
Combating Money Laundering, Terrorist Financing, and Counterfeiting Act - ssijak
https://www.reddit.com/r/Bitcoin/comments/6hbis7/us_congress_going_full_1984_on_bitcoin_and_assets/
======
mabbo
It sounds as though governments are simply trying to amend existing law around
money laundering and terrorist financing to try to deal with the invention of
digital currencies. This sort of thing has happened before.

Back in '06 I was an intern in the tech department of FINTRAC, Canada's agency
for stopping money laundering and terrorist financing, so my knowledge is
outdated and only specific to one country- but everyone has roughly the same
rules and goals with these laws- track large money movements to find money
laundering operations and stop money from finding it's way to terror groups.
They use the $10,000 rule- banks report your info if you move more than that
in or out of your account and border security reports it if you move that much
in cash across a border.

Over time though, new tricks are always figured out, and laws updated. In '06,
it was casinos ("yeah I won big last night, that's where the money came
from"), currency exchanges ("oh yeah, we do a huge amount of business and over
charge everyone"), and jewelry stores (buy diamonds in cash, carry them over
borders instead of money). So reporting laws were updated.

Now the trick is "I bought a lot of bitcoins in 2009 and finally sold them
today, that's where the money came from". If the laws aren't updated, money
laundering becomes easy again.

What else do we expect governments to do? Now, are these laws well written and
not overreaching? I'm not sure, and that's worth debating.

~~~
runeks
> What else do we expect governments to do?

We expect it to not both support the laws that create a $100B black market for
drugs in the first place, and then try to combat the consequences of its own
actions and claim it's solving a problem, rather than creating two of them.

~~~
mabbo
I'm very much in favour of legalization of drugs.

But there are other crimes that create illicit money: extortion/blackmail,
human/child trafficking/exploitation, murder for hire, theft,
ransomware/malware, and whatever new horrible ideas get created next.

Making money laundering harder makes criminal activity less beneficial to
commit. And while ending the illegal drug trade will greatly reduce the need
for anti-money laundering organizations, it certainly won't end the need
entirely.

~~~
ng12
Sure, and the government should be investigating people who have lots of
suspicious cash. That's a lot different than penalizing people with private
wealth just because they have it.

~~~
finnh
How do you expect the government to _know_ about people who have lots of
suspicous cash? That's what the reporting laws are intended to help detect...

~~~
ng12
They shouldn't unless they have reason to investigate me. I live in the US. I
have a reasonable expectation of privacy and it shouldn't be a crime to not
proactively confirm that I'm not committing crimes.

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throwanem
Is there an analysis somewhere that isn't so, uh, /r/bitcoin? There's a kind
of occasional Chicken Little style there that seems to add more heat than
light.

~~~
csydas
Yes, and please don't take this as a snarky comment:

ctrl+f "digital currencies" and you will see exactly how involved the bill is
with Bitcoin.

You are right to suspect this is the reddit crowd over-reacting, and the
amendment to the title is probably better. Basically, there is a proposition
to include the words "Digital Currenc(ies/y)" into a few places in the bill.

I am somewhat reminded of an earlier court case from Florida where the judge
dismissed charges involving Bitcoin because there was no legal definition for
it. This bill is basically addressing that and presenting a legal framework
for Money Laundering and Terrorist Financing investigations to allow
investigation of Bitcoin as well.

The fallout from this can be interpretted by others, but this isn't a specific
bill or "1984" attack on Bitcoin, it's adding digital currencies as part of a
legal framework for two specific crimes.

edit: added "investigations" to the second paragraph to clarify that it
presented a legal framework for such investigations.

~~~
mdinstuhl
But ETH is not a currency - it's GAS!

~~~
omginternets
Gas that acts very much like a currency insofar as it is a store of value due
to its utility and scarcity.

This is pedantry at its worst.

------
MichaelGG
Just a reminder when talking about this with people: Money laundering is not
an actual crime that harms anyone. It's a made-up thing to make prosecutors
lives easier by lowering the bar on what they can go after people for. We need
to undo the marketing that governments push out and media plays along with.
It's sad that not telling the government your every financial move is seen as
wrong in any remotely free society.

~~~
freehunter
Money laundering itself might not be something that harms anyone, the problem
is it's often done to conceal actions that _have_ harmed someone or _will_
harm someone. If I'm selling drugs or weapons, someone is going to start
asking where all this money came from. It's easier for my legal case to say
"my laundromat" or "my car wash" than it is for me to say "selling crack and
Glocks".

You could make the case that money laundering itself should not be considered
a crime, but it should be strongly considered with other evidence of wrong-
doing. There are very few legitimate reasons to go out of your way to conceal
the source of your income, so in doing so you're already behaving
suspiciously.

Like it's not illegal to swerve back and forth in your car without ever
leaving your lane, but if a cop see you doing it you're probably going to get
pulled over. Because the only reasons you'd be swerving like that tend to be
actual illegal activities.

~~~
notatoad
It sounds like you're trying to argue against the person you're replying to,
but aren't you both saying essentially the same thing? It's a made up thing
that makes prosecutors lives easier when they're trying to catch somebody
committing a real crime.

~~~
freehunter
Every law is a made-up thing. There's no inherent laws of man that govern the
world divined by God himself.

What the parent is trying to argue is that the entire idea of money laundering
should be forgotten and there should be no negative public perception of money
laundering. What I'm arguing is sure, maybe people shouldn't go to jail for
money laundering by itself, but there are zero legitimate reasons to launder
money. The very fact that someone has gone to any length to hide the source of
their income means they've committed a crime. Not the crime of money
laundering, but the crime of _whatever they did to earn the money_. Because if
they didn't commit a crime to earn it, they wouldn't go through the trouble of
hiding it. Money laundering is probable cause for further investigation.

His argument sounds to me like people who argue that since the Constitution
doesn't say the government can collect taxes, that means taxation is theft and
we shouldn't pay them. It's the libertarian ideal that money is private
property, humans are inherently good (unless they've won an election), and
laws don't apply to you if you just _believe_ it hard enough. Unfortunately
that's not the way the world works. In reality, where there is smoke there is
fire, and where there is money laundering there is someone concealing a crime.

~~~
MichaelGG
Really? Zero? What if I work in something I'm embarrassed about and want to
front it through something more respectable? Or what about the simple idea
that _I shouldn 't have to tell anyone about my income sources_?

I agree that a front is a reason for someone to be suspicious. Find a
laundromat doing a million a day? Sure, investigate them. But that alone
should not be a crime.

~~~
freehunter
>what about the simple idea that I shouldn't have to tell anyone about my
income sources?

That's not even an argument. That's the lack of an argument. That's throwing a
temper tantrum and saying "but I don't wanna!"

It's a sovereign citizen argument and I love seeing YouTube videos of people
telling the police that exact thing.

------
lightbyte
>detailing a strategy to interdict and detect [...] digital currencies [...]
at border crossings and other ports of entry for the United States;

Uh what? They want to detect the presence of crypto currency at the border?
How would that even work? Something tells me none of the sponsors for this
bill know any specifics for how bitcoin et al. work.

~~~
garrettdc
My assumption would be if they were to see someone with a foreign address come
and try to cash out 1000 BTC in USD (or even 10BTC currently) on one of the
exchanges, then they would want to know where those bitcoins came from. It
would be able to combat another form of layering (with the normal process of
placement, layering, and integration). So "at border crossings" here would
probably mean any bitcoin exchange operating in the US that deals with foreign
entities.

~~~
MichaelGG
That would be a strange way to word it, wouldn't it? More likely they want to
scan your device and use it against you if you are "carrying" undeclared
"currency".

~~~
lightbyte
You don't "carry" crypto currency though, you hold the private key to an
address. I don't see how they could determine some random binary blob on your
laptop/flash drive/etc. is in fact a private key that is responsible for a
number of coins. What if I used an Electrum wallet and just kept the master
seed saved, then it's just a string of random words. I could just as easily
memorize that or physically write it down somewhere instead.

~~~
MichaelGG
I think that's why they have a part about determining if technology can be
invented to detect this. And a lot of these laws seem to have a point of
making easy things illegal, so they have more ways to go after you if they
need to.

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tinus_hn
Kind of silly given that with Bitcoin anyone can see all transactions ever
made.

~~~
zer0tonin
Mixing is a thing.

~~~
opportune
The thing I don't understand about mixing is that shouldn't it pretty much
always be taken as an indication of money laundering? I can't think of any
reason someone would need to mix / tumble coin if it were all legit.

Seems to me that receiving bitcoin from an address known for mixing should be
an automatic red flag.

~~~
Rmilb
Financial privacy. You can still report it on your taxes. Maybe some of the
coins you now own were stolen and you just happened to get them from the
exchange and you are concerned about the fungability of bitcoin in your legal
jurisdiction.

------
SuperGent
Does this mean that someone with a $10K credit card could be picked up and
have their assets stripped? What about those business guys with oversea bank
accounts that are undeclared? I wonder if anyone would use this law to stop
political opponents..

~~~
mabbo
It's reporting requirements, not making it illegal to have money.

If you've ever bought a car or house, or really made any purchase over
$10,000, your bank filed a report to the government with every detail they
know about you and every detail about the transaction made. That's not
paranoid delusions, that's publicly known law.

[https://en.m.wikipedia.org/wiki/Financial_intelligence#Unite...](https://en.m.wikipedia.org/wiki/Financial_intelligence#United_States_examples)

~~~
panarky
This is not true.

The Currency Transaction Report only covers cash transactions. That means
green pieces of paper with pictures of dead presidents on them, not electronic
money in a bank account.

Deposit or withdraw cash, buy money orders or cashiers checks with cash, buy a
car or house with cash, and if it's over $10,000, it gets reported.

But if you write use a check, credit card, ACH or wire transfer, that's not
cash and the bank doesn't have to file a Currency Transaction Report.

That's because these transactions are already in the banking system, so
there's already a good audit trail of what money is moving where.

~~~
conductr
Partially true.

In the US, there is also this thing called Suspicious Activity Reports. They
are triggered with any transaction >$3,000 (typically cash-equivalents; but
that can be wide reaching). There are some requirements where banks must
report but there is also the discretionary part. This is where banks can be
held liable for not reporting suspicious activity. Because of that, it is safe
to assume most banks report every transaction above $3,000 of any type.

But let's face it, most bank databases probably have something like this going
on; GRANT SELECT ON Transactions TO USGOVT

------
gehwartzen
“(7) ‘prepaid access device’ means an electronic device or vehicle, such as a
card, plate, code, number, electronic serial number, mobile identification
number, personal identification number, or other instrument, that provides a
portal to funds or the value of funds that have been paid in advance and can
be retrievable and transferable at some point in the future.”.

Would this not also cover carrying a debit card linked to an account that
contains >$10k?

~~~
spinlock
I don't think a debit card (linked to a bank account) would be considered
"paid in advance". If you had a prepaid card, then it would.

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eth0up
Some other most wondrous endowments from the seraphic beneficence of
Pecuniaria:

1\.
[https://en.wikipedia.org/wiki/Know_your_customer](https://en.wikipedia.org/wiki/Know_your_customer)

2\.
[https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance...](https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act)

------
stuntkite
None of this is particularly new information. I mean he mentions that bill at
the top but no real discussion about it's contents. John Oliver did a great
piece on civil asset forfeiture a while back and the $10,000 rule has been
around forever. I'm not saying this isn't a bill that we should care about but
this post is useless bullshit.

~~~
discombobulate
Did you read the link[0]? It seems there are amendments to the current bill.

[0]: [https://www.congress.gov/bill/115th-congress/senate-
bill/124...](https://www.congress.gov/bill/115th-congress/senate-
bill/1241/text#toc-idea0e9489fc8f46379f95bb56c8bbbda5)

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nubela
The answer here is Monero.

------
known
There was no terrorism prior to bloom.bg/1O04ymn

~~~
kps

      > There was no terrorism prior to [1974]
    

Simply false.

