Why is it illegal to operate money transfer? Why founders are responsible for the crimes committed by its users? Are they guilty because the business was "unlicensed" or did they specifically promoted crime in some way?
Laws for MSB's anywhere require them to comply with legislation based on where their costumers are originated.
When you move money from your US account to your friends in the UK through say PayPal; PayPal has to comply with the regulations in both the US and the UK.
Amongst those things the MSB also needs to ensure that they do their due diligence to ensure that they do not provide a service to launder money or facilitate other illegal activities this often includes running background and credit checks on the costumers, providing notifications of transfers to the authorities, checking their costumer base against a list of known criminal organizations and suspect individuals, and in general even required to report any set of transactions which fit a certain pattern.
LR (just like say Megaupload with it's "reversed" payment model) was designed to circumvent all of this intentionally while there might be some legitimate use for it it's primary use was to transfer funds and exchange currency in an unregulated manner which makes it attractive to only a certain type of individuals which seek that intentionally, anyone else would not want to use it using an unlicensed MSB is a sure way of getting your funds frozen and putting you under investigation.
I don't even understand how people can support them, even if they did not do so intentionally they've put their entire costumer base under a microscope if people used this service thinking it was a legitimate MSB they were defrauded. Money laundering and tax evasion is tricky, many laws in many countries are often structured in such manner that the accused has to prove that those funds were acquired legitimately and that all taxes were paid as due. Even if LB did this out of sheer stupidity (which obviously they didn't) they deserve to get their asses handed out to them just for putting every person who ever used them at risk of going to jail or getting in debt due to financial irregularities.
Also it's customer, not costumer.
However, in the US it is illegal to operate a money transfer business without getting the proper licenses and registrations at the federal, state, and local levels.
It's even more illegal to operate a money transfer business that's being used for laundering, know or be told of these laundering uses, and then not do anything about it.
The US could pass a law that Sainsburies (a UK grocery store, with no US locations) has to employ a jazz band at every one of their stores for 3 hours every friday afternoon... but it doesn't matter, because the US does not have jurisdiction over the UK. Even if a US citizen goes and visits and stops by a sainsbury and is upset at the lack of a jazz band.
As you've probably noticed, the US goes around the world and enforces its will all the time. Whether its via various asymmetrical treaties, direct military invasion or some other tactic, they usually at least move the needle towards the direction of their desire.
Which is not to say that the US is alone in these actions. There are lots of entities that enforce their will like this. Russia for example just recently went and took a nice chunk of land for itself in the form of Crimea. This was neither new nor surprising, especially for me as I was born in a Russian occupied territory.
As it stands today, there are some entities that are effectively more equal under the law because they have infinity money. One of the most important rules for a successful adult life is to never cross anyone with infinity money (unless you yourself also possess infinity money). Money talks.
It's like anything else. If you operating a nightclub, and there's a crowd of people selling meth in the bathroom all night, you're facilitating a crime.
2) Usually money laundering means the money was obtained illegitimately. That money had to come from SOMEWHERE, and someone was probably harmed in the taking of it.
according to whom?
My goodness, that flag does look a bit gold fringed.
Illegal means it violates a law. A crime is something that actually harms someone.
Gay marriage may have been illegal, but it was never a crime, for example.
Alas, these days the USA is a very authoritarian culture and the idea that there might be US laws that are themselves crimes to enforce seems alien. But logically and morally it is the case.
You're language is too loose to be making such distinctions. Crimes have a legal meaning so you can't just use the word crime in its moral sense only without being specific.
>On HN people rarely make the distinction because they think something being illegal makes it a crime.
HN isn't that dumb.
> Gay marriage may have been illegal, but it was never a crime, for example.
In the sense you're using the word crime (i.e. moral) you're absolutely wrong, it was a moral crime and gay people were the victims of said oppression.
More details about the case when the charges were announced a couple of years ago.