The Kremlin Is Suddenly Obsessed with Cryptocurrencies Due to the Magnitsky Act | Hacker News Reader

The Kremlin Is Suddenly Obsessed with Cryptocurrencies Due to the Magnitsky Act

thedailybeast.com

61 pointsjseliger24 comments

This is my first time reading extensively about the Magnitsky Act -- isn't this very clearly a Bill of Attainder aimed at specific individuals? It also seems to be in direct violation of the fourth amendment, though I think it might be ambiguous whether it applies to foreign nationals.

At the very least it seems like each seizure should be individually heard and approved by a judge.

(IANAL) I guess the fact that they were out of the country complicates things a lot. The Wikipedia entry about the act does not mention seizures, but talks about preventing them from entering the country and using the banking system which the government already has lots of discretionary authority over.

My guess is that it is theatre. The US could already kept those guys out, and freeze the bank accounts without new legislation, but legislators wanted to be seen as doing something. And if the naming of individuals is out-of-order, then they can rely on those individuals not bothering to challenge it in the US courts.

Could a committed nation state try to 51% attack a popular currency for nefarious purposes? It would seem to me (given these oligarchs' assets are frozen outside of Russia and that they are seemingly unbankable in the west), that having control of ethereum/bitcoin mining power would be a relatively easy way to move money around, obfuscate the movement of that money, and steal some in the process.

They could. However, they would risk making the currency worthless if detected.

I expect the only situation in which 51% attacks would be useful is when a party wants to deliberately destroy a currency.

I don't think money laundering and corruption narrative makes sense here. Since the west basically controls the financial system of the world, it's only natural for Russia to adopt an alternative that no one controls and take away some power from the west. The only weird part is that they actually figured this out.

It at least highlights the potential ineffectiveness of monetary sanctions on changing the political climate, which is the point of the Magnitsky Act.

I pretty much disagree with this point, however, until banks and hedge funds offer services denominated in cryptocurrencies. The Act is still a hurdle for those named to do any "legitimate" business in the West, hence Putin's relentless campaign to repeal it.

The Russians, the Chinese and the African tin pot dictators want their money out because they know it can be seized by the next government. If you end on the wrong side of Putin, you're shipped to Siberia and everything seized to pay the billions in tax debt, you all of the sudden owe.

Plus, now that they have money they want to be able to get some respect. What good is money unless you can spend outside Russia in places like Greece, Monaco...

In The Atlantic's ^1 article on the magnitsky law they mention that oligarchs store their wealth in western banks 'where property rights and rule of law exist.'. Ive also heard somewhere that there is a theory of Russia being a British/Western crypto-colony since so many oligarchs live in London. 1 - https://www.theatlantic.com/politics/archive/2017/07/bill-br...

I always believed that the way crypto currencies will succeed is primarily for these reasons. In some ways it mirrors how porn pushed important technology. While it isn't nice that crypto currencies enable criminals in the long run I think this will benefit us as it will increase usage, add more services, keep liquidity etc.

What I don't quite get is why the US government is so nonchalant about cryptocurrencies. The US owes much of its privileged financial position to the ability to siphon wealth from other economies by printing dollars. That's why it shits its proverbial pants every time China ever so slightly rebalances their reserves in favor of the Euro.

If, let's say, Bitcoin became an accepted unit of international money exchange, no one gets to ever print another dime. It's as close to a gold standard as possible without there being actual gold. You can't therefore dilute the balance owed, by quantitative easing or anything like that. And you can't pay back your debts with money you've just printed, because your ability to print is exponentially expensive

Cryptocurrencies so far have been a joke that pose no serious threat to the dollar and provide plenty of fun opportunities for seizing criminals' assets, so why would they intervene?

Key phrase is "so far". The math behind it all is definitely not a joke.

...what if the US gov. already broke all those cryptos, and are waiting for the best moment to cash-out? dun dun dun...

I'm not sure siphoning off wealth by printing dollars is really a thing. China for example has become vastly wealthier over the last few decades while selling stuff in return for dollars, rather than having anything siphoned off.

They were extremely poor though, and they got there through currency manipulation, which is now reaching its limits.

I think there are some parallels between the cryptocurrency shift and US internal frictions today. The government now is like a machine running without a master, and that's hurting its ability to respond to this development in more than a basic bureaucratic sense of getting tax money and arresting criminals. Stronger control would take a coordinated effort across several arms(propaganda, legislation, backdooring and attacks on the network, seizures). The capability is there in theory, but it's going to other perceived threats with more short-term political value.

On the other hand, if the tech hockey sticks in adoption, that's basically the end of the world order as we know it and the start of one where economic value skips around between different cryptocurrencies, never really staying in anyone's control. In effect a "marketplace for power consolidation".

It's not quite like the gold standard, because liquidity between cryptocurrencies is a software feature, not a physical constraint, and a perpetual stream of speculative ICOs discourages capital pooling. If you're poor in the dominant currency, you simply adopt the underdog to even the odds. Everyone will be writing themselves blank checks through chain forks, in effect encouraging a demurrage economy.

How effective is a named sanction? Certainly the Russian government could simply rename these people if they needed to. It's not like they're going to travel to the US where the US could apply biometrics, since they'd probably be arrested with or without this act.

I would imagine the post-2014 general sanctions due to the Ukraine stuff are much more effective.

ZrCoin. Right.[1] Each coin is supposed to be exchangeable for a kilo of zirconium oxide. That's worth about $25. Since the coin is currently selling for $1.37, down from $75, the market doesn't believe this.

Bitcoin is getting big enough to be useful for large-scale money laundering. At last, a use case at scale!

[1] https://coinmarketcap.com/assets/zrcoin/

This is great for the ICO market.

Incredibly yellow writing from a journo not competent in both cryptocurrencies and Russian politics (LDPR is a far right party? LOL)

Just because he got the party affiliation wrong, doesn't mean that Russia isn't corrupt to the core.

EU screwed them really well during the Cyprus bank crisis, quite a few lost their hard stolen money. http://www.bbc.com/news/world-europe-21992745

It means low quality of the article, at least.

Wikipedia claims it's a far right party. Is Wikipedia wrong?

https://en.wikipedia.org/wiki/Liberal_Democratic_Party_of_Ru...

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