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Comment by jstanley | Hacker News Reader

Money laundering regulations are one of those things that started out with good intentions (prevent people who obtain money via theft or fraud from being able to spend it in the legitimate economy) but has now morphed into a kafkaesque burden that isn't obviously a net positive for society.

This is one of the reasons I'm a big fan of cryptocurrency. Your service would not have been shut down by the payment processor if you were able to handle the money yourself without relying on a third party.

The world probably hasn't reached the point where going cryptocurrency-only would be viable for your service, but onerous anti-money laundering regulation is just pushing more people towards cryptocurrency, at the margin.

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>This is one of the reasons I'm a big fan of cryptocurrency. Your service would not have been shut down by the payment processor if you were able to handle the money yourself without relying on a third party.

If your cryptocurrency-based store wouldn't comply by the same regulations that third party was required to comply with, though, then you, as a merchant, would be breaking the law. Which takes you back to square one, cryptocurrency or not.

It's just that with cryptocurrency you get to decide to break the law and continue accepting payments, instead of being based to Stripe.

Why on earth would a cryptocurrency-based store have to comply with the same regulations as a card payment processor?

One is just accepting payments, the other is processing them for vast amounts of third parties.

>Why on earth would a cryptocurrency-based store have to comply with the same regulations as a card payment processor?

Because money laundering can happen at any level, and specific regulations apply, you don't need to be a card payment processor processing "payments for vast amounts of third parties".

As long as you accept payments, even for a lemonade stand in the corner, you need to comply with these.

In fact you probably misunderstood what Stripe demanded on the parent's situation: they didn't demanded the parent's store comply with the same regulations Stripe does as a card payment processor. They demanded they comply with the regulations a store should comply with.

The difference is that you don't get blocked by the third party before you even try to start.

You are correct that the law is still there, but it's the difference between innocent until proven guilty and guilty until proven innocent.

On a first look money laundering by itself doesn't seem to hurt anyone very much except for the state. But of course it is used as a vehicle. Those putting in the effort needed to go through a money laundering process, you may ask yourself: why are they doing all this? My guess is that human trafficking and other terrible stuff is realized with this, so I think there is a point making it difficult - up to the point of "blocking innovation" - when it comes to opening a market place.

> This is one of the reasons I'm a big fan of cryptocurrency.

> Your service would not have been shut down by the payment

> processor if you were able to handle the money yourself

> without relying on a third party.

Yeah but this is also the ethical problem of cryptocurrency. Most people agree that money by itself has something bad attached to it, at some level it encourages people to do evil stuff. If you now look at cryptocurrencies, this is even worse! We complain that most major banks partake in speculation with food. But we completely ignore that with these currencies far worse stuff is possible without going through the process of money laundering, the state is completely not involved.

This is a crazy double-standard if you consider that many hackers consider themselves having a much higher ethics than any other business person.

It's not a double-standard. Complaining about a wrong action (like speculating on food¹) is not the same as complaining about a system that makes a wrong action possible (like cryptocurrencies). Much like one can defend the protection of speech one despises.

The equivalent would be to complain about specific uses of cryptocurrencies, or in the other direction, about the very existence of banks and commodity markets.

¹ (just taking your example, not necessarily my opinion)

Why is speculating in food bad? Futures markets feature in explanations of why economies without centralized planning are the ones that never have famines.

Like I noted at the bottom, I just used parent's example, I don't necessarily agree with it.

Ok this might have been a bad example. I'm aware that Futures historically play a role of an insurance for food producers. Are those then by volume the major part of so called food speculation?

This HN. Capitalism baaad, UBI goood.

> Most people agree that money by itself has something bad attached to it, at some level it encourages people to do evil stuff.

What?! This is not true. Money is not inherently evil. Money is a tool, just like a hammer. I can build things with it or do harm with it.

>Your service would not have been shut down by the payment processor if you were able to handle the money yourself without relying on a third party.

But without payment processor you need to handle a lot of that yourself (security, refunds, fraud, recurring payments, taxes, EU VATs, etc.). All the complicated stuff that caused us to outsource payment services in the first place.

I was under the impression that everyone outsources payment processing because PCI compliance is hard.

It's a complete pita, but even without any security rules you still need to figure out how to clear payments using something like ACH, weird and usually 99% undocumented bank APIs, building a lot of automation, reporting & monitoring tools yourself, etc. It's a lot of work.

I actually like that you can go after people financing terrorism or making huge amounts of cash from illegal drugs, gambling, smuggling and the like. Without money laundering regulations, and within cryptocurrencies, that would be a lot harder.

People dealing in significant amounts of cryptocurrency will eventually have to be regulated in some way, also.

You can go after people laundering money through cryptocurrency, of course.

The part I'm protesting (in this thread, at least) is the part where the regulations on banks and payment processors are so onerous that they refuse to work with legitimate businesses.

Are there any numbers? How much of a dent to terror financing this does? I doubt it's very much.

Just imagine if basically anybody could finance terrorism without much fear of being discovered. I doubt very much there would be less terrorism then.

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