🇬🇧A draft EU Parliament report published today would ban anonymous payments and donations in #cryptocurrencies such as #Bitcoin & #Ethereum. The stated aim to tackle money laundering and terrorism is only a pretext to gain more control over personal data.


@echo_pbreyer I usually agree with you. Not this time.

This is not as clear-cut as it seems to be.

Cryptocurrencies (especially the "privacy coins") are not a cash replacement, the power dynamics are different because cash has friction when used in huge amounts that cryptocurrencies lack.

This makes cryptocurrencies (and esp. "privacy coins") way more useful for organized crime, corrupt politicians, and the superrich, than cash could ever be.

The power dynamics are *opposite* to those in case of cash.

@echo_pbreyer let me say this differently: where cash is a boon to private citizens in preserving their privacy from the rich and powerful, cryptocurrencies (esp. privacy coins) are a boon to the rich and powerful in making it more difficult to hold them to account.

The "cryptocurrencies = digital cash" false equivalence is a sham. Be careful what you support.

@rysiek @echo_pbreyer Nonsense. Electronic cash is the same as cash for all intents and purposes, and it's much easier to have HSBC launder your fiat money than it is to launder billions of EUR in cryptocurrency. You do actually have to get in and out of something like Monero if you intend to do that, because you're not going to be able to spend that in XMR or want to keep that in XMR. Which means it *is* perfectly detectable for the worst offenders, while this law would violate privacy for all.

@raucao @echo_pbreyer "cash" and "HSBC laundering" are two different things. You have to get that cash to HSBC somehow first, and that's exactly where the friction of hauling huge amounts of cash hits the hardest.

It then becomes traceable, even if with considerable difficulty. Consider: Panama Papers, Paradise Papers, and other such leaks.

(disclosure: I worked for an investigative journalism organization that was involved in publishing these leaks)

@rysiek @raucao @echo_pbreyer You are trying to argue that individuals do not benefit from using bitcoin privately, with individuals who benefit from using bitcoin privately.


@sharperguy @raucao @echo_pbreyer I never argued that. Obviously individuals might benefit from using cryptocurrencies. My worry is about who benefits the most, and in what way.

In case of physical cash, the benefits (privacy and untracability of transactions) are squarely on the side of people using small cash payments. Which is great!

In case of privacy coins, these benefits might be more on the side of the super-rich or corrupt, who might be trying to hide their wealth from accountability. Less great.

· · Web · 1 · 0 · 1

@rysiek @sharperguy @echo_pbreyer Show me a method of getting 10 million EUR cash into a privacy coin without buying BTC first (and even that's a challenge), today or within the week.

With cash, that's fairly easy for a 10% fee.

@rysiek @sharperguy @echo_pbreyer ... and then out again somewhere you can park that out of sight.

@raucao @sharperguy @echo_pbreyer I have trouble parsing your question. You are asking me to show you a way to get 10mln EUR in cash into privacy coins, and then you say it's fairly easy with cash? Really not sure what you're asking me to do here.

@rysiek @sharperguy @echo_pbreyer Sorry, had to edit. It's easy with cash to cash, not easy with cash to e.g. XMR.

@rysiek @sharperguy @echo_pbreyer ... and by "fairly easy" I merely mean possible with the right connections, not easy for us two schmocks, of course.

@rysiek @sharperguy @echo_pbreyer (By "with cash" I mean purchasing another fiat currency for example.)

@raucao @sharperguy @echo_pbreyer you are comparing apples to oranges: cash -> crypto vs. cash -> cash. Better comparison would be cash -> cash vs. crypto -> crypto.

Getting 10mln EUR in physical cash changed into 10mln USD in physical cash is doable, but has some considerable friction.

Getting 10mln EUR equivalent in crypto moved from one cryptocurrency to another is, I would guess, less trouble. Especially for us two schmucks.

@raucao @sharperguy @echo_pbreyer and that's the crux of the problem. Once money is "in" the cryptocurrency world, it can slush way more easily back end forth, regardless of the amounts. This is dangerous on the societal level if these amounts are in the high millions of EUR equivalent.

Yes, there is considerable friction *currently* in getting that monies into and out of crypto, but that's why all the NFTs and web3 bullcrap is happening. A lot of it is just money laundering.

@rysiek @sharperguy @echo_pbreyer There is nothing more easy to trace than wallets owning NFTs.

@rysiek @sharperguy @echo_pbreyer And that is exactly the point. The instruments used for actual money laundering are easy to trace and then require traditional investigation anyway. KYCing all bitcoin transactions ever is not helping with that at all.

@raucao @sharperguy @echo_pbreyer NFTs are not about untraceability, they are about laundering funds. If you have a bunch of dirty money and you want to launder them, you *want* the magical NFT thing to be traceable, so that you can say "yes Mr Taxman this is where all this money comes from: this particular pixelated ape! cross my heart, and you can trace it on Tech Blockchains!"

@rysiek @sharperguy @echo_pbreyer Yes, that's my point. How is adding more useless KYC helping at all when that's the easiest way of laundering?

@raucao @sharperguy @echo_pbreyer well, how do we tackle this, then?

We seem to agree that *some* anti money laundering regulations are needed in general (correct me if I am wrong here).

We seem to agree that NFT market is ripe with money laundering schemes, and that that is a problem that needs *some* response.

Can we find a *good* way of tackling these? I am not saying that the current draft is good, but I *am* saying we need a better response than a knee-jerking "no way!"

@rysiek @sharperguy @echo_pbreyer A "no" to bad regulation is necessary when there is no good option on the table IMO. I don't have the answer to your question. But pretending that doing something symbolic is better than doing nothing is exactly why the current regulations are failing us on a global scale and not really hurting bad actors much, in relation to how much they are hurting the rest of us.

@rysiek @sharperguy @echo_pbreyer (And yes, I agree that someone actively trying to steal a country's wealth or trying to blow up civilians should be prosecuted in some way. But if the cost/benefit ratio is off by this much already with KYC/AML regs, then I don't see how mindlessly adding more of them can be a rational act, or even be proposed in good faith.)

@raucao @sharperguy @echo_pbreyer measuring cost/benefit only by "how much money got confiscated based on this policy" is bonkers. Imagine if the policies were in fact 100% effective -- and money laundering was completely non-existent. The policy effectiveness measured using this metric would be 0! And it would still affect businesses and private people!

This is not an acceptable to measure this.

@rysiek @sharperguy @echo_pbreyer That logic is flawed. You can easily compare against current estimates of how much is being laundered and see if it went up or down, and have at least a guess about the order of magnitude. Also, there is no policy that is 100% effective, ever, unless you have 100% control over literally everything that humans do, which would be a complete nightmare (but is unfortunately the kind of thinking where this piling on ever more surveillance comes from).

@raucao @sharperguy @echo_pbreyer the "100% effective policy" was a thought experiment to show where this kind of argument leads.

I still have not received a clear answer to a yes/no question I asked a number of times already:
are we in agreement that *some* anti-money laundering regulations are needed?

Do we also agree that what needs to happen is that anti-money laundering regulations become way more effective and way less onerous to people not engaged in money laundering?

@raucao @sharperguy @echo_pbreyer the paper you yourself linked says:

> In practical terms, criminal enterprises no longer holding $3 billion of illicit assets confiscated
each year, and leaders less readily able to recapitalize illegal endeavors, are profoundly
affected. Likewise, criminal activities are frequently disrupted and thwarted. This can
be difficult to measure but may help lift success rates noted above.

@raucao @sharperguy @echo_pbreyer measuring the effectiveness of anit-money laundering policy using the amounts confiscated is like measuring the effectiveness of speeding tickets using the amounts of fines paid. The paper itself makes it clear this is a *bad* metric, and that lack of good metrics is an important part of the problem!

@rysiek @sharperguy @echo_pbreyer Show me where, and that's not KYCd already. Both cash to crypto (which you are worrying about because you are talking about laundering actual EURs) as well as crypto to crypto is next to impossible at that scale.

Sign in to participate in the conversation
Mastodon for Tech Folks

This Mastodon instance is for people interested in technology. Discussions aren't limited to technology, because tech folks shouldn't be limited to technology either!