[Jorge1o1]

I work at a bank and the mountain of anti money laundering / KYC regulations we have to deal with is mind-boggling. I’m not surprised that such a law is coming especially since in my view, the decentralized nature of crypto makes money laundering even easier.

Even if you kept a blacklist of wallets with dirty money, I think it would be possible to spin up a chain of brand new wallets and quickly funnel coins through them before the blacklist could keep up in a way that would be impossible with fiat transactions and traditional banks. I could be wrong though, maybe someone’s got an algo for that.

Opinions my own.

[asdfasgasdgasdg]

> especially since in my view, the decentralized nature of crypto makes money laundering even easier.

This barely qualifies as an opinion. It's a simple fact.

[biolurker1]

Actually an incorrect opinion. A vast majority of criminals as in the EU study you can find online use fiât money because it's untraceable while Bitcoin is traceable and transparent publicly.

[anonyxyz]

Bitcoin is not the only cryptocurrency.

[arcticbull]

Right but the blockchain for people with something to hide will be about as conspicuous as El Chapo Dollars haha. Again you knock it out at the gateways.

[gruez]

>I think it would be possible to spin up a chain of brand new wallets and quickly funnel coins through them before the blacklist could keep up in a way that would be impossible with fiat transactions and traditional banks

Can't you spin up a chain of brand new offshore accounts/shell companies in a friendly jurisdiction and quickly funnel money through them before the blacklist could keep up?

[arcticbull]

This would work for some amount of time. However, foreign banks are unlikely to hold USD-type value without a correspondent banking relationship or a custodial banking relationship exposed to the US market (and hence US regulation).

The reason many, especially smaller, banks don't want to do business with criminals is they fear they'd lose their access to the US market through a termination of these relationships. This would then push the bank into insolvency.

I know this because all this happened to Tether, lol. There's been some documentation, likely as part of the NYAG lawsuit or the Paradise Papers leak -- or both. Noble initially refused to bank them for this reason, so they invested in Noble, who then took them on as customers. Their custodial bank (Wells, IIRC) told them to eat dirt, and it pushed Noble into insolvency.

[Jorge1o1]

Well that’s precisely why we have all these customer onboarding / AML regulations. To onboard trading clients (think hedge fund) I’ve seen compliance ask for corporate structure diagrams, lists of the major shareholders with bios, list of the board of directors, articles of incorporation, addresses, copies of the counterparty’s AML policy, etc.

[krageon]

It being the case that banks launder money for criminals at scale, it's kind of mystifying why you think anyone would need an additional way to do so.

[joeseppy]

That's only for big time criminals, terrorist organizations and human rights abusing corporations and their Ilk. Small timers gotta get creative

[krageon]

That's fair. I was mostly operating under the impression banks care primarily about problems at scale (where they are invested in being part of the problem), but perhaps that was naive.

[tinus_hn]

Almost as simple as cash money. Easier because you don’t have to lug it around, harder because nobody accepts it for payment and it’s still traceable.