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Comment by tmcw | Hacker News Reader

> Even for valid (non-criminal) uses cases, there are numerous laws and regulations that translate into crazy fees to do proper crossboder money transfer.

DeFi would have to follow those laws, right, and would be just as much of a pain to use after it has all of that compliance built in?

Otherwise, what you're doing is just illegal, and the alternative you should be comparing crypto to is something like "hiding money in carseat cushions", not TransferWise, right?

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If you are talking cross-border money transfer, in countries like the US you cannot just willy-nilly have an exchange that changes fiat for crypto and vice-versa. In order to sign up for Kraken/Coinbase/etc you have to pass through KYC / AML on-boarding and are under continuos AML monitoring of the size and structure of your transactions. In the original example, the US company buys crypto from an exchange in the US using fiat from a US Bank Account and will transfer that to another exchange off country (in my example it would be a LATAM country). There is a trail of the entire process on the sender (US side). However, it is true that the responsibility and thoroughness of the AML on the other side depends largely on the receiving country(the KYC/AML program requirements of the exchanges in the other side will vary great). Legally and conceptually, it is just like it would happen with transfering Fiat in the traditional way (e.g. once I send you money to your bank in LATAM you can take it out and do whatever you want with it - legit or shady), except with all the fee/speed/etc benefits. The main conceptual difference is how you create liquidity (changing from crypto to fiat) on the other end (i.e. through p2p or through the exchange). Of course the gray area is what happens on the other end, but as a sender you have gone through all the checks and requirements. You even get paperwork at the end of the year and the US exchange will submit suspicious activity reports (if necessary) to the US govt just like a regular bank would do. Totally legal and correct.

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