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Australian Watchdog Frets Over BitCoin, MMOs' Money Laundering Potential

timothy posted about 2 years ago | from the brought-to-you-by-silk-road dept.

Australia 134

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)."

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134 comments

Easy target (1)

History's Coming To (1059484) | about 2 years ago | (#41010425)

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.

Re:Easy target (-1)

Anonymous Coward | about 2 years ago | (#41010471)

The biggest money laundering operation out there is the Obama administration and the radical Marxist Democrat party.

Pay up suckah.

Re:Easy target (0, Funny)

Anonymous Coward | about 2 years ago | (#41011365)

You spelled "Republican military industrial complex" wrong.

And if you think Obama is a Marxist, I have some overpriced gold coins to sell you.

Re:Easy target (-1)

Anonymous Coward | about 2 years ago | (#41011655)

You spelled "Republican military industrial complex" wrong.

And if you think Obama is a Marxist, I have some overpriced gold coins to sell you.

Good--you two keep fighting like that and hopefully you'll ignore the fact that it doesn't matter which party gets 'voted' in to office until it's too late....

Re:Easy target (-1)

Anonymous Coward | about 2 years ago | (#41011815)

The Communist Party of the USA supports Obama, did you know that?

http://taxfoundation.org/state-tax-climate/california

Obama is a Marxist. I am still waiting for any evidence he is not.

It's not simply Obama either, the entire Democrat machine is radical left. You should learn some history, you might open your eyes a bit.

"One of the traditional methods of imposing statism or socialism on a people has been by way of medicine. It’s very easy to disguise a medical program as a humanitarian project, most people are a little reluctant to oppose anything that suggests medical care for people who possibly can’t afford it." - Ronald Reagan

Re:Easy target (-1)

Anonymous Coward | about 2 years ago | (#41012185)

Whow. How did the Tea Party discovered Slashdot. I'm dazzled !!!

Re:Easy target (-1)

Anonymous Coward | about 2 years ago | (#41012321)

That's right, we are here and we are everywhere. You should feel lucky, you are going to be educated.

Re:Easy target (-1)

Anonymous Coward | about 2 years ago | (#41012311)

Obama is a Marxist. I am still waiting for any evidence he is not.

BURDENS OF PROOF DO NOT WORK THAT WAY! GOOD NIGHT!

Re:Easy target (-1)

Anonymous Coward | about 2 years ago | (#41012629)

I have presented a significant amount of proof.

And I won't go over and over it again. He supports big governent, unions, is anti business and wants to share the wealth. None of these things are conservative principles. There's plenty more, you are free to read for yourself.

It is you who assert he is a conservative - with zero proof. You are incorrect. Thanks for playing.

Re:Easy target (-1)

Anonymous Coward | about 2 years ago | (#41012709)

I have presented a significant amount of proof.

You have presented none whatsoever.

It is you who assert he is a conservative

I said nothing even remotely resembling this, and you know it. Now stop playing at reverse-shilling for Obama; it's not the clever trick you think it is.

Re:Easy target (-1)

Anonymous Coward | about 2 years ago | (#41012765)

"I said nothing even remotely resembling this, and you know it"

No I do not as we are all posting as AC and if I mistook you for another poster fine.

"Now stop playing at reverse-shilling for Obama; it's not the clever trick you think it is."

This makes no sense whatsoever.

Re:Easy target (-1)

Anonymous Coward | about 2 years ago | (#41013347)

It makes perfect sense, because it is a 100% accurate description of what you are doing. You fervently support Obama, but are too stupid to make a coherent argument in his favor (or against Romney). Instead, you are propping up a strawman version of conservatism in the hope that it will make liberalism look good by comparison.

Don't further debase yourself by pretending that anything else is happening here.

Re:Easy target (0)

History's Coming To (1059484) | about 2 years ago | (#41012371)

Yup. They support you too, so you're clearly a Marxist. Reagan? He supported the Taliban and Saddam Hussein. Your arguments either make no sense at all, or demonstrate that you are whatever you're arguing against. Take your pick.

Re:Easy target (0)

Anonymous Coward | about 2 years ago | (#41012695)

You people really are brainwashed, it's quite amazing.

Let's try this another way, forget about Obama for a time, are you a Marxist - do you even know what Marxism is?

How much of each dollar that you or I make do you believe we should be allowed to keep?

Re:Easy target (1)

Anonymous Coward | about 2 years ago | (#41012899)

Apparently you don't much about Marxism yourself - Marx didn't believe in taxes, and in fact, Marx was ultimately a anarchist. You know, like libertarians. Like the Tea Partiers pretend to be, except they're really just a cog in the Republican statist machine.

Re:Easy target (0)

Anonymous Coward | about 2 years ago | (#41013053)

"Marx was ultimately a anarchist. You know, like libertarians. Like the Tea Partiers pretend to be, except they're really just a cog in the Republican statist machine."

Dude you are truly beyond hope, do you have any idea how much dissonance exists in the above sentence? This is clearly the stupidest thing I have yet seen posted here - and that's an accomplishment. Good luck with that.

Re:Easy target (1)

History's Coming To (1059484) | about 2 years ago | (#41013109)

You want my political views? OK, here goes.

The idea of adopting a "left wing", "right wing" or in fact any political group is fundamentally flawed. Perfectly good policy is regularly thrown out because "the other side" will not associate with anything proposed by their opponents, both left and right wing.

There is nothing wrong with Marxism, liberalism, republicanism or even national socialism, they're all perfectly good ways to run a society if implemented by decent people. I'll take a guess that you're a republican? You do realise there have been republican Presidents who have done some good and wonderful things, and some republican Presidents who have been borderline war criminals? Ditto any large political group you choose to pick. Partisan politics is one of the most parasitic and damaging cults on the planet, at least as bad as religious intolerance.

We need to concentrate on putting good people into power, regardless of their politics.

Feel free to continue ranting against people who disagree with your compartmentalised and narrow view of humanity's potential, I'll be off reading up on Marxism to see if I can work out why it makes you so angry.

Re:Easy target (0)

Anonymous Coward | about 2 years ago | (#41013617)

We need to concentrate on putting good people into power, regardless of their politics.

But what does "good people" mean? Either it's so vague that nearly anyone is "good people", or it's too specific to be entirely orthogonal to politics.

(different AC here, in case the lack of strawmen didn't make that clear)

Re:Easy target (1)

History's Coming To (1059484) | about 2 years ago | (#41013739)

Refusal to join any political party would be a good starting point.

What we need is a WOW Lobby (1)

BMOC (2478408) | about 2 years ago | (#41010473)

LEEEEROOY JEEEENKINS!!!

Re:What we need is a WOW Lobby (2)

Impy the Impiuos Imp (442658) | about 2 years ago | (#41011157)

Nah, for taxation, "WOODROW WILSON!!!1!11!"

Re:Easy target (1)

camperslo (704715) | about 2 years ago | (#41010893)

Yes, it seems the closer one looks, the more there is to find with dirty deeds in the banking industry. And it's not just what has been done, but the scale of it.

"In 2010, Wachovia, now owned by Wells Fargo, settled out of court for the largest violation of the Bank Secrecy Act in US history. They paid a fine of $160m for laundering a whopping $378.4bn from Mexican currency exchange houses between 2004 and 2007. Much of this cash is thought to have been drug money, moved without proper documentation from Casa's de Cambio in Mexico to US banks. "

http://www.aljazeera.com/indepth/features/2012/06/201261515312418850.html [aljazeera.com]

Re:Easy target (1)

bmo (77928) | about 2 years ago | (#41011035)

" They paid a fine of $160m for laundering a whopping $378.4bn from Mexican currency exchange houses between 2004 and 2007. Much of this cash is thought to have been drug money, moved without proper documentation from Casa's de Cambio in Mexico to US banks.

And given the size of that fine, they're still doing it. Cost of doing business. No more than getting nailed by a red-light camera.

--
BMO

Re:Easy target (1)

infodragon (38608) | about 2 years ago | (#41011917)

More like getting a single parking ticket in some small city for $7 when you make over $1m/year for over 10 years and consistently park, in the same spot, in violation of the rules. The scale of the fine is but pocket change. Or in Monty style "Tis but a scratch"

Re:Easy target (4, Insightful)

CanHasDIY (1672858) | about 2 years ago | (#41011321)

Standard Chartered Bank (SCB) has agreed to pay the New York State Department of Financial Services (DFS) $340 million to settle charges that the British bank concealed over $250 billion in transactions with Iranian clients and deliberately lied to New York banking regulators.
But SCB is not an isolated case. In 2009, Lloyds Bank and Credit Suisse were fined $350 million and $536 million, respectively, for allegedly removing or altering information to conceal prohibited transactions with Iranian clients and customers from other sanctioned countries.
In 2010, ABN Amro and Barclays were docked $500 million and $298 million, respectively, for allegedly committing similar crimes. Then, this June, ING Bank paid the largest ever fine -- $619 million -- against a bank for allegedly moving billions illegally through the U.S. financial system on behalf of Iranian and Cuban clients...

While five banks have entered into deferred prosecution agreements with the DOJ and agreed to pay fines in the hundreds of millions of dollars, no bank official has been criminally prosecuted and punished.

http://www.cnn.com/2012/08/16/opinion/banks-too-big-to-prosecute/index.html [cnn.com]

Re:Easy target (1)

MozeeToby (1163751) | about 2 years ago | (#41013049)

Standard Chartered Bank (SCB) has agreed to pay the New York State Department of Financial Services (DFS) $340 million to settle charges that the British bank concealed over $250 billion in transactions with Iranian clients and deliberately lied to New York banking regulators.

I wonder what their profit margins were on those transactions... I'm guessing it was higher than 0.136%, in fact, given that they knew what they were doing was illegal (and therefore risky) I'm guessing it was probably well over 1%. So how is a piddly $340 million fine going to deter anyone?

Re:Easy target (3, Insightful)

Reverand Dave (1959652) | about 2 years ago | (#41011813)

If you give a man a gun he can rob a bank, if you give a man a bank, he can rob the world.

got bitcoin? (0)

Anonymous Coward | about 2 years ago | (#41010461)

Naah, I am a slashdotter I just say no.

Best money laundering vehicle (2)

stevegee58 (1179505) | about 2 years ago | (#41010463)

The best money laundering vehicle remains the USD denominated in good old $100 greenbacks.

Re:Best money laundering vehicle (1)

_merlin (160982) | about 2 years ago | (#41010577)

Please enlighten me on how converting to/from USD would serve as a money laundering strategy. Note that I'm not agreeing with people who fret over the "threat" of Bitcoin - I just fail to see the point of your post.

Re:Best money laundering vehicle (1)

Anonymous Coward | about 2 years ago | (#41010683)

The federal reserve note is NOT legal tender and never has been a real form of money. The constitution states that gold and silver are the only legal tender. Just because Corp US says something is right doesn't mean it is.

Re:Best money laundering vehicle (3, Informative)

Trepidity (597) | about 2 years ago | (#41010777)

Offtopic, but see the Legal Tender cases [wikipedia.org] .

Re:Best money laundering vehicle (1)

Chris Mattern (191822) | about 2 years ago | (#41010865)

The constitution states that gold and silver are the only legal tender.

(citation needed)

My copy of the Constitution doesn't seem to have that statement. Maybe I just don't have the double-secret probation edition.

Re:Best money laundering vehicle (1)

Chris Mattern (191822) | about 2 years ago | (#41010927)

And to forestall the incoming ignorance, yes, I know about Article I, Section 10. It prohibits the *states* from issuing legal tender that is not gold or silver. The Federal government is under no such restriction.

Re:Best money laundering vehicle (1)

SaroDarksbane (1784314) | about 2 years ago | (#41011033)

That is to say, you have a certain interpretation as to the meaning of the words, and are not completely unaware of the words.

In the future, it might be best to just lead with your interpretation instead of snark about "double-secret probation editions" of the constitution. It would be more conducive to productive conversation that way.

Re:Best money laundering vehicle (1)

HungryHobo (1314109) | about 2 years ago | (#41011499)

Any alternative "interpretation" would be pretty stupid unless the person who held it also believed that the federal government was also disallowed from entering into Treaties and Alliances

any snark is fully justified.

Re:Best money laundering vehicle (1)

SaroDarksbane (1784314) | about 2 years ago | (#41011715)

Well, yes. I think everyone must concede that the text of the section applies to the states and not the federal government. I was talking about interpretations stemming from the interplay of state and federal obligations related to money, not this passage by itself.

Re:Best money laundering vehicle (1)

sg_oneill (159032) | about 2 years ago | (#41012019)

Its not an interpretation. It literally says "States". And since the constitution is very speciic in language about states vs the fed, there isn't any scope for "alternative" interpretations.

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

So yeah.... thats not ambiguous. Especially when the Section 8 enumerated powers says;-

8.1 The Congress shall have Power To (...)

8.5 To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

And so there you have it. The cosntitution FIRST says that the federal legislature can coin money and give it a value, THEN it says that the states are forbidden to. The states thus may use the *federal* currency to engage in trade, or if it wishes it may use gold or silver coins only.

Any alternative interpretation is incorrect. The constitution is not ambiguous about this.

Re:Best money laundering vehicle (1)

SaroDarksbane (1784314) | about 2 years ago | (#41010965)

A believe he's referring to Article 1, Section 10:

"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

Re:Best money laundering vehicle (2)

egamma (572162) | about 2 years ago | (#41011069)

A believe he's referring to Article 1, Section 10:

"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

You bolded the wrong section. It should looks like this:

"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal;coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

Re:Best money laundering vehicle (1)

SaroDarksbane (1784314) | about 2 years ago | (#41011139)

I wasn't making an argument one way or the other; I was clarifying what the AC was talking about. Your snark is appreciated, however.

Re:Best money laundering vehicle (1)

shentino (1139071) | about 2 years ago | (#41011487)

Reread the constitution, and double check to see if that's referring to the federal government or the states.

Re:Best money laundering vehicle (1)

pla (258480) | about 2 years ago | (#41010993)

Please enlighten me on how converting to/from USD would serve as a money laundering strategy.

Because cash has no history, simple as that. You have no way of knowing if the last person to spend that $20 bill the ATM just gave you bought diapers, or heroin, or bullets for the Taliban with it.

Now, the converting to/from part may present something of a problem in itself - But once you start dealing in bills instead of bits, the IRS/Treasury/DoJ lose any ability whatsoever to track that $100k from questionable sources, until it reappears in entirely innocent deposits at 80 different banks across 12 states.

Which, ironically enough, makes BitCoin less suitable for money laundering... Although BitCoin has taken steps to preserve anonymity, it does have a complete history of every transaction in which a given BTC has participated, right back to the originally mined block.

Re:Best money laundering vehicle (1)

oakgrove (845019) | about 2 years ago | (#41011679)

While, yes, Bitcoin transactions by necessity have to be verifiable to stop double spending, etc., any user can have as many pseudonymous wallets as they want so there is no way to know if any particular entity has 1 1Billion dollar wallet or 1Billion one dollar wallets. The only thing tying an individual to a particular pseudonym is the account credentials so tying money to any particular individual withing the system itself so far hasn't been possible. Of course if somebody does something stupid offline to tie themselves to their wallets then that's their mistake and has nothing to do with how secure bitcoin itself is.

Re:Best money laundering vehicle (1)

pla (258480) | about 2 years ago | (#41012281)

While, yes, Bitcoin transactions by necessity have to be verifiable to stop double spending, etc.,

Don't take my comment the wrong way, I love BitCoin, and sincerely hope it succeeds to the point of driving every fiat currency on the planet into nothing more than an obscure quirk only used for paying taxes in legacy-currency-holdout nations. I won't hold my breath on that one, though. :)

But yeah, I agree, the transaction history doesn't seriously jeopardize anonymity, which most of the haters don't seem to grasp. It does, however, lead to at least the possibility of a provable chain of custody (with each step discoverable via intimidation) back to the person of interest; with cash, you can't prove it, and even ignoring that, the chain effectively ends at the most recent time the cash sat in a Walmart register.

Re:Best money laundering vehicle (1)

oakgrove (845019) | about 2 years ago | (#41012481)

I'm fairly new to the whole bitcoin concept though I do like the idea a lot. In the scenario where someone follows the transaction chain, how would you go about intimidating any particular wallet holder? It seems like in order to do that, you'd need their identities which is about as feasible as getting a tor using AC poster's identity on Slashdot from geek.net brass, e.g., pretty much impossible. If I'm off base, I'd really like to know.

Re:Best money laundering vehicle (1)

tlhIngan (30335) | about 2 years ago | (#41013223)

Don't take my comment the wrong way, I love BitCoin, and sincerely hope it succeeds to the point of driving every fiat currency on the planet into nothing more than an obscure quirk only used for paying taxes in legacy-currency-holdout nations. I won't hold my breath on that one, though. :)

You do realize that BitCoin will become and new fiat currency right? And since it has some severe flaws in it (notably, it's ripe for deflation), you're just going to end up with a currency that speculators are going to go nuts with.

BitCoin will cause even more wild fluctuations in financial markets, because the speculators (who already are using BitCoin) will just continue to do the same with bitcoin. And considering people "roll back" bitcoin transactions every time there's a hack that "devalues" the value of it versus current fiat currency (like how NYSE rolled back stock trades). All those hacks that steal bitcoins cause the price of it to crash, those transactions get rolled back because if you own a lot, suddenly they're worth less, etc.

Oh, and if you're wondering what bitcoin speculators are speculating on - think of the other currency the world has - precious metals. Bitcoin isn't a magic currency, it's just another fiat currency and all the usual financial market problems we have will still be present. We'd have high-frequency traders still, stocks, speculation, etc. And you can bet they're going to pursue arbitrage as well. Bitcoin just extends the human greed element to a new location.

Re:Best money laundering vehicle (5, Insightful)

girlintraining (1395911) | about 2 years ago | (#41010861)

The best money laundering vehicle remains the USD denominated in good old $100 greenbacks.

Not really, no. The biggest problem with drug cartels is what to do with all those damn physical dollars. They take up a lot of space and complicate logistics considerably, even fatally. So they use bank accounts, credit cards, etc., to purchase supplies and cut checks to their employees, just like any other business. But to do that, their financial records have to look just like any other business too, or the money will be seized.

Money laundering is not a simple process like people believe it is, especially when the sums become non-trivial. It's actually very complicated, since every financial transaction is recorded electronically. Nobody shows up with a fist full of hundred dollar bills to buy a house, or a car -- those that do immediately get added to a dozen different watchlists. You pay with a guaranteed check, a credit card, or other financial instrument. Nowhere is the old adage "When in Rome..." more true than in money laundering. Your records have to look the same as any other legitimate business. Even the smallest discrepancy, the most benign mistake in your record keeping, and a forensic accountant could flag you -- and then the government comes and throws you in a black van and you're never seen from again.

Most drug dealers are busted on money laundering charges, not drugs. And for good reason -- it's a lot easier to hide drugs than money.

Getting involved in cash-heavy businesses? (4, Interesting)

swb (14022) | about 2 years ago | (#41011505)

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.

Increased Book Value of the Business (4, Interesting)

Anonymous Coward | about 2 years ago | (#41014031)

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 stupid laws get repealed. That the rich have no special privileges or immunities to prosecution. That everyone is equal before the law. That somebody grabs a clue and a calculator and moves the economy from a casino and a ponzi scheme to long term steady sustainable growth.

I feel sorry for all you kids. Your view of the world has been so constrained.

Read something by the Greeks. Their starting point for discussion is Infinity.

Re:Best money laundering vehicle (1)

Doctor Morbius (1183601) | about 2 years ago | (#41013577)

Just take the drug money buy WoW gold with it then sell the gold to someone else and voila you're now in the gold farming business; which is legitimate.

Re:Best money laundering vehicle (1)

Anonymous Coward | about 2 years ago | (#41010999)

Check your churches first. Biggest tax evasion/money laundering loop hole in existence.

Re:Best money laundering vehicle (1)

Reverand Dave (1959652) | about 2 years ago | (#41011883)

AMEN. They are also some of the largest organized criminal organizations on the planet as well.

Re:Best money laundering vehicle (1)

swillden (191260) | about 2 years ago | (#41011579)

The best money laundering vehicle remains the USD denominated in good old $100 greenbacks.

Right, because when you show up with a briefcase full of $100 bills and say you want to buy a house, no one will have any problem with it.

Untraceable funds is exactly the problem that money laundering is intended to solve. In order to be able to spend your ill-gotten income, you need to be able to somehow make it traceable to some sort of legitimate origin. Greenbacks are no help at all. Oh, sure, you can buy groceries and beer and stuff with them easily enough, but trying to buy large-ticket items with cash raises all sorts of red flags.

Massive Yawn time (1)

RobertLTux (260313) | about 2 years ago | (#41010481)

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.

Re:Massive Yawn time (1)

BMOC (2478408) | about 2 years ago | (#41010581)

from the home of a Treasury Department agent:
"Hi Honey, how was your day?"

"ah, Tough day, first the WOW servers crashed, then LOTRO's Draigoch bugged on us twice, then I couldn't find anyone to group with in SWTOR."

Re:Massive Yawn time (2)

JDG1980 (2438906) | about 2 years ago | (#41010589)

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.

I can see the Fox News headlines now: "Federal Government Hires People to Play Video Games."

Re:Massive Yawn time (1)

Anonymous Coward | about 2 years ago | (#41010659)

I can see the Fox News headlines now: "Obama Administration Hires People to Play Video Games."

ftfy

Re:Massive Yawn time (1)

g1zmo (315166) | about 2 years ago | (#41012355)

Or, depending on the current White House occupant: "President Backs High-Tech Initiative To Combat Terror Network Funding"

seems like an ongoing thing (1)

Trepidity (597) | about 2 years ago | (#41010511)

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 [slashdot.org] on a 2011 investigation.

Previous weakest-links have included cell phones [slashdot.org] and gullible humans [slashdot.org] .

Re:seems like an ongoing thing (1)

IamTheRealMike (537420) | about 2 years ago | (#41010617)

They track conduits that could possibly carry large amounts of money from questionable sources

Actually the point of AML is to track all "intermediations of value", to use the American regulators turn of phrase. The communications equivalent would be requiring everyone to present multiple forms of ID to get an internet connection, banning/requiring strict regulation of proxy providers and imprisoning people whose computers were involved in proxying (regardless of whether a crime was committed using the proxied connection). Internet providers would also be expected to pro-actively report any "suspicious activity" according to a vague set of rules and again staff or executives could be imprisoned if they fail to do so. Internet connections with Iran or other countries would be banned. Anything that can potentially be turned into a proxy, like a website language translation or re-compression service, would then be seen as "threats" that needed to be regulated and require proofs of ID to use, etc.

You can imagine that such a regime would not be welcomed by most Slashdotters, but what I've described is exactly how the financial system works in 2012!

No surprise (0)

Anonymous Coward | about 2 years ago | (#41010991)

The single most important concern to any government is money. If you want to know the truth, all you have to do is follow the money.

(If you didn't get it, the goal of these laws is to guarantee a steady stream of revenue for the business of government, not to prevent organized crime from doing business. If you have the capacity to admit it, the last thing government wants to do is eliminate organized crime.)

Sauce for the goose... (1)

shawnhcorey (1315781) | about 2 years ago | (#41010711)

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?

So what's this then? (0)

Anonymous Coward | about 2 years ago | (#41010739)

Some watchdog quango desperately looking for self-justification and more juicy targets to regulate?

Other people's power is always a "threat" (1)

Anonymous Coward | about 2 years ago | (#41010749)

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.

And in other news... (2)

bmo (77928) | about 2 years ago | (#41010827)

... 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 [cornell.edu]

Australian law: http://www.aic.gov.au/publications/current%20series/tcb/1-20/tcb004.aspx [aic.gov.au]

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

Request to Australians (0)

Anonymous Coward | about 2 years ago | (#41010853)

Stop smoking weed when you're working with your brain. :D

Re:Request to Australians (1)

oakgrove (845019) | about 2 years ago | (#41012119)

Or "start" depending on your perspective.

Dangerous to whom? (0)

SimplyGeek (1969734) | about 2 years ago | (#41010937)

"emerging threats" to whom?

The government.

What they fear the most is a populace that can exchange value (money) freely amongst themselves without the government's knowledge.

Dangerous indeed...

Let's focus on the real threat (0)

Smegma4U (301112) | about 2 years ago | (#41010955)

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?

Re:Let's focus on the real threat (1)

CanHasDIY (1672858) | about 2 years ago | (#41011143)

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.

Re:Let's focus on the real threat (1)

iluvcapra (782887) | about 2 years ago | (#41012155)

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.

Even paladins kill things and take their stuff. (1)

Impy the Impiuos Imp (442658) | about 2 years ago | (#41010961)

Just wait until they find out MMO fortunes are built on more corpses than WWII.

Re:Even paladins kill things and take their stuff. (1)

JDG1980 (2438906) | about 2 years ago | (#41011103)

Sounds like an interesting premise for a novel. Stereotypical gamer geek raids and loots another group in his MMORPG, and is surprised by the size of the haul. Then he finds out he's pissed off some very bad people in the real world...

Re:Even paladins kill things and take their stuff. (1)

JoshuaZ (1134087) | about 2 years ago | (#41011507)

"Halting State" by Charlie Stross has a pretty similar premise. Real world cops are called in to investigate a bank robbery in an MMO.

What's wrong with money laundering? (0)

funky_vibes (664942) | about 2 years ago | (#41011025)

Tell me, what's wrong with money laundering?
Clearly it seems people should only be allowed to spend their money in ways sanctioned by the government.

Re:What's wrong with money laundering? (1)

SimplyGeek (1969734) | about 2 years ago | (#41011417)

Agreed. The very premise behind laundering is that you wish to keep your transactions private. This is inherently ethical.

Re:What's wrong with money laundering? (0)

Anonymous Coward | about 2 years ago | (#41011495)

it cheats the state from its cut (tax), which is why most countries have strict laws regarding making anything that resembles currency
ofcourse if you have enough money it doesn't matter the laws doesn't apply and tax is optional, lol

Re:What's wrong with money laundering? (1)

JoshuaZ (1134087) | about 2 years ago | (#41011527)

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.

Re:What's wrong with money laundering? (1)

funky_vibes (664942) | about 2 years ago | (#41011875)

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?

Re:What's wrong with money laundering? (2)

IamTheRealMike (537420) | about 2 years ago | (#41012195)

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!

Re:What's wrong with money laundering? (1)

TFAFalcon (1839122) | about 2 years ago | (#41013989)

Does this also apply to stocks? When high freq traders make deals, do they have to file a report for every one of them?

the issue is not how they spend it (1)

Chirs (87576) | about 2 years ago | (#41011605)

but how they obtain it in the first place

Re:the issue is not how they spend it (1)

funky_vibes (664942) | about 2 years ago | (#41011803)

Exactly my point.

Re:the issue is not how they spend it (1)

SydShamino (547793) | about 2 years ago | (#41012583)

The sixteenth amendment makes the government's business.

Re:the issue is not how they spend it (1)

SydShamino (547793) | about 2 years ago | (#41012613)

Don't you hate when you a word out of a sentence.

MMO's ARE MONEY LAUNDERING (0)

Anonymous Coward | about 2 years ago | (#41011027)

I've been saying this for the last 3 years, good god people.

Here's how it works in a nutshell:
Paypal or other ill gotten gains are used to buy game time/gold/etc in a MMO
That account is stripped and given to another "player"
That "player" in turn sells the parts back to other players for the ingame currency, who pay that player with paypal, prepaid cards, etc.

Substitute paypal with any other forms of internet payment.

If you want to see an end to this, you'll have to demand that MMO's, Zynga, Xbox Live, Nintendo, etc immeditely stop using "points" that can be bought, and and ban the "freemium" gameplay model that is found on many social gaming systems. They will have to use traceable means of payment, which for many games is unworkable.

Here's my proposal, it's quick and simple:
Create a traceable serial-numbered virtual global currency that can only exchanged at financial institutions (banks, credit unions, paypal), not this bitcoin bullshit.
In order to buy property online, safely, you create the transaction inside the game (eg in-game brokerage/escrow, this sends a direct payer to payee request in your banking online/app) and it will only withdraw/deposit this into that virtual-currency account. This bypasses all fee/tax/border/customers/duties/tariff systems that don't apply to virtual goods. When it comes to tax time, you'll be required to declare how much money you made virtually.

Game companies could solve a lot of these problems themselves by not operating as freemium in the first place. When you have a subscription game, the free trial puts a gaping hole in the anti-bot/anti-laundering system because players just create throw-away accounts. A game I'm playing right now I believe does this right and disables the bank/trade when the account is trial. It also disables communication until you've played several levels (thus requiring 4 hours of gameplay before one could make a "spambot" and even then you're still stuck in the beginner zone and can't leave it.)

To solve the problem with freemium games, there needs to be a way to tie the physical hardware (doable with consoles, ipod/ipads) to the account. Since most MMO RPG games are PC based, this is a problem. Maybe if USB ID tokens were required before playing, it would solve a lot of this.

Re:MMO's ARE MONEY LAUNDERING (1)

nurb432 (527695) | about 2 years ago | (#41011953)

But who gives anyone the right to tell me who i want to spend my money.

actually i kno a public company that is laundering (0)

Anonymous Coward | about 2 years ago | (#41012105)

but i'm not telling because the stock's been doing great and i don't wanna kill the goose that lays the golden eggs. but it's an open secret that anyone who's been paying attention has figured out lol why doesn't the government go after them? because the government is involved (yes it's mexico related lol)

REAMDE? Should read... (2)

ravenscar (1662985) | about 2 years ago | (#41011133)

Aussie watchdog starts reading Neal Stephenson novels in hopes that he'll find more things to fret about.

Re:REAMDE? Should read... (1)

queazocotal (915608) | about 2 years ago | (#41011501)

And bans delivery vehicles with large contact patches.

interesting timing, reading it right now actually (1)

Chirs (87576) | about 2 years ago | (#41011659)

This was my first thought as well..."someone just read REAMDE". :)

Legitimate use (-1)

Anonymous Coward | about 2 years ago | (#41011207)

People are using bitcoin as an alternative to paypal or credit card transactions for what are in their eyes fully legitimate purposes. BigContent doesn't like a site? Call Big$ and poof! accounts are blocked. Bitcoin routes around financial blockades set up by the Big Corporations of this world.

maybe governments... (0)

Anonymous Coward | about 2 years ago | (#41011237)

should stop interfering in the free market. launder my nuts, fags.

Laundering, almost certainly (0)

Anonymous Coward | about 2 years ago | (#41011541)

http://en.wikipedia.org/wiki/Silk_Road_(marketplace)

BitCoin exchanges aplenty there. Apparently there was also a quick foray into the sale of weapons. I imagine most governments will be watching very closely, and trying many angles of penetration.

Neal Stephenson? (0)

Anonymous Coward | about 2 years ago | (#41012259)

Sounds like someone at AUSTRAC has been reading Reamde

changing times ... (1)

micahraleigh (2600457) | about 2 years ago | (#41012299)

In the olden days money laundering was hunted down to stop crimes that affect real people. Now it is hunted down to get tax money.

"Threat" (5, Insightful)

J'raxis (248192) | about 2 years ago | (#41012601)

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?

Seems simple to me (1)

SealBeater (143912) | about 2 years ago | (#41012993)

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.

threat to inflation (1)

roman_mir (125474) | about 2 years ago | (#41013479)

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.

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