This is an anti-money laundering law. It doesn’t ban transactions that size, just in cash.
You know what still works? Debit cards. Credit cards. I’d assume checks. Possibly other apps (though I’d be afraid to put so much money through them personally).
BTC does nothing good special here unless you’re trying to launder money.
> No need for the government to actually check using information.
But do they need to check that for every citizen without a warrant in close to real-time? Is panopticon the only way for it to be effective? Is this what citizens want?
No one needs to do anything. You are free to vote for a regression to the era when financial crimes were rampant and almost impossible to discover, let alone investigate.
> Because they need that information to identify and trace tax evasion and money laundering.
Isn't that what IRS audits are for?
This discussion reminds me of the automatic CSAM scanning on phones (Apple iirc?). Seems like a noble cause but you sure are handing over a lot of power.
They did it poorly. The past was rampant with organized crime that was fairly difficult to discover let alone trace. Modern accounting laws make it difficult to hide dirty money and help ensure that we have the tools to trace and collect evidence to take down criminal enterprises when we pursue them.
You also had a lot of tax fraud. It was easy to lie about things like how many children you had for tax discounts, so people often did. This particular loophole was closed by Social Security Numbers, but the principle is the same: records deter lies. The IRS often knows how much tax you should pay before you file.
Help, my movements are restricted because I'm cuffed! Oh, wait, government access to transactions doesn't restrict anything and is nothing like being cuffed.
It's not just government access; it's also the handing over of nearly every transaction to a private entity, whom can sell your transaction data to whomever they'd like at will.
This isn't all about government overstep. It's also about the giving up of your privacy to for-profit entities.
Regarding the gov:
In the US, citizens have protections against unreasonable searches and seizures. Forcing nearly all transactions into the view of the gov is an unreasonable search.
Then regulate it. Government regulation is the solution to private sector overreach, private entities already cannot just sell any data to anyone, the government does not let private entities run amok like this.
The US government regulates itself on the circumstances to which it can search data it already has the power to obtain all the time. Searches become unreasonable when law enforcement does not provide a valid reason to search & acquire information in front of the judiciary. But if the judiciary rules it to be reasonable, the government should have a way to obtain such data. Promoting the use of untraceable transactions like cash is essentially preventing the government from ever procuring any relevant data even if it would be reasonable and relevant.
Ah, but the government still needs a reason to snoop. That's the point, and using an anonymous mechanism of transaction, such as cash, cannot be the government's argument for why they need the data, because that would necessarily mean that the gov has the right to all data, which the 4th ammendment specifically prohibits.
If you want to ban the government from requesting searches with "this person used cash" as a reason, then go ahead. But if they have another good reason to look at someone's transaction data then the data should exist to be searched. Law enforcement can still need to produce a reason for why they need to search the data, but with anonymous transactions the data simply does not exist. The government can (and does) require transactions to be recorded without asking to search that data at the same time.
Because it's easier to enforce non-recording violations when transaction records are automated. The government does try to crack down on businesses that don't record, but it's difficult due to the nature of cash.
With third party doctrine in the US, the gov is allowed to get all data from 3td parties, so blocking cash is the equivalent of giving the gov all your data without need for a warrant. While I understand this article is about Israel, such cash blocking laws would be death to private transactions in the US.
Then change it in the legislature if that's what you want. That's what the Stored Communications Act did for ISPs, otherwise all ISP records would be subject to Third Party Doctrine. Thankfully the US chose to update its regulation to match modern usage of technology instead of going "oh no, the government now has access to our ISP records, we shouldn't transition anything important to the internet because that will be the death of private communications".
It doesn't make much difference to me personally, bank records have never been subject to 4th amendment protections and Americans don't freak out about that, don't see why financial transactions are much different. Cash transactions are already not supposed to be private because records are supposed to be kept, it's just easy not to keep records which is a fact exploited by criminals.
Of course cash transactions were supposed to be private. There is no need to record the parties involved in a transaction; only that the transaction pays applicable taxes. Did you forget that income tax didn't exist in the US until the 16th ammendment? And that ammendment made no specification that every transaction must be recorded for gov inspection.
Regarding ISPs, you can still hide that info from the gov by routing through a no-log vpn. Your proposal seemingly prohibits that type of mask, purposely.
We cannot give up individual freedoms because it makes police work harder.
Who cares how cash was intended to be like 100 years ago, it rationally bears no relevance to how it should be done today. I said they are not supposed to be private, not that they weren't.
The IRS sets a cash threshold above which you are required to manually report the personal information of the payer (ie Form 8300). The headline notes the Israeli threshold at 6000 shekels, the IRS sets it at 10000 dollars. We've established the threshold, we're just haggling over the number.
I never expressed any intention to allow people to hide from the government based on technical hacks that won't realistically be known or used by most people anyway. If you don't want government to read your stuff, that's the law's/legislature's job to determine that, like the Stored Communications Act. While criminals and citizens alike have equal access to technical loopholes, the law alone distinguishes between them.
Financial crime is the backbone of organized crime, it is the foundation of hostile spycraft and funds the most depraved regimes. I absolutely refuse to regress to the era where the mafia and cartel leaders ruled the streets and stood toe to toe with law enforcement. Anti-laundering laws are written in blood and they are designed to prevent those scenarios, not tie law enforcement hands then blame them for not working hard enough. You're going to have to do more than spout libertarian cliches to convince anyone.
> I absolutely refuse to regress to the era where the mafia and cartel leaders ruled the streets and stood toe to toe with law enforcement
Assuming you're talking about the US, this really only happened because of the dramatic increase in organized crime prosecutions in the 70s (mostly due to the departure of Hoover), the RICO act which significantly increased sentences for typical mafia activities like drugs/loansharking/extortion/etc, and the witness protection program which changed informing from a likely death sentence to a potential to turn a new leaf. Money laundering only became a crime in 1986, the original BSA mainly just introduced cash reporting requirements (which had a threshold that at the time was two times GDP per capita). Also things like carjacking, cigarette trafficking across states were made federal crimes which again made prosecution easier. "Follow the money" is touted as this law enforcement panacea but historically is not really that effective. Which is why for instance most major narcotics trafficking cases today almost always rely heavily on wiretaps and informants/government witnesses.
And the now standard practice of adding money laundering charges to non drug cases really only started happening after 9/11. So in my opinion there is a lot of evidence that these laws have had rather limited benefits in terms of stopping crime but because of the erosion of the threshold due to inflation are having an increasingly large negative effect on privacy of regular people.
Just uttering the words "this only really happened because of the dramatic increase in organized crime prosecutions" is not really evidence that transaction records are not useful, neither is noting the date of money laundering laws. Money laundering laws necessarily came after the organized crime crackdown because we had to study these cases to proactively address them. You can't build an Al Capone-style cash empire in the US anymore.
Unlike what you imply, money laundering is not about tacking on charges but rather detecting and tracing criminal organizations so it can be effectively prosecuted. Money laundering's critical role in organized crime is now widely understood [1]:
- without money laundering, criminal finance is easy to discover
- criminalizing it provides a legal basis for international cooperation that wouldn't otherwise exist to pursue global organizations
There also aren't any Great Depressions and bank runs anymore, but we don't ask to remove those finance laws even though they historically didn't prevent the Great Depression.
I would also push back against this idea. The two biggest "rogue regimes," Iran and Russia, generate hundreds of billions in clean money and substantial portions of their budget from oil/gas sales. Iran just has to have somewhat unique financial relationships with Turkey/China/UAE due to sanctions and their removal from SWIFT but I don't think that's really what you or most people mean by organized crime. They don't need financial crimes to make money. In fact their governments are often the victims of massive financial crimes and looting (Russia during privatization, Russia today with corrupt government contracts, Iran with subsidized goods like gasoline being smuggled out of the country on a massive scale, etc).
North Korea is maybe an example of what you're talking about but as a percent of total financial crimes its activities are small. They're also aren't doing structured cash deposits in bank accounts or whatever. They're stealing money through phishing and wire transfers or crypto hacks. After stolen money has been sent through 3 or so jurisdictions the amount of international cooperation needed to recover it will take at least a year.
Transaction identification is essential for sanctions and trade enforcement. While countries like Iran & Russia do a lot of legitimate oil/gas sales, their oligarch leaders evade sanctions that cut them off from enjoying Western luxuries they crave.
Transaction records also ensure hiding domestic sanction violations is extraordinarily difficult (unless you're state-backed like Swiss or Chinese banks). You won't see these countries rely on financial crime because these transaction systems already largely prevent them, few organizations really think they can get away with it. For example, North Korea cannot use cash to transfer large amounts of money because that's not even allowed in the first place, it has to use things like wire transfers. They are already subject to a monitored financial system that blocks major undocumented cash transactions. Once the records are mandatory, international data search & coordination can be made more efficient independently.
This is an excellent point and should be more visible. One effect of this is business model support for payment processors.
It's clearly not the only intent of the law. Bu when a government does something to benefit large and entrenched players in the market, we can all be forgiven for thinking that the fix is in.
Keep in mind this also implicitly waives 4th Amendment protections for financial activity. As soon as you have a payment processor involved in a transaction, it's 3rd Party Doctrine all the way to the bank. Kiss expectation of privacy goodbye.
I am curious. What are some of these mysterious on/off-ramps which do not record your private information?
> If used correctly,
PGP is also secure but the burden of using it "correctly" is higher than most regular people are willing to put up with. So, at least for the time being, it effectively is not private
You’re decrying Bitcoin’s affiliation with criminals while advocating its use for money laundering.
The solution isn’t Bitcoin. (It’s never Bitcoin.) It’s fighting such laws. Also, simpler than using Bitcoin with a similar risk profile: use cash. It’s tougher to trace than the blockchain, which makes it less likely you’ll get caught ex post facto.
A law like this doesn’t seem like a bad idea to me (though I’m sure many will disagree). At a certain point carrying so much cash just gets very risky.
I don’t disagree with you outright but the denomination seems incredibly small with (unless I missed something) the only intent to reduce the supply of cash in circulation.
If they capped it at something like an order of magnitude more I could maybe feel differently.
Not sure why you’re getting downvoted as you present a valid opinion.
That's less than 2 bills here (Switzerland) . Absolutely insane. Why even print cash at that point?
I doubt this brings in any more money in taxes and I would bet it's so small of an amount compared to the legal tax loopholes which the "big guys" use that it only hurts the general public than solve their tax issues.
A global trend. Australia has a $10K AUD (~$7K USD) limit introduced in 2020. China just introduced 2022 documentation requirements for cash withdrawls and deposits over 50K CNY (USD$7400) and are trialling e-renminbi (CN govcoin). Essentially the whole of Chinese society already pays most bills through Tencent's WeChatPay and the now-apparently-nationalized Alibaba's Alipay, so they have an effective govcoin by proxy already.
Its unsustainable and is another probable leading indicator that they won't last in their current state long term(among MANY other indicators).
Only concern is whatever nonsense happens in either Israel or the UK tends to be a test run for an eventual roll out to the US. We inherit all the bad (surveillance society, erosion of rights etc.) and none of the good (universal healthcare, some decent safety net etc.)
It is, unfortunately, completely sustainable. I used to be a great friend of cash, but with automatic cashiers everywhere and a Garmin watch that you can import your card into, I don't even need to carry a wallet if I just want to buy a few apples. And Covid introduced card use to many people who used to be reluctant about it. (The older demographics, which was most threatened by severe disease.)
I still realize all the privacy and civil rights ramifications etc., but cash is slowly becoming an equivalent of steam engines fighting against diesel and electricity on the railway; high maintenance and inefficient.
I predicted it few years ago, we are headed towards a cash less society
That's the natural evolution of the economy anyways, optimizing energy, resources and usages, no waste, no trash
Money only just an agreement between parties, as long as we agree, then we don't need money anymore
Social contract, as long as you are part of the community (it'll end up being worldwide), you'll receive everything you need (universal basic income), unemployment, crime, poverty, diseases, all will disappear
Optimizing energy for finally sailing in space, and engage with space exploration, meeting with our advanced neighbors
>Money only just an agreement between parties, as long as we agree, then we don't need money anymore
The entire point of the modern banking system is to intermediate between people that are separated by time and distance and who may not know each other.
You honestly believe crime, poverty and disease will disappear due to this? Lol.
I pre-emptively welcome you to a new era of cybercrime and social engineering like never before. Likewise, until people stop living on top of each other in cities, sharing mass public transport, disease is going nowhere.
As for poverty, well, digital money means that John Doe in the gutter likely isn't going to be getting any donations from kind strangers in the form of cash anymore, and likely isn't going to be able to spend anything without a device, or a fixed address. Prepare to see a surge of crime in that case.
"Oh but we'll give people UBI". You really think so? The cost of living crisis in the UK says otherwise.
A lot of countries in Europe have a limit at 2000€. I don’t find it particularly surprising. It forces people to leave a trace of large payments in order to be able to track money laundering.
72 comments
[ 5.3 ms ] story [ 142 ms ] threadIn an age of the modern computer and internet, cash has to evolve. People deserve the right to privacy with their money.
I know a lot of people are anti BTC, even here on HN, and I get where people are coming from, but do you not also think that people deserve privacy?
"Only criminals use it"
I use/trade BTC all the time for legit reasons because most people I know also have BTC. I firmly and will always believe in peoples right to privacy.
INB4 "BTC is not private"
If used correctly, it is. SO rather than just stomp on BTC, why not help the cause?
You know what still works? Debit cards. Credit cards. I’d assume checks. Possibly other apps (though I’d be afraid to put so much money through them personally).
BTC does nothing good special here unless you’re trying to launder money.
Why does the bank / government need to know were/how I'm spending my money?
I'm already taxed when I'm paid every month, I pay my property taxes. This is not about tax evasion or money laundering for me.
Because they need that information to identify and trace tax evasion and money laundering.
> This is not about tax evasion or money laundering for me.
Oh, since you said so, I guess it must be true. No need for the government to actually check using information.
But do they need to check that for every citizen without a warrant in close to real-time? Is panopticon the only way for it to be effective? Is this what citizens want?
Isn't that what IRS audits are for?
This discussion reminds me of the automatic CSAM scanning on phones (Apple iirc?). Seems like a noble cause but you sure are handing over a lot of power.
You also had a lot of tax fraud. It was easy to lie about things like how many children you had for tax discounts, so people often did. This particular loophole was closed by Social Security Numbers, but the principle is the same: records deter lies. The IRS often knows how much tax you should pay before you file.
This isn't all about government overstep. It's also about the giving up of your privacy to for-profit entities.
Regarding the gov: In the US, citizens have protections against unreasonable searches and seizures. Forcing nearly all transactions into the view of the gov is an unreasonable search.
The US government regulates itself on the circumstances to which it can search data it already has the power to obtain all the time. Searches become unreasonable when law enforcement does not provide a valid reason to search & acquire information in front of the judiciary. But if the judiciary rules it to be reasonable, the government should have a way to obtain such data. Promoting the use of untraceable transactions like cash is essentially preventing the government from ever procuring any relevant data even if it would be reasonable and relevant.
It doesn't make much difference to me personally, bank records have never been subject to 4th amendment protections and Americans don't freak out about that, don't see why financial transactions are much different. Cash transactions are already not supposed to be private because records are supposed to be kept, it's just easy not to keep records which is a fact exploited by criminals.
Regarding ISPs, you can still hide that info from the gov by routing through a no-log vpn. Your proposal seemingly prohibits that type of mask, purposely.
We cannot give up individual freedoms because it makes police work harder.
The IRS sets a cash threshold above which you are required to manually report the personal information of the payer (ie Form 8300). The headline notes the Israeli threshold at 6000 shekels, the IRS sets it at 10000 dollars. We've established the threshold, we're just haggling over the number.
I never expressed any intention to allow people to hide from the government based on technical hacks that won't realistically be known or used by most people anyway. If you don't want government to read your stuff, that's the law's/legislature's job to determine that, like the Stored Communications Act. While criminals and citizens alike have equal access to technical loopholes, the law alone distinguishes between them.
Financial crime is the backbone of organized crime, it is the foundation of hostile spycraft and funds the most depraved regimes. I absolutely refuse to regress to the era where the mafia and cartel leaders ruled the streets and stood toe to toe with law enforcement. Anti-laundering laws are written in blood and they are designed to prevent those scenarios, not tie law enforcement hands then blame them for not working hard enough. You're going to have to do more than spout libertarian cliches to convince anyone.
Assuming you're talking about the US, this really only happened because of the dramatic increase in organized crime prosecutions in the 70s (mostly due to the departure of Hoover), the RICO act which significantly increased sentences for typical mafia activities like drugs/loansharking/extortion/etc, and the witness protection program which changed informing from a likely death sentence to a potential to turn a new leaf. Money laundering only became a crime in 1986, the original BSA mainly just introduced cash reporting requirements (which had a threshold that at the time was two times GDP per capita). Also things like carjacking, cigarette trafficking across states were made federal crimes which again made prosecution easier. "Follow the money" is touted as this law enforcement panacea but historically is not really that effective. Which is why for instance most major narcotics trafficking cases today almost always rely heavily on wiretaps and informants/government witnesses.
And the now standard practice of adding money laundering charges to non drug cases really only started happening after 9/11. So in my opinion there is a lot of evidence that these laws have had rather limited benefits in terms of stopping crime but because of the erosion of the threshold due to inflation are having an increasingly large negative effect on privacy of regular people.
Unlike what you imply, money laundering is not about tacking on charges but rather detecting and tracing criminal organizations so it can be effectively prosecuted. Money laundering's critical role in organized crime is now widely understood [1]:
- without money laundering, criminal finance is easy to discover
- criminalizing it provides a legal basis for international cooperation that wouldn't otherwise exist to pursue global organizations
There also aren't any Great Depressions and bank runs anymore, but we don't ask to remove those finance laws even though they historically didn't prevent the Great Depression.
[1] https://www.unodc.org/e4j/en/organized-crime/module-4/key-is...
I would also push back against this idea. The two biggest "rogue regimes," Iran and Russia, generate hundreds of billions in clean money and substantial portions of their budget from oil/gas sales. Iran just has to have somewhat unique financial relationships with Turkey/China/UAE due to sanctions and their removal from SWIFT but I don't think that's really what you or most people mean by organized crime. They don't need financial crimes to make money. In fact their governments are often the victims of massive financial crimes and looting (Russia during privatization, Russia today with corrupt government contracts, Iran with subsidized goods like gasoline being smuggled out of the country on a massive scale, etc).
North Korea is maybe an example of what you're talking about but as a percent of total financial crimes its activities are small. They're also aren't doing structured cash deposits in bank accounts or whatever. They're stealing money through phishing and wire transfers or crypto hacks. After stolen money has been sent through 3 or so jurisdictions the amount of international cooperation needed to recover it will take at least a year.
Transaction records also ensure hiding domestic sanction violations is extraordinarily difficult (unless you're state-backed like Swiss or Chinese banks). You won't see these countries rely on financial crime because these transaction systems already largely prevent them, few organizations really think they can get away with it. For example, North Korea cannot use cash to transfer large amounts of money because that's not even allowed in the first place, it has to use things like wire transfers. They are already subject to a monitored financial system that blocks major undocumented cash transactions. Once the records are mandatory, international data search & coordination can be made more efficient independently.
Can you imagine the government forcing 2.55 of entire swaths of the economy over to VISA?
Debit transactions also have fees.
If the government really wants people to switch to digital, kill VISA fees.
VISA is the 'Organized Crime Syndicate' that has a stranglehold on the entire digital economy.
Gov. can't do it because banks/visa practically own them.
It would take a Jimmy Carter or Bernie Sanders for that.
Institutional Dems. won't ever do it.
It's clearly not the only intent of the law. Bu when a government does something to benefit large and entrenched players in the market, we can all be forgiven for thinking that the fix is in.
I am curious. What are some of these mysterious on/off-ramps which do not record your private information?
> If used correctly,
PGP is also secure but the burden of using it "correctly" is higher than most regular people are willing to put up with. So, at least for the time being, it effectively is not private
The solution isn’t Bitcoin. (It’s never Bitcoin.) It’s fighting such laws. Also, simpler than using Bitcoin with a similar risk profile: use cash. It’s tougher to trace than the blockchain, which makes it less likely you’ll get caught ex post facto.
Why should I not be allowed to take that risk?
At a certain point, carrying so much data just gets very risky.
I doubt this brings in any more money in taxes and I would bet it's so small of an amount compared to the legal tax loopholes which the "big guys" use that it only hurts the general public than solve their tax issues.
Yes, the 1’000 Fr. note [1].
[1] https://en.m.wikipedia.org/wiki/Banknotes_of_the_Swiss_franc
That is the point. The governments of the world hate any privacy you have. They're just turning the screws until they can get rid of cash.
Only concern is whatever nonsense happens in either Israel or the UK tends to be a test run for an eventual roll out to the US. We inherit all the bad (surveillance society, erosion of rights etc.) and none of the good (universal healthcare, some decent safety net etc.)
I still realize all the privacy and civil rights ramifications etc., but cash is slowly becoming an equivalent of steam engines fighting against diesel and electricity on the railway; high maintenance and inefficient.
What’s acceptable? Alternate means. Such as…
“digital transfer or a debit card“
The better to see you with, my dear.
If I'm not mistaking it's similar limit in Italy.
One store credit to rule them all and in the darkness bind them.
That's the natural evolution of the economy anyways, optimizing energy, resources and usages, no waste, no trash
Money only just an agreement between parties, as long as we agree, then we don't need money anymore
Social contract, as long as you are part of the community (it'll end up being worldwide), you'll receive everything you need (universal basic income), unemployment, crime, poverty, diseases, all will disappear
Optimizing energy for finally sailing in space, and engage with space exploration, meeting with our advanced neighbors
The entire point of the modern banking system is to intermediate between people that are separated by time and distance and who may not know each other.
I pre-emptively welcome you to a new era of cybercrime and social engineering like never before. Likewise, until people stop living on top of each other in cities, sharing mass public transport, disease is going nowhere.
As for poverty, well, digital money means that John Doe in the gutter likely isn't going to be getting any donations from kind strangers in the form of cash anymore, and likely isn't going to be able to spend anything without a device, or a fixed address. Prepare to see a surge of crime in that case.
"Oh but we'll give people UBI". You really think so? The cost of living crisis in the UK says otherwise.
I don’t think there’s any evidence in the least.
… the US Bank Secrecy Act of 1970 made banks file gov reports on transactions/deposits over $10k (which was worth the equivalent of $80k today).
By never changing the threshold while dollars became worth 1/8th of what they used to, they broadened the scope by 8x.