Comment by ETH_start

Comment by ETH_start 10 months ago

12 replies

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There is no empirical evidence that the laws you're talking about benefit society. Take anti-money laundering laws for example, which have demonstrated no evidence of policy effectiveness:

https://www.tandfonline.com/doi/full/10.1080/25741292.2020.1...

For a more personal look, see how it affects people born in the "wrong country":

https://www.reddit.com/r/MakerDAO/s/XYh1ajhP0P

The actual laws that are needed, are those against victimful acts, like fraud, and you don't need the kind of freedom-reducing regulatory restrictions that have become so numerous in recent decades to have anti-fraud laws.

Effective enforcement of anti-fraud laws alone would be sufficient to stop the bulk of the scams in the crypto space, and there is nothing inherent to crypto that prevents legal authorities from pursuing those who perpetrate fraud and bringing them to justice.

On the plus side, free market competition has fostered innovation and discipline in the crypto space. We've gone from bug-prone smart contracts like the DAO eight years ago to highly secure bluechip DeFi applications like Aave, Uniswap, Compound and MakerDAO surviving completely unscathed in the last crypto crash.

Scams still abound unfortunately, and I believe that will only subside once people at large understand that crypto is more like cash than like a bank account, in that there is no social consensus system that can reverse fraudulent transactions in crypto like there is in banking. This is the flip side of being able to control your own funds, and transfer them without censorship.

Once people do broadly come to realize this aspect of crypto, I believe they will be far more cautious in how they choose to handle it.

Eddy_Viscosity2 10 months ago

> there is nothing inherent to crypto that prevents legal authorities from pursuing those who perpetrate fraud and bringing them to justice.

I will happy to be corrected here, but my understanding is that the foundationally key aspect of crypto that makes it worth anything at all, is that people can use it to circumvent traditional financial tracking of transfers and how they are associated with the individuals who made them. So in order for legal authorities to go after fraudsters, wouldn't they need these tools - the very ones crypto circumvent by design?

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  • KetoManx64 10 months ago

    Bitcoin, the first, biggest and most important cryptocurrency blockchain is a often referred to a "public ledger". There is no obfuscation built into itz all transactions you make are public and if someone knows your wallet address they can see every transaction you've made. Very few cryptocurrencies are private by default (eg, Monero) and they hold a very small portion of the cryptocurrencies market cap.

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  • ETH_start 10 months ago

    Most of the scams happening in the crypto space involve a significant non-crypto element, like a fake website that is made to look another website, or social engineering through messages on Discord.

    These criminals are well known by crypto communities, with repeat offenders targeting a given community numerous times over a course of months/years. Law enforcement has numerous opportunities to go after these individuals, even if they used a perfectly traceless cryptocurrency.

    In the case of FTX, it was run like a traditional bank, taking deposits and holding users'crypto and fiat assets on their behalf. The signs of a fraud were replete for many months before the crash that exposed it all, but the company was simply never investigated.

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bdjsiqoocwk 10 months ago

> Take anti-money laundering laws for example,

So are you arguing that we should do away with those laws and people should be allowed to launder money? Or are you arguing that we should keep the laws and not go after "victims" and presumably hope that everyone behaved according to the law?

If possible keep it short, if you're writing 7 paragraphs I can't be bothered.

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  • ETH_start 10 months ago

    AML laws are misnamed. They're really something like "report every transaction to the authorities" laws, or "prove yourself innocent to your bank before you transact" laws.

    I'm suggesting that the transaction layer is not the point at which crime should be targeted. Doing so requires the entire population being burdened with prior restraint where every they need to jump through hoops for every transaction, and need to give up their privacy altogether.

    If criminal acts are generating illicit revenue, then those acts should be investigated and prosecuted. Investigations should be targeted, and done in a manner that respects privacy rights, with authorities obtaining warrants before searching an individual.

    Real criminals and crime leave all manner of evidence trails. The dragnet surveillance approach to combating crime, that requires doing away with foundational rights like the right to privacy and the right to be presumed innocent and to freely associate, is not justified in any way.

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    • Eddy_Viscosity2 10 months ago

      I agree with the sentiment here, but financial transactions have to be recorded anyway as proof of who is supposed to have what. If people can be anonymous in these transactions, then they will be used for criminal activity. These scams and such are all money-driven crimes, so the 'follow-the-money' approach seems like it would be the most effective to find the criminals and also used as proof by prosecutors to the courts.

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      • ETH_start 10 months ago

        I may be misunderstanding your point, but there’s no law requiring individuals to report their financial transactions to the state. That requirement applies to banks, not peer-to-peer exchanges like cash or crypto. The fact that these regulations even exist is disturbing. They essentially allow people who work for certain state agencies to monitor everyone’s banking-based financial activity without a warrant, something that should never have been normalized.

        These banking rules should be scrapped. They force people to give up their privacy and prove their innocence before they can transact. This is a blatant infringement on individual freedom, and it only benefits people who might abuse such powers, as agents of overreaching governments.

        When it comes to fighting crime, there is no evidence that dragnet financial surveillance is effective. Criminals have been caught and prosecuted for centuries without the state needing to track every transaction. And since these laws were implemented, there is no evidence they have reduced the volume of financially motivated crime. Organized crime generates hundreds of billions of dollars worth of illicit revenue each year, despite all of the privacy that has been sacrificed.

        There are far more focused ways to go after criminals without invading the privacy of the entire population. Law enforcement can geotrack scam websites, use undercover agents to gather evidence, and subpoena social media companies to get the information they need. These methods work, and they respect privacy. There’s no reason to burden everyone with blanket surveillance when the actual criminals leave plenty of other evidence.

        Privacy and security are not mutually exclusive. We should repeal these invasive laws and return to a society that respects and protects the fundamental right to financial privacy.

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    • bdjsiqoocwk 10 months ago

      Well I'm just happy that people like you have no power.

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      • ETH_start 10 months ago

        So you would rather we all be under warrantless surveillance by the state? Looking at the historical record, do you think this makes us more safe?

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