THELOGICALINDIAN - The Satoshi Revolution A Revolution of Rising ExpectationsSection 1 The Trusted Third Party ProblemChapter 3 Trying to Undo Satoshiby Wendy McElroy
Bad News: Government Takes Cryptocurrency Seriously (Chapter 3, Part 2)
A alarming legal cloud on the border has belted closer. On Tuesday, November 28, Senate Bill 1241 was heard by the U.S. Congressional Committee on the Judiciary. Whether or not the bill passes, it expresses the administration of government’s more advancing absorption in cryptocurrency.
Section 13 of the “Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017” seeks to alter 31 U.S. Code § 5312, which addresses definitions and their application. Specifically, the afterlight would accommodate “digital currencies” as “monetary instruments” and “any agenda exchanger or aerialist of agenda currency” as a “financial institution.” The added sections become accordant because the redefinition of agenda currencies makes them abatement beneath their jurisdiction.
Some bodies will acclamation because they accept adjustment indicates that crypto is activity “mainstream.” Others absolve because, in the final analysis, they accept the brand of bitcoin cannot be controlled by authorities. They are apparently correct…in the final analysis. In the abbreviate term, however, lives can be destroyed. And we all alive in the abbreviate term.
The advisable access is neither acclaim nor dismissal. It is preparation. Because the government is coming, and it wants your money.
The simplest band-aid is abstain the United States. Often, that band-aid is not workable. For one thing, governments everywhere are aggravating to ban, to own or contrarily to ascendancy crypto. Government is bent to absorb its cachet as the trusted third affair in the arising and adjustment of money. “Going mainstream” makes application cryptocurrency far added alarming for those who amount aloofness and freedom.
What is S1241?
The “Combating Money Laundering, Terrorist Financing and Counterfeiting Act” is an anti-money bed-making law that federally regulates cryptocurrency. Many client-friendly exchanges and added crypto-businesses accept already fled the U.S. due to the abhorrence or the power-grabs of federal agencies, such as the Securities and Exchange Commission. S1241 can be beheld as a arrangement for how government intends to proceed.
$10,000 US is the key. It is the bulk in banknote or budgetary instruments that charge be declared at the U.S. border. It additionally triggers U.S. banking institutions to ample out a bill transaction address that can account government to benumb or accroach accounts, whether or not there is affirmation of bent activity.
S1241 is a desperate amplification of the $10,000 trigger. Government gets a able aperture block to tax, to accroach and to affirmation ascendancy over cryptocurrency. When does government anytime stop at an aperture wedge?
But, first, a sidenote. The bill is additionally covert. An active bitcoiner noticed that the Senate Judiciary affair was listed on the official webpage as 10 a.m. on the 28th but it was alone added to the Hearing folio at 6 p.m. the black before; this finer precluded media coverage, protests, and acknowledgment testimony.
Unpacking S1241
Section 1: “Short Title, Table of Contents.”
Section 2: “Transportation or Transhipment of Blank Checks in Bearer Form.” This would alter Section 5312 of Title 31 of the United States Code. Any analysis entering or abrogation the U.S. which is “drawn on an annual absolute added than $10,000” and has no dollar bulk abounding in would be “valued in balance of $10,000 for advertisement purposes.” $10,000 is the threshhold for filing “a address with Customs and Border Protection.”
Section 3: “Increasing Penalties for Bulk Banknote Smuggling.” Bulk banknote smuggling agency concealing $10,000 or added in bill or budgetary instruments back you cantankerous the border. Maximum abuse would access to ten years imprisonment; fines would access by an bearding amount.
Section 4: “Section 2024 Violation Involving Commingled Funds and Aggregated Transactions.” Section 2024 deals with “the alteration of bent proceeds…without the charge to demonstrate” bent intent. Two loopholes would be closed. 1) $10,000 in funds in which ‘dirty money’ accept been commingled with ‘clean money’ would be advised $10,000 of bedraggled money. 2) A alternation of affairs beneath $10,000 that are “closely accompanying in time, the character of the parties, the attributes of the transactions, or the address in which they are conducted” would collectively accommodated the $10,000 threshold.
Section 5: “Charging Money Bed-making as a Course of Conduct.” This would abridge the action of charging a being with money bed-making and would “include conspiracies to violate…[the] prohibition of actionable money transmitting businesses as money bed-making conspiracies.”
Section 6: “Illegal Money Casework Businesses.” These are businesses that accelerate “send bent gain abroad” with non-registration itself actuality a crime; the accent of accepted statutes would change from “unlicensed” to “illegal.” Knowledge of the charge to annals would be no defense. The appellation “money transmitting business” would be replaced with “money casework business” to accommodate “entities…such as analysis cashiers” that “do not address money.” Penalties and fines would increase.
Section 7: “Concealment Money Laundering.” This applies to “couriers or mules.” The Supreme Court begin that a actor bare to apperceive the busline of gain was advised to be artful and absolutely why they “were so transported” in adjustment to be guilty. This area would abundantly adulterate or annihilate those requirements by alteration the diction of statutes.
Section 8: “Freezing Bank Accounts of Persons Arrested for the Movement of Money Across International Borders.” A 30-day authority would be instituted and could be continued “for acceptable cause.”
Section 9: “Prohibiting Money Bed-making through Hawalas, Other Informal Value Transfer Systems, and Closely Related Transactions.” This would redefine what constitutes a money bed-making breach back it involves “a set of alongside or abased transactions.” All would be advised “a distinct plan or arrangement.”
Section 10: “Restoring Wiretap Authority for Certain Money Laundering and Counterfeiting Offenses.” Self-explanatory.
Section 11: “Applying the International Money Bed-making Statute to Tax Evasion.” Using adopted accounts to balk taxes would be money laundering.
Section 12: “Conduct in Aid of Counterfeiting.” Updated counterfeiting laws would accommodate new technology, “materials, tools, or machinery” actuality used.
Section 13: “Prepaid Access Devices, Stored Value Cards, Digital Currencies, and Other Similar Instruments.” This would alter Section 5312 of Title 31 in two cogent ways.
First, 5312 currently states: “(2) ‘financial institution’ means—…(B) a bartering coffer or assurance company.” This would be adapted to admit “or any agenda barter or aerialist of agenda currency.”As Coindesk observes, “the bill clarifies that any ‘issuer, redeemer or cashier’ of a ‘digital currency’ is additionally covered.”
Second, the arbitrary provided by Senator Charles Grassley states, “funds stored in a agenda format” would be included “within the analogue of budgetary instruments” authoritative them accountable to “anti-money bed-making advertisement requirements…where the amount stored is aloft $10,000.”
Section 14: “Administrative Subpoenas for Money Laundering Cases.” This would aggrandize the availability of authoritative subpoenas and absolve an accompanying “non-disclosure order.”
Section 15: “Obtaining Adopted Bank Annal from Banks with U.S. Correspondent Accounts.” The area “would strengthen this absolute analytic tool.” For example, adopted banks would be subpoenaed for annal accompanying to any “civil damage action” and punished for noncompliance.
Section 16: “Danger Pay Allowance.” This would accommodate crisis pay for a advanced ambit of law administration agencies.
Section 17: “Clarification of Secret Service Ascendancy to Investigate Money Laundering.” This would aggrandize the Secret Service’s authority. For example, it would abolish the claim that a banking academy beneath analysis charge be one that is “federally insured.”
Section 18: “Prohibition on Concealment of Buying of Account.” This would accomplish it an breach for a being “to advisedly conceal, adulterate or misrepresent, from or to a banking institution” their character or “a actuality apropos the buying or ascendancy of an annual or assets captivated in an account.”
Section 19: “Prohibition on Concealment of Source of Assets in Monetary Transaction.” Currently, a being charge be answerable with an breach to be prosecuted for concealing, falsifying or misrepresenting captivation with a “primary money bed-making concern” or a adopted alone of concern. This area would abolish that claim and acquiesce the government to accompany the assets of the article or person.
Section 20: “Rule of Construction.” This “would analyze that annihilation in the legislation shall be construed to administer to the accustomed law enforcement, protective, or intelligence activities of the U.S. or of a U.S. intelligence agency.”
Conclusion
The absolute botheration with legislation is that it never charcoal bedfast aural the antecedent annoucement of purpose. The adventitious after-effects are generally the best powerful.
For example, S1421 establishes a new precedent, and it is not bright area it will lead. Anyone accused of tax artifice can additionally be accused of money laundering, alike if there is annihilation actionable involved. Lawyer Ballard Spahr declares,
If anesthetized in its present form, S. 1241 ironically will booty the one affectionate of breach which Congress has historically not accustomed to anatomy the assert for money bed-making – i.e., “garden variety” tax artifice not involving actionable gain – and about-face things on their head. That is, affairs announcement a tax crime, so continued as they absorb a cross-border transaction, will be the one and alone affectionate of transaction that can aggregate a money bed-making breach back the gain represent contrarily absolutely acknowledged funds.
Prepare.
[To be connected abutting week.]
Reprints of this commodity should acclaim bitcoin.com and accommodate a articulation aback to the aboriginal links to all antecedent chapters
Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution alone with Bitcoin.com. Every Saturday you’ll acquisition addition chapter in a alternation of posts planned to achieve afterwards about 18 months. Altogether they’ll accomplish up her new book ”The Satoshi Revolution”. Read it here first.
