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Comment by ceejayoz | Hacker News Reader

> So much money rolled in so fast that they occasionally ended up with huge piles of cash on their kitchen counter.

Seems like that'd be a red flag, considering it's a digital currency.

It seems like withdrawals were in cash: "Quadriga used an unusual teller-window system for customers to withdraw their money. Rather than pay customers via bank wires, they were told to come to a nondescript building in Laval, Quebec to pick up the cash."[0]

[0] https://en.wikipedia.org/wiki/Quadriga_Fintech_Solutions

That's both sort of an explanation - even my local grocery store uses armored cars to transport money to/from a bank, not holding piles of it at home - and more red flags.

It’s important to remember that Quadriga wasn’t able to get banking services in Canada. Canadian banks were refusing to do business with any cryptocurrency-related businesses.

Keeping the cash at home wasn’t a good idea, but being blocked from using traditional solutions necessitated that they build their own.

Something similar happened with cannabis related businesses in the US.

Since essentially ALL banks are FDIC insured, taking money from a business selling cannabis, which is illegal under Federal law, is prohibited. There have been multiple documentary/news show episodes about this.

Interesting side fact, NPR Planet Money did a special where they tried to find a bank that was NOT FDIC insured. They picked the smallest single physical location bank they could find but even that bank was FDIC insured.

At the beginning one of Quadriga's products was an ATM that people could use to deposit cash and get BTC in return. It's just about plausible that they emptied the ATMs and took the money home occasionally.

https://en.wikipedia.org/wiki/Quadriga_Fintech_Solutions

>It's just about plausible that they emptied the ATMs and took the money home occasionally.

What kind of business with ATMs "takes the money home"?

Even if it's totally legit, it's also totally insecure - they could be robbed at any time.

Money in such quantities are not takes to the home and stacked the kitchen top, they are deposited to banks - by armored guards in vans.

> What kind of business with ATMs "takes the money home"?

The kind where $200M of customers' money "goes missing" and the ceo "suddenly dies" on a holiday to a country famous for its scam artists?

Yes, which is my sentiment exactly.

Whereas the parent commented that "they might had simply taken the money from the ATMs home" as an excuse for them being a legit business while having stacks of cash on their kitchen tops.

A lot of folks in this thread would find reading up on (or especially working in) the US cannabiz and sex-work spaces incredibly enlightening.

Can you say more?

When no banks want to work with you, and when you offer a service that can be paid for in cash, it's not surprising that the entrepeneur will end up carrying a lot of cash at any given point in time.

Definitely not ideal, but what else can they do?

I know some people that used to run a number of those 'private' atms you'd find in gas stations, etc. They regularly drove to the various machines to fill them up with cash, driving an old pickup truck and carrying around 30-50k in 20$ bills in a brown paper bag. Security by obscurity I guess.

From my time in the Bitcoin ATM space, it was difficult to get a bank to accept a large amount of cash from a Bitcoin ATM.

The issues at the beginning was use of non-standard sized bill receptors and non-digital vaults at the ATMs but that has been solved recently. At the time, we used two ideas: provide a regular ATM right next to the Bitcoin ATM to dispense bills out (so we'd get ACH) and regular pickups and drop-offs to a bank.

> What kind of business with ATMs "takes the money home"?

Unbanked businesses? Some of them because they are illicit, but others exist because banks don’t want the association.

It's undoubtedly completely stupid, that's a given, but if your husband runs a company that deals in large amounts of cash (like one that runs ATMs), then it's plausible that seeing piles of cash on the kitchen counter might not be an immediate red flag.

a Crypto company whose founding principle is "not banking"

I mean, poorly-run ones is the obvious answer.

Yeah I'm a little confused about how that plays out exactly...

Lots of ways. For example, say you bought a luxury watch or handbag; found its not your thing, and sold it to someone for $2k in cash.

I sold my GPU for $2500 yesterday. Cash please. It's currently lying on my kitchen counter.

Now, piles may be crazier, but sell a Tesla?

> Now, piles may be crazier, but sell a Tesla?

I had a friend who was moving country and wanted to sell his Porche. Someone offered to buy it for a reasonable price, but wanted to pay cash. My friend thought that sounded really dodgy; so he agreed on the condition that they both physically go to a bank teller and have the bank teller deposit the money in his account as he watched. The other guy agreed; so that's what they did. He showed up with a giant bag full of bills, just like the big drug deals in the movies. At that point my friend felt he'd done his duty, and that anything dodgy to be Somebody Else's Problem to detect / deal with.

Afterwards I heard that Travelers prefer dealing in cash; so there wasn't necessarily anything dodgy going on (other than presumably the general effort to avoid scrutiny).

Just because the money itself was legitimate, doesn't mean something shady wasn't going on. The buyer could have been laundering money, with your friend actively helping him. For his sake, I hope he verified the other person's details and saved them, because if he deposited >$10k cash, it was reported to the government, and he'd be responsible for saying where it came from, and they may not like the answer.

Well for one, in the UK, when you sell a car, the seller fills out a little chit and mails it to the government, who then mail a new title to the buyer. So at least there'd be record of the sale, and an address to start to track where the money came from. In addition I think he thought the bank's security cameras would add critical information about the seller. Not sure what other verification he may have done.

Do people who buy luxury goods often just sell them for cash if they don't like them?

That seems strange.

Yes. And for many other reasons.

Some luxury brands intentionally limit production of popular items and only sell them to their best customers. Since everyone wants the limited things, they buy lots of the lower tier, unlimited stuff to become a VIP customer and get offered a slot to buy a limited item. Ferrari is famous for limiting sales of their highest end cars to certain clients. High end hand bag producers limit sales of their most popular models to approved clients only. High end watches are similar as well.

If you can't afford all the extra stuff you had to buy along the way, you can try to resell it and get some of the cash back. If you need more cash, you can resell the limited availability items as well, often for a significant profit over the MSRP, even after the middleman's cut.

Fashionphile, The Real Real, Ann's Fabulous Finds, Yugi's Closet are all active companies in this space.

Many people use luxury goods as a medium to transport significant wealth around. You'll get questioned for bringing more than $10.000 in cash in or out of the UK or most of the western world. But you get an expensive watch and it'll likely slip.

The resale value on most luxury watches is terrible though.

People who don't like attention from law enforcement do.

Interestingly, cash is the most interesting thing for law enforcement because they can legally steal it.

If you have a lot of money coming in ... not sure you NEED to sell good for cash.

It's just a weird choice IMO.

I certainly have items that I could sell but don't want to deal with the time actually selling it.

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