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Comment by Retric | Hacker News Reader

It’s surprisingly difficult to move around large amounts of fiat money without being caught. Large scale gangs get good at it by necessity, but many people have gotten caught. More importantly the effort to launder money is a major disincentive for criminal activity as it shifts the risk vs reward ratio.

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Not really if the penalty of money laundering is far smaller than the profit. Just look at HSBC. Penalty for it is just the cost of doing business.

It’s reducing the reward not just increasing the risk.

That is the very different problem of willingness to punish "system-critical" money launderers, versus the ability to detect rogue money launderers. Failure on one problem does not invalidate efforts on the other.

What is the difference between the two? Organized crime always goes through banking insiders, it just makes sense. That's how high level bankers get rich generally.

Most crime isn’t well organized. Which is why catching outsiders is still quite useful.

I’m not so sure about that. In my country (Hungary) actually all big crimes have to go through the prime minister, he’s working together with the national bank and lots of other politicians, bankers and lawyers to steal the EU money that the country gets. Otherwise it’s a peaceful country (that is getting less peaceful as the government steals more of the economy).

Big crimes make the news, small crimes are when people are getting mugged. Both types of crime are significant, but small crimes are vastly more common.

HSBC was fined $1.9 billion for processing (not profiting) $881 million + $660 million. Their profit was probably only a few percent of that. But even if they simply took all $1.5b as profit, they still were fined more than that.

You might say they probably laundered more money than that. You're probably right. But it ain't what you know, it's what you can prove.

Assuming the bank profits a few percent, a $1.9 billion fine wipes out the profit from 10s, maybe 100s of billions of laundered money.

And nobody went to jail. Which is the point of the argument. HSBC are STILL trading and moving money today.

This was also not the first time HSBC was caught doing this.

Nothing has changed. They made the losses back. I know execs calculate fines as operational expenses because I've helped them do it (granted not HSBC but people aren't too disimilar from each other)

> It’s surprisingly difficult to move around large amounts of fiat money without being caught

For the average Joe maybe.

For corporates? What a joke. I work in fintech systems for ForEx and credit lending. Gets abused by banks allllll the time. And I don't mean some sketchy african or asian bank. I mean HSBC. They still trade, despite the billions in fraudulent transactions they've knowingly moved.

And HSBC are just retarded, I promise you ALL the large banks have moved fraudulent transactions. Not always intentionally, but banks consist of people and people are easily swayed with the right pressure points.

Does crypto make this easier to do? Yes, but the problem isn't the medium of value transfer. That's as untrue of crypto as it is of fiat.

And if you want to launder crypto, just sell a few NFTs.

Even crypto needs to be converted to fiat at some point to actually spend it, either directly so you can move it to a bank account or turn it into cash, or indirectly by using a crypto-backed credit cards and if that money isn’t legit, you still have to launder it if you can’t prove to your tax authorities where it came from.

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