Squillions: How money laundering won
lrb.co.uk
lrb.co.uk
I like cash because it's direct, and where possible I avoid paying by card because I don't want the merchant to pay fees to third parties.
In Europe, most of the time, using cash doesn't imply avoiding taxes on the transaction, but having cash is essentially sovereignty.
There were even complaints that lowering the restaurant sales tax (which happened a while ago) would be unfairly disadvantaging small restaurants, since benefiting from a tax cut requires paying taxes in the first place…
In a lot of cases it's a lot higher than just taking card.
But Visa and Mastercard effectively set the rates, and the higher they are, the more issuer business they get; meanwhile merchants are essentially never in a position to reject either Visa or Mastercard (notable exception Costco confirming the general rule), so market forces are pretty one-sided.
I think if Visa and Mastercard were three-party networks like Amex or Discover (now Capital One), their interchange would have long been regulated down by >90%.
French companies pay social contributions (~45% of the full salary) via Visa and MasterCard, and the French authorities are making it nearly impossible to pay these by wire transfer.
It's also worth noting there are also huge fixed costs for credit card transactions. We're currently upgrading our pinpads and it's been an absolute nightmare to get the right parts in just for physically connecting the damn things to our counters, we lost almost a whole day of backend POS access for our vendor to push a required update, and I'm looking at more fees to be able to support other types of cards which require POS certification.
We strongly prefer our customers use cash.
Couple that with inertia. We couldn't go cash-only even if we wanted to without pissing off a lot of our customers and losing sales. We only recently decided the cost of check fraud outweighed the push back we knew we'd get if we discontinued accepting personal checks.
We're a community-owned business with a fiercely loyal customer base. When we tell folks what payment method is cheapest for us, many will actually choose to use that payment method just to help us save money.
The costs to handle cash are fairly low. He bought one of those fancy cash counters like they have at the bank for a few hundred. He also bought one of those cheap little ATMs for perhaps $500 and charges $1 to take out cash. He keeps $2,000 on hand at all times between the safe and the ATM itself. Otherwise, he just stops by the bank two blocks down the street to deposit profits. As for security, well, they just carry concealed weapons.
The ATM paid for itself in the first month, presumably also the cash counter machine. Notably they did have one counterfeit $100 come through that they forgot to scan. I suppose that’s novel to cash although chargebacks on cards also do occur.
But this is just my anecdotal experience, do you have actual numbers/statistics on this?
The only people who think it's cheaper are those that value their time at 0.
Cash is actually faster in many cases, the 'slowness' is the matter of perception and the need to make a cognitive operation of 1st grader counting, which is apparently a daunting prospect for many people.
And even if it were slower by 20-30 secs, the advantage it gives in control and privacy is such enormous that I don't understand people who use banks at all.
The last thing other people should know is how, where, and when a person spends their money. And due to the AML surveillance from the discussed article the banking privacy is practically dead.
I never spoke about speed.
> the need to make a cognitive operation of 1st grader counting, which is apparently a daunting prospect for many people.
Don't be a condescending prick. The fact that counting exists at all is a cost that people don't measure.
> due to the AML surveillance from the discussed article the banking privacy is practically dead.
Or if you read the fine article you would realise that AML rules generate so much noise that there isn't any analysis.
Which is even worse, since the only practical use of that data is now selective enforcement and/or parallel construction.
Not to mention the constant hassle such laws have for regular folks trying to transact in cash while barely being a speed bump for those engaging in actual money laundering at scale.
> The fact that counting exists at all is a cost that people don't measure.
When cash skills were common and regularly utilized, the average cashier could count out most change in about the time a card swipe or dip happened. Tap makes it considerably faster though.
Today I agree - the average cash handling skills are effectively nonexistent to the point I comment on it when a cashier understands how to count back change correctly, much less do it from muscle memory.
All I can say for sure is no store I’ve ever encountered has operationalized the newfound ability to differentially reject some cards yet. I am starting to see grittier establishments offer 5% cash discounts more frequently than they used to, and I’m always happy to pay cash when they do.
But when there’s no discount, why would I forgo better accounting and 3-5% back in points?
The settlement allows stores to decline different *classes* of Visa cards. It was always possible to accept Visa but not MasterCard, etc. What was not previously possible was to query, before the transaction “what will the fees be” and reject cardholders presenting high-fee cards from a network you have a relationship with.
That is now allowed, by consent decree. But so far no one is doing it.
Do you have a source for this? Often times merchants don't accept American Express because it charges higher fees [1].
[1] https://www.bankrate.com/credit-cards/business/why-american-...
Incidence is very much on customers, but (high interchange fee) credit card users are getting a rebate of most, if not all, of that. It’s the cash users who AREN’T getting a rebate, and thus the incidence is on them (and people using other low-or-zero cashback payment methods).
It's really the perfect scheme, as the system creates its own never ending supply of advocates.
Moreover, we should encourage every retailer to offer this, because getting 2% back (or less) while paying 3% more is not just a net loss, it's also worse for privacy.
Also the big part of this game is sign up bonuses, like spending $5,000 and get 100,000 points instead of the 2% daily rate.
Why subsidize? There is no subsidize at all, an empty seat on a flight is an empty seat unsold, any money they can make back is extra profit. Airlines do not make money by flying people nowadays, but by selling miles in bulk to banks [0].
This completely disregards the opportunity cost of being able to sell the same seat. Even if the airline is absolutely unable to sell the empty seats cheaper, consider what consistently giving away seats for free would do to the remaining paid seats...
> Airlines do not make money by flying people nowadays, but by selling miles in bulk to banks
They certainly make some money from this, but definitely not the bulk, or even all of it. Don't believe everything you hear on the Internet, even (or maybe especially) if it's presented in a shiny, high production value video.
> consider what consistently giving away seats for free would do to the remaining paid seats
After all those years it is still fairly niche because few people knew about how it actually works, and it took quite a bit of learning, with dedicated forum [0] existing for decades. It shows even in this thread, and I would rank hn ppl very tech-savvy. Also the award seats are not given out free, since airlines got paid when they sold miles to banks.
> but definitely not the bulk
Even CNN thinks otherwise: Frequent flyer programs: The most profitable part of the airline industry [1]. If you think about it a bit, this is basically money printing under little oversight. What business can be more profitable than that?
I chose that video because it does explain why and is often quoted to newcomers in the community, hence its view count. I myself have been in this game for a couple years and my family almost travel solely on international award tickets now, so it is not just something heard over the Internet.
[0]: https://en.wikipedia.org/wiki/FlyerTalk
[1]: https://edition.cnn.com/2024/09/08/business/frequent-flyer-p...
I do however very much doubt that it’s somehow core to the economics of airlines. I think that the real power of rewards programs is that they exploit the principal-agent problem of business travel, with an added bonus of many people being very bad at redemptions and realizing how much they’re often overpaying for a few extra miles or status.
Second, I submit that money laundering should not be considered a crime at all. Monitoring it (for example, banks required to report large cash transactions to the government) just leads to mass surveillance of innocent people.
Transferring money from A to B - why should that be a crime? The point of anti-money-laundering laws is that the money generated at point A may have been generated illegally. It isn't the money transfer that is the problem, it is the illegal activity. The police need to put in the effort to prosecute that illegal activity.
This is reminiscent of the continual pressure to break end-to-end encryption. The police want an easy way to do their (admittedly difficult) job. But the price is just too high: mass surveillance, and many false positives, affecting the general populace.
You're correct on the privacy implications. It's shocking how much data AML monitoring companies have collected about you, there's more data points than any single person could think up. These aren't entities owned by the government - they're private companies.
Also yes money laundering does not require cash but I think the author is highlighting the scale of it. Most countries tax consumption a.k.a VAT and 'hidden transactions' such as cash transactions bypass that.
You can be anti-anti-money-laundering but then you also either have to be a complete anarchist or completely anti-taxation and anti-data-collection by corporations and yet still have a reasonable argument for how this will result in the ability for society to have a government.
I'm not saying the system is perfect - far from any means. However the utopia you describe seems infeasible to me.
Its effectiveness is shockingly poor and rounds to zero:
https://www.tandfonline.com/doi/full/10.1080/25741292.2020.1...
A few minor comments.
My wife and I have owned and used 1000 CHF notes quite a few times in the past. The last two times we moved apartments I paid part of the moving fee with a 1000 CHF note. We've also bought furniture this way. Nobody was surprised to see this and the notes were accepted without question or comment. To a person who spent their life in Britain this sounds absurd because the British government has - true to form - been trying to wipe cash out for many years to improve surveillance. You can't get any high value notes there, they just don't exist, because the state assumes that anything it can't see must automatically be suspicious. And there's so much street crime, and the police care so little about burglary, it would be very dangerous to hold such notes. But in Switzerland it's safe and the government doesn't try to wipe cash out, so paying with high value notes is common. (Although bank notes are in no way as private as people assume and can be tracked quite well, because they don't tend to circulate far.) This situation makes a mockery of the recommendation to fight crime by removing high value bank notes. The UK did this already and ML is out of control there: criminals just don't care.
I looked into the case of George Cottrell once. The case against Cottrell collapsed because it was founded on entrapment (the eight months was a plea deal in the usual American fashion, and doesn't mean much). It boiled down to undercover FBI agents asking Cottrell, "how could we launder money" and he explained how to do it, in the way anyone familiar with the topic could. He didn't make any offers to actually do it, didn't do it, and that's why "could be jailed for up to 20 years" turned into an eight month plea bargain to let prosecutors save face. Then after he was released he trolled US LE by writing a book called "How to launder money". Usually not given is the subtitle: "A guide for law enforcement and politicians". It's not written for criminals but people love to omit that detail.
Carousel fraud in the EU is a huge problem that governments hate to talk about because they don't know how to fix it and fear that by talking about it, they'll just teach more people how to do it. It's an infinite money glitch but in the real world. It's interesting that the UK thinks they solved it. I suspect they didn't, rather, enforcement collapsed elsewhere and it became easier to just go back to other ways of scamming the government.
Yes, although this is mostly by capping the highest regularly circulating note at £50 after the war and then waiting for inflation.
> And there's so much street crime,
[mostly false]
> and the police care so little about burglary,
Sadly true (including "find my iPhone" reports; there was a joke during the Mandelson scandal that this was the one time the Met had managed to locate a phone)
> The UK did this already and ML is out of control there: criminals just don't care.
Yes, which makes a sort of orthogonal point about whether or not cash is actually important for this. There's the conspicuously suspicious businesses ("American sweet shops"), but also more complicated stuff going on (Scottish Limited Partnerships were in the news). Then there's all the Crown dependencies, which are a total financial wild west still.
> Carousel fraud in the EU is a huge problem that governments hate to talk about because they don't know how to fix it
God yes. This is a significant problem in VAT as a concept; I don't understand why the EU loves VAT so much.
I'll give you one better. I know someone who had their nearly new Range Rover stolen in Manchester - reported to the police etc. Few days later, they found it parked at a car park near a big supermarket. Rang the police, they said well, if you still have the keys...just take it? And he was like hang on, you don't want to look at it, check for drugs, take fingerprints, you know, do any actual police stuff stuff around stolen property? And they were like nope, don't have the time or the people to come out, if you have the keys just take the car back and make sure you tell your insurer you got it, that's all we can do.
Because it's easy money as taxation goes. Facing growing fiscal deficit and worsening credit score, the first thing the government in Romania did last summer was to rise the (general) VAT quota and cut on some VAT exceptions. It works quicker and more reliably than other means for securing the budget needs.
The VAT related fraudulent schemes are a problem in EU as many other things are, but they are investigated, often prosecuted, and written about. For anyone interested, more can be found at the European Public Prosecutor's Office's site: https://www.eppo.europa.eu/en/media/news
But there has been some changes in recent years so I don't know how it is today.
In the 21st century the US eventually pressured them into not being a tax haven for anonymous money hidden by US nationals.
The twin questions of tax and terrorism remain as pressure against money laundering.
You get a lot of nonsensical talk in other countries about the Swiss economy because the alternative would be to admit that it's a genuinely strong economy and thus that the Swiss are doing things right. There's a culture in the British civil service of assuming there's nothing that can be learned from other countries policy-wise.
Look at the article and note the common themes: money is frequently laundered through dodgy chains of high street stores that don't seem to have any actual customers. Everyone is aware of this problem but nobody solves it. What the article doesn't explain is why: it's because these chains are largely owned by ethnic minorities and the left wing governments that have ruled Britain for decades are terrified of anything that looks like an ethnically targeted crackdown, or anything that could be called "Islamophobia".
Good luck running a fake vape shop in a Swiss village, lol. I've never seen or heard of such a thing here. In Britain you can just drive for a while and see lots of them. Look at the sibling comments where British police won't even investigate car theft (the idea there's not lots of street crime there is crazy). Come visit Zürich and it won't take long until you see bobbies on the beat, just cruising around looking for trouble. Levels of attention to low level street crime are completely different.
The origins of the Switzerland/ML link are the numbered (anonymous) bank accounts available and used in WW2, often by Jews trying to preserve their wealth from confiscation by the Nazis. Along with a general culture of financial privacy in which the local governments are constrained by law from obtaining all your transaction data from banks.
The AML system was invented by Americans who cared a lot about the war on drugs, tax evasion, and later, the war on terrorism. They didn't care about financial privacy at all, probably because they never lived right next to Nazis or communists, or experience floods of refugees fleeing totalitarian governments during WW2 (not on the scale Switzerland did). So the global AML system has been built largely by America threatening huge trade sanctions on any country that didn't agree to comply and financial privacy be damned. After all, Uncle Sam is the very avatar of democracy and freedom so who could object to it knowing everything?
Culture of financial privacy <-> American sanctions. Who wins? The answer is the US wins and Switzerland implemented all the rules long ago. Swiss citizens get some level of privacy from their own government, but Swiss banks will hand over all your data and then some to the US government if you're a "US person" - a category much broader than merely being a US citizen. So banks and sometimes other companies here often have you declare that you're not a US person because dealing with such persons results in the full force of the AML/FATCA compliance cannon being pointed at the org and it's too expensive and dangerous to deal with.
From 18th May:
“A new £30m High Street organised crime unit has been announced by the government after the BBC's year-long investigative reporting into illegal mini-marts, vape shops and barbers.”
https://www.bbc.co.uk/news/articles/ce3pzwx449no
Of course, remains to be seen what, if any, impact this ends up having.
A lot of what I learned about it, I learned by reading random documents published by governments designed for people working in regulated industries. Or by talking to people who worked in banks or regulators themselves. AML doesn't just cover banks but also in some countries casinos, car dealerships, lawyers, auction houses... it's like trying to push down on mercury so the scope of the rules constantly expands.
Oh come of Facebook for christ sake. Absolute hogwash.
With a dwindling number of legitimate cash users, any business that is pulling in huge sums of cash well beyond the average is going to look increasingly suspicious.
It's not just that, though. It's common here in France for credit card operators to have fees in the 5-10% range (or 0.30€ per operation + 2% of the amount). That's why you often see signs « card accepted above 10€ », and that's why your local shop will probably not mind if you're missing 10 cents when paying cash.
Interchange in the EU is capped at 0.4% for credit cards. Typical costs for processing are much lower than 5-10%.
For example, Adyen charges the 0.4% interchange + their fee of 0.6% and a flat 0.11€. On a 10€ transaction, that's 2.1%.
In most cases this is cheaper than handling cash. When you accept cash, you have to pay somebody to close and reconcile the drawer, take the cash to the bank (or have a security company do it for you), account for shrinkage / mistakes...it's a bit of a myth that cash is cheaper for businesses to handle, especially in places like the EU where card interchange rates are highly regulated.
Now of course, if your cash is not going the usual routes and isn't getting accounted for in the books...that equation can change.
And he was paying his staff under the table in cash anyway! But would still rather just withdraw from the business account, rather than having to deal with handling of customer cash every day.
Still clients pay much more. To be fair, the prices i remember are from 15 years ago, and now there seems to be better offers for small businesses. For example, SumUp proposes 1.75% flat (no per-transaction fee). But yes, i'm quite sure that's not the kind of fees Carrefour or FNAC are paying.
Collectibles (e.g. trading cards) are still a "cash is king" market. Some dealer only take cash, virtually all of them prefer it, and offer steep "discounts" (lack of markup) for cash.
Also lots of takeaways, they'll be on JustEat/Uber Eats and cash-only in store which is a PITA. My local chippy is cash only and no-delivery. I can't find a single record for a recorded business, or health rating either!
In Finland I was paying for apartment-building laundry machines with my phone in 2005. Mind-boggling that in the US, those still require quarters over two decades later.
That is illegal in the UK. That is why many trades people here will accept bank transfers but not cards.
Well, they are plenty threatening in the sense that if you don't follow them, they will refuse doing business with you, which suddenly means you can't accept cards at all, which can kill a business entirely.
On top of that, merchants carry the risk of chargeback fraud or stolen cards, and in some industries that can be another double digit percentage by itself.
Services for laundering cash are going to see a huge uptick in turnover.
You put the cash in the local slot machine, the slot machine owner then purchases legitimate services from your wife / cousin / other family member’s business.
Or you rent a hole in the wall location massage business that that maybe legitimately employs one or two people but on the books they manage to see back to back clients for 20 hours a day.
Another good one is hair dresser / barber, they often take cash.
I’m not sure the stress is worth (presumably) 20% or so savings for his income.
quite a bit of labor runs on cash. you can usually get a deal for a lot of services by paying in cash. sometimes the floor manager will take cash and never even report the transaction to the business much less the tax man (I rent forklifts and get plating work done this way).
Which creates national security and sovereignty issues. Cash is robust and decentralised. There is a good reason Sweden went from pushing cashless to advising people to keep cash at home for emergencies, and were at least considering an obligation to accept cash for small transactions.
Are you talking about people who don't pay tax? They create very large national security and sovereignty issues. Countries that don't collect much tax have real problems with both of these.
> There is a good reason Sweden went from pushing cashless to advising people to keep cash at home for emergencies
The key phrase being "for emergencies".
Nothing like as bad as the potential problem of your economy grinding to a halt.
There are other ways to deal with tax evasion. Those countries usually do not have good systems. If you investigate properly, design tax laws properly, chuck a few people in jail, etc. the problem can be solved.
Not using does not close loopholes, or prevent corruption, or stop people sending money offshore.....
> The key phrase being "for emergencies".
If you go cashless you will not have the infrastructure to use cash in an emergency.
Curious how that line is received within the HN crowd.
Yet, somehow, billions of dollars of value move through crypto. I wouldn’t be surprised if most of that activity is tax evasion and money laundering.
Suppose someone has a million dollars in cash and wants to turn it into "clean" money in a bank account, or transfer it to another country. They pick any goods with a high cost to weight ratio and a third party sale value close to its store price, list them on any marketplace for a competitive price in the country they want the money to end up. When someone orders it from them, they use the dirty money to buy one at any retailer, ship it to buyer, get paid in clean money. When operating at scale they could even get the wholesale price for the goods and be turning a small additional profit from the operation.
What does cryptocurrency add to this? Maybe slightly lower overhead or setup time? If it didn't exist, would they actually be prevented from laundering the money?
The IRS sees a clean million dollars in your bank account. They ask "how did you get that?" You answer "Oh I just sold this super expensive thing on a marketplace". Then they ask "Ok, but how did you get/buy this expensive thing?" What do you say?
This is not the part cryptocurrency replaces. If you suddenly have a million dollars and you say it's because you sold some Bitcoin, they're just going to ask where you got a million dollars worth of Bitcoin.
Moreover, the answer in practice is that they make something up. Pretend they're playing Storage Wars and finding treasures when they're actually buying worthless storage lockers with a tiny amount of clean money and expensive items with dirty money, or sell things they could plausibly claim to have made themselves or restored/repaired themselves. There are tons of real companies whose business is to haul away some other company's junk and then try to sell it, but then who can say whether or not all the TVs they're selling were among the pallets of junk they were paid to haul away from a dozen different corporate offices?
It was a centralized operation. The feds seized the server and arrested the guy. For money laundering, obviously. No more Liberty Reserve.
You can't do that with Bitcoin - that's the innovation. It's very censor-resistant.
Suppose you had the Liberty Reserve guy mail you a box with a million dollars in cash, proceeds from your unspecified illegal enterprise. Now you want to go buy a house or a Ferrari or whatever. What are you supposed to tell the IRS when they ask where you got the money? It helps you with that not at all. Meanwhile the things people actually do to provide a manufactured answer that question are unrelated to the ability to send cash over the internet.
No apriori principle can tell you what the ratio of 'genuinely circulating' to hoarded money should be. When money was gold or silver, as Bagehot says, the hoards in e.g. France were huge, but those in Scotland, where there was enthusiasm for the banks, were tiny.
Wouldn't the person buying the tractor in the US for $$$ have to show where that money came from? Can you show up to John Deere with over a million dollars _in cash_?
Literal cash, as in actual paper pieces of money, is not a common medium to do so.
Some dealers might be willing to do this for you, but most will not. They will direct you to your local bank to deposit the money and get a cashiers check instead. They do not want the liability of it all. Perhaps better chances at the Ferrari dealer you've bought 14 cars from over the past 30 years I suppose?
I asked my (luxury) dealer if I could pay cash the last time I bought a car and they basically said “hell no, we haven’t done that in over a decade”. The risk of being caught up in some drug money investigation or whatnot is too great.
Coincidentally showing up to your bank with a duffel bag worth of cash to deposit is a great way to both get your accounts closed, as well as be added to a blacklist so it will be very difficult to open an account anywhere else.
Cash? As in hundred dollar bills?
But it doesn't take too many cash purchases that are not inline with your tax returns before somebody is going to start snooping around.
edit: although sometimes, a lot longer than one might expect.
Citation needed? Where did you hear that this is a routine occurrence? That seems risky for everybody involved, and it requires a report to the government from the seller.
A dealership may take issue with it but a private party accepts no liability by taking cash.
Secondly, while it's possible to construct a private party transaction in the US where this is fine, if the person spending the duffel bag acquired the money illegally, you the seller are liable if you should have known. "Willful blindness" when accepting illegal proceeds makes you liable too. See 18 U.S.C. § 1957
Maybe I misspoke by saying you would be liable for laundering specifically, but certainly accepting that money is a crime if you have any reason to think it was ill-gotten. And that's a huge risk that no one wants to take on.
They're paying cash for a 20yo bulldozer that leaks enough to be a liability, loading it on a trailer and sending it home.
Just sentences like this:
> This isn’t just a problem for far-off countries of which we know little, like the EU and the US and China. Here in the UK [...]
So good! I feel like I'm becoming an old cynic but if it's the tenth time on the day that I read an overdramatized "It's not X, it is Y" in an article, actually good writing just hits different.
The article here is outstanding.
I think it has been relaxed a little bit later on, but in Italy everybody does the "I'll charge you X less without VAT" (which is 23% in Italy, I should point out), so this is also fighting that.
They just want to track what you spend your money on, that's step one. Step two is to restrict what you can spend your money on, although this is a partial side effect of part 1.
[0] (Romanian article) https://economedia.ro/parlamentarii-usr-au-depus-un-proiect-...
It's hard to say what happens with all of that.
Where do people get these ideas? How do they sincerely hold them?
No non-religious government wants to restrict what you can spend your money on. They want to get a cut of your money, but otherwise it's strictly better for them if you spend as much of it as possible.
If they don't want you to have things, they just attack those things directly, like hard drugs or weapons. No need to restrict your ability to purchase.
Let's ignore the fact that that was done by private companies and not directly by a government.
The mechanism is to make it so undesirable objects are not available for sale. The above comment is implying these things would remain legitimately for sale as normal, but you would be unable to spend money on them.
Seemingly the only effective way to solve this would be to ban purchasing highly resellable items with cash and requiring that cash to be deposited in to the system first.
I wonder if the "it's my money, I can withdraw it if I want" argument is good enough to send them on their way? (in addition to $1,000 being such a small amount as to be less-than-trivial when it comes to the overall problem of money laundering).
* https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...
In what way is money from selling drugs "dirty"? Why does it even need laundering?
As the other commenter said, "Ozark" is a really good show about this.
In real life, wouldn't they just open another car wash? Even in the show, Los Pollos Hermanos was a chain.
Pay closer attention to Mike's criticism of Walter's antics; or the general contrast between Gus, who is a professional criminal, and Walter, especially when Gus "fires" Walter. Ultimately, things end up poorly for Mike and Gus because Walter doesn't know how to behave as a criminal. (Or as a tech startup founder, for that matter.)
Suppose a piece of equipment has a market value of $200k if it's working, but only half that if it's in need of major repairs. They go to a farmer and offer them $100k plus another $100k piece of equipment for the $200k one, but instead of listing it as a $200k transaction, they specify the condition of the expensive one as non-operational and list only the $100k in money. The farmer is happy because they get to write off a $100k loss on their taxes and get the other $100k piece of equipment off the books. The other party then claims to have repaired the $200k equipment even though it was never broken and sells it for $200k, thereby laundering $100k in dirty money.
This is why attempts to prevent money laundering have extremely low effectiveness. All you need is two parties, one of which wants to get something of value off the books, the other other of which wants to get clean money on the books. They engage in an on the books transaction and an off the books transaction at the same time, account for the value of the off the books transaction in the price for the on the books transaction, and agree on a reason for that to have been the price which is plausible but hard to verify.
usually loans from banks. Farmers tend to have a lot of debt.
> One of these [recommendations is] a change in the legal attitude to drugs [...] with the significant weakness that it is very unlikely to happen in a reasonable time frame
But what else could you expect from a .co.uk website, they are experts on creating orwellian police state dystopias where everyone's every single move is monitored by a big brother
(Note the two and the zeros in “$20 billion to $80 billion.”)
Now I just need some dirty money to go through the hassle of cleaning
Found this quote interesting given Europes richest person is the head of a luxury brand company.
I always wonder who was buying all this high end stuff - the concentration of wealth has created a more billionaires - but they aren't that many of them and there is only so many watches one person needs.
It also may explain why China is struggling to establish it's own luxury brands - the money laundering prefers that cross border flow.
> Governments don’t do anything about the status quo, for a number of reasons: it inconveniences them to look too deeply into the darker corners of their own financial systems, and they make money from printing their own currencies and don’t much care how that cash is used. But most of all, they don’t do anything about it because they haven’t got a clue.
The last one couldn't be farther from the truth, and the first one couldn't be farther from a lie.
But even for money laundering, the cash has to buy real things or it would be useless.
So a total sack of bullshit. The kind or lobbyist that are paid to propagate lies and fear in order to justify new regulations that they would like to pass to have more control. Might also really probably be pushed by a big electronic payment corporation or one of the big banks that would like to ensure to have the income of the electronic transactions and not the cost of managing cash.
Outside of this social graph, where private cash transactions still exist, the state lacks power and relies on stigmatizing cash ownership, consumption, movement. This stigma is largely successful and ubiquitous but inconsequential to anybody that matters or has a lawyer of their own.
Electronic settlement of funds since the 1970s has allowed for the state to leverage financial institutions for records and enforcement. Electronic settlement without institutions since the 2010s removes that power from the government and is merely a reversion to the mean. Any delay in the prevalence of this is both user-error, social stigma, and a government's unfamiliarity with the reality that their own constitutions and documents that organize the state are things that have to be updated to actually remove an expectation of privacy from finance.
> We don’t know what successful money launderers are doing in the present moment. All we do know is what unsuccessful ones have been caught doing in the past.
One major and necessary fallacy inside the social graph is that electronic settlement between institutions assumes that the deputized institutions have blessed the funds and user as not money laundered. Only the user and who they transact with can trigger an investigation by the government at this point, by reporting the money for taxes or in a large withdrawal to cash out of the social graph, without further laundering it. This user error is mostly mitigated as soon as cross border payments are done, because the next financial institution doubly assumes funds from another country's banks are clean. The banks and sovereignty become the washing machine inside the electronic settlement system.
This is doubly important to realize, because it's the tip of the iceberg in brand sovereignty. One country's illegality is not another country's illegality.
You can't simultaneously be for a stigma against withdrawing large amounts of cash, while considering the Communist Party's capital controls to be oppressive. Removing one capital control, blesses the other.
This is a blind spot for most people, since they don't consider them to be the same things, but fortunately this cognitive dissonance highlights the reality. It is impossible to completely stigmatize and the capital routes around the stigma and all capital controls, unless the entire world is under a single totalitarian regime.
All while only the edges, moving between physical cash and electronic system, and moving cash between borders and the electronic system, are policed, in what could really only be the ultimate hubris of expecting the state to be involved at all.
And it's not just cash. Its assets too. The state is hoping for titled and electronic settlement of assets. In the last 30 years a systematic global dismantling of explicit "bearer assets" has been done, when the bearer assets were offered by the state. But this is also unsuccessful, as since the 2010s, the bearer assets created and settled without a financial intermediary have existed and been wildly popular.
All capital controls have been obsoleted while they were never fully implemented to begin with. No matter whether that's the idea of your neighbor holding a lot of physical cash, or a subject of the Communist Party in another country circumventing capital controls you consider oppressive.
This article covers the same points with a wildly contrived conclusion: To attempt to change anything in favor of the state being more effective at enforcing its invented crime of money laundering instead of curbing the actual illicit behaviors. For reasons that are assumed and unexplained, so it's impossible for me to change my view on. My view is simple - capital controls are dead and a waste of time. The article and both books it references actually agree on that. My other view is that the state should just do classic investigative work on illegal behaviors which means finding the people involved and subpoena-ing them, something it seems to have forgotten how to do in favor of relying on deputized intermediaries who are temporary, ineffective, and inconvenience just the law abiding.
Most people want government to be able to seize assets of baddies. It is possible with cash, it is possible with banks, hardly possible with crypto.
The technology to scam people at scale with untraceable emoney is not everybody's cup of tea.
Speaking from a country that invaded its neighbor, for our government (as well as north korea) it is lovely to have a way around sanctions. Libertarian crypto bros of the west are a godsend.
They are also a godsend to current American president which loves a nice side of washed crypto along with all the other theft.
It is absolutely possible to like cash and dislike crypto
Also if you're talking about Russia, people are switching back to cash en masse because cashless transfer between people is essentially half-criminalized. You run the risk of getting all your bank accounts blocked instantly on mere suspicion or for things outside of your control, with almost no real rules, accountability, or practical ways to push back. It's the way to avoid the runaway government process in the first place.
False. If you say this as advice to anyone you are putting them in danger. Cash is a no go for most vendors and you may struggle to buy food if you only have cash. I was personally rejected numerous times and told to scan QR or go home.
> if you're talking about Russia, people are switching back to cash en masse
Also false. I don't know a single person to switch to cash. Friend of a friend lost bank card and was basically on QR for months, no cash no plastic.
Here is what I know:
- There are limits on dollars basically since the beginning of war. (Normal people aren't affected because they don't use dollars)
- There was apparently a brief scare that banks cannot satisfy if you want to withdraw a lot of ruble and then the gov quickly claimed it to be false (of course). The amounts were too high for any normal person.
- a bit of cash is helpful to help because censorship infrastructure caused internet hiccups so electronic payments occasionally don't go through, but it seems rare now
- in western regions people tend to carry more cash simply because mobile internet is regularly unavailable. After all if you can't access your banking app to pay for coffee while civilians in Ukraine across the border are getting bombed, it's a bit embarrasing.
Otherwise everyone is as cashless as usual, people moving money out of banks en masse is probably made up.
>Also false. I don't know a single person to switch to cash.
I'm sorry but either you have a pretty specific circle or you're not living in Russia (Moscow isn't). I'm talking about private transfers, not x5 groceries. Electricians, plumbers, and other workers I happened to hire in the recent several months were all reluctant to deal with bank transfers. I advise reading the federal law 161 and the actual "enforcement" practice. I personally know two debanked people, both are elderly, one is a scam victim and another was trying to move her own savings. In the second case it took months of refusals, unclear procedures, and a metric ton of paperwork to get out of it, and it was only possible because I was helping.
I dont, not while they get to decide who the baddies are.
Ukraine event's is prime example why finanical privacy is important. I think we're solving taxing issue from wrong angle, we should be look this another angle: Merchants should be identifiable and taxable while customer stay private. GNU's solution "Talor" is very interesting and promising.
I don't know about stigma, per se, but there are a few places where businesses have a pretty explicit legal right to refuse cash, UK, Netherlands, Sweden, US. Oddly in PRC refusing cash is illegal.
capital, as an aggregate expression of people's desires, moves like water. if will flow through any small opening
capital controls will flow through any weak link, whether that's a Shanghai free trade zone, a freeport at the airport in JFK or Zurich, physical cash, illiquid assets traded through a trust, or natively in crypto, or crypto wrapped within the same aforementioned structures, no matter what the prevailing or commoner's view is everywhere else in the region
even countries that can change on the whims of an all powerful head of state, they don't really mess with the capital because it drives everyone else away and reduces the head of state's own liquidity and economic driver.
Disable Javascript and CSS
For example
curl https://www.lrb.co.uk/the-paper/v48/n09/john-lanchester/squillions \
|sed '1s/^/<meta http-equiv=content-security-policy content=\"default-src none\">/' > 1.htm
firefox ./1.htm
Or use a text-only browser
links https://www.lrb.co.uk/the-paper/v48/n09/john-lanchester/squillions
links -dump https://www.lrb.co.uk/the-paper/v48/n09/john-lanchester/squillions"Browser profiles" and other "browser features" created by developers working for Google or Mozilla, a Google partner, that are not reviewed and compiled by the user, are potentially compromised by conflicts of interest if used to protect users from online advertising
If the user does not compile the browser themselves, and permits "automatic updates" (remote code execution), then Google or Mozilla can prevent users from using "extensions" or "add-ons" by changing the browser software
As such, annd for various other reasons not mentioned, using "extensions", "add-ons" and "browser features" as protection from data collection, surveillance and advertising is not ideal
In some cases it may be totally ineffective. In others it may actually subject the user to _more_ data collection, surveillance and advertising
One can use these to insert a Content-Security-Policy, either via HTTP header or <meta> tag, that disables Javascript and CSS
Personally, I use a local forward proxy to insert HTTP response headers, not a browser add-on, for experimentation and learning
As a matter of practice, I read HTML with a customised text-only browser that does not auto-load resources, nor does it interpret Javascript or CSS. There is no DNS prefetching or other nonsense. As such, a "Content Security Policy" is not necessary
People do think bitcoin as option but nothing is private they also can be tracked by chainalysis.com
One thing i know is private is Monero and its heavily censored and its not easy to get as of i know
People need to learn about Bitcoin.
Indeed. Bitcoin is now a major player in the money laundering business. NFTs are so much better than fake pocelain!
I'm sorry, that's not how it works.