Guys what is wrong with ACATS
bitsaboutmoney.com
bitsaboutmoney.com
That's OK, though, because the person making the stamp is keeping a lot of records, so they'll know what they stamped.
When I first got my Treasury Direct[1] account, I couldn't verify my identity using their online process, and so I had to mail in FS Form 5444[1]. My local credit union had "Medallion Service" as one of the reasons for booking an appointment (separate from "Notary"), and they were able to take care of it. As mentioned in the article, the person at the credit union asked me for a monetary value. As it was a new Treasury Direct account, I said "$10,000" (the maximum amount of Series I bonds you can get per calendar year).
And as implied in the article, my credit union had no problems issuing this, even though they were not involved in Treasury Direct in any way.
It's interesting, all the 'little' 'home-grown' ways of identity guarantee that pop up when needed.
[0]: https://www.bankofamerica.com/signature-services/medallion-s...
If I were to request to move funds in 6-to-7 figures range across institutions, I absolutely would want the receiving outfit require that I visit my current outfit in person first to authorise such a transfer. Making sure that such visits are smooth and efficient is good service.
On a related note, when I got my mortgage in the UK, the issuing bank/lender-arm required me and my wife each to get a Proof Of Being Alive. (I'm not a UK native.) Turns out embassies issue these quite routinely, for a modest fee, and a visit that lasts at most 15 minutes. At the time I found that requirement both confusing and irritating, but in the context of the article, it makes sense. The lender was about to issue a sufficiently large loan to a person with very limited[ß] UK transaction history.
On the upside, more recently that same bank/lender prodded and arranged me to get an early, admittedly pretty good fixed deal on my remortgage - two months before the central banks started to hike their rates. Without that early intervention my current rate would be at least three percentage points higher.
ß: from the viewpoint of a financial institution, who likely measures customer relationship ages in decades.
So, about that… The Medallion Signature Guarantee is often obtained from an entity not involved in the transfer. From [0] on my post:
> We do not provide medallion signature guarantees for assets you're transferring out of a Bank of America or Merrill account (guarantees are typically provided by a third party not involved in the transfer or by the firm receiving the assets).
In a way, that's a good thing: By the time you've initiated this transfer, the receiving entity should have done their KYC. And the losing entity probably would not want to take the cost of the liability. Having a third party—one who has had you as a customer for some time—is a good layer of security.
As far as I'm aware, a "seal" and a "stamp" are the same thing. In particular, a seal is just a device that impresses ink onto paper. How is that supposed to be different from a stamp?
https://www.japanlivingguide.com/living-in-japan/culture/han...
https://en.wikipedia.org/wiki/Heirloom_Seal_of_the_Realm
(Depending on the documentary technology of the culture, a seal may also be used to make a physical impression in a soft substance, but obviously that is still no different from a "stamp".)
Seals also can be impressions left in wax or embossed into a document itself.
Stamps can also be separate paper pasted onto a document (eg a postage stamp, a visa stamp)
The terminology is fuzzy.
I worked for a bit with a non-profit which was involved in international adoptions. Seeing documents under apostille with elaborate seals wasn't uncommon. eg, a multi-page document attached to a government certificate of authenticity, bound together by a ribbon passed through a drilled hole, with the hole filled with wax.
The use here is to indicate a device that demonstrates that a specific person approved a document. Conceptually, it's a signature.
In wax we can seal the envelope so that tampering is detectable
"We do not provide medallion signature guarantees for assets you're transferring out of a Bank of America or Merrill account (guarantees are typically provided by a third party not involved in the transfer or by the firm receiving the assets)."
This seems to differ from the article and seems to be a way to make it harder to withdraw assets (why would a third party provide a medallion to insure someone else's assets?)
The article seemed to imply that the institution transferring the securities would also be in the best position to vouch for the identity of the owner who it had been the custodian for.
Interestingly, Fidelity lets you put your account into "lockdown" mode there they'll reject all ACATS (and ACH too I believe) transfers automatically without your intervention. I've always wondered what kind of legal magic they're pulling to make this compliant with FINRA rules.
What eventually convinced me over that it's not a problem is, as Patrick says, that these institutions will with high likelihood make you whole for fraudulent transfers, the same way they will for fraudulent ACH. The financial system generally works.
This applies to so much of the financial system, that it baffles me people worry about the things they do. I have family members that are so scared of card skimming they only pay in cash, and friends who are still too scared of the internet to buy things online.
That's easy to understand. For the "financial system", $1000 is nothing. For many people, $1000 means the difference between having something to eat or not. Even if you get your money back in the end, not having any money for several days can be a disaster; and the 1% chance that you might not get that back can be too much risk to bear.
> I have family members that are so scared of card skimming they only pay in cash
That's understandable. With cash, all you can lose is the cash you have in hand at that moment; if your card is skimmed and used without your permission, you can lose up to the card's limit (and perhaps even more, if the limit isn't strictly enforced). You might say that fraudulent transactions will be reversed, but there's always that 1% chance that the other side will somehow manage to convince your bank that the transactions were in fact legitimate.
> and friends who are still too scared of the internet to buy things online.
When you buy at a store, the goods you bought are in your physical possession at the moment of the payment. When you buy things online, the goods you bought show up days or even weeks later, if they do, and until they arrive, you have no idea whether they're actually what you bought (and that's on top of the "card skimming" risk).
Sure, if you have enough resources, you can tolerate losing $1000 of the limit of one of your credit cards for a few days until the charge is reversed (and even, in the worst case, absorb the loss in case that charge isn't reversed), but not everyone can do that. And the perceived risk can be higher than the unknowable real risk; someone who has heard about (or experienced) enough incidents in which money was lost (temporarily or not) will understandably be more reluctant to expose themselves to these risks.
Nowadays I pretty much have the bare minimum in the bank and just spend cash.
[0] I have a couple of monthly bills that cause a physical check to be printed and mailed. And one of the recipients only checks their mail twice a week so the float time is significant. I deal with them because I must.
Taking back a wire transfer seems to basically involve someone at your bank phoning a friend, and it all works in the end.
Crypto has a long way to go, but tradfi hasn't solved its own problems. Until then, I guess we'd all better hope our bank representatives have a lot of friends in the industry.
(I mean interesting mostly in a bad way.)
This can be implemented as a smart contract on any sufficiently advanced blockchain (definitely Ethereum, not sure about Bitcoin).
The way this works is that you put the money in an escrow contract first, designating a trusted third party as an arbiter. If you don't dispute the transaction for a few weeks, the money goes through irreversibly. If you do, the contract "locks up", and the third party can now either decide to send the money on to its destination or return it back to you. The contract is designed in such a way that those are the only things that third party can do with your money, they have no way of taking it for themselves. Either way, they get a small cut for the trouble of adjudicating the transaction.
If what you're worried about is wallet hacks, not disingenuous merchants, that's doable too. Instead of storing your money directly in your wallet, you'd have to store it in a smart contract, designed in such a way that your key is the only one that can move money out of it. However, limitations would be placed on the contract with regards to how much money can be moved daily. Such limits would likely be different for transfers to trusted escrow contracts and for irreversible transactions. If you needed to move more money, you could designate a trusted third party (let's say a traditional bank doing traditional bank things for identity verification) as being able to override these limits for you. Again, that would be their only responsibility, they would not have the right to move any of your money without your permission. This essentially relegates a bank to the role of an identity verifier who cannot take control of your money in any possible way except by colluding with a hacker who already has access to your wallet.
THe reason none of this exists is ecosystems and network effects, not technical limitations.
[1] https://www.newsweek.com/banks-have-begun-freezing-accounts-...
Irreversibility was a key design parameter of bitcoin.
You can kludge a reversal system on top, much as you can build an SQL-a-like atop Mongo. Or you could not use a system whose literal point is the opposite.
People conveniently forget the rampant scams, identity theft, and numerous types of fraud that are clearly irreversible in tradfi. Then they present it as a new problem that crypto must solve as well as being the same as the old system.
That's what insurance is for, for instance.
There's a serious checksum in each of the BTC wallet formats that makes the chances of any random set of typos extremely unlikely to be valid.
A mis-pasted (but valid) wallet address could happen.
Not to minimize the myriad other ways to easily lose, or lose control of, cryptocurrency!
There is some way to encode a checksum in the capitalization of the letters/digits A-F, but I’m not sure how ubiquitously supported that is. It seems like a pretty bad hack in any case.
It boggles that they could make such a massive design error, especially with the Bitcoin examples staring them in the face.
But ENS is now prohibitively expensive in terms of fees and also not universally supported, so here we are.
A robust financial system has to be reasonably accessible to such a wide range of people and institutions with varying capabilities that even building something that caters exclusively to the technically inclined is all but impossible.
I wrote on here before about how Vanguard used to offer a FIDO2-only MFA option. You could disable SMS MFA. That eventually got removed because the mobile app never supported it, so now they’ve enforced SMS as a mandatory MFA factor. And FIDO2 has been fairly easy to implement on mobile for years before Passkeys specifically were pushed.
Trust isn’t a given and not always warranted, but when it is, it is a feature, not a bug.
Of course, the medallions were handled by a sales guy (sorry, financial advisor) working for broker D who then spent an hour trying to convince me I should move my account to them instead. Eventually he finally gave in and sent off the paperwork.
It's annoying the hoops you have to go through to get control of your own money.
For what it's worth, you may wish to consider a credit union, as it's less likely that a credit union would also own a brokerage.
(1) Most institutions require you to have been a member for 6 months before they will grant a medallion. I was transferring money between Fidelity and Schwab. Neither of which have branch offices within an hour of where I live. And I only have a virtual bank. There was no one willing to give me a medallion because I have no local banking relationships. I had to pull a favour with work to get our controller to vouch for me at our business bank.
(2) I've done domestic and international wires for much more money without needing anything like a medallion. Why can't I do something like log in to Fidelity and wire the funds across directly?
(Also, have fun finding the forms required to transfer your retirement account. Fidelity at least made the process exceptionally difficult, and their customer service agents acted like they didn't know what a Simple IRA was or why one would want to transfer out. Sure there's a page about transferring, but it likes to loop you into the "transfer funds into" flow.)
I agree with the author that it is totally terrifying, but I feel the assets should be kept with a third party or third party verification service so that the broker isn’t incentivices to “verity” details.
I think medallions are a good solution to this problem and like the author of the piece says they are shockingly easy to get. I think that the advisors themselves receiving the money generally have huge relationships with the companies they work with that issue medallions and even the third party companies with relationships with the receiving advisor will generally provide one for free even if the person doesn’t have one.
Small nit: since this song isn't a fact or idea per se, it would probably be more accurate to call this a cognitohazard.
https://news.bloomberglaw.com/mergers-and-acquisitions/matt-...
You can get to the same content here:
https://www.bloomberg.com/opinion/articles/2023-02-16/the-se...
Which was previously posted to HN here:
At some point you just can’t connect to the db on the other side because it belongs to a different institution.
The song is currently ruining my life in a very different sense: I keep listening to the song over and over to try to guess which three notes you're talking about, but I can't for the life of me figure it out. Mind clearing that up for me?
(Personally, I definitely see how the song could be perceived as infectiously catchy, but it doesn't seem to do it for me. I think the structure and rhythm are a little too irregular for it to get stuck in my head.)
Earworms are probably the same. Specific either to unique brains, or to particular brain neuro-templates.
But you're right. This was a real case that Seinfeld must have been referencing.[2]
The doctor, Venkat Ramani, is still active and is the Vice Chair of Neurology at New York Medical College. [3]
[1] https://en.m.wikipedia.org/wiki/The_Good_Samaritan_(Seinfeld...
[2] https://web.archive.org/web/20240324001523/https://www.nytim...
[3] https://www.nymc.edu/faculty/faculty-profiles/by-name/ramani...
Shit, do I always sound like a fool because I am a fool, or just because everything I know has been turned into a sitcom joke that I never found out about?