🇬🇧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.

@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 (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.

@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.

@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!

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