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Comment by ggm | Hacker News Reader

What "cost" to the money launderer? What is the "cost" like, compared to e.g. mules taking cash to casinos, or laboriously processing e-card visa style money?

ie how "effective" is this, compared to alternatives? I had a belief the rate of IPR payment was low, so this is probably a low rate of return, high cost, fully digital method.

Which in my theory, would also be making spotify significant profit, as the facilitator. Are they now at some legal risk if they can "detect" this traffic?

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Every single business can be a vector for money laundering. From cash laundromats to high end technology, if the launderer owns the business then it has potential. I would estimate the government catches somewhere in the ballpark of 0.00000001% of all laundering. Businesses also have zero incentive to stop this activity as long as they get their margin.

I have asked people who work with preventing money laundering how expensive it is, how much you get back from a launderer in clean money for every dollar you pay him in dirty ones. They have all estimated a 20-25% premium.

That doesn't seem like it would be sustainable if only 0.00000001% was caught.

I think the difference is if you do it yourself vs. trust a third party. The third party is charging a risk premium.

And I'm saying if the risk was that small, they couldn't charge that premium.

yes. but the cost side matters: if a criminal has $1,000,000 but can only recover $1,000 "safely" burning $999,000 then a method which returns $500,000 for burn of $500,000 is better, if riskier. "it depends"

I worked in an office next to an Uber clone that was clearly unsuccessful. Yet they had a significant Series A from a Russian oligarch, then got bought a few years later at something like 10x the Series A funding amount by a different Russian oligarch. There was a press release and a news story about how wonderful this was.

This scheme was so clearly a laundering play, but everyone pretended it was some amazing exit. I'm confident the tech industry is full of these shenanigans, but I've never seen anything like this uncovered.

If they can offload on the market, this might be net lossless or lower loss at scale than other methods.

I guess taking net company worth into a bank in Cyprus or something and using it as security to buy land, boats, whatever achieves the real outcome. Even if only some 1/nth can be collateralised

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