I think it’s more a sign that crypto is mainstream finance now. Specifically, the type that has enough money sloshing around at the top to warrant lobbying efforts and mingling with the finances of regulators.
> Same for crypto, keeping it on the fringes will only help illegal enterprises and rogue nations use it to bypass sanctions.
None of this has any impact at all on whether or not crypto is used for illicit purposes in other locations. Crypto is also already taxed and legal, so the comparison to cannabis doesn’t make sense either.
It’s no longer about Bitcoin. It’s about alternative asset classes. I think the new ventures in the crypto space have realized that BTC is old news and that the real money is in creating endless new crypto assets and ventures.
I agree that we shouldn't be banning this sort of thing, but if people want to throw electricity at it in ways that I consider a huge waste of resources, I'd really like to see that taxed better. And not in a regressive way that makes every electricity user pay more.
> Obviously HN community is down on crypto.
I don't really think that's true, and please remember that the HN community is not homogeneous, and various people have very different (and strong) opinions on many things. I'm personally not a fan of cryptocurrency (I think it's a waste of time and effort, and to top it off it's currently an environmental disaster), but the top comments on this article are relatively positive right now.
I believe @dang has mentioned often that early comments on most articles end up being pretty negative, because the early posts will be more knee-jerk (which tends to bring out the worst reactions in people). Only after people have time to read and cool down will posts be more measured. This article was only posted an hour ago (at the time I'm writing this), so no surprise there's a lot of negativity here.
Honestly I'm not sure I consider HN a "community" in the same way I consider other online ... communities, communities.
With notably rare exceptions you don't have a lot of sharing of personal milestones, and while you might occasionally "recognize" a poster (and we have a few "famous" ones) it's much easier to deal with each comment as a stand-alone statement without any provenance.
Even meta-discussion about the nature of HN like this seems a bit gauche and is discouraged.
The issue here isn't about what activities should be taxed, it's about overly broad KYC reporting requirements.
Pretend the original provision was about ATMs... the language could be used to argue that armored truck drivers should be required to collect personal information and transaction data for every user of every ATM they deliver cash to. Obviously that's not really possible and would be a huge privacy issue. The risk people are seeing here is that the current language could be abused to make ATMs illegal altogether, since nobody would want to risk getting in trouble during the process of stocking them.
This will earn you downvotes because it is a childish sentiment of HN.
Many on HN dislike crypto in its current form of lawlessness. Regulation like this is a positive step for the ecosystem. Cryptos will still have to prove their value outside of finance to become more accepted by HN.
That should be a great proxy, but regulators have so overburdened legal dispensaries that they need to be bailed out. Illegal sources could have been easily been made extinct or at least sidelined, but are still able to thrive because the overhead to get a license and stay licensed is so immense.
https://www.latimes.com/california/story/2021-06-14/californ...
The municipal governments try to shut them down with daily fines but they either eat the cost because it's so lucrative or shut down temporarily and pop up somewhere else.
At least one shop had large bricks put in front of them at multiple locations and they just put someone outside with a square tablet and sold it there.
https://globalnews.ca/news/5369230/cement-blocks-illegal-mar...
I highly doubt the underground/grey markets will go away.
If finance can't be tracked it can't be taxed.
If it's mainstream more and more people could potentially switch to crypto, which would reduce their tax collections.
Just theorizing. I have no idea if this would happen.
Money laundering (aka, pooling cash together to make it harder to track) is defacto illegal by itself, even if you use the money for legitimate purposes.
A federal "money laundering" charge requires an illicit origin, and so since successful money laundering will never have an illicit origin, the charge can only be tacked on to another indictment.
After centuries of not having much surveillance tools of the money supply, the state has had a 50 year run of the privilege of deputizing financial intermediaries to surveil the electronic payment system. Now the electronic payment system will begin to inherit the same tenets of cash. This is just a reversion to the mean.
Fair.
But think about it: a _singular_ person in your mixing pool can make the entire pool illegal. One, singular, person using that money for contraband (illegal porn, illegal drugs, illegal tax evasion) will turn the entire pool illegal.
Do you trust everyone else in the pool to be using it for legitimate gains? If you went into court, would you be able to say with a straight face that "Everyone in my mixing pool was in fact, doing legal activities?"
So in practice, I'd argue that most mixers are illegal (because surely, there's at least one person using the mixer for illegitimate purposes). Furthermore: the BTC transaction into the pool (and out of the pool) will forever be written into the blockchain. If you use your same wallet for both sides (or if the prosecutors can prove that one of your wallets was on the input-side, and another one of your wallets was on the output-side of the mixing process), you're now tied to all of the illegal activities that mixing pool is associated with.
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That's the thing. Mixing pools have never been tested in court. But imagine what a prosecutor would say to a jury, and imagine what the jury would rule.
It's very difficult to know, but I'm leaning towards this not holding up in court. At least not upon appeal. If a mixer has tens of millions of known participant addresses and the government tries to argue that merely owning a single address that received anything from the mixer means you aided and abetted some other crime from some other person who used the mixer, I think the defense could point out how that just isn't remotely statistically sufficient to imply any sort of involvement.
>Do you trust everyone else in the pool to be using it for legitimate gains? If you went into court, would you be able to say with a straight face that "Everyone in my mixing pool was in fact, doing legal activities?"
I'm not sure if proving a negative will work. Now, if they can prove you had knowledge at the time that at least one person used it illicitly, then I think it'd depend how the mixer works. If it works so that any "dirty money" is purged out within the next few transactions, then they might have to prove that you sent or received funds close to those distribution windows and had specific knowledge that some specific illegal act was likely occurring at that time.
I see how they could potentially prosecute the owners of the mixers, if the owners are aware of at least one case of criminal use, but prosecuting the users sounds much more difficult.
* "The only reason to use a mixer is to hide money"
* "You joined a pool of millions of individuals, all of whom had the explicit goal of hiding money from the traditional financial system".
* "You (probably) knew that the money you get in your output wallet comes from a random individual in the pool".
As such, the implicit assumption in a reasonable person's mind is: this money you got is absolutely from someone else who was trying to hide their money. The law also states that aiding and abetting them is illegal in of itself.
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> If it works so that any "dirty money" is purged out within the next few transactions, then they might have to prove that you sent or received funds close to those distribution windows and had specific knowledge that some specific illegal act was likely occurring at that time.
Well, the issue with "faster moving" mixers is that it more closely connects the dirty money with the source. "Slow moving" mixers with larger pools are more entangled, harder to know where the money came from.
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I dunno. The RAII has been mildly successful in court over IP addresses used in Bittorrent peers, right? That seems to be roughly the same level of involvement as we're seeing here. I'm not necessarily saying you're going to get jailtime, but you probably will be roped into the court case if someone in your pool was doing something sketchy.
Is hiding money inherently a crime, though? I think it only might be if you're trying to violate a specific law regarding transparency. Naturally, if you're using a mixer, you must be trying to hide your money or how you're using the money, so if that much is illegal then you can skip all the arguments about the source of the other funds in the mixer. But if it isn't illegal, then I think you might need to tie it to belief that a specific crime likely occurred.
I'm definitely not a lawyer and could be totally wrong. But that's the defense I'd give, at least. Unless mixers are explicitly declared illegal, or unless there are explicit reporting requirements which you're evading (e.g. they have reason to believe that you used the mixer to evade taxes), the accusation just seems too weak and vague.
>Well, the issue with "faster moving" mixers is that it more closely connects the dirty money with the source. "Slow moving" mixers with larger pools are more entangled, harder to know where the money came from.
That's true. The better the mixer, the harder it might be to prove you aren't guilty if you're not guilty. But, at the same time, the harder it might be to prove you are guilty if you actually are guilty. (Assuming the crime in question is what the mixing was allegedly abetting, like a cryptocurrency exchange heist or something.)
>I dunno. The RAII has been mildly successful in court over IP addresses used in Bittorrent peers, right? That seems to be roughly the same level of involvement as we're seeing here. I'm not necessarily saying you're going to get jailtime, but you probably will be roped into the court case if someone in your pool was doing something sketchy.
That seems very different to me. The inherent act of downloading or uploading the content is illegal. So if an IP registered to your name and home address is downloading the content, then it's just a matter of trying to prove that you likely initiated that activity. The IP's "guilt" is already a given.
I think it'd only be analogous if mere use of a mixer is also itself illegal; even assuming a scenario where no one is using it to help with any other crimes. But if it is, then it's just begging the question, since using it would be illegal because it's illegal to use. And then it'd just be a matter of proving you had access to and were using that cryptocurrency address at that time, since the address's "guilt" is already established.
Perhaps I'm wrong about money laundering. But what if prosecutors instead hit you with smurfing? (https://www.goldinglawyers.com/smurfing-money-example-lost-e...)
Perhaps smurfing is closer to the mixing. The _intent to hide_ is by itself illegal in the law, and frowned upon severely in our country.
Although I don't agree with how you extrapolate other legal scenarios to one about mixer users, I'm also not worried about juries, the judges especially on appeal are where your rights matter and would not be swayed by emotional arguments like a jury. You are pretty much paralyzed if you are always worried about what prosecutors can target you for and what juries can be swayed to do.
If you have the tech skills to mine bitcoin is it trivial to find and use a mixer, or is it something requiring more specific expertise?
IRS is offering $625,000 USD to anyone that can crack the Monero algorithm [1].
[1] https://www.forbes.com/sites/kellyphillipserb/2020/09/14/irs...
They would probably not exchange into USD, there are plenty of other currencies and they would probably favor a local currency.
Because they're typically based in Russia, and Russia has a policy that it will not prosecute its citizens for computer crimes unless they perpetrated them against Russians or Russian organizations. My understanding is most ransomware has code to detect Russian computers (e.g. by checking localization settings), and will refuse to run if it finds itself on one for that reason.
https://krebsonsecurity.com/2021/05/try-this-one-weird-trick...
I don't know, I'm not a Russian in the ransomware business.
But I speculate that doing it that way might be so blatant and inconvenient to the Russian government that it might get the policy that protects them changed. Also, I'd imagine any bank that accepts such payments would quickly get itself blacklisted. This stuff isn't actually binary, so it's not smart to take it to the limit.
Though, the true answer to your actual question is what the other commenter said: it's mainly due to the Russian government turning a blind eye to it as long as they don't target Russian/ex-USSR citizens. So even if you do know a ransomware operator's full name and home address and everything else you can possibly know about them, you can't do anything about it besides hope they leave the country and try to catch them then.
Now you have congressmen with laser eyes on 100k bitcoin twitter profile pics, the head of SEC taught classes about blockchain at MIT; it is way too late.
The smart thing is to embrace it, the complete opposite of the Chinese government course of action. You set back the entire nation by not embracing innovation.
They can significantly hurt the price but limiting reputable shops from accepting it though.
It isn't since it doesn't change property relations. It is more of a "different asset" they could own and speculate with.
> If finance can't be tracked it can't be taxed.
Crypto-tokens are very traceable and most can be deanonymized by forensic accountants.
> If it's mainstream more and more people could potentially switch to crypto, which would reduce their tax collections.
It wouldn't and most people aren't savy enough in cybersecurity to avoid having their tokens stolen. (And most protocols don't have a chargeback or recovery mechanism)
It is not a threat to their power, imagine the corrupting power of being able to produce wealth anonymously without being traced or taxed and having that sanctioned by the government.
I don't know where this meme came from. If the U.S. government declared Bitcoin legal tender tomorrow, it would be monumental. But practically speaking, not that much would change. The Fed would buy Bitcoin the way e.g. the Swiss National Bank buys dollars and euros. And the Treasury would issue Bitcoin bonds or something, I don't know.
Cryptocurrencies currently make it easier to evade taxes, which benefits the rich, and easier to make money in a host of new financial activities, which benefits those near those activities, i.e. people with money and banks and first movers in the technology.