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> Crypto solves the problem (partially) of where to store your revenue instead of a bank.

How exactly? You run a pot shop and end the day with $10,000 in USD. What happens next?

Go buy Monero from local Monero.

The GP is saying that after you have the cash in hand from your customers, how do you transfer it into a digital currency like btc or monero or anything else?

You need to physically have an armored transport take it to whoever is selling you the cryptocurrency.

Edit: I guess that's a potentially profitable but unfulfilled niche. Create a company that can take cash in big amounts and sell cryptocurrency. Not sure how feasible is it but that is the missing link as I see it.

> Edit: I guess that's a potentially profitable but unfulfilled niche. Create a company that can take cash in big amounts and sell cryptocurrency. Not sure how feasible is it but that is the missing link as I see it.

That just pushes the problem down the road to somebody else, though. At the end of the day somebody's going to have a huge pile of cash, and no bank will accept it without knowing where it came from.

You have a point.

I guess this really does boil down to a federal vs state legality then?

So if it's legal in a federal level then banks should be able to accept the cash right? or would they have a "right to refuse the business because we don't like it even if it's legal at the federal and the state level"?

> Create a company that can take cash in big amounts and sell cryptocurrency. Not sure how feasible is it but that is the missing link as I see it.

The problem is they would fall under the same money laundering rules that banks are and would probably not want to take dispensary cash. Even if they do take the cash, where would they deposit it?

> Create a company that can take cash in big amounts and sell cryptocurrency.

I believe this is commonly referred to as an exchange. I believe there are quite a few in existence already.

I meant physical cash in large quantities.

Oh right. I believe this is commonly referred to as organised crime.

Is it organised crime having piles of cash from otherwise legal activity?

Let's assume there is no federal vs state legality issues and instead it's just "legal". If selling X product generates large quantities of cash, is that organised crime?

I would think not, but then again I'm not a lawyer so I could be wrong. If I am wrong then yeah, the idea is definitely not sound.

If the activity is wholly legal then there isn't a problem looking for a solution: existing cash handling services will gladly do business with you.

Taking in large sums of cash and swapping it over for some cryptocurrency or another is bound to attract at least a few people who have need to launder cash. Thus, the service is likely to run afoul of Know Your Customer regulations etc etc.

As others have pointed out elsewhere in the comments, we ought, in my opinion, fully legalise and regulate the industry.

> Is it organised crime having piles of cash from otherwise legal activity?

Selling marijuana in the United States is not a legal activity. It's a federally prohibited activity that if you are really successful at it (simply by amount of money made) can be charged as a felony with a mandatory life sentence (in the no-parole federal system, where a life sentence actually means life.)

All this marijuana to crypto currency stuff is great in theory.

But at some point, you, the skinny geek with your bags of cash and bitcoins is gonna run into people who have already solved this problem and have been doing it for the past 40+ years. The drug cartels. Probably gonna be some conflict there.

Give the customers a 5% discount if they pay in Ethereum, Bitcoin Cash, Monero, ZCash, etc.

Then you'll end your day with about $9,950 in USD...

What legitimate liquidity aggregator is going to hold the counterparty risk for PotCoin/HempCoin and have banking relationships? Because once the Weed-coins are sold for BTC and given to a liquidity aggregator in jurisdictions where marijuana/hemp are illegal that becomes money laundering.

Cryptocurrencies that dodge regulations do not; their value is backed by the greater fool theory and the fact that this new retail wave aren't too familiar with AML/KYC/counterparty risk

To address your last point, a non-gubmint backed stablecoin would address that, but then again, perpetual motion devices would probably stop energy issues.

Now I kind of want to create a PotCoin/HempCoin marketed as a solution to marijuana businesses (which are rapidly growing as more states legalize so get it now while it's still cheap!) inability to use federal banks just to see how many people i could fool into buying it.

The sad thing is I bet I could make millions...

Literally none of that matters to a prosecutor. In fact, taking steps to obscure the source of funds is going to be considered a crime in and of itself.

You may not like it but KYC/AML regulations exist and are enforced.

> If that aggregation vehicle is through a privacy-focused coin like Monero or Zcash, or anything onion routed (e.g. Lightning network), how exactly do you demonstrate laundering?

You should be more concerned about how you demonstrate it's not laundering, because in more and more jurisdictions KYC (Known Your Customer) regulations in banking means you will in more and more circumstances get questions about where your money came from and potentially be asked to prove it.

This may or may not affect your jurisdiction now, but these will likely get more common as crypto spreads.

E.g. my ex bought a house recently, and part of the funds she paid the deposit with were transferred from her sister as part of her inheritance from her dad. Which created a whole circus with her lawyer, who was obligated to be certain they were not dealing with laundering, of digging up not just her statements, but dealing with requests for her sisters bank statements, and documentation of the source.

If one of those steps is effectively a tumbler, the answer may very well be "you can't prove the money is clean; we can't deal with you, and we have to report this"

No need to make any specific approach illegal even - just require that anyone you make large payments to are sufficiently satisfied the source is clean, which will be exceedingly hard for users of methods that obscure where it's from.

> Crypto solves the problem (partially) of where to store your revenue instead of a bank.

The question on everyone's lips is: in what way is storing money in a bank a problem.

Any way you slice it banks are a number of solutions. Problems not so much.

lol, crypto isn't magic. Security through obscurity is not a solution. We're trying to move away from that tor blackmarket world.

People need security through legality. This just needs to be... not illegal.

Crypto is not illegal. You just have to pay taxes on it, and exchanges might ask you to explain where the money came from.

I'm surprised nobody created a bank/exchange to take advantage of the situation.

Weed revenue is federally illegal. I think that's ridiculous, but buying crypto with that money in order to buy clean money is still considered money laundering under federal law.