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Australian Watchdog Frets Over BitCoin, MMOs' Money Laundering Potential
angry tapir writes "Australia's anti-money laundering watchdog AUSTRAC believes that money laundering using digital currencies such as Bitcoin and virtual worlds (such as MMOs) are possible 'emerging threats'. The organisation's latest 'typologies' report earmarked virtual worlds and Bitcoin as two areas that the agency would be monitoring, although at this stage no-one seems sure to what extent they are being used (and some of the issues with Bitcoin, such as the fluctuating exchange rate and limited options for transferring value to real-world currencies through conversion to non-digital currencies or using it to pay for goods or services, mean that it's unlikely it's being used for money laundering on a significant scale)."
Non-traditional methods of money laundering still pale into insignificance compared to the more conventional means. Just take a look at the banks recently served subpoenas in the US. It's the same as programming, building something new with the latest technology will usually be far more effort and result in far less return than sticking with established techniques. It's just easier to look like you're "doing something about it" when you're not targetting multinational organisations which have significant political and business influence.
Please consider this account deleted, I just can't be bothered with the spam anymore.
The best money laundering vehicle remains the USD denominated in good old $100 greenbacks.
LEEEEROOY JEEEENKINS!!!
I swear they give me mod points to shut me up.
This is an old and dead issue since any reputable MMO will have locks in place to prevent large scale money laundering. Also i would put odds that The Treasury Department has folks "in world" just so they can monitor things.
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They track conduits that could possibly carry large amounts of money from questionable sources, and Australian police seem like they've been particularly interested in MMOs for a while. Here's a /. article on a 2011 investigation.
Previous weakest-links have included cell phones and gullible humans.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
How come when the drug cartels use creating financing, governments get so upset but when banks do the same thing, they are rewarded by having their debts pay off for them?
Don't stop where the ink does.
Of course alternative currencies are an emerging threat. Anything which gives people more power, whether it's owning their own computers, tech advances in solar energy, having the right to vote, (let's throw in some "darker" examples), owning weapons, having access to crypto, etc, is going to be an "emerging threat" to someone.
Fortunately, this is the good kind of threat, from the point of view of citizenry. All "money laundering" means, is that transactions are harder for central authorities to track. Central authorities tend to have nasty agendas for often than not; denying them knowledge moves powers away from them and toward us.
... grass is green, the sky is blue, and the sun will come up tomorrow.
The entire Silk Road operation is dependent upon bitcoin being used as a method of money laundering.
Any transaction obfuscating the exchange of value for illegal goods is ipso-facto money laundering.
US law: http://www.law.cornell.edu/uscode/text/18/1956
Australian law: http://www.aic.gov.au/publications/current%20series/tcb/1-20/tcb004.aspx
And both laws encompass "known or should have known" concepts - that if it's obvious and you wilfully or negligently turned a blind eye, you're in trouble anyway.
--
BMO
Just wait until they find out MMO fortunes are built on more corpses than WWII.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
Aussie watchdog starts reading Neal Stephenson novels in hopes that he'll find more things to fret about.
Ummm, why don't we worry about cleaning up the real sources of excessive money laundering first?
Of course, I'm talking about BANKS, which are far more of a problem than BitCoin or MMOs...for evidence, just look at the headlines of oh, the last 10 years?
The BANKS already gave the mob, er, government, their cut, so they get a free pass.
No offense meant toward my Sicilian friends.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
Agreed. The very premise behind laundering is that you wish to keep your transactions private. This is inherently ethical.
Isn't this the "old school" way of laundering money?
Either through outright purchase or, more commonly, strongarm, gain control of a business that does a lot of cash transactions -- bars, restuarants (cheap ones now), vending companies, taxis, anyplace people spend cash. Also gain control or create a business that acts as a vendor to that business on a regular basis (food wholesaler or other supplier).
The dirty money goes in as revenue to the cash-heavy business as bogus sales. Some money comes out "clean" as the business profits, but probably more of it comes out "clean" as payments to the suppliers. This allows you to offset your fake sales revenue (which is dirty cash input) with fake supplier sales so you don't have to account for, say, a million cans of coca cola or a couple of tons a beef a week.
Anyway, I've always been told that this is why the mob has been big in vending.
People use money laundering to disguise income from illegal sources such as drug cartels, arms dealing, prostitution, bribery, theft, extortion rackets, etc. That's the whole idea of money laundering. It takes dirty money and launders it. You might not think that all those activities should be illegal, but I strongly suspect that at least some of them are things you think should be illegal. And tracing the money is one of the most effective ways of catching criminals and breaking up criminal enterprises.
but how they obtain it in the first place
This was my first thought as well..."someone just read REAMDE". :)
It'd be more effective if we just put everyone in jail with forced labour and didn't give them any money to begin with.
I believe money laundering laws are at least one step beyond what most people regard a free society.
If the police can't deal with crime in an ethical way, why did we need them again?
But who gives anyone the right to tell me who i want to spend my money.
---- Booth was a patriot ----
Or "start" depending on your perspective.
The soylentnews experiment has been a dismal failure.
Banks engage in vast schemes of money laundering, but in order to access them for this purpose you have to have a large amount of money to start, because the process of institutional money laundering is expensive.
Bitcoins and MMOs aren't expensive. You just send an email and voila.
The concern isn't the volume of currency being laundered. What does concern them is that these new technologies democratize and disrupt money laundering in the same way the Napster disrupted copyright infringement. Suddenly, instead of a few thousand professional criminals you have 100 million casual lawbreakers, who consider their marginally illegal act as nothing more than a nuisance that "sticks it to the Man," and any attempts to prevent them from buying their cocaine on Silk Road as "infringing on their freedom to $WHATEVER." Just as Napster and Bittorrent transformed piracy from a back-room hobby into a multi-billion dollar industry with an adjunct political movement and a complete shift in social mores.
Don't blame me, I voted for Baltar.
Actually if you check the regulations, any movement of value which is over-threshold for which you don't perform the relevant ID checks and investigations is also defined as money laundering. You can be a money launderer without even realizing you're a criminal if you simply don't file the right paperwork, where "right paperwork" is unfortunately somewhat vague. For example if you sell a house or run a pawnshop you may need to follow AML regulations and try and figure out where the purchaser/seller gets their income from, otherwise you too can be a money launderer even if no other crime was committed!
Yeah, it's a "threat" all right. It's a threat to their control over people. But then again, privacy and the freedom it brings is always a threat to governments, isn't it?
Liberty in your lifetime
Take your ill-gotten monetary gains and anonymously deposit money into a bitcoin wallet
(If you have a lot, pay a team of people to just go to Walmarts and banks and deposit money, yes anonymously, for now)
Tumble/fog your bitcoins a bit. Never use the same address twice and make sure your wallet has the "Use TOR network" checked.
Buy gold and silver with them (there's a website that takes bitcoins for gold/silver and they are not that much over spot. Comprable to gettting them off Ebay.)
If you really are chasing the money, take that silver/gold and sell it on Ebay, you'll probably make a small profit.
-- Its survival of the fittest...and we got the fucking guns!!!
Those are a threat alright, they are a threat to the government's ability to steal money, and when I say money, I mean purchasing power. These are the threat to the ability of the governments of the world to steal from you via currency printing and interest rate manipulation.
You can't handle the truth.
Does this also apply to stocks? When high freq traders make deals, do they have to file a report for every one of them?
So you put an extra 10 bucks of 'dirty' money into a business each month. Since all the operating costs are already paid, this money goes right to the bottom line. This extra 10 dollars a month increases the bottom line by 120/year. Now it is time to sell the business. It sells at a multiple of earnings. Let us say 5 times.
So $10 x 12 months x 5 P/E = $600
That 10 bucks a month has increased the sale value of the business 60 times.
Pretty cool, eh?
And IF the 'dirty' money is what pushes the business from loss to profit, ouch, that new owner has got some real problems. Buyer Beware.
The numbers might be a bit off, but it illustrates the concept.
Moral of the story is that you need a good accountant. He will find stuff like this. He knows all the tricks. He has too. He would not be a good accountant if he did not. They don't put these tricks in books or on the internet. Find a really old guy that has done audits on Governments and Megacorps. If he has a non-assuming ten year old car that goes really really fast, you have your guy.
If you have ever seen Yodi the Beancounter do an audit on some amateur bookcooker, the most terrifying thing is how fast he finds the frauds. He will walk right up to exact one of the myriad of filing cabinets, and pull out the exact file, and poof, you're busted. It is indistinguishable from magic.
The Government has some really scary good auditors. Some of the best.
Guns, God and GAAP. The three pillars of civilization. Laugh if you like. But when you reach a certain point in the game, when you violate GAAP with a crooked set of books, in many people's minds, you have violated one of the 3 holy of holies. Expect wrath and retribution of biblical proportions. You have been fairly warned.
Oh, and don't do drug deals over the phone. Ever.
Don't do drug deals over the internet.
You are doing something illegal and then the police do something illegal to catch you, you get all holy with the righteous indignation? What is that? That is unclear thinking. If you chose to break the law, do not whine. Be a man about it. There are no safety nets.
When you break the law, you are a 'Bad Guy'. This means the 'Good Guys' can do 'whatever it takes' to bring you to justice. The good guys are holy, doing God's work. You are evil scum slime, with no rights at all. You deserve to be punished. Cast into a lake of fire. Zero Tolerance. The means justifies the end. This is how they think. GOT IT?
Seems obvious, but here we are discussing it. Maybe their parents did not teach them. The police are not your friends. The government is not your friend. The Establishment and the Man are out to get you and fuck you up. The media is out to deceive you. The law is there to keep you in your place, to exploit you, to steal the fruits of your labors. It always has been, It always will be.
None of this is on the internet because it is illegal stuff. There is no 'How to Launder Money' site. There is no 'Making a safe dope deal' site. There is no 'Dial A Doper App' with encryption and good data retention laws. The dope vendor is a felon and you cannot call the cops or take him court.
When you break the law, you are going past the point on the map where it says "There be Dragons". There is no app. Jail sucks. You friends will rat on you faster than you can say "Mark Zuckerberg"
Maybe dope should be legal. Maybe tax rates should be low enough that nobody needs to launder money. Or put it offshore so a greedy debt ridden governments do not seize it. Maybe if there were enough good paying jobs people would not need to do so many crimes. These are the real issues.
So to close, there is a whole dark world of knowledge on how to survive and prosper when the system gets corrupt from top to bottom. The price of failure in this world however is Jail and Death.
But I would rather spend my time pushing back the darkness, and focus on saving this civilization. I would rather the system worked, that is stays honest. That stupi