The Offshore Networks of Oligarchs | Hacker News Reader

The Offshore Networks of Oligarchs

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213 pointsrntn94 comments

Every time I have to fill in some AML (anti-money laundering) form I think how much of a waste of time and money it is for every party involved since the real big fish are getting around it with professional help. It's all very kafkaesque and invasive so I come to the conclusion it's more about powerful governments existing to gain more power than it is about solving any injustice.

100%. Elites are allowed to do "money laundering" while commoners are put in jail for it.

FinCen exists to put commoners in jail, for the same things the Elites can do without going to jail. The Elites use Shell Companies to do the same tactics.

The following have FinCen put commoners in jail, but elites move money the same way via Shell companies and stay out of jail: 1) Breaking up transactions, to hide total amount. Commoners=Jail vs Elites=Shell Companies.

2) Fee assets when law enforcement comes = "Obstruction of Justice". Commoners=Jail w/FinCen. Elites=no jail via Shell companies articles of incorporation

3) Keeping identity secret. Commoners=Jail w/FinCen. Shell Companies= No Jail

4) ...list every way commoners go to jail via FinCan and cross boarder. Elites do full list via Shell companies and don't go to jail.

From your comment, shell companies look like some magical protective gear.

Are they that expensive to set up? I think a discerning commoner could consider doing so if the amount of money is enough to certainly trigger AML.

> Are they that expensive to set up?

It depends.

Usually it isn't the shell company itself per se that is expensive, it is the professional advice to use it to achieve your desired ends that you pay the big bucks for.

That said, a run of the mill offshore company in <insert-island-banking-nation-here> runs around $3-5K USD per year in various administrative and filing fees, depending upon your specifics.

Slightly less for a US shell company.

However. In order to avail yourself of advice for various tax minimization tactics and strategies, and have those tax attorneys nearly indemnify you when the IRS comes a-knockin'...now you're talking percentages of AUM. It isn't the specific consultation fees, though those are fairly healthy. These consultants won't really materially help you when the IRS audits you unless you have been running your entire bookkeeping and CPA book of business through them the entire time. Those fees rack up quickly over the years.

Once I worked out their business model and the numbers, it suddenly made sense why the fancy tax minimization strategies were commonly employed only by large companies hiring these folks, large companies with in-house teams like this, or count-the-commas-club UHNWI's. The strategies they shared with me were clever, years later I independently confirmed they would have worked, but I don't have nearly enough FCF to sanely justify using them.

I'd imagine that insights into specifics and knowing who you can trust for what is a major barrier.

From what I've gathered from various schemes like this, including smaller-fry ones, it seems like the minimum requirement is to have enough Serious Business Shit going on that you can plausibly mask a bunch of activity (international, ideally) as part of that. Normal people don't.

You've also got to have enough money that any tax authority looking at you decides you'd be an expensive target, so they won't try it unless they're sure it's a slam-dunk.

OK, if we assume that it only works if you can hide a small amount of illicit activity in a flurry of legit activity, it can't be such a large problem; maybe you can make 5% of your transactions illicit, but not even 50%. I don't think this is the case with Russian oligarchs right now.

I always had thought that the idea of shell companies is that there is a long chain, or even DAG, of companies that own basically nothing but obligations of other such companies, and the structure is large enough that tracing it back to the original masters and beneficiaries becomes infeasible.

If running a typical no-op LLC is $200-300 a year, running 30 of them is $6-9k, not an entirely trivial amount but quite feasible for anyone interested to hide even mere $200-300k of illicit activities, like selling a moderate-size home.

we cant accurately enough guess how these boutique wealth management firms do their thing... but we could pay them to do the guessing for us.

>we could pay them to do the guessing for us.

No we can’t. Their clients would drop them with prejudice if they even suggested serving commoners.

They can chose the persecution if they insist?

I imagine super cheap and easy to set up. Can't be much more complicated than creating an LLC

Such was my idea, too. But a peer comment mentions that the scheme only works if there is enough background activity to hide a particular tree in the forest. I'm puzzled.

$50/year for an llc in Delaware from what I recall hearing a few years back

Like many laws, they apply to you and me, not to the oligarchs. The international lawyers and accountants are the gatekeepers that navigate them through the loopholes.

That reminds me of FATCA. They made the burden just high enough for banks taking sub six-figure accounts that it's worthless to bank an American customer overseas unless they are rich.

Depends on the country.

Progressive ones have laws against refusals to open accounts, especially if you are a citizen of the country you’re trying to open an account in.

Yes and they do it under the pretence of solving sexual slavery or child sexual abuse...yet at the same time how many global leaders have visited J.Epstein's island?

Maybe none? There's no evidence that Clinton or Trump ever visited the island, so I guess the 10th in line to the British Throne is probably the closest you can get to a "global leader"?

Trump not mentioned in court. Clinton yes.

Celebrities and high profile figures named in court documents Prince Andrew Alan Dershowitz Emmy Taylor Sarah Kellen Eva Dubin Glen Dubin Jean Luc Brunel Nadia Marcinkova Bill Clinton Marvin Minsky Henry Jarecki Naomi Campbell Ron Eppinger Stephen Hawking

Which is both a different question to whether “global leaders” were at Epsteins island and not entirely true..

https://nymag.com/intelligencer/2019/08/what-the-unsealed-ep...

Intelligencer? Do they feel the name is clever, is it historical or is it just the most stupid sounding name they could come up with?

Historical.. It was the name of a paper that Jonathan Swift founded (among other historical papers by the same name)

https://www.gutenberg.org/cache/epub/13169/pg13169-images.ht...

Nothing will be 100% proof around evasion or exploitation.

The answer isn't to do nothing and let it be a free-for-all.

That's not what was proposed. The problem is that things like KYC laws are now probing down to thresholds like $600, so the cumulative cost (both directly, of compliance, and indirectly, of overbearing surveillance, chilling effects etc.) is hugely increased for little benefit. In the name of limiting untoward concentrations of money capital, it creates untoward concentrations of political capital.

But this is like... killing two birds with one stone for, mmm, certain politicians?

I think both sentiments have merit and are not necessarily mutually exclusive.

Money stuff tends to follow power laws. The basic, beaurocratic checks probably dissuade 80% of offenders while only stopping maybe 20% of the volume.

Doing nothing would leave those 80% of offenders free to launder which seems bad. Meanwhile, it seems fair to call the measures mostly ineffective.

There’s also a cost to these measures. They frequently block or add friction for people just trying to do legitimate business. Is it worth it?

Just makes the rest that can avoid it more powerful.

KYC doesn’t protect you from much, all sorts of scams still send money to bank accounts and you wont get your money back from the bank it was sent to even though they should have systems in place to know what is happening and where money is going.

And as you mention it doesn’t dissuade the powerful. So what’s the purpose other than control and bullying the ones who didn’t commit a crime?

> basic, beaurocratic checks probably dissuade 80% of offenders while only stopping maybe 20% of the volume

Concentrating illicit behavior into fewer nodes also makes whacking them when necessary simpler. I doubt the concentration this paper notes would occur were Russian and Chinese oligarchs able to hold dollars without KYC.

Just as likely IMO is that the 20% are using regulatory capture to stomp out the 80% and consolidate their business and create even more effective crime.

It's darkly funny how nearly every control mechanism in capitalist society equates to merely making a particular action more or less expensive.

Very unlike in historically known communist societies, where a mere bribe was not enough, you had to have access to a right person to bribe.

AML is just the financial arm of global mass surveillance.

now go further down this line of thinking... how those with status and money must view the world as nothing more than theatrics. airport security theatre being the most obvious

Watch this.

The Spider's Web: Britain's Second Empire | Finance Documentary | History

https://www.youtube.com/watch?v=OYfnkLurLA8

And if you dont like the source, here are some alternatives.

https://www.theguardian.com/business/2012/jul/09/city-london...

https://www.theguardian.com/uk/2011/oct/31/corporation-londo...

https://www.theguardian.com/commentisfree/2011/oct/31/corpor...

https://www.theguardian.com/artanddesign/2016/feb/19/city-of...

We're looking for the "Goldilocks Zone" of privacy. We want:

* Enough privacy that activists don't wind up facing death squads * Not so much privacy that drug cartels wind up running the country.

The problem is that cryptography is all or nothing: for a given observer, the transaction is either private or it isn't.

I'm fascinated by models like differential privacy. Maybe there are ways of making systems which snare large scale abuses but provably leave the minnows free.

There is nothing about the nature of privacy itself that leads to drug cartels running the country. There could be a world with perfect privacy and a perfect justice system where this wouldn't be a problem at all. Of course that isn't realistic, but the tendency should be to always trend towards more privacy and less corruption. Thinking that a private yet safe world isn't possible is a fallacy, because privacy itself isn't the source of these issues.

The problem is the institutions writing the laws see it as, "enough privacy to allow us to deal with the Contras, but enough surveillance to stop activists from running the country." ;)

Small nitpick: it isn’t entirely true that cryptography is “all or nothing”. With things like time lock crypto and proof of work you can effectively have a scheme where large scale snooping is impossible (would take too much compute), but any individual transaction can be decrypted with a bit of work.

Ah, I remember the times when the US only allowed to export 40-bit RSA in order to be able to do just this. As a result, non-US versions of e.g. SSL were not as secure, and quickly became laughably inadequate.

Frankly, I think that was mostly silly: you can either keep some math completely secret, or deal with the situation when the adversary knows the math a perfectly as you do, and can implement relevant computation. Unlike building actual rockets, implementing relatively simple math is not rocket science.

Here's a link explaining the original Panama papers, on which this work and detailed analysis is based:

https://www.icij.org/investigations/panama-papers/

The premise here is very solid- shut down the small number of people that the Oligarchs depend on, and their ability to operate is curtailed much more effectively than trying to attack the oligarchs directly.

The challenge with it is that this doesn't generalize to any shared principle and it's cynical realpolitik dressed up as network science.

I'd argue this paper is less a work of scholarship than an example of collusive, astroturfed, agitprop, where even though russia's oligarchs are an easy target because they are still new money and retain the taint of trade from the corruption that produced their fortunes, the authors are casting aspersions on highly regulated businesses that provide the financial rails for investing and preserving pensions and sovereign wealth.

The only reason you can insure anything or have long term financial instruments at all is because of special purpose vehicles that persist longer than the whims of a given regional governing party. These vehicles are infrastructure that provides financial stability for capital flows that facilitate social stability and growth. I remember the eurozone sovereign debt crisis', and to me the paper just looks like another (tawdry) setup for blaming "speculators and international financiers" for the failed technocratic policies of their peers own makings.

The approach of "going upstream," is guilt by association, and it's unprincipled overreach. The paper is entertaining, and I'm glad that the networkX python library has become so accessible that social activists can use it, but I think we should hold the authors to a higher standard.

From my naive perspective it almost reads that you won't be able to receive your money on the proper hongkong HSBC select account and are upset about it

Reality is that tax dodging is a wildly out of control problem, and worse it is considered to be de defacto standard to even run a business at all. From south Dakota to the city of London and beyond. It is really a problem

The reason I don't think it's a serious problem is that governments operate on the counterfactual that they can legally collect enough to fund their patronage to key coalitions.

They can't, and if they have their own currency, their debt never comes due because they can steal it from savers through inflation. But they prefer to play this game, and that requires trading that debt to someone, and those someones are pension funds and other governments who use these vehicles in jurisdictions that can't easily be looted by said debtor states. The last government to collapse because of tax evasion was Greece, and the reason people evaded there was because it was complex, inconsistent and corrupt. The evasion facilities were built in by design, usually under the auspices of "justice," for favoured parties. The state is happy because when everyone is compromised, they have the discretion to step around the laws and always get someone on something, and blackmail and extortion are more efficient than courts.

That said, this perspective is from a basic disagreement in principle with managerialism. We pay what we are legally obligated to, and if the rules are so complex as to be inconsistent and exploitable, and governments are too mercurial to risk leaving capital within their reach, it's their own fault. The whole rich-people-bad argument is ugly and insincere because it advocates an extortionate state that panders to smaller human urges, and so I don't have a lot of tolerance for it.

The outlash against oligarchs has almost nothing to do with tax dodging. If anything they pay many thousand times more than they consume in public services (they're not even in London the whole year and the property tax alone on one penthouse is probably more than the average person pays in taxes in a decade). It is more about sanctions right now than anything. This paper promotes the "facilitators" idea that if we could just eliminate a few key offshore providers we could stop the oligarchs right in their tracks. They have some nice theoretical calculations and visualizations that justify this. I think in the real world the outcome would be very different because there is no reason to think that a 1000 more "facilitators" wouldn't pop up wherever the new cool jurisdiction is. Are we really expecting the whole world to leave trillions of dollars on the table?

Property tax in London? You mean ... council tax? For a penthouse in the City - 2,194 pa. There is a one time sales tax (stamp duty) but that's not what you mean I think.

Oligarchs owning property in London are not forced to contribute to the London coffers .... not at all

https://www.cityoflondon.gov.uk/services/council-tax/council...

So... I am supposed to believe that ultra high income people that are known to engage in a high degree of conspicuous consumption while using minimal government services contribute nothing to the budget? They don't pay way more in VAT than the average person? They don't create any construction employment that in turn is taxed? I'm not saying they're good people or anything but if anything it seems like their obvious benefit is that they contribute to the economy.

The original post was about property tax specifically. Walk down Park Lane at night and look at the dark million dollar apartments - if no-one lives there there is not a lot of "trickle down" happening - the maids, the drivers, the restaurants, the money does not flow unless they are home. But the point of super rich is to avoid states and their taxes and capricious democratic decisions.

Yachts are useful for that.

Is it a small number? I would guess most jobs in the City of London wouldn't exist if the loopholes were closed.

But the current adversary (Russian oligarchs supporting the current Russian authoritarian president) is more narrowly defined, so the idea is likely more of a specific hit operation than of a complete elimination of the system of loopholes.

Younger me was so excited by bootstrapping new connectivities & systems, resented government survelliance of personal lives. The Manifesto of Cyberspace was scrawled across my brain.

But wow, my dislike for how many vast powers in the world are so very un-observable was also high then, & the implications of bitcoin & cryptocurrency to let these systems grow & be harder to deal with has only gone up & up & up ever-more.

Ultimately we're far more tracked by corporations anyhow now, and that only barely has to do with the currency we use.

> the implications of bitcoin & cryptocurrency to let these systems grow & be harder to deal with has only gone up & up & up ever-more.

While I agree the implications are concerning, I think its difficult to overstate just how much of a stranglehold the US regulatory and surveillance machine has over the global financial system.

Trying to buy and sell things online without sharing your real name or address is functionally impossible for 99% of people (unless you are willing to break the law or learn how to use cryptocurrency). This is because the gatekeepers to the Internets finances (banks, credit cards, etc) are required by law to identify who they are working with.

This makes a sort of sense until you zoom out and see the scope of the problem. Because it is impossible in 99% of cases to move money around online without using those gatekeepers, there functionally is no financial privacy online.

I should not have to share my bloody name or address with anyone to order a god damn box of chocolate.

> Ultimately we're far more tracked by corporations anyhow now,

True, and thats very concerning and should be pushed back against. But when corporations collect data on you, the worst thing they do with that data (generally speaking) is not treat it with care and the data gets stollen / made public.

When the government collects data on you, the worst thing they do with it (generally speaking) is throw you in jail or kill you. The scope of the concern is astronomically higher.

"I should not have to share my bloody name or address with anyone to order a god damn box of chocolate."

You don't. Get off your ass and go buy a box with cash. On the drive over meditate on who generally benefits when given the ability to move large sums of cash anonymously (hint: terrorist organizations, drug cartels, and tax dodging oligarchs).

I think you're missing the point here. I'm not a crypto advocate, but Visa and Mastercard definitely have too much power as do most online transaction processors, and the amount of information that online processors collect (at the request and joy of governments) is quite scary.

A select few organizations can control whether you can buy necessities or not and cut you off even from legally earned money on a whim. Banks have finite cash on hand which limits your mobility and liquidity at any given moment in the event of an emergency. Online commerce at this stage may as well be a secondary benefit given how your information is scooped up and resold to advertisers.

Financial systems are quite convenient, there's no denying that, but they're extremely fragile and the system exists at the whim of a few select people. Visa and Mastercard have demonstrated they can effectively remove persons from modern civilization at their discretion, not even with official government requirements, and that this has not been challenges is really unsettling.

To reiterate, cryptocurrencies are not the answer here in their current state, as they're too unstable and basically inherit not only all the issues that normal banks bring, but also introduce a ton of new issues. I don't know how to ensure sovereignty for individuals who are legally earning compensation when a support representative for banks can click on a checkbox and make them penniless. Nevermind if the company the representative works for is influenced by an unhappy government.

Finance is terrifying, and we're really in a strange place where we don't have a good answer for ensuring individual sovereignty with any currency, crypto included. I stress over this because I'm less and less confident every year that there is a good solution for this besides eschewing Finance entirely (and that's quite the magic trick...)

Individual what now? Sovereignty? We pretending fiat currency isn't a thing now? You a gold bug? Understand I don't disagree with any particular point you've made here but you may as well be freaking out about the weather. If the international financial system were to ever truly brick 2/3 of the world's population would busy themselves with killing each other. The surviving third that didn't succumb to disease would likely starve. What flavor of (now worthless) fiat currency you might have hoarded isn't going to alter any outcomes. I feel like what you're expressing here is less like a rant on international banking and more like pathological mistrust in institutions as a concept.

Please, reminder that the cia literally funded their own international bank (bcci) in order to do their clandestine operations

Yeah, they've also funded their own charter airlines and a few drug cartels, because apparently destabilizing all of central and South America is an expensive proposition. Where are you going with this?

What's entertaining about this line of thought, that corporations will only treat your data without care and you really need to worry about the government because they'll kill you is that there is a long history in the US of corporations straight up murdering people.

And I'm not even talking "accidentally", or though neglect. I'm thinking of the union busting efforts of the railroad and mining companies in the late 1800s and early 1900s where the corporations straight up murdered folks.

> I'm thinking of the union busting efforts of the railroad and mining companies in the late 1800s and early 1900s where the corporations straight up murdered folks.

my favorite examples of corporate union busting from that era all involve the US Army being deployed against workers.

Corporations can deny you credit, change your interest rate, increase your bail, close your account, refuse to do business with you, and generally make your life harder.

I think you underestimate the worse things corporations do with data and how many people that affects. Cambridge analytica and the scandal with FB and Brexit would be one example.

Pointless yelling ensuing: why do you care if people track your chocolate spending? You’re not important enough for anyone to ever put your face to your name to your purchase of the chocolate. Forgive me if I’m talking to someone famous, but I’m not. Nobody gives a damn about you on the internet. They want to know you bought chocolate because they want to sell you more chocolate. That’s it! Just be grateful you don’t have to get off your ass to order the chocolate.

I’ve never understood the hubbub over privacy. Outside of obviously malicious attacks (that we should be well-protected from) it all just seems that you’re being observed so that other people can make money. That doesn’t bother me if I’m getting something out of it (chocolate). There are extreme examples of employees with access viewing the data, but they should be considered statistically insignificant in the discussion because they’re so rare.

It's easy to say when times are good. Government basically sort of tries & does good. But as others have pointed out, America has some ghastly data-collection-against-the-people situations in the past 100 years alone.

For example, Ralph Van Deman[1]. After being instrumental in the Philippine-American war (1899-1902)'s military intelligence division, creating some of the first (and incredibly far reaching) catalogs of potential enemies & associates & basically anyone anywhere near-by & using torture regularly to extract confessions/information, he came home to America... to start enormous files as leader of the new Military Intelligence on anti-War, labor, human rights & basically any American standing up or making any noise. Or who happened to be a couple degrees of separation away. Sending under-cover agents out to report back with unsigned reports, working under a veil of secrecy, & calling them "enemy agents" for not being happy-dumb American's & advocating voices.

Among many truly awful things, this lead to the sheriff of Bisbee gathering a vigilante posse of 2000, taking over the telephone network, and then leading the group by a car with a machine-gun mount on it (owned by the local mines of Phelps & Dodge), through Bisbee breaking into homes & pulling people out of beds at gunpoint. The strikers were told at gunpoint to get back to work, and 1186 refused & were shoved into passenger & cattle cars & hauled 180 miles under armed guard. Van Deman is far from personally responsible here, but he is an early leader of the modern world in weaponizing information against potential or related threats. You might be innocent, but if you talk to the wrong people or go to the wrong place, suddenly you're suspect, and maybe men with guns will come into your house & put you on a train out & that's that.

Creating systems that resist the impulse to corruption is necessary. "Abuse of power comes as no surprise", is one Holzer-ism. And what's safe today may not be safe tomorrow (power changes hands but records endure). And I think there is some essential need for human privacy at some level, that it's a gross & disgusting world if humans are deprived of a sense of independent identity, are too closely handled from above.

My example comes from American Midnight, which is a very very very long tale about awful things the US did just 100 years ago. It's well written and as the title says incredibly dark. A huge amount of the book touches on the power of information. We've seen other horrific examples in other states. It seems essential we have privacy, that we give people a sense that they have their own lives to live, with free choices.

[1] https://en.wikipedia.org/wiki/Ralph_Van_Deman

You failed to grasp the context of my comment. Do you really think I would advocate for a total lack of privacy? Of course it’s a balancing act.

The immediate example has to do with supplying identifying information in order to purchase online goods. I view it as the regulations that enable the data collection are in place to empower the consumer. Obviously, if we could keep the good parts (good return processes, immediate credit return for fraudulent transactions, etc.) I would prefer more privacy to less. It’s just not possible in today’s technological climate.

A potential solution is to make small transactions anonymous, but break the anonymity for large transactions. Of course a large transaction could be broken into many small transactions, but it'd be much more cumbersome and expensive.

For specific sanctioned entities, a possibility would be to let users specify a list of addresses they're not willing to share an anonymity pool with.

Here's Vitalik talking about these ideas in a recent interview:

https://podclips.com/c/K3RLE1?ss=r&ss2=ethereum&d=2023-02-28

I recently had to leave working for a cryptocurrency adjacent startup because my stomach kept getting into knots about how oligarchs are doing a lot of VC funding in the space, and the reason they are funding it is to cement their authority.

Interesting, can you provide more details without doxxing yourself?

This person isn't necessarily an oligarch, but they are a major vendor of market research and VC dollars in the space. This is how important they think the stakes are around fake internet money [1]:

> The Biden Administration is trying to strangle crypto.

> A lot of folks have been trying to stifle that criticism, but the effort to destroy the industry is quiet but pervasive across the exec branch.

> The time to make crypto an issue that wins or loses the Presidency is now.

Investors in my company support that view. It's an example of doing things indistinguishable from what oligarchs want: no questions on their authority, even in the wake of massive consumer harms relating to token speculation and fundamentally unsolvable UX issues for retail consumers.

I had to leave mostly because I couldn't deal with the constant cognitive dissonance. The only reliable source of income in crypto is arbing yields on customer deposits to US treasuries, and the whole space is reliant on the government for macroeconomic stability already and they are creating big deposit flow risks and banks are rightfully worried about it. [2]

[1] https://twitter.com/twobitidiot/status/1624563275760279554

[2] https://twitter.com/ecommerceshares/status/16302871693307494...

Crypto has been pretty unsuccessful at moving large volumes anonymously over a multi year timespan

https://www.goodreads.com/en/book/show/60462182

I think there are a lot of things that aren't tracked very well.

Randomly pumped tokens/NFTs - even newly issued and pumped ones - are moving large volumes anonymously.

You act like a random trader that caught the wave, but really you are also the addresses pumping the asset with the dark money that isn’t intended to be cashed out. The pumped addresses just wind up with the asset and will never cash out. Your KYC'd address just looks like a good crypto trader.

A clean 8,000% gain doesn't look different than a dirty 8,000% gain.

Got this message in my Discord message requests, from 13 hours ago:

  Yo!*Welcome to [redacted]!*
 What can we offer you
 We providing quality crypto pumps. *We share the name of target coin in advance.*
 *We are professional cryptotraders*
 And finally, we show you how to beat the market and be ahead of everyone.

  **This is your chance to multiply your investment together with the cryptocurrency market whales**! 
 
 ** The amount of invites is limited! Hurry up to take your place there:** : [redacted]

maybe, but that's most likely a scam where you will be exit liquidity for the leader too.

but people with the "dark money" can also pay similar kinds of groups. this happens in the stock market all the time too.

if you have the dark money that you won't cash out, you can do it yourself pretty easily as well, you don't actually need to notify a crowd because there are so many bots that will join a pump of any token, and that will cause it to trend too.

Anyone can setup their organizations to use a LOT of ways to legally minimize their tax bill. For example, you can create a separate corporation in a non-tax state like Nevada and put most of your cash in it and if you are in California, you will completely not have to pay it if you do it right. See Apple Corporation's Braeburn Capital. https://en.wikipedia.org/wiki/Braeburn_Capital Apple uses this to avoid all California tax on that cash that they deposit in that company. California tax is 8.84%, and that is a LOT of money that they would have to otherwise pay.

There are other things that one can do, but there's a lot of record keeping and expense so you have to make enough money to make it worth it.

But just owning a company is a fantastic tax break by itself. You get to write off all kinds of things as an expense as long as it is for business purposes.

After being in the crypto space for a while, and thinking a lot about the problem of tracing money, I've come to the conclusion that the system I'd prefer would be a hybrid.

Everyone needs a quota of anonymous spending, say $50/day, $1000/ month and anything after that is public on government ledger.

I've mentioned this to a few friends, who've always called it dystopian, yet all alternate systems seems to be worse in terms of illegal abuse.

> a quota of anonymous spending, say $50/day, $1000/ month and anything after that is public on government ledger

You're describing cash + digital money.

1. This system is too complicated and messy, we need to throw it away and rebuild it from scratch.

2. This new system is so simple and works perfectly.

3. Hmm, it doesn't account for this one problem. Doesn't matter, we can just iterate and add in a special case.

Repeat 3 a few hundred/thousand times.

4. This system is too complicated and messy, we need to throw it away and rebuild it from scratch.

Yeah, I think the crypto keyword threw you off, I actually dislike the entire web3 space.

I also do see change as inevitable, as that's what humans usually do.

That's why I think we'd need to have actively describe some desired properties of whatever money will be in the future.

Partial anonymity is one of them, but it's actually being eroded now: you can't order an Uber with cash or book an airbnb for a night with cash.

Yea, but cash isn’t very web3 now is it.

Shhhh, no talk about our web4 plans

Completely agree, cash is great, am not aiming to reinvent the bus! There is though a push to remove it, and it's a bit clearer when we aknowledge the goal.

You haven't considered another option: make legal the illegal. At some point you have to ask yourself, how much liberties are you willing to give away for the feeling of safety.

> yet all alternate systems seems to be worse in terms of illegal abuse

worse than that system, sure. Worse compared to a fascist state that has near total control over everyone? I don't think it's clear that tax evasion and black market deals are worse than that, the scale is just different.

China is much deeper in technology than the Soviet Union ever was. Imagine what Stalin had done with China's abilities in 2023, I think accepting Oligarchs, tax evasion and Drug Cartels is a fine trade off to avoid that.

It’s not either or in an all or nothing sense, and it’s not either or necessarily either. There’s a very appropriate comment on another sub-thread pointing out that privacy and corruption aren’t necessarily linked. We need to balance as we progress towards a more private and less corrupt world.

> don't think it's clear that tax evasion and black market deals are worse than that

The paper's original context is the War in Ukraine. That doesn't mean we shred up our Bill of Rights. But the counterfactual is starker than tax evasion and cocaine naughties.

The other context which the authors and all the human rights groups who complain about this stuff ignore is that strict application of the AML laws results in mass derisking and the wholesale exclusion of entire industries and even countries from the financial system because banks do not want to risk the fines. Several major Caribbean banks are constantly on the verge of losing correspondent relationships despite doing basically everything the FATF asked that they could afford. Non banks ATMs (which aren’t even considered MSBs), check cashers and a whole host of other businesses are de facto excluded from major US banks right now. I think the desire to “do something” about Russia has made any sort of cost benefit analysis go right out the window.

How do I meet these oligarchs and help them hide a tiny bit of their cash and I take a 1% fee per year on a piddling amount like $100 million? I love helping people, would love to help any oligarch out there reading this comment.

Just make it legal to eat oligarchs.

Except you're focusing on the wrong part of the problem here. Most oligarchs are building huge wealth not only so that they can control their own existence without any interference but also so that their children will be able to enjoy that multi-generational wealth. They want to be seen as dynasty builders.

The solution should be to eat their children instead so that, for them, we have removed the incentive to hold such massive wealth as there will be no one to inherit.

We'd still need to make that legal though and figure out a good spice mix and vegetable accompaniment. These are not insurmountable problems though.

The first thing can be handled by initially making it legal among societies with a known history of cannibalism since it would not be a stretch for them. It can be portrayed as them making an effort to rediscover their lost traditions. Documentary filmmakers can follow their journey of discovery and someone with an accent can do a dry narration punctuated with bits of inside jokes.

Then, using the power of social media to brainwash on a huge scale we could normalize this deviance by portraying these cannibal societies in a flattering way, mentioning their cannibalism in an offhand way but emphasizing more their strong connections to nature, their local environments and their reverence for tropical sunsets, bright colors smeared on their body parts, and non-obvious astronomical alignments.

We already see, every day, the power of advertisers and marketers to convince ordinary people to buy, use, or believe things that most of us understand are probably bullshit. Therefore we should begin by marketing these products to Americans. Employ those marketers to shift focus from pot legalization, where they have scored some wins after only a generation or two of effort, to reduction of financial crime and destruction of oligarchies by adding children of the oligarchs to the food supply. Congress and the FCC likely will, after appropriate levels of lobbying and graft, support legislation allowing televised commercials for products made from oligarch children to be shown during major sporting events and prime time TV shows. It will take a little money to make this happen but there's plenty out there for everyone and we can always just print more.

Of course, products like this will see minimal market penetration in the EU without some serious corruption and catchy advertising slogans. Their regulators are tough and they actually test food products before allowing them to market. They have to make sure that a Russian oligarch kid product was actually produced by a Russian in Russia as per tradition. We know that Americans can be convinced that all those unpronounceable food ingredients in their food must be there because it's all either good for them or it's somehow organic. They've been conditioned by marketing to believe it's better than all the stuff they routinely ate before producers jacked up prices and added organic labels to their product lines.

The EU is a bit more strict, disallowing all kinds of things Americans routinely consume. Therefore there must be considerable effort expended to shift perceptions of American food products and that is where the Linux fanboys come into the game. Their enthusiasm for Linux, in all thousand-and-one variants and obscure distros, has built a self-sustaining amalgam of business, government, and home users whose energies can be refocused to engender support among the general EU population for these children of the oligarchs products that their more discerning taste buds would typically ignore or reject.

With appropriate marketing, some street demonstrations in selected cities, and careful product placement at events like info-sec hackathons and Oktoberfest, EU citizenry can become heavy consumers too of products like tubular meat sticks (with spices!).

For any countries that reject these consumer products we can always send in the British. They've likely invaded the same countries in the past anyway and stirring up shit to rebuild empires makes as much sense as stirring up shit to build empires did. After all, they hauled William Wallace's preserved leg around as a show-and-tell example of what happens to someone who refuses to bow to their monarchy and ended up with an empire that stretched across every time zone. Biggest bullshitters anywhere. Bigger even than Texans and I'm a Texan so I know a bit about bullshit. This whole post is bullshit. There's no reason why they can't be the biggest salesmen for oligarch kid parts.

We just have to make sure, as a global community, that we don't come close to running out of oligarchs or their children as the market could be huge with the right players pushing the products. Supply must always be balanced with demand or non-oligarch children like our own could become commoditized.

Perhaps the industry would need to function in the homeopathic product space where infinite dilutions can be cleverly advertised to the clueless consumers as the perfect way to enjoy and benefit from the product. Maybe in the end we only need one oligarch kid, or just a toenail clipping, or like many over-the-counter supplements peddled to American consumers, we can simply list it as an ingredient but omit it entirely. We might not need any at all! Perception is key here and that is where the real power of advertising and marketing comes into play.

No one ever checks anyway. Capitalism rocks and we all just roll (over).

That's enough sarcasm for one post.

This was a beautiful rant, can I use parts of it in a VtM game?

My email is in my profile now if you want to discuss this. I was not familiar with that game but it looks interesting. Great work if you are one of the developers!

I'll need to see more details.

Just need to do the same to expose all the trust funds owned by our own oligarchs next...

It's interesting how they're called "oligarchs" if they're Russian, but "job creating entrepreneurs" if they're American.

403'd.

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