I know it sounds a bit crazy but what if the government hired people to investigate and arrest criminals instead of requiring private companies to do that? AML is a costly and ineffective security theater.
It's creating a paper trail for the prosecution when the feds decide they want to take someone down.
It's not money laundering per se that the feds have an interest in prosecuting. They have an interest in prosecuting sanctions evasion, tax evasion, black mail, drug smuggling, etc. It's the source of dirty money that they want to stop, not the dirty money itself.
What happens is they think someone is smuggling drugs. They see they have money, the money looks suspicious, they get a warrant from the bank, they give them all their AML/KYC forms, and the feds go and track down the real source, and find out that the forms were full of lies and now they can get the drug dealer on bank fraud charges -- which means they don't need to connect them to drugs or murders or anything else, even if that's the real reason they're interested in them.
AML/KYC stuff only prevents crime in that it forces criminals to commit other, easier to prosecute crimes to cover up their original crimes.
1) Non-criminals also lie on the forms. Mainly because it's sometimes their only way to open a bank account (if they are deemed risky by an AML department), even if they have a legal source of income. This renders people who would otherwise not be criminals into criminals. Just recently, I came across a Tweet[0] from someone who will have to face this dilemma sooner or later.
2) It's a loophole for prosecution, as you admit yourself. It's meant to circumvent well established legal principles. For example, in AML cases, the burden of proof is reversed ("guilty until proven innocent"). It's used as a tool to punish people for crimes when the evidence is not sufficient. Is this really something we want?
[0] https://twitter.com/mikeinspace/status/1708719585556344993
When you face a tricky situation with trade-offs, you have to find a smart and/or complicated solution. It's not usually productive to say "just throw away the solution we have" even if that can be an emotionally satisfying answer.
1) Give up on on their legally acquired BTC, potentially worth millions of dollar.
2) Be honest on the form and pray that they don't get flagged.
3) Lie on the form.
There's basically no legal option for cashing out their BTC. A lot of early BTC adopters face this issue, as not everyone had the foresight to keep a paper trail for their 50$ "funny internet money" purchase at Starbucks.
Disclaimer: IANAL and this is not legal advice.
[0] https://en.wikipedia.org/wiki/Financial_Action_Task_Force
You got lucky and/or maybe forgot that you supplied that information when you signed up. Sometimes it can just take the form of asking for occupation and income. It's possible that they didn't ask further proof if they determined that your transactions were not unusual given your declared occupation and income.
[0] https://coinbase.com/legal/user_agreement/united_states "Verifying your identity by submitting the following information: [...] Source of Funds"
avoiding banks is not a crime.
Absolute nonsense. There was a time when like half of all Russian mafia lived in London fully in the open, and they only vacated the place when they started being kicked out through visa cancellations, not fraud charges.
This change changes really nothing in the fact that first world country governments don't want to prosecute those guys.
At most, they don't give a fuck, at worst, they are actively conniving.
And it's not that they are hard to prosecute at all. Anybody who can read some Russian can get a completely damning charge sheet with a few minutes googling on most of them, let alone British MI-6 analysts.
The crazy theory that you can somehow increase prosecution chances with "Al Capon charge" makes little sense if criminals whose offences are provable in 5 minutes without that are walking around. like nothing.
There are many accounts in the press of banks employees saying they send hundreds of suspicious activity reports for absolutely clear cut cases without any reaction. And they can't do anything on their own, as their paperwork is completely impeccable from the reporting standpoint.
Thinking rationally, it makes sense that a mafioso who is going to launder few billion $, will ensure that his paperwork looks more full, and accurate than that of a legit company. Few percents of such sums will hire legions of top lawyers to do the reporting.
- They do not address the underlying crime: prevent the crime in the first place, instead of moving funds
- The focus is on compliance, not on the crime prevention: make sure banks checks all the boxes on the form, so that no one will get a jail card
Furthermore AML tends to mix sanctions (we don’t like China) with organised crime (drugs). The political sanctions themselves are not always direct result of a crime.
What could be done to improve the situation
- Making all company shareholder data public (was in the EU, but then a crook who worked for Russian oligarchs got this overturned https://www.investigate-europe.eu/posts/luxembourg-businessm... )
- Make real estate agents criminally responsible for selling real estate for criminals
- Focus on the largest asset flows (Danske Bank, London real estate) instead of setting up paper compliance procedures for consumers
- Transparent funding flows (public blockchain)