UK tells operators to shut down crypto ATMs or face action
neowin.net
neowin.net
Crypto, in general, is just another example of tech charging ahead while in many cases clearly violating existing laws and regulations.
In this particular case, the article specifically notes that:
> To operate in the UK, crypto ATMs should be registered with the FCA and comply with UK Money Laundering Regulations (MLR). According to the FCA, none of the cryptoasset firms that have registered with it have been granted permission to operate ATMs so those that are operating are illegal and, the FCA said, customers should not be using them.
A more accurate headline would be: "Crypto ATM operators violate laws, forced to shut down".
These ATMs are no different than the shenanigans that Uber got up to: deliberately skirting or outright violating not just the intent but letter of the law in order to "disrupt".
I'm waiting to hear an announcement that these ATMs will start using geolocation techniques to shut themselves down when law enforcement is nearby...
Then, given Uber success in making legislation evolve, crypto ATMs will receive at worst a slap on the hand, then be fully legalized in a few years, while the existing ATMs will become a thing of the past for a new generation of customers.
(I have no idea how it's in continental Europe or the UK, but that how it's here in the US)
I just followed up on the Uber analogy: the only people I know to still be using regular taxis are old people.
When they retire, I think Uber/Lyft will dominate the market.
> The economy isn't going to switch from cash to crypto in a few years time.
Likewise, the economy is not going to fully deprecate taxis: in a few years time, there will still be taxis. Then maybe just in some high density cities like NYC or London.
But I think the business model of a taxi you can't book from a smartphone is going to end up very dead
To play devil's advocate: they might not exist as a company today had they complied with the law. There's a critical mass problem with trying to do something new that toes the legality line and had they not had the user-base they might not have been able to gain the funding that then allowed them to lobby to change the laws. They lucked out, though, and were popular enough that nobody was able to successfully shut them down for operating what essentially came down to an unlicensed (and maybe uninsured at the time?) cab company.
If we accept that it's okay to get rich by breaking the law, where is the line that makes it not okay to deal drugs or sell illegal financial products in the hopes they might be legalised later?
Nowhere. It’s a gamble. Vietnam War draft dodgers didn’t know they would be pardoned, but did it anyway. Normal people hated taxi companies and their dirty cars and “credit card reader doesn’t work” bullshit. Uber made the right call that they would get support.
If you like currently illegal drugs, you might think that crypto is the path forward, but money launderers are scamming the system and these laws to fight them are well supported and push against the crypto tide. It’s a gamble.
> sanctions of criminal punishment for those who commit sodomy are unconstitutional
I don't think anyone was getting rich of sodomy? The argument is spesifically about profiting from criminality, not about disobedience/protest and lawbraking in general.
Are those machines that take gift card and give you money in exchange also considered ATM.
According to the government crypto is not a currency. So it’s can compared to collecting baseball card or stamps.
In US law it is the practice of engaging in financial transactions to conceal the identity, source, or destination of illegally gained money. In UK law the common law definition is wider. The act is defined as "taking any action with property of any form which is either wholly or in part the proceeds of a crime that will disguise the fact that that property is the proceeds of a crime or obscure the beneficial ownership of said property".
Quite a bit of UK property is owned this way. https://www.private-eye.co.uk/registry
Both the UK media and government like to apply the term in super creative ways. When they speak of Russian money laundering in London, it’s usually a complete fabrication.
E: Throttled, so can’t reply directly to rwmj.
Why would you risk bringing dirty money from Russia to the UK when Russia is so deeply corrupt that it’ll be trivial to come up with extensive documentation demonstrating legitimate sources of funds?
Anti-money laundering experts will look a number of factors to determine how risky that money is. Large sums of money from Russia turning up in personal accounts is incredibly risky, and the knowledge that high levels of corruption exist in Russia means that forged documents are expected, so documentation will be viewed with high levels of scepticism.
Moving that money into property quickly starts to obfuscate the source of the money. Additionally property ownership laws in the UK make it very difficult to differentiate between property bought with dirty money vs clean money, but there’s are strong cultural expectation that property can be bought and sold quickly and easily. As a result it’s much easier to find banks and lawyers that are happy to overlook slightly dodgy aspects of your property trade, because they’re common in property deals and may exist for large number of legitimate reasons.
Additionally you can take advantage of the fact that the UK is seen as high trust country with low levels of corruption. So it’s much easier to sell property to people in rest of the west without much detailed scrutiny.
Actually most of the World's money laundering happens in tax heavens, of which like half is Uk/US/EU islands and territories. Money from known dictators flows through them, and shell companies "invest" in london properties, inflating realestate prices and robbing locals of the chanse to ever own a home.
Even when money is coming directly from Russia, no documentation regarding its origin was needed to buy a house.
There is a string of never ending money laundering scandals at deutche bank, HSBC, abd credit Suisse.
None of this is secret, this is all in official court documents.
The 4th Amendment should have been read as including all financial transactions among "papers, and effects". AML/KYC laws are completely incompatible with a free society.
Depending on how you define it, money laundering could be seen as just the act of hiding the origin of some pool of funds. That, by itself, is morally pretty neutral.
For example, in the US campaign finance laws effectively allow money laundering by allowing legal PACs which can receive donations, spend those donations on political activities, and obscure the source of those funds. This is justified on the basis of protecting free speech.
Conversely, it can also be used to hide the source of funds generated in the commission of a crime, which impedes the work of law enforcement.
It's kind of why there is also a way for you to claim illegally obtained income on your tax form as well.
They may not have proof you committed the crime, but they have proof you tried to hide the crime. So if you make that a crime as well, you get them anyway. The goal isn't to be accurate, the goal is to stop criminals.
Also, by knowingly helping someone launder money, you are kind of aiding them in their crimes. So it's a way to get accomplices as well.
The prime identifying characteristic of a police state.
You're looking for ways to evade justice. It's evident in your choice of words. You're concerned with conviction of something harmful. The harm they committed was in the other crimes. They should evade punishment for that because they managed to hide it well?
Your ends may be laudable but your means are immoral. The ends do not justify the means.
> You're concerned with conviction of something harmful. The harm they committed was in the other crimes. They should evade punishment for that because they managed to hide it well?
You say they're evading punishment "because they managed to hide it well" but the fact remains that you were never able to prove they actually did anything worthy of being punished for in the first place. Don't you see the obvious error in that? The only thing you actually know is that their financial transactions were not documented to your satisfaction. In effect you're demanding that they prove their innocence, whereas in a just system one is innocent until proven guilty.
It’s similar to knowingly trading in stolen goods. If there are no laws against that then black market trading is far less risky and far more lucrative.
I think what concerns me about defining a crime so generally as something you only do after committing another crime would be the presumption that the state was infallible when defining all other crimes. So it equally improves a states ability to enforce both legitimate and illegitimate laws, but does little to address the crimes that led to ill-gained capital in the first place.
Having known some criminals, their solution to money-laundering laws was simply not to file their taxes. It didn't stop them from committing crimes, so the "deterrence" angle seems as flimsy as ever here.
It would be unreasonable to expect a deterrent to stop everyone - some people are arrogant/stupid enough to believe they might get away with their crimes, and some are actually clever enough to do so. The point is that it deters all the people who might be tempted but aren't (rightly or wrongly) sure they'd pull it off. I don't imagine there's a way to measure how many people that is, but if it's "some" then the deterrent has worked.
Also, specifically in the case of money laundering, the laws aren't vague catch-all things that try to cover every base. They're very specific about what reporting you need to do when you carry out financial transactions. If you're doing those transactions you have to complete certain reporting criteria, and if you fail to that properly you committed the crime. There's no need to assume the state was infallible and had to define every crime. They don't. They just needed to define every type of financial transaction, and what questions to ask when those transactions happen (they're things like "Ask the person where the money came from." and "Please attach confirmation, in the form of a bank statement, that this is really where the money came from."), and that's quite easy.
Just in case there’s a dead body — and definitely not so the government can track the contents of everyone’s car.
You are correct on both counts. States use multiple means at their disposal to make it harder run an illegal business. Anti money laundering law is probably the last of those hurdles.
That said, fixing the real root cause is easier said than done. Take one of the biggest source of money laundering in/around the US, drugs. Fixing the root cause here calls for asking some tough questions. Why is drug use/abuse so pervasive? Why not make it legal? Can free, universal health care fix it? And so on.
Basically well placed for fancy places to take the next sucker out to lunch.
That's what happens when you milk your clients for 2 and 20.
At least there won't be so many Russian tarts there anymore. ;-)
Ladies who lunch might be the more polite term, but that generally implies well-dressed which regrettably is not the case amongst the Russian Nouveau Riche.
Many Russians will also be applying for visas right about now, many of them will be granted.
Like damn, I find it hilarious that HMV and this ATM were singlehandedly holding up the Bond Street station experience for you.
Maybe if you'd said "Russians" I'd understand, since their banking system is partially cut off, but in that case we'd be talking about money laundering intended to bypass international sanctions.
https://www.swift.com/our-solutions/interfaces-and-integrati...
There’s no separate comms infrastructure for SWIFT, it’s very much vulnerable to internet-based DDoS.
The question then becomes: how is the network designed to handle DDoS attacks? For example, you'd need to identify the network segment or host IP address where the SWIFTnet connections are terminated, among many other things, and I have no idea how you'd do that and if the system builds in resiliency for things like DDoSes.
Of course, the simpler answer is just to blow up the ISPs and cut power to datacenters.
Regardless, if the Ukrainian banking system connection to SWIFT was indeed disrupted, you wouldn't be able to transfer funds to a crypto exchange in the first place, which rather undermines its use as a way to get funds out of the country...
It’s an issue that regulators like the FCA are keenly aware of, and are pushing banks hard to find a solution to.
For example https://www.hsbc.co.uk/help/money-worries/no-fixed-address/
First, even citizens can find it challenging to join a challenger bank. Some UK citizens don't have the types of documentation those banks require. I once spoke with customer service of one when they asked for a photo of my passport 1 year after I'd opened the account. I knew not everyone had a passport or other document they accepted, and the bank confirmed a substantial minority of UK citizens had no way to meet the identity requirements, and they were fine with not having those people as customers.
So imagine what it's like for a refugee: It is not uncommon to flee somewhere without a passport with you. A bad idea, but obviously it happens. Maybe you never even had a passport.
Second, because the UK "hostile environment" laws exist to prevent access to banking as well as access to tenancies.
In some parts of the UK, banks are required to check your visa status.
If you're a refugee with supporting documents from the UK state, you should be fine getting a bank account, though it may take longer to verify your identity. If you lack those documents, perhaps because you're a new refugee who fled somewhere in haste and hasn't been through the system yet, or whose claim was denied because the UK system is infamously unsympathetic, not so much. Even the online challenger banks will not give you an account until after the visa check.
But then, your point about e.g. tenancy agreement would also get in the way.
In some parts of the UK all potential landlords, even "informal" ones, are required by law to check visa status, and must refuse to give a tenancy to someone who does not pass the checks.
If I were a Ukranian refugee I would be getting every penny I can out into cash, preferably euros. Not sticking all my money into some dodgy internet currency from a country that generally no longer has reliable internet access.
With cryptocurrency, one can transfer and hide one’s life’s savings behind 12-24 words that derive a set of private keys. That is it. Burn it into your long term memory, and you will be able to recover your funds anywhere in the world.
Secondly, if we're thinking about fleeing Ukraine you need to have transfered that money before the crisis. You can transfer a decent amount of money into dollars and be confident it's going to stay stable, you're going to have that amount of cash to leave with. If you transferred into BTC a month ago, you've lost roughly 10% of the money you transfereed just because the volatility. So you're putting this escape money at significant risk (imagine that the war didn't happen, and you've just burned a big chunk of your savings through BTC volatility). Going back to the first point - if you're literally talking about a backpack full, presumably you're talking about sticking your entire life savings into BTC? And just what? Hope it goes up?
Finally, your scheme sounds a little... risky. So Russia invades Ukraine and starts shelling your cities, you've got to travel cross country out of Ukraine, into a Polish refugee centre, possibly facing life threatening conditions. And at the end of it - better have remembered that 24 word pass phrase! Because if you forgot it, your entire escape money is gone forever!
This is something people are doing. It is something directly enabled by this technology.
This goes into some of the uses but doesn't mention atms https://www.vox.com/recode/22955381/russia-ukraine-bitcoin-d...
Personally, if I were living in a place that is at threat of war (and let's face it, this war was no big surprise) I think I'd be much more likely to just keep a few hundred dollars stashed away in cash, than rely on a usb stick.