The term "money laundering" originally referred to the practice of concealing the movement of funds involved in a crime. Now they've redefined it so that concealing the movement of funds is itself a crime, even if the funds are entirely legitimate and no other crime is involved.
Actually, it hasn't been redefined at all - at least legally.
To quote Wikipedia:
It is defined as knowingly engaging in a financial transaction with the proceeds of a crime for the purpose of concealing or disguising the illicit origin of the property from governments.[1]
More specifically, money laundering is defined in Article 6.1.a.i and 6.1.a.ii of the United Nations Convention against Transnational Organized Crime[2]. The PDF won't let me copy & paste the text, but it uses the language "proceeds of crime" in both subsections.
Some jurisdictions may have monetary reporting laws which are broken during transferring BTCs, but it isn't money laundering (under international law anyway).
Yes, because the motivations behind money laundering are driven almost exclusively by crime. For purchases you wish to remain private, such as personally embarrassing products, there are 'anonymizing' but traceable services for you to save face with.
There are very few legitimate reasons to be concealing where you money came from or is going from the IRS, and they well aware of the intent behind the actions.
The problem isn't the IRS, it is everybody else who wants to know. Especially in the case of bitcoin where all transactions are public record.
Come up with a way for the IRS to investigate (not just get it handed to them on a platter, but something that mathematically requires a level of effort to prevent fishing expeditions by IRS employees) while simultaneously keeping all transactions private from everyone else and then we'll have a solution.
There are very few legitimate reasons to be concealing where you money came from or is going from the IRS, and they well aware of the intent behind the actions
Nice circular reasoning. Because everything that the IRS would disapprove of is illegitimate? When did the IRS get ultimate moral authority?
IRS doesn't care what the money is from or for, only that Uncle Sam gets what he's owed. Income from criminal enterprises is not special: you have to pay taxes on it like everything else. The source of the income is kind of don't-ask-don't-tell.
Spending on sex toys is not special, unless the national security apparatus (or more likely your competitor in the private sector) already has a reason to try to discredit you. Which is a valid concern for activists, but not most people.
Investigations and enforcement actions by the IRS have nothing to do with the morality of your checking account statement and everything to do with tax evasion.
The largest threat to your financial privacy is private enterprise. Underwriters, prospective employers, and others with a financial stake in your "good behavior" are the most interested in judging the moral acceptability/health/prudence of your financial choices.
Spending on sex toys is not special, unless the national security apparatus (or more likely your competitor in the private sector) already has a reason to try to discredit you. Which is a valid concern for activists, but not most people.
Amazing.
Translation: "Rights are essential for small group of people, because everyone else is not exercising them anyway. So lets just take the rights away".
1) Bitcoin is incredibly more transparent than banking system or tax system. If anything, it is not convenient for tax evaders. HSBC, however, managed to launder 200bln of drug money.
2) I'm a person. I have to pay taxes. Top500 corps - not so much, in practice. What do you say about that?
3) Where the fuck did you get that I'm a tax evader? I was addressing your point about people's rights and your evaluation of their need of having those rights.
Well, you may ignore IRS but it doesn't mean that IRS will ignore you; and it is perfectly able to take your stuff and liberty even if you don't give a shit about what they think.
It may be, depending on your definition, but the term "money laundering" has a distinctly criminal connotation. Bitcoin mixing is more analogous to paying for something with cash withdrawn from a bank account rather than making a bank transfer directly.
Money laundering is the process of concealing sources of money. If the IRS found out Western Union was trying to cover it's tracks of who sent/received money they would be investigated immediately. Laundering implies you have something to hide, most likely tax dollars or ill-received profits.
Except with Bitcoin, there are valid reasons to conceal the source and destination of money from the public besides criminal activity. The money being "laundered" isn't necessarily "dirty" to begin with.
The same logic applies to encryption. People have a right to privacy.
There can be (and are) regulations that may (in particular circumstances) make illegal to conceal the source and destination of money transfers even if the money is clean.
People don't have an absolute right of privacy - the laws can and do restrict that.
Only if that money is the proceeds of a crime and you're attempting to conceal the source of the illegal funds.
The flippant and universalizing way several of the commenters here are referring to money laundering as "concealing where the money came from" cast far too wide a net.
The definition you're using here would include concealing where $500 came from that was donated by anonymous friends to give to another friend in need. Suddenly, by your metric, if any of the friends suspected of donating the cash to help someone don't fess up to the source of the cash, they're laundering money.
Yeah, that's ridiculous. But it fits your description. Money laundering requires the currency be earnings from criminal activity.
If you're running a coin mixing service that makes the coins anonymous to others then as soon as a single transaction is true money laundering (from criminal activity), then you're liable for that. If a single Fed sting operation on silkroad buys drugs for some bitcoin that afterwards gets to your service - you're going down.
Pretty much the only way to do so 'properly' would require you to make the coins anonymous to the public, but ID all of your customers and keep records on who actually gets which coins in the end.
Like the other commenter, you're speaking to a different angle. I was commenting strictly on the repeated blanket statements made throughout these comments that any concealing of the source of money == money laundering. I was not speaking to liability ramifications of running a coin mixing service at all. I wasn't even contending that there might not be legitimate claims made against bitcoin activity that could be money laundering. The act of concealing where money came from as a general principle is not itself money laundering. Yes, running a service that facilitates concealing the source of money can quickly become a target and risk liability for laundering activities. That is still, however, an entirely different point.
Put your money where your mouth is. Openly run a mixer. Openly advertise that you are the person who operates it.
If you're right and I'm wrong, it'll be a lucrative business and you'll probably quickly dominate the mixer industry, as it'd be very easy for you to get press and build name recognition. You could do it as a very part-time job.
If I'm right and you're wrong, you'll be in prison.
Comments
Call it what it is, money laundering.
The term "money laundering" originally referred to the practice of concealing the movement of funds involved in a crime. Now they've redefined it so that concealing the movement of funds is itself a crime, even if the funds are entirely legitimate and no other crime is involved.
Actually, it hasn't been redefined at all - at least legally.
To quote Wikipedia:
It is defined as knowingly engaging in a financial transaction with the proceeds of a crime for the purpose of concealing or disguising the illicit origin of the property from governments.[1]
More specifically, money laundering is defined in Article 6.1.a.i and 6.1.a.ii of the United Nations Convention against Transnational Organized Crime[2]. The PDF won't let me copy & paste the text, but it uses the language "proceeds of crime" in both subsections.
Some jurisdictions may have monetary reporting laws which are broken during transferring BTCs, but it isn't money laundering (under international law anyway).
[1] http://en.wikipedia.org/wiki/Money_laundering#Criminalizing_...
[2] http://www.unodc.org/documents/treaties/UNTOC/Publications/T...
Yes, because the motivations behind money laundering are driven almost exclusively by crime. For purchases you wish to remain private, such as personally embarrassing products, there are 'anonymizing' but traceable services for you to save face with.
There are very few legitimate reasons to be concealing where you money came from or is going from the IRS, and they well aware of the intent behind the actions.
The problem isn't the IRS, it is everybody else who wants to know. Especially in the case of bitcoin where all transactions are public record.
Come up with a way for the IRS to investigate (not just get it handed to them on a platter, but something that mathematically requires a level of effort to prevent fishing expeditions by IRS employees) while simultaneously keeping all transactions private from everyone else and then we'll have a solution.
Nice circular reasoning. Because everything that the IRS would disapprove of is illegitimate? When did the IRS get ultimate moral authority?
IRS doesn't care what the money is from or for, only that Uncle Sam gets what he's owed. Income from criminal enterprises is not special: you have to pay taxes on it like everything else. The source of the income is kind of don't-ask-don't-tell.
Spending on sex toys is not special, unless the national security apparatus (or more likely your competitor in the private sector) already has a reason to try to discredit you. Which is a valid concern for activists, but not most people.
Investigations and enforcement actions by the IRS have nothing to do with the morality of your checking account statement and everything to do with tax evasion.
The largest threat to your financial privacy is private enterprise. Underwriters, prospective employers, and others with a financial stake in your "good behavior" are the most interested in judging the moral acceptability/health/prudence of your financial choices.
Amazing.
Translation: "Rights are essential for small group of people, because everyone else is not exercising them anyway. So lets just take the rights away".
From where do you derive a right to hide your finances from a government whose power to levy an income tax is explicitly codified in the Constitution?
1) Bitcoin is incredibly more transparent than banking system or tax system. If anything, it is not convenient for tax evaders. HSBC, however, managed to launder 200bln of drug money.
2) I'm a person. I have to pay taxes. Top500 corps - not so much, in practice. What do you say about that?
3) Where the fuck did you get that I'm a tax evader? I was addressing your point about people's rights and your evaluation of their need of having those rights.
There are very few legitimate reasons to be concealing where you money came from or is going from the IRS
That's irrelevant. I don't need a reason for concealing where my money comes from.
Oh sure, the IRS may disagree, but I have a really hard time giving a shit about what the IRS thinks.
Well, you may ignore IRS but it doesn't mean that IRS will ignore you; and it is perfectly able to take your stuff and liberty even if you don't give a shit about what they think.
Point taken, but in spite of their aspirations, they are neither omniscient nor omnipotent. Thank goodness.
I make sure Uncle Soprano gets his cut.
It may be, depending on your definition, but the term "money laundering" has a distinctly criminal connotation. Bitcoin mixing is more analogous to paying for something with cash withdrawn from a bank account rather than making a bank transfer directly.
Money laundering is the process of concealing sources of money. If the IRS found out Western Union was trying to cover it's tracks of who sent/received money they would be investigated immediately. Laundering implies you have something to hide, most likely tax dollars or ill-received profits.
Money laundering is the process of concealing illegal sources of money.
It isn't.
A mixer's sole purpose in life is collect a fee for concealing sources of money. It's textbook money laundering.
Except with Bitcoin, there are valid reasons to conceal the source and destination of money from the public besides criminal activity. The money being "laundered" isn't necessarily "dirty" to begin with.
The same logic applies to encryption. People have a right to privacy.
There can be (and are) regulations that may (in particular circumstances) make illegal to conceal the source and destination of money transfers even if the money is clean.
People don't have an absolute right of privacy - the laws can and do restrict that.
It doesn't matter what the reasons are, or whether you have a right to it, if you're trying to conceal where money came from, it's money laundering.
Only if that money is the proceeds of a crime and you're attempting to conceal the source of the illegal funds.
The flippant and universalizing way several of the commenters here are referring to money laundering as "concealing where the money came from" cast far too wide a net.
The definition you're using here would include concealing where $500 came from that was donated by anonymous friends to give to another friend in need. Suddenly, by your metric, if any of the friends suspected of donating the cash to help someone don't fess up to the source of the cash, they're laundering money.
Yeah, that's ridiculous. But it fits your description. Money laundering requires the currency be earnings from criminal activity.
If you're running a coin mixing service that makes the coins anonymous to others then as soon as a single transaction is true money laundering (from criminal activity), then you're liable for that. If a single Fed sting operation on silkroad buys drugs for some bitcoin that afterwards gets to your service - you're going down.
Pretty much the only way to do so 'properly' would require you to make the coins anonymous to the public, but ID all of your customers and keep records on who actually gets which coins in the end.
Like the other commenter, you're speaking to a different angle. I was commenting strictly on the repeated blanket statements made throughout these comments that any concealing of the source of money == money laundering. I was not speaking to liability ramifications of running a coin mixing service at all. I wasn't even contending that there might not be legitimate claims made against bitcoin activity that could be money laundering. The act of concealing where money came from as a general principle is not itself money laundering. Yes, running a service that facilitates concealing the source of money can quickly become a target and risk liability for laundering activities. That is still, however, an entirely different point.
Put your money where your mouth is. Openly run a mixer. Openly advertise that you are the person who operates it.
If you're right and I'm wrong, it'll be a lucrative business and you'll probably quickly dominate the mixer industry, as it'd be very easy for you to get press and build name recognition. You could do it as a very part-time job.
If I'm right and you're wrong, you'll be in prison.
You're not responding to the point I wrote, or the parent comment to which I replied.
It's both. There is such a thing as synonyms.