deception that debanking crypto
| scammers is political. Debanking Farage was political.
| Trading e-currencies is financial "innovation" that no one
| should feel _financially_ safe around.
|
| Now the "real" racism among people who don't believe that
| business should be regulated is not believing that crypto is
| money.
| robertlagrant wrote:
| I don't think I've ever seen anyone claim that businesses
| shouldn't be regulated.
| empath75 wrote:
| It's dehumanizing language that encourages violence.
| adolph wrote:
| Maybe this is a minor quibble, but Quisling was a person.
| Thus, drawing parallels between Quisling's actions and
| those being characterized is not dehumanizing.
|
| https://en.wikipedia.org/wiki/Vidkun_Quisling
| dalemhurley wrote:
| I'm one of the few people who can truly say I've built a bank
| from scratch--starting as a single individual in a small office
| and eventually obtaining a full banking license in one of the
| most highly regulated financial environments in the world,
| Australia.
|
| I invited Marc Andreessen for a conversation on X (formerly
| Twitter), after the Joe Rogan interview. It is no surprise I
| didn't receive a response when he's one of the wealthiest and
| most influential figures in tech, and I'm certainly not even the
| richest person on my street.
|
| At its core, a bank's business model is straightforward: you act
| as a caretaker for depositors' money. Your primary obligation is
| always to ensure that depositors can withdraw their funds in
| full, whenever they need them, within the terms of the contract.
| Profitability is achieved by carefully managing risk--both in
| holding deposits and lending them out--while making sure that, at
| all costs, you can make every depositor whole.
|
| In practice, this means thoroughly understanding and mitigating
| risks. To do so means we identify every possible scenario, assess
| its likelihood and potential impact, plan how we'd mitigate the
| risk, and determine the residual exposure. Our regulators then
| review this work, probing relentlessly, testing our assumptions
| against extreme hypotheticals: floods knocking out our data
| center, hackers encrypting our backups, simultaneous runs on
| accounts associated with crypto exchanges--every remote yet
| plausible crisis is considered. We then refine and repeat this
| cycle until the regulators are satisfied we understand every
| angle of our risk profile.
|
| Every mitigation strategy we implement has a cost--whether it's
| the liquidity we must set aside or the capital reserves we are
| required to hold. If the regulator believes any exposure is
| excessive, the bank must increase its capital buffers, making the
| business more resilient but also more capital-intensive.
|
| From a traditional perspective, stable term deposits or mortgages
| are ideal for banks. They're long-term, predictable, and well-
| understood, with minimal servicing costs. In contrast, servicing
| the crypto industry poses unique challenges. While there can be
| mutual benefits, the costs and constraints imposed by regulatory
| and liquidity requirements often clash with the crypto sector's
| expectations.
|
| Ultimately, it's a cost/benefit analysis. Crypto-related accounts
| tend to require holding large liquidity buffers, limiting
| profitability. Banks must maintain extremely high-quality liquid
| assets because these crypto accounts can be called upon at any
| time, as they are generally setup as an on-ramp or off-ramp for
| the exchanges' customers. If a bank is required to hold 100% of
| those deposits in liquid form just to meet potential instant
| demand, the profitability of such relationships diminishes. Once
| you factor in operational overhead, compliance, and the capital
| required to ensure depositor safety, the margins shrink even
| more.
|
| Capital adequacy is another critical complication. The bank must
| have sufficient Tier 1 capital to cover all depositors in the
| event of a collapse. This includes provisioning for winding up
| the bank and ensuring depositors remain whole even if certain
| assets become illiquid. The instability and occasional outright
| fraud we've seen in the crypto domain (e.g., the FTX/SBF scandal)
| means that funds could vanish or become tied up. As a result,
| banks often need to raise even more capital or reduce shareholder
| dividends. This is costly, and that cost must be considered in
| pricing and strategic decisions.
|
| Finally, the operational and compliance costs associated with
| handling crypto transactions--from specialised staff to advanced
| monitoring systems--can be prohibitively high.
|
| The reality is that the associated liquidity, capital, and
| operational requirements often make it an expensive proposition
| with limited upside for the bank. At the end of the day, the bank
| must always ensure depositors are protected, and that priority
| imposes constraints that may not align with the crypto industry's
| expectations.
| anonymoushn wrote:
| I guess it is surprising that crypto service providers cannot
| come to an agreement with banks by just paying more money for
| the service or by implementing some rules for their users which
| would allow some portion of their bank deposits to be held in
| slightly less cash-like assets.
| ta_1138 wrote:
| It's more than just money: A payment processor is not all
| that different from a crypto exchange in their relationship
| with the bank: It's a very special company that can bring
| real risk to the banks underneath, so they have to do a lot
| of regulatory work internally to keep working together. The
| Stripes and Adyens of the world spend efforts in regulatory
| because they have to keep the bank happy, but they find those
| efforts just cost money, not harm the actual goals of the
| business.
|
| Many of the crypto services believe that no, there's no way
| they'll do what the bank tells them and still remain useful
| to their clients. They'd have to compete with the truly off-
| the-regulatory-world competitors, and probably lose a lot of
| business there. So they get unbanked, in the same way that
| I'd get un-bared if I decided to keep showing up at said bar
| with the same clothes as Donald Duck.
| wmf wrote:
| Maybe that's why Coinbase charges such high fees.
| loeg wrote:
| I think one of Patrick's points is that the real cost to the
| bank for providing these services to crypto companies is
| _more than the entire profits of the crypto companies_. So
| there is no mutually agreeable meeting point.
| Yeul wrote:
| America's new dictator in chief is all in on crypto.
|
| My opinion is that crypto leads to instability, corruption and
| tax evasion which is why they all got kicked out of China but
| good luck.
| gadders wrote:
| I think this was his best article yet - it lays out all the
| various things that have been conflated under "debanking" - some
| justifiable, some less so.
|
| I have no idea where Patio11 sits politically, but as someone who
| tends right I would say it was a fair description of political
| debanking (and social media deplatforming), if North America-
| focussed.
|
| And I think it would be fair to characterise Patio11 as a crypto-
| sceptic.
| gadders wrote:
| LOL. Crypto bros big mad.
| efitz wrote:
| The article's refusal to acknowledge that there might be
| viewpoint discrimination going on makes it feel like the author
| is trying to do a Jedi mind trick.
| TwoNineFive wrote:
| The right-wing false-victimhood ragebait narrative of the
| "Debanking" non-scandal is the story. It's ragebait propaganda
| and has no place on HN.
| bayarearefugee wrote:
| People whose business is effectively a grift should not be
| offered banking services, both as a moral issue and as a good
| business decision.
|
| Right-wingers are far more likely to be grifters.
|
| So right-wingers are more likely to be debanked but correlation
| is not...yadda yadda.
|
| The tech industry was a lot cooler back when it was mostly
| graybeard hippies and not a bunch of incel adjacent techbros
| who never grew out of their Ayn Rand idolization phase.
| ranger207 wrote:
| Debanking is part of the culture war now, which means that
| someone's reaction to it shows that they're either on the right
| or on the left, with no positions in between allowed, and that
| therefore they also support all the other culture war positions
| of their chosen side. The culture war is designed to bundle
| positions together like this, and to force issues into the
| bundle, in order to foster an us-versus-them feeling about
| every issue. It's possible to recognize this is happening,
| attempt to analyze the issue and the merits of each side of the
| argument, and come to a conclusion that one side or the other
| has the better argument. It's difficult though to convince
| others that your position is not because of culture war
| dynamics because the design of the culture war is to minimize
| independent analysis.
|
| I think that debanking is absolutely a right wing false
| victimhood propaganda narrative, but I'm still interested in
| why they think it's an issue, partly in order to engage in the
| argument and defeat it based on facts, and partly to continue
| to learn the foundations for their side of the culture war in
| general
| sixhobbits wrote:
| It's interesting that the idea that 'banks should refuse to do
| business with potential terrorists' is something that most people
| I know support, or don't care about.
|
| Until it happens to them. Then suddenly they get quite passionate
| about the state that the world is currently in.
|
| I don't have data on how many people are being debanked, but
| anecdotally it definitely seems to be some kind of 'line go up'
| number, and I wonder if cumulatively it will get to some kind of
| critical mass where we have a large enough percentage of people
| make enough noise that the laws are reigned in, or if they'll be
| 'that group of weirdos' forever.
|
| (I almost got debanked once -- I had my account re-instated after
| many weeks of extreme stress
| https://news.ycombinator.com/item?id=37925678)
| Andrew_nenakhov wrote:
| A few years ago in Russia, when protesting was still barely
| legal and possible, prominent opposition leaders were 'fined'
| for ~1M USD each for damages to businesses what happened due to
| some protest activity. Banks simply deduced every account
| balance by -50000000,00 RUB and have a nice day.
|
| Whoever thinks that 'but that was bad, evil Putin's government
| and our nice, good government would never do such a thing'
| should think again. The government should not have such power
| at all, neither directly, nor via bank proxy that would
| 'independently' refuse you service.
|
| When you happily cheer that in EU you can't pay with 500 EUR
| bill (because tax evasion, crime, etc!!!), you are basically
| helping the government create means to financially strangle
| anyone the government doesn't like. One day it might strangle
| you.
| hgomersall wrote:
| How could they not have the power? All power the banks have
| is directly derived from their ability to operate as they do
| within a currency regime that is directly controlled by the
| state. Best case is it's _your_ state; plenty operate in a
| system controlled by a foreign state.
| sneak wrote:
| Everyone is a "potential terrorist". Actual criminals are
| people who are tried and convicted of crimes. Everyone else is,
| by definition, innocent.
| stainablesteel wrote:
| all of the laws meant for terrorists are being applied to
| normal citizens at an astounding rate, things like border
| crossings and these unconstitutional laws like the patriot act
| have really undermined people's rights
| Muromec wrote:
| And terrorist is a word created to deny enemy combatant a PoW
| status because we said so.
| AnAfrican wrote:
| The PEP part of the Rogan interview was when I understood
| Andreessen was most likely bullshitting. Funny how this is not
| clearly stated, most likely because of who Andreessen is.
| zith wrote:
| I wonder why Andreessen needs to use disinformation to shape
| opinion if the actual problem is so bad? I find it very
| unlikely that he does not know how PEP actually works.
|
| It is so demonstrably false. Anyone who has worked in an
| finance adjacent industry likely knows the definition of a PEP.
| AnAfrican wrote:
| Seems to me that he has crypto-related goals but involves
| more people to gain political support. The OP article's last
| paragraphs make it quite clear IMO.
| stainablesteel wrote:
| what was BS about it specifically? people were in fact getting
| debanked, outside of crypto too
| AnAfrican wrote:
| It is explained in the article.
|
| The concept of Politically Exposed Person has nothing to do
| with views in US politics.
|
| It's really about foreign officials and their families. And,
| in spirit, it's really about officials from countries with
| high corruption risks.
|
| And Andreessen knows it. That's the bullshit.
| stainablesteel wrote:
| people were debanked, this is a fact. it was also a
| viewpoint from the left-wing establishment, spearheaded by
| elizabeth warren, that crypto should basically be blocked
| from operating in the us
|
| the biden administration was going after their political
| opponents in many ways (prosecutions of trump and his
| lawyer, targeting multiple of elon's companies & the
| delaware courts going after his salary, peter navarro not
| being allowed executive privilege, eithan heim intimidation
| and prosecution for whistleblowing trans surgeries on
| children), this is also a fact
|
| whether they used the PEP terminology selectively, or
| didn't use it at all, is sort of missing the point. there's
| a political persecution going on the background and the
| debanking, which was 100% happening and should not be, was
| done on a purely political basis. the entire process of
| debanking was basically invented for political reasons so
| they could debank gun manufacturers. there's nothing non-
| political about this
| nstj wrote:
| Why is the linked post so long?
| brilee wrote:
| His argument seems to boil down to a the financial regulator
| equivalent of the trolley problem.
|
| In Operation Choke Point, the regulators were actively moving the
| lever to debank morally repentant industries. In "Operation Choke
| Point 2.0", the complex system of regulatory guidelines and
| actors seemingly self-coordinates to debank crypto, and the
| failure of anyone to intercede is painted as a willful neglect.
| Those on the regulator side say, "I didn't do anything", and
| those on the crypto side say, "you have every power to do
| something".
| cromwellian wrote:
| Seems to me that what Andreessen was really mad about was the
| CFPB forcing his portfolio companies that committed consumer
| fraud to return money to their customers. He also lied about
| the CFPB doing debanking, they don't have that power.
|
| While debanking may be a problem, there's a false populism in
| these disingenuous VCs, pretending that their troubles are the
| same as everyone else. These guys want to operate in grey areas
| that enable laundering, illegal gambling, buying/selling
| contraband, and straight up rug pulls, and not be subject to
| any risk or oversight.
| snowwrestler wrote:
| The point is that Operation Choke Point was an actual
| operation, but Operation Choke Point 2.0 is not; it's just a
| label that someone started using to try to generate sympathy
| for their private business goals.
|
| And a smart reader should recognize the difference and adjust
| their reaction accordingly.
| bradley13 wrote:
| This bit is downright scary: "the bank cannot explain why SARs
| [Suspicious activity reports] triggered a debanking, because
| disclosing the existence of a SAR is illegal. 12 CFR 21.11(k)
| Yes, it is the law in the United States that a private non-court,
| in possession of a memo written by a non-intelligence analyst,
| cannot describe the nature of the non-accusation the memo makes.
| Nor can it confirm or deny the existence of the memo."
| metacritic12 wrote:
| Absolutely, it's one of the most undemocratic, potentially
| violative of 1st amendment laws that is out there.
|
| This is from the point of view that money laundering as a law
| is essentially thoughtcrime. The police state has done an
| orwellian job of normalizing not privacy, but instead telling
| the government the reason you are doing every transaction.
| Then, any attempt to not tell the government is "money
| laundering".
|
| Of course, if you are the state, the powers of this tool are
| alluring. Imagine if the state could compel citizens to write
| down what they're thinking, and compel justifications for
| everything they do in life. Think of how many crimes we could
| solve! Think of how many bad folks we can catch ahead of time!
| _fat_santa wrote:
| I get why this is insane but I also get why the law is there
| which leaves me in a wired spot. Part of me wants to say
| something along the lines of "make SAR's disclosable / viewable
| to American citizens or legitimate users" but you can't really
| do that because the bad guys will quickly exploit any escape
| hatches like this.
|
| What do others think about this? Because I'm kinda stuck in the
| middle about them.
| metacritic12 wrote:
| The middle ground seems to be allowing SARs (which are
| analogous to tips to police officers), but not requiring
| banks keep them secret from the customer. The bank could
| decide to do so, but also could decide not to, like any other
| speech.
| hiatus wrote:
| What is the incentive to divulge the information if they
| don't have to? Customer service? "We're the one bank that
| will tell you why we are dropping you as a customer"?
| metacritic12 wrote:
| Probably some amount of customer service. Banks are at
| their distrection then on whether they want to tell you
| or not -- just like for any other reason for dropping you
| as a customer.
|
| I guess more important than empirically whether banks
| tell you, it's that it should be their right to tell you
| if they want.
| hiatus wrote:
| When a case is brought to court, they have to outline the
| methods used to determine the perpetrator. Why is it okay to
| do that for things like murder and other crimes but not for
| banks?
| mandevil wrote:
| SAR's can be discussed when criminal charges are filed.
|
| The most famous case I know of that stems from a publicly
| available SAR is former Speaker of the House Denny Hastert
| (R-Il) after his retirement from the House, when he was a
| lobbyist. He was being blackmailed by someone for his
| previous sexual assaults from his days as a high school
| teacher and wrestling coach three decades earlier, before
| he went into politics. He went to a bank to withdraw a
| bunch of cash to pay his blackmailer, and the bank started
| to fill out the form they do whenever you withdraw over
| $10,000 in cash (not a SAR, just a regular form). He saw
| the form being filled out, and decided he didn't want a
| paper trail with the government showing he was being
| blackmailed. So instead he stood in line hundreds of times
| at the bank, withdrawing $5,000 each time. This was why a
| SAR was filed, because he was clearly doing something
| called "structuring" which is setting up transactions
| deliberately to avoid those disclosure rules. After the FBI
| investigated, they decided that they couldn't get him for
| child sexual abuse, because it had been so long ago that
| the statue of limitations had expired. But they could get
| him for structuring, to which he plead guilty and served 15
| months in jail.
|
| Besides the fact that knowing about when they are filed
| would tip off criminals, there is also the fact that
| oftentimes they are filed for perfectly innocuous reasons,
| and are never investigated and don't go anywhere. Not ideal
| to have publicly available "this guy did something
| suspicious" flags that have not been investigated further
| looming over you and haunting the rest of your life. Since
| SAR's are not shared with other financial institutions,
| they won't follow you the same way.
| bradley13 wrote:
| If there is evidence against you, you surely have the right
| to know of it and to contest it! That's pretty fundamental to
| any reasonable justice system.
| sneak wrote:
| You have no right to a banking relationship, so there is no
| justice involved.
|
| It's not scary until everyone stops accepting cash.
| dvdkon wrote:
| It is already scary, many governments mandate that large
| purchases are only made through the banking system. Not
| to mention the private-sector pressure (how do you get
| paid for work?).
| jeffhuys wrote:
| But then we have to pay taxes on any amount of cash money
| above ~650 EUR in the Netherlands. They WANT to steer us
| towards cash-less, and MANY shops in the Netherlands have
| already stopped accepting cash. It's where we're going -
| ultimate control. No right on banking, but also it's a
| necessicity soon. So.... Too bad?
| sneak wrote:
| I leave my cards at home and only carry cash.
| liontwist wrote:
| Maybe that was a true when a bank was a private business
| and you could reasonably live without it. Today they are
| effectively a branch of the government and your life
| would be seriously impaired.
|
| For example, where does your employer setup direct
| deposit? How do you apply for a mortgage and demonstrate
| assets?
|
| If society relies on technology then you need it to
| participate. Yes you can still breathe without access to
| transportation, but you can't work in the economy. In
| 1940 car or bus access was a luxury because normal people
| got along fine without one. That's why it's misleading to
| say increasing car access is an better standard of
| living. It's actually an increase in the cost to
| participate in life.
|
| So yes banking must be a right. Or alternatively we could
| strengthen cash rights (reduce technology) with legal
| protections to qualify for loans, etc. But that won't
| happen.
| miohtama wrote:
| In the EU, there is a right for a bank account. But this
| right does not cover anti-money laundering excuses to
| debank a person.
| liontwist wrote:
| So it's effectively a jail sentence, and that's fine for
| people who break social rules, but we have built up a
| whole justice system for applying them. When government
| pretends taking away your bank is anything less serious,
| they just want to sidestep due process.
| miohtama wrote:
| It's not government taking it away. It's a bank taking it
| away because they do not want to spend time and money to
| resolve the situation. The legal risk is high where as
| there is very little upside for retaining the customer
| relationship.
| liontwist wrote:
| So what would happen if were in that situation and then
| went to another bank?
| kasey_junk wrote:
| Banks can only share sars in very limited circumstances.
| If you went to another bank they, in almost every case,
| would not know that your previous bank filed a sar.
| Muromec wrote:
| The bank will however ask why you are switching to them
| and telling "my account was closed without explanation"
| will make them think twice
| kasey_junk wrote:
| We don't need to invent a mechanism for banks to share
| bad customer data between each other. There is a whole
| ecosystem like credit bureaus for bank accounts.
|
| But sars being secret has nothing to do with that.
| mandevil wrote:
| FINCEN (and others who have search access to it, which
| rounds to most Federal Government criminal investigators)
| can see all SARs filed. Banks (and other financial
| institutions obligated to file a SAR- like casinos!)
| don't get to see what any other institution has filed.
| The point of a SAR is to provide a data point for an
| investigator, not to create a black-list of unbankable
| people.
| mppm wrote:
| There is a right for a personal bank account only.
| tredre3 wrote:
| Which is already a big improvement over the situation in
| America.
|
| Being cut from the savings/investment/loan system would
| certainly suck and be unfair if you did nothing wrong,
| but much less than losing your basic bank account. That's
| where you receive/cash your pay, tax refunds, any
| government benefits, write checks (for things that are
| still paid that way by default), make transfers, etc.
| mppm wrote:
| That's true, and it's certainly better than nothing, but
| engaging in some legal _business activity_ is also one of
| the basic personal freedoms in the Western value system,
| one that is trampled on very badly by the recent rise of
| draconian banking regulations. For businesses, the
| banking situation in the EU is actually worse than the US
| right now. It depends on the country, but in some places
| small businesses basically have to go begging around,
| hoping that some bank will take on the "compliance risk"
| of opening an account for them.
| sneak wrote:
| I disagree. Bank accounts aren't the solution; regulating
| the end use cases (ie businesses that don't accept cash)
| is a much better option for society.
| Muromec wrote:
| If anything, the government out here discourages using
| cash and not the other way around
| wbl wrote:
| There are thousands of banks hungry for your business.
| Just because one doesn't want to do business with you
| doesn't mean another one won't.
| liontwist wrote:
| That is not true. All the banks must satisfy the same
| regulator. None of them are going to take a risk that
| invites audits from the big cheese to get your 20k in
| savings. The legal term to avoid here is "unilateral
| action" - don't do what the other banks aren't doing.
|
| The list of problematic people is even shared between
| them by the regulator.
|
| Due to the savings and loan crisis there is no longer a
| plurality of banking businesses each with their own
| independent thinking. There are 10 marketing corporations
| for the same government service. Same with mortgages.
| lotsofpulp wrote:
| Which is the root problem, and the solution is a
| constitutional amendment guaranteeing an inalienable
| right to an electronic money account one can send and
| receive money from.
|
| "Banks" don't really have a point in a cashless society
| (the government can operate a database just as well), but
| it seems the government wants to the ability to persecute
| selected people or populations with plausible
| deniability. So they use the ability to get banned by big
| business as a proxy.
| wbl wrote:
| Who would provide credit and do maturity transformation?
| Maybe you end up with duration matched funds everywhere
| but I think that's unlikely for regional banks.
| lotsofpulp wrote:
| Why is credit and maturity transformation needed for
| electronic payments?
|
| If people want to borrow money to pay for something
| (credit cards and the like), that can be its own thing
| that the government is not involved in.
| latedoomer wrote:
| It can be incredibly stressful even right now. I had my
| bank freeze my accounts because they believe I deposited
| a fraudulent check (I hadn't). They were incredibly
| unhelpful during the entire process necessitating hours
| on hold, going to the branch multiple times and
| eventually they threatened to close all my accounts. Took
| about a week to get sorted while I had no access to my
| funds, including direct withdrawal bills like my mortgage
| payment.
|
| And you are correct... I had no rights. They had all the
| power, and they knew it and acted accordingly.
| btown wrote:
| But the SAR itself, from how it sounds in the OP, is not
| the trigger that makes a person/business unbankable across
| the entire banking system - only at that single bank.
|
| The OP article makes a reasonable point that administration
| officials can and do exert pressure on banks to withhold
| services to certain industries like debt collectors. And
| there indeed is a slippery slope there, and one that VCs
| with significant exposure to crypto are motivated to
| highlight.
|
| But "withholding evidence," and the SAR secrecy
| specifically, doesn't seem to be a mechanism by which that
| happens. I'm far more concerned with what might cause an
| individual to lose access to _all_ banks than what might
| cause them to lose access to one.
| psychlops wrote:
| We are headed towards very few monolithic banks in the
| near future. I imagine that if one debanks a client, they
| will all do so for the same reasons.
| glitchc wrote:
| But debanking is not a criminal charge. The US has
| thousands of banks, surely one of them would take your
| business.
| browningstreet wrote:
| You should see the rules about discussing SARs you are asked
| to respond to, as an employee of a bank, with your colleagues
| and managers...
| efitz wrote:
| You've stipulated that the debanking was ok but that not
| disclosing why was problematic?
|
| How about this:
|
| 1. Corporations are highly regulated legal constructs. Being
| given an extraordinary right (immunity for shareholders) they
| should be expected to return significant value to society. I
| propose that value should be "lack of freedom of association"
| - eg I don't think corporations should be allowed to stop
| doing business with, or refuse to do business with, anyone
| citizen, except after conviction in a court of law for
| behavior directly related to that business.
|
| 2. Government should not be able to use their secret
| monitoring to prevent anyone from doing anything. No lists,
| secret orders, etc. If government wants someone debanked,
| take it to court.
|
| Finally, if corporations can't debank people, how do they
| handle unusual cost/risk? With pricing, of course. If porn
| and crypto transactions pose extraordinary financial risk,
| then allow pricing based on actual financial risk.
| AnAfrican wrote:
| >Finally, if corporations can't debank people, how do they
| handle unusual cost/risk? With pricing, of course. If porn
| and crypto transactions pose extraordinary financial risk,
| then allow pricing based on actual financial risk.
|
| And you're absolutely certain that powerful and vocal
| crypto people won't claim that this special pricing is
| discrimination as they're doing now with debunking ?
| pjdesno wrote:
| Look at the mortgage and credit card markets.
|
| Most lenders don't discriminate via pricing - they accept
| or deny individual applications. The _market_
| discriminates via pricing, as higher-cost providers are
| willing to loan to customers who pose more significant
| credit risks.
| efitz wrote:
| Mortgage market works as you describe.
|
| Credit card market works very differently - if Visa and
| Mastercard debank you, then you are effectively excluded
| from the market.
| DrillShopper wrote:
| > I don't think corporations should be allowed to stop
| doing business with, or refuse to do business with, anyone
| citizen, except after conviction in a court of law for
| behavior directly related to that business.
|
| I would quit contracting on the spot if that became the
| law.
|
| Some clients deserve to be fired or avoided.
| efitz wrote:
| Don't incorporate. Make an LLC.
| marcosdumay wrote:
| The law seems to be punishing people based on secret
| judgements over sealed "non-accusations".
|
| Sorry, but no, I can't see why a country would want a law
| like this.
|
| Honestly, my country had a dictator impose a Constitution
| that made sure every person had access to banks over 200
| years ago (we haven't had a democracy at that point, but
| nobody even discussed it since, because nobody disagrees). I
| also can't understand how come the US treats that system so
| frivolously.
| DrillShopper wrote:
| This is all tied to the war on drugs and laundering of drug
| money (post-9/11 it become about terrorism as well, but
| again, more on drug money being funneled into terrorist
| groups)
|
| There are enough people in the US that think that the mere
| existence of drug users is an indictment of society, so any
| action taken to limit the ability of people who sell drugs
| is justified. You also see this with asset forfeiture laws.
|
| So the reason these laws exist is the people against drugs,
| unable to see that the war on drugs has been lost for over
| 20 years at this point, want to impose more and more
| draconian restrictions around them which just fuels the
| power of cartels and criminal gangs selling drugs.
|
| If the war on drugs worked then why can you get them in
| every high school and prison in the US?
| marcosdumay wrote:
| You fight money laundering by letting people use the
| banks, have the banks record everything, and using the
| records on court to get the money back.
|
| You may have something about limiting international
| transfers, but forcing people out of the banks is
| contrary to the goals of a criminal investigation.
| miohtama wrote:
| I have a friend that is constantly being debanked and his wires
| getting lost because he has the same name as politically
| exposed Russian person.
|
| Banks do not negotiate. They just kick him off and sometimes
| even lose his money.
|
| There is nothing he can do, even though everyone who would look
| the issue would figure out it's just a shitty automatic system
| flagging it because of an unrelated person 's name. It would
| cost too much time and money for banks to fix this mistake, so
| giving a boot is cheaper.
| sroussey wrote:
| I'm surprised there is no redress number like for plane
| flights.
| nick3443 wrote:
| Sounds like a big inconvenience, did he try to change his
| legal name?
|
| Edit: I have no idea why this legitimate question is being
| down voted. I'm not suggesting that he _should_ change his
| name or even that such a solution is an acceptable state of
| affairs. And the replies received re:past names are
| furthering discussion.
| voxic11 wrote:
| Apparently AML/KYC programs do consider past names so that
| people can't simply change their name to avoid sanctions.
| But one would think if they were going into that much
| detail they would be able to tell that you aren't the same
| person as the sanctioned entity.
| elric wrote:
| KYC is a joke.
|
| Source: I worked on a KYC system.
| RobotToaster wrote:
| How does that not violate the due process clause? It's pretty
| clear they're acting "under color" of the state.
| happyopossum wrote:
| Due process is related to legal proceedings - this is a
| commercial relationship.
| advisedwang wrote:
| "No person shall ... be deprived of life, liberty, or
| property, without due process of law"
|
| A SAR does not deprive you of life, liberty or property.
| KaiserPro wrote:
| Debanking isn't unique to the USA either.
|
| In the UK, there is no concept of "universal service". if you
| look dodgy, your bank account can be closed. However unless there
| is strong evidence of fraud, you should be able to get your
| assets back, assuming that you can find a bank to take you.
|
| But
|
| Its more often the most vulnerable that cannot get bank accounts.
| If you have no fixed address, then you are not able to have a
| bank account.
|
| If you work in stuff that looks like a prude to be sex work, you
| are also extremely vulnerable.
|
| so yes, its great that this might be looked at in the USA, it
| won't however get reform, because its a very powerful and useful
| tool for the an administration to pull on when it wants to exert
| pressure.
| jdietrich wrote:
| >In the UK, there is no concept of "universal service".
|
| The nine largest banks have a legal duty to provide a bank
| account to any eligible applicant under Part 4 of the Payment
| Accounts Regulations 2015, except where providing an account
| would be unlawful under other legislation (fraud, money
| laundering and terrorist financing) or where the customer has
| engaged in harassment against the bank's employees.
|
| https://www.legislation.gov.uk/uksi/2015/2038/part/4
|
| >If you have no fixed address, then you are not able to have a
| bank account.
|
| The above legislation applies to customers with no fixed
| address. Two banks offer products specifically for customers
| with no proof of identity and no fixed address. Many others
| have significant flexibility in their identity and address
| requirements.
|
| https://england.shelter.org.uk/professional_resources/no_fix...
| KaiserPro wrote:
| Alas my edit time has ran out, otherwise I would update with
| your correction.
|
| Thank you for correcting me with sources, it is appreciated.
|
| The People I know who have no fixed address, told me how
| difficult it was to get an account. I know when I opened my
| account recently, I had to provide a whole host of
| information that wouldn't be possible to have if I was
| homeless. I made the mistake of projecting incorrect
| assumptions, confidently. I went full techbro, which is wrong
| of me.
| motohagiography wrote:
| What's infuriating to me about this article is that bank
| "supervision," makes banks a direct proxy for policy via
| nominally private bodies but without any public accountability.
|
| Well regulated banking is a national asset and source of soft
| power internationally, and having a bunch of anxious de-bankers
| at the controls is a hollowing out of the common wealth of the
| society as a whole.
| bilalq wrote:
| In the Muslim community, we have a phrase for the phenomenon of
| many of us getting debanked: "Banking while Muslim"[0][1].
| LaunchGood was debanked a few years ago and really had to
| struggle to survive[2][3].
|
| My own startup was threatened to be kicked off Stripe with just
| 24 hours of notice. It took an exhausting effort and connections
| with employees inside Stripe to escalate our case to get our case
| re-reviewed. Google Payments for the Play Store halted payment
| processing randomly and sent me a message demanding to get copies
| of my passport and other details. When I sent it, they said
| they'd respond in 72-96 hours and just came back saying they
| needed the same document again even after I sent it. This
| repeated several times. Every time I contacted them, they came
| back with an automated response saying that they'd look at my
| message. After I asked for escalation to an account specialist,
| the specialist said they'd get back to me in 96 hours. That
| situation also took escalations with friends at Google to get
| sorted out in the end, but not until we spent two weeks churning
| subscribers and losing revenue.
|
| [0]: https://ispu.org/banking-while-muslim/
|
| [1]:
| https://twitter.com/search?q=%23bankingwhilemuslim&src=typed...
|
| [2]: https://www.thefp.com/p/debanking-america-melania-barron-
| tru...
|
| [3]:
| https://web.archive.org/web/20190430201629/https://tinylette...
| 9cb14c1ec0 wrote:
| Incredibly informative write-up. I consider myself much more
| banking-industry literate than most, and I learned a lot.
| mikece wrote:
| If you are debanked can you not sue for defamation and slander?
| After all, only criminals and terrorists get debanked, and if
| that's happening to me that's a public statement by a public
| corporation.
|
| There is also the problem of punitive action (debanking) upon
| suspicion of wrong-doing rather than the conviction of it, which
| is a violation of due process on the side of the government.
| stainablesteel wrote:
| andreesen's comments on JRE basically said this:
|
| there was no way to sue because the banks were debanking anyone
| involved in crypto as a "politically exposed person". this was
| a regulation forced on the banks by the federal government. any
| bank not following this policy would then be caught under a
| million internal investigations by the feds, which is
| excruciatingly painful for them. as such, the banks weren't
| liable for following procedures, and the feds weren't
| "responsible" for it as they were very passive aggressive in
| writing and enforcing rules in such a way that didn't expose
| them. it wasn't said openly but it was deeply assumed with an
| undertone meant to circumvent the law. the politically exposed
| thing had been done prior with gun manufacturers and weed
| dispensaries so it had some kind of precedence
|
| he described it as a puppet with no master above the strings
|
| i completely agree that's it's 100% illegal, but there were a
| number of people who apparently had this same problem yet had
| no real legal recourse. i don't fully understand it but i
| assume a bunch of well off founders would have been able to
| figure it out. their only solution was to apparently support
| trump because it was so heavily tied to the left wing
| establishment.
| stainablesteel wrote:
| It definitely happens for political reasons. Let's be honest
| here, this is a completely one-sided hunt. And it's the next step
| in provoking war of retaliation amongst a political populous from
| an establishment that's losing power. It's disgusting.
|
| Anyone should be able to have a political opinion or open a
| crypto business without needing to worry about the sanctity of
| their bank accounts. Let's just all agree this is abhorrent
| behavior and to stop this immediately. It's happening all across
| the west and it needs to just stop. Political competitions should
| be fair, not insidious.
| flyingcircus3 wrote:
| Wouldn't your argument be far more defensible if it wasn't
| dripping with a siege mentality and provocative, yet
| unfalsifiable claims? Youre a step away from claiming that the
| children yearn for the mines.
| stainablesteel wrote:
| it happens in europe, canada, and did in the US, so it's not
| just not unfalsifiable, it's provably true.
|
| it's definitely not a siege mentality to say "let's treat
| each other fairly despite political differences". i don't
| know what you mean, the rest is nonsense
| southernplaces7 wrote:
| Given all the rightfully angry comments and descriptions in here
| about how easily megacorp banks and financial institutions can
| debank people on a whim with next to zero recourse, one wonders
| why nothing like some sort of cryptoraphically generated,
| decentralized token ecosystem doesn't exist by which people can
| send each other usable monetary value rapidly and via many
| avenues that are difficult to block...
|
| We could call it, crypto... currency, maybe?
|
| Wouldn't it be nice of something like this existed, at least as
| an option for those who don't live in bubbles of never having
| been the financial rape victims of a large bank, government or
| formal regulatory algorithmic system.
| FuriouslyAdrift wrote:
| In the US, there's not a lot (other than a chunk of cash and lots
| of regulations) to stop a private individual or group from
| starting their own bank.
|
| In the past, large companies and high net worth individuals did
| just that.
| snowwrestler wrote:
| The implication that Libra was killed by a letter from 2 U.S.
| Senators is hilarious. That's not how businesses make major
| decisions.
|
| A public letter from a couple Senators is not a leading indicator
| of a regulatory problem. Individual Senators have essentially
| zero regulatory power whatsoever.
|
| It is a trailing indicator of a PR problem. The Hill staffer he
| quotes is trying to point this out, but Patrick misses it.
| Perhaps he does not have the personal experience to understand
| this aspect of what Congress does (unlike the regs he covers
| earlier in the article, which he clearly has working knowledge
| of).
___________________________________________________________________
(page generated 2024-12-10 23:01 UTC)